Press releases

Legal & General delivers growth across the business, IFRS operating profit of £1,002m, cash generation of £728m and increases final dividend by 25%

17 March 2011

Legal & General delivers growth across the business, IFRS operating profit of £1,002m, cash generation of £728m and increases final dividend by 25%

  • Worldwide sales up 28% to £1.8bn APE (2009: £1.4bn APE), net asset flows £9.7bn (2009: £10.5bn)
  • IFRS operating profit £1,002m (2009: £1,109m), IFRS pre tax profit £1,092m (2009: £1,074m)
  • Operational cash generation up 11% to £808m (2009: £726m), net cash generation £728m (2010 target: £600m, 2009: £699m), plan to generate £700m net cash
  • Earnings per share 14.07p (2009: 14.82p)
  • Full year dividend up 24% to 4.75p per share (2009: 3.84p per share)
  • EEV profit before tax up 204% to £1,677m (2009: £522m), EEV per share up 16% to 132p (31/12/2009: 114p)
  • IGD surplus up to £3.7bn (31/12/2009: £3.1bn)
  • IFRS return on equity 18.2% (2009: 22.2%)

Tim Breedon, Group Chief Executive, said:

"In 2010 we successfully demonstrated we can both grow the business and deliver improved net cash generation. Today’s results evidence the value created by our improved business model.  We are building a strong track record in delivering cash which, coupled with the high visibility of future cash flows, has given the Board the confidence to recommend a further 25% increase in the final dividend to 3.42p per share.

"We are confident about the growth prospects for Legal & General.  Customer demand is rising in the UK, and we have the right business model and product mix for the current economic and demographic environment.  There is consolidation in many of our markets, and this further underpins our confidence that Legal & General will be a growing force as the welfare state retrenches and individuals increasingly look to high-quality, good value risk, savings and investment provision.  We expect to generate £700m of net cash in 2011.

"Our balance sheet is strong, each of our business divisions is profitable and cash-generative, and we are delivering excellent results across the Group."

Returns – dividend increased by 24%, covered 3.0 times by earnings

Return on equity (%)18.222.2
Number of shares (m)5,8675,862
Net cash generation per share (pence)12.4111.92
Earnings per share (pence)14.0714.82
Full year dividend per share (pence)4.753.84
Cash dividend cover (x)2.63.1
Earnings dividend cover3.03.9

Key performances indicators

Operational cash generation1 up 11% to £808m, net cash generation up 4% to £728m

2010 - £mRiskSavingsInv MgmtInternationalGroup & capital financingGroup projects2010
Operational cash generation4391381624425-808
New business strain(10)(70)----(80)
Net cash generation429681624425-728
IFRS Operating profit56011520610258(39)1,002
2009 - £mRiskSavingsInv MgmtInternationalGroup & capital financingGroup projects2009
Operational cash generation454106125833-726
New business strain50(77)----(27)
Net cash generation50429125833-699
IFRS Operating profit7355017212757(32)1,109

ASSETS - £354bn in LGIM, £64bn on Savings, £25bn in Annuities


EEV Results – Embedded Value per Share up 16% to 132p