Legal & General Delivers Strong 2024 Results, Executing Growth Strategy
Why we think this is good
The RNS highlights strong financial performance, with core operating profit and EPS up 6%, and a large store of future profit. The Group has made strategic progress, simplifying its portfolio and strengthening its core businesses. It is also returning significant capital to shareholders through dividends and buybacks. While there are some investment variances, the overall outlook is positive.
Key Points
- Core operating profit up 6% to £1,616m
- Core operating EPS up 6% to 20.23p
- Solvency II coverage ratio of 232%
- Solvency II operational surplus generation of £1.8bn
- Intend to return c.40% of market cap to shareholders over 2025-2027
Summary
Legal & General Group Plc has reported strong financial performance for 2024, with core operating profit up 6% to £1,616m and core operating EPS up 6% to 20.23p. The Group has made significant strategic progress, simplifying its portfolio through the sale of Cala and US Protection, and strengthening its core businesses in Institutional Retirement, Asset Management and UK Retail.
The Group is targeting 6-9% CAGR in core operating EPS (2024-27), >20% operating Return on Equity in 2025-2027, and £5-6bn cumulative Solvency II capital generation over three years (2025-2027). It intends to return the equivalent of c.40% of market cap to shareholders over 2025-2027 through dividends and buybacks.
The Solvency II coverage ratio remains strong at 232%, with Solvency II operational surplus generation of £1.8bn. However, investment and other variances of £(1,383)m impacted profit before tax, which was £332m.