Press release
H1 2021 Results: Strong financial performance – 14% growth in operating profit and 22% ROE
4 Aug 2021
Press release and analyst pack
Nigel Wilson, Group Chief Executive: "Thanks to the hard work and dedication of my colleagues across Legal & General, we have delivered a strong set of financial results, with EPS up 21% since H1 2019. And we expect to deliver double digit growth in operating profit at the full year.We’re continuing to make investments that are economically, environmentally and socially valuable, in line with our longterm commitment to delivering Inclusive Capitalism and supporting the Building Back Better and Levelling Up agenda.
We are already a leading asset manager and we remain focused on continuing to scale-up our asset origination capabilities which are a unique and important component of our synergistic business model which has driven our 22% ROE."
Strong financial performance1, now well above pre-COVID 2019 levels
- Operating profit of £1,079m, up 14% (H1 2020: £946m), with double-digit growth or higher in LGC, LGI and LGRR
- Earnings per share of 17.78p, up 21% on H1 2019 (14.74p) and up significantly on H1 2020 (4.89p)
- Profit after tax2 of £1,065m (H1 2020: £290m) and Return on equity of 22.0% (H1 2020: 6.3%)
- Solvency II coverage ratio3 of 183% (H1 2020: 173%)
- Interim dividend of 5.18p, up 5% (H1 2020: 4.93p), consistent with our stated ambition
Growing contribution to our five-year (2020-2024) ambitions4
- Cash generation of £0.9bn, up 14% year on year. Capital generation of £0.8bn, up 9% year on year
- Cumulative cash and capital generation of £2.4bn and £2.3bn respectively, against our ambition of £8.0-9.0bn by 2024
- Cumulative dividends declared £1.4bn (H1 2021: £309m, 2020: £1,048m) against our ambition of £5.6-5.9bn by 2024
Good PRT new business volumes and strong net flows
- Global PRT new business premiums of £3.1bn (H1 2020: £3.4bn) with £2bn already won/in exclusive negotiations for H2
- LGIM external net flows of £27.4bn (H1 2020: £6.2bn), with AUM up 7% to £1.3tn
- Individual annuity premiums up 15% and LGI new business annual premiums up 6
Unique and growing alternative asset origination capabilities
- Legal & General Capital (LGC) operating profit doubled to £250m (H1 2020: £123m)
- ESG-aligned asset origination expertise in clean energy, residential property, digital infrastructure and SME finance
- Third party capital AUM of £6.8bn against our ambition of £14bn by 2025
Long-term, growth-oriented and highly synergistic business model
- An established track record: HY11 to HY21 CAGR of 11% in EPS, 12% in DPS and 7% in book value per share
- Highly synergistic: five focused divisions that create a virtuous circle of internal demand and supply, supporting c20% ROE
- Long-term and predictable value creation: 40+ year duration business with earnings driven by a growing stock of assets
- Attractive global growth markets: retirement solutions ($53tn), asset management ($136tn), climate change ($20tn)5
- A longstanding commitment to Inclusive Capitalism and a leader in ESG: rated #1 Life & Health insurer by ShareAction
Further information
