L&G delivers bumper retirement profits, hits dividend target

Insurance big cap Legal & General Group PLC (LSE:LGEN) increased pension-based operating profits by 10% in 2023 to generate £886 million in a year that saw record appetite for de-risking among legacy pension providers.

Some £50 billion in PRTs was transacted in the UK, with L&G leading on some of the landmark deals, including the British Steel Pension Scheme and Boots Pension Scheme transfers.

L&G announced a firm-wide operating profit of £1.67 billion for 2023, basically flat from £1.66 billion in 2022, while adjusted profit before tax nearly halved to £561 million.

This was attributed to “unrealised mark-to-market impact of higher rates on asset valuations, the cost relating to our announced Modular Homes closure and the write-down of our investment in Onto”.

L&G said it is confident in achieving its five-year ambitions (2020-2024) of cumulative capital generation of £8-£9 billion, with net surplus generation to exceed dividends of £5.6-5.9 billion.

Matching expectations, the company declared a full-year dividend per share of 20.34p, marking a 5% increase from the previous year.

“We must be as ambitious for Legal & General's future as we are proud of our history,” stated chief executive António Simões.

“This is the right moment to take a fresh perspective, build on our track record and set out a vision for profitable and sustainable growth.  I look forward to outlining our strategy and plans at our Capital Markets Event on 12 June."