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
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
Further information
