Press release

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

9 Aug 2022

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

Further information

Ed Houghton

Group Strategy & Investor Relations Director

Email Ed Houghton

John Godfrey

Director of Levelling Up

Group Communications

T: 020 3124 2090Email John Godfrey

Notes to editors

Established in 1836, L&G is one of the UK's leading financial services groups and a major global investor, with £1.1 trillion in total assets under management (as at FY24) of which c. 44% (c. £0.5 trillion) is international.

We have a highly synergistic business model, which continues to drive strong returns. We are a leading player in Institutional Retirement, in Retail Savings and Protection, and in Asset Management through both public and private markets. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.