H1 2018: Consistent delivery of growth from divisions
9 Aug 2018
• OPERATING PROFIT1 FROM DIVISIONS2 UP 7% TO £1,059M (H1 2017: £994M), increases in 5 out of 6 businesses since H1 2017
• OPERATING PROFIT1 OF £909M, up 5% (H1 2017: £862m excluding mortality release) after increased investment in the business
• EARNINGS PER SHARE3 DOWN 8% TO 13.00P (H1 2017: 14.19P), impacted by financial markets
• PROFIT AFTER TAX DOWN 19% TO £772M (H1 2017: £952M)
• RETURN ON EQUITY1 AT 20.3% (H1 2017: 26.7%)
• INTERIM DIVIDEND4 OF 4.60P PER SHARE (H1 2017: 4.30P)
• SOLVENCY II COVERAGE RATIO5 OF 193% (H1 2017: 186%)
• SOLVENCY II OPERATIONAL SURPLUS GENERATION UP BY 11% TO £0.7BN (H1 2017: £0.6BN)
Investing & Annuities
• LGR ANNUITY SALES OF £1.1BN6 (H1 2017: £2.0BN)
• LGR LIFETIME MORTGAGE ADVANCES UP 23% TO £0.5BN (H1 2017: £0.4BN)
• GROUP-WIDE DIRECT INVESTMENT UP 38% AT £16.3BN (H1 2017: £11.8BN)
• LGIM AUM UP 4% AT £984.8BN (H1 2017: £951.1BN)
• LGIM EXTERNAL NET FLOWS OF £14.6BN (H1 2017: £21.7BN), US FLOWS $11.5BN (H1 2017: $10.8BN)
• LGI GROSS WRITTEN PREMIUMS UP 3% TO £1.4BN6 (H1 2017: £1.3BN)
• GENERAL INSURANCE GROSS WRITTEN PREMIUMS UP 12% TO £193M (H1 2017: £173M)
Legal & General again delivered consistent, positive results with five of our six businesses increasing their operating profits for the first half of 2018. Operating profit from divisions increased 7% to £1.1 billion and RoE was 20.3%... We are confident that Legal & General is strongly positioned for growth in H2 and beyond.
Nigel Wilson, Group Chief Executive
VP, Group Investor Relations and Strategy
Group Investor Relations Manager
Investor Relations Analyst
1The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary, on pages 99 to 104 of this report.
2Represents operating profit from divisions and excludes mortality reserve releases (H1 2018: £nil, H1 2017: £126m). H1 2017 release reflects changes to LGR’s base mortality assumptions.
3Excluding mortality reserve releases (H1 2018: £nil, H1 2017: £126m).
4A formulaic approach is used to set the interim dividend, being 30% of the prior year full year dividend.
5Solvency II coverage ratio on a shareholder basis is adjusted for the Own Funds and SCR of the With-profits fund and the final salary pension schemes.
6Constant FX rate comparisons have been calculated by applying the average FX rates for H1 2017 to both H1 2017 and H1 2018 local currency results. Actual FX rate comparisons apply the H1 17 and H1 18 average FX rates to the equivalent periods’ results respectively.