4 Mar 2020
2019 results: EPS1 up 16% to 28.7p, ROE 20.4%, record Pension Risk Transfer sales of £11.4bn and LGIM external net flows of £86bn
Legal & General’s strategy of Inclusive Capitalism, underpinned by structural growth drivers, has enabled us to achieve our five year EPS growth ambition in four years, growing 58% since 2015.
Our five growing, profitable and increasingly international businesses compete in attractive, growing markets and work together to deliver economically and socially useful customer solutions. Society’s increasing focus on net zero carbon, ESG investing and levelling up through investment in all regions plays to our strengths, creating future growth opportunities.
Having delivered EPS growth of 16% to 28.7p, dividends up 7% to 17.57p, and a 20% plus ROE, we are well - positioned for the future and we remain ambitious. Nigel Wilson, Group Chief Executive
- Operating profit from continuing divisions3,4 up 17% to £2,514m (2018: £2,152m)
- Operating profit3 of £2,131m, up 12% (2018: £1,902m)
- Earnings per share1 of 28.66p, up 16% (2018: 24.74p)
- Return on equity at 20.4% (2018: 22.7%)
- Full year dividend up 7% to 17.57p per share (2018: 16.42p)
- Profit after tax up 16% to £1,700m (2018: £1,468m) excluding mortality reserve release, including mortality reserve release profit after tax5 was £1,834m (2018: £1,827m)
- Net release from continuing operations up 15% to £1,606m (2018: £1,396m)
- Solvency II operational surplus generation up by 9% to £1.6bn (2018: £1.4bn)
- Solvency II coverage ratio6 of 184% (2018: 188%)
- Pension Risk Transfer sales7 of £11.4bn (2018: £9.1bn), including $1.1bn of US PRT (2018: $0.8bn)
- Individual annuity sales up 22% to £970m (2018: £795m)
- Group-wide Direct Investment up 34% at £25.7bn (2018: £19.2bn)
- LGIM AUM up 18% at £1,196bn (2018: £1,015bn)
- LGIM external net flows of £86.4bn (2018: £42.6bn)
- Insurance GWP up 6% to £2,729m (2018: £2,580m)
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1. Excludes post-tax mortality release of £134m (2018: £359m). Including these impacts, EPS was roughly flat at 30.92p (2018: 30.79p).
2. The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary, on pages 85 to 89 of this report.
3. Excludes mortality release of £155m (2018: £433m) from LGR’s £49.1bn net longevity exposure. 2019 mortality release relates to changes in longevity improvement assumptions
to align to CMI 2017 tables, adjusted to reflect our annuitant portfolio. Including the reserve release, operating profit was down 2% to £2,286m (2018: £2,335m).
4. Excludes Mature Savings and General Insurance.
5. Profit after tax attributable to equity holders.
6. Solvency II coverage ratio on a shareholder basis, which is adjusted for the Own Funds and SCR of the With-profits fund and the Group final salary pension plans.
7. Excludes Longevity Insurance transactions (2019: £nil, 2018: £287m).