Legal and General share price watchers got a fresh read on the group’s first half as Legal & General posted £918 million in core operating profit, 7% higher year on year and about 4% ahead of the company-compiled consensus of £883 million. The board also lifted the interim dividend by 2% to 6.24p per share, keeping the payout in line with expectations.
That combination gives shareholders a clearer picture of the first-half numbers they are being paid against. Core operating earnings per share rose 11% to 12.1p, moving above the top end of the medium-term guidance range of 6-9% and leaving the company saying full-year earnings growth should exceed the top of that range.
António Simões on L&G
António Simões said the group was making “good progress in becoming a simpler, more focused L&G”. That line tracks the set of results behind it: asset management fee-related earnings increased by 37%, while the cost-income ratio improved by 4 percentage points to 71%.
£1.2 trillion in assets under management gives that improvement scale. The sharper fee line matters because it shows the asset management arm is carrying more of the earnings load, which helped support the profit beat even before the dividend decision was announced.
£2 billion IFRS profit
£2 billion in IFRS pre-tax profit added another layer to the half-year report, though that figure reflected a gain from the disposal of the group’s non-retained US business. The reported profit therefore sits alongside the operating numbers rather than replacing them, and it helps explain why the headline result looked stronger than the underlying core profit alone.
3% growth in Solvency II operating surplus generation, to £790 million, also pointed in the same direction. That figure was around 5% above the average forecast, suggesting the company generated more surplus than the market had pencilled in.
201% solvency coverage
201% was the solvency coverage ratio at the half-year point, down from what the market expected at 206% but still above L&G’s operating target range of 160-190%. That is the main friction in the release: profits beat expectations, yet the capital buffer moved lower than forecast.
£450 million of a £1.2 billion share buyback had been completed at the time of the results. For shareholders, that means the cash return story is not just the 2% dividend increase; it also includes a continuing repurchase programme that was already under way when the numbers were published.
How Legal & General share price moved after the results is not stated, but the first-half beat, the dividend lift and the solvency dip give the next trading session a clear set of figures to weigh rather than a vague earnings story.
