Legal & General Group Plc (LON:LGEN) has announced its 2024 Full Year Results.
Core operating profit up 6%, executing our growth strategy with a sharper focus and enhanced returns, with a £500m buyback
António Simões, Legal and General Group CEO:
“2024 has been a year of significant strategic progress and strong financial performance. We delivered 6% growth in our core operating profit and core EPS, alongside excellent new business volumes, while investing for the future.
We are seeing positive commercial momentum as we execute our strategy with rigour and pace. By sharpening our focus and simplifying our portfolio – through the sale of Cala and US Protection – alongside our strategic partnership with Meiji Yasuda and our investment in Taurus, we are strengthening our ability to generate sustainable growth in our core businesses: Institutional Retirement, Asset Management and UK Retail. We stated at our Capital Markets Event that we intended to return more to shareholders and that is exactly what we are doing. Our clear capital allocation framework supports our plan to return over £5 billion over the next three years, through dividends and buybacks.
Looking ahead, our momentum demonstrates why we are confident in our ability to deliver on our ambitious targets, directing our capital and expertise where they can create lasting value, and making a meaningful impact for customers, shareholders and communities.”
Strong financial performance[1]
• Core operating profit of £1,616m and Core operating EPS of 20.23p, both up 6%
• IFRS Profit before tax[2] of £542m
• Solvency II capital generation of £1.8bn and Solvency II coverage ratio3 of 232%
• A large store of future profit[3] of £14.8bn
Sustainable Growth
• Institutional Retirement: £10.7bn of Global PRT written; £8.4bn UK PRT and record volumes in US and Canada
• Asset Management: £1.1trn global AUM; growth in revenue as we pivot to higher fee margin products, and average fee rate increased from 7bps to 8bps. Private Market AUM of £57bn, with £1.2bn of external committed capital from several new fund launches, and a strategic investment in US real estate equity specialist, Taurus
• Retail: Record volumes in Retail Annuities of £2.1bn and continued strong growth in Workplace DC
Sharper focus
• Introduction of a disciplined capital allocation approach, including the creation of Corporate Investments unit
• Major disposals to unlock value and reinvest for growth: Cala (£1.35bn4) and US protection (£1.8bn[4])
• Alongside the creation of a strategic partnership with Meiji Yasuda, increasing growth potential in US PRT and co-investment capital of ¥150 bn[5] in Asset Management
Enhanced Returns
• Dividend per Share of 21.36p up 5% and £500m buyback announced for 2025
• Intention to return more than £5bn (or c. 40% market cap6) within three years
Outlook
As we look at 2025, Legal and General Group have strong commercial momentum in each of our three businesses.
In Institutional Retirement, we have a busy PRT pipeline and have already completed £1.2bn of transaction in the UK and we are actively pricing on £17bn of new deals, with visibility on a further £27bn. We expect strong volumes this year, with good profitability and low new business strain. We will continue to adapt to changes in market conditions and deliver attractive returns, as we have successfully demonstrated in 2024.
Asset Management has also had a positive start to the year as we continue to see flows into higher margin products. This is expected to increase as we see more of our Workplace clients transition into our Lifetime Advantage Fund which has a c. 15% investment in our Private Markets Asset Fund providing enhanced returns to DC savers and aligning strongly with the government agenda to deploy more pensions money into productive finance in the UK. We also expect to see part of the ¥150bn of co-investment from Meiji Yasuda flow into our private markets business.
In Retail, several Workplace schemes that we won in 2024 will fund this year, and we will continue to strengthen our proposition. We expect the thriving retail annuities market to continue, with increased competition, as higher interest rates and increased awareness around the benefits of guaranteed income, continue to make these products more attractive to customers. We are well positioned in this market. Our UK protection businesses will continue to focus on writing strong volumes at disciplined margins.
We now have a plan in place for the disposal of each of the remining assets in our Corporate Investments portfolio as we continue to simplify our business and unlock value to redeploy into our strategic businesses
