Actually better in many regards than I expected, underlying positive business activity trends in each area, as many opportunities as threats, and an even bigger mortality release. A jump in new equity release business and surging transfers-in of bulk annuity books combined with data to say we are not going to outlive ourselves will be a powerful combo.
The only negative is slightly less free cash from operations on the basis that more has been set aside for investment (as opposed to a buyback, thank goodness) - sorry guessing here, I will need to check that, a huge report in 3 parts will take some reading. A conservative statement to say future compound growth might only be 10% pa.
So the final dividend only up to 11.82p was a bit stingy.
But all in all well done Nigel Wilson, again. I wholly agree with the remark above that on all the evidence this is undervalued, my own view is to expect a new ceiling of 305p.
So why on earth the slump today seems very harsh, looking for negative comment to explain it and can’t find any … more to do with renewed fears of an ugly Brexit than LGEN itself? In which case I will be watching this very closely for a buying opportunity so I can go overweight again, but in the meantime expect a slew of broker BUYs.
Longevity progress stalling will be so important for many others, not least the ability of UK Plc to pay for state pensions out of the current NI regime as baby boomers begin to retire … people calling for extra-ordinary increases in NI contribution will need to pipe down, and coupled with continuing record employment levels we should be more confident that we can stick with the triple lock. Huge read across for company and public service DB pension liabilities, equity release NNER, awful life insurance companies (and even Cumbo in the FT fer crissake) demanding we rescind or curtail pension freedoms because there was a risk we might outlive our own plans and “run out” … utter garbage, when are the scaremongering dinosaurs of the life-assured pension industry going to realise we will not be frightened into saving more than we need for retirement, we just need fairer charges and better value flexible pension products. Norwich Union charged me 1.49% of AUM for over 30 years for doing nothing more than plonking my contributions in a default fund. I still cannot believe I got an unsolicited offer from a SIPP provider of a 1.9% pa annuity last year. An industry still full of greedy crooks.
LGEN always used to top the annuity tables for low charges and highest income rates, they would be my first choice if I did want to explore a backstop annuity as part of my retirement plans. Which perhaps explains why they are winning a little new annuity business while others are not.
Rant over, that feels better.