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Press releases

H1 2022 Results: Continued strong performance – 8% growth in Operating profit and EPS, 21% ROE and SII coverage ratio of 212%

9 Aug 2022

Press release and analyst pack

Sir Nigel Wilson, Group Chief Executive: “We’ve made a good start to the year, with operating profit and EPS up 8%, cash and capital generation up double digits, DPS up 5% and a return on equity of 21%. We have delivered for our institutional clients and retail customers, while generating good volumes and margins in a buoyant PRT market and continuing to scale LGC at pace – both in the UK and now also in the US – originating assets for our own business and for third parties, whilst also delivering a positive outcome for the economies where we invest. Our balance sheet is strong and highly resilient, with a solvency ratio of 212% and with 100% of cash flows received from our Direct Investments. We are committed to providing financial security for our customers and colleagues in a tough economic climate and remain confident in our ability to grow profits sustainably and at attractive returns over the long-term.”
Continued delivery of strong financial performance1
  • Operating profit of £1,160m, up 8% (H1 2021: £1,079m)
  • Earnings per share of 19.28p, up 8% on H1 2021 (17.78p)
  • Profit after tax2 of £1,153m (H1 2021: £1,065m) and Return on equity of 21.3% (H1 2021: 22.0%)
  • Solvency II coverage ratio3 of 212% (H1 2021: 182%)
  • Interim dividend of 5.44p, up 5% (H1 2021: 5.18p)
Growing contribution to our five-year (2020-2024) ambitions4
  • Cash generation of £1.0bn, up 22% year on year. Capital generation of £0.9bn, up 14% year on year
  • Cumulative cash and capital generation of £4.3bn and £4.1bn respectively, against our ambition of £8.0-9.0bn by 2024
  • Cumulative dividends declared £2.5bn (H1 2022: £324m, 2020-21 £2,147m) against our ambition of £5.6-5.9bn by 2024
Strong PRT new business volumes and LGIM net flows
  • Global PRT new business premiums of £4.4bn (H1 2021: £3.1bn), including our largest ever US transaction
  • LGIM record H1 external net flows of £65.6bn (H1 2021: £27.4bn), with AUM down to £1.3tn due to market movements
  • Protection premiums of £1,605m (H1 2021: £1,500m) and Individual annuity premiums of £453m (H1 2021: £483m)
A strong and resilient balance sheet
  • No defaults in H1 or for the last 13 years. £2.7bn credit default provision remains unutilised5
  • 99% investment grade £73.2bn annuity bond portfolio
  • 100% of scheduled cashflows received from our Direct Investments
  • Strong and growing IFRS and Solvency II balance sheet
Long-term, growth-oriented, and highly synergistic business model
  • An established track record: HY11 to HY22 CAGR of 11% in EPS, 11% in DPS and 8% in book value per share
  • Highly synergistic: four 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 ($57tn), asset management ($149tn), climate change ($20tn)6
  • A longstanding commitment to Inclusive Capitalism and a leader in ESG: rated #1 Life & Health insurer by ShareAction

  1. The Group uses a number of Alternative Performance Measures (including adjusted operating profit, net release from operations, return on equity and LGIM AUM) to enhance understanding of the Group’s performance. These are defined in the glossary, on pages 99 to 105 of this report. Operating profit represents adjusted operating profit.
  2. Profit after tax attributable to equity holders.
  3. Solvency II coverage ratio of 212% is post £0.8bn payment of 2021 final dividend.
  4. Cash generation defined as net release from operations and Capital generation defined as Solvency II operational surplus generation.
  5. The reduction since FY21 (£3.4bn) reflects the formulaic impact to the discount rate as a consequence of rising interest rates and widening credit spreads.
  6. $57tn retirement solutions market, Willis Towers Watson, 2022 Global Pension Assets Study; $149tn asset management market, BCG, Global Asset Management 2022; $20tn climate change market based on forecast that $130tn of investment is needed to 2050 in order to achieve zero emissions, scaled pro-rata to 2025.
    BloombergNEF: New energy outlook 2021
    https://about.bnef.com/new-energy-outlook

Further information

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Ed Houghton

Group Strategy & Investor Relations Director

Email Ed Houghton

Nim

Nim Ilankovan

Investor Relations Director

Email Nim Ilankovan

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John Godfrey

Director of Levelling Up

Group Communications

T: 020 3124 2090

Email John Godfrey

Notes to editors

Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.

*at 31 Dec 2022

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