L&G hikes divi by a third

23rd Mar 2010 07:03

Insurer Legal & General raised its dividend by a third after each of its businesses delivered higher profits and generated more cash in 2009 than in 2008 despite lower sales overall. The full-year dividend is 3.84p, ahead of market consensus expectations of 3.67p but below the top of the range forecast of 4p from Panmure Gordon.The company's operating profit on an international financial reporting standards (IFRS) basis in 2009 jumped to £1,109m from a restated £592m in 2008. On a European Embedded Value (EEV) basis operating profit was £1,319m from £875m a year earlier. IFRS profit before tax was £1,074m, compared to a loss of £1,491m the year before, while the IFRS profit after tax was £844m, compared to a loss of £1,130m the year before. Gross written premiums eased to £5,275m from £5,895m in 2008 while the investment return saw a big turnaround, producing a surplus in 2009 of £38,201m versus a loss of £37,749m in 2009. Total revenue was £43,790 in 2009 versus negative revenue of £31,644m in 2008. Net cash generated more than doubled to £699m from £320m in 2008. IFRS diluted earnings per share was 13.74p, up from 7.16p the year before, while the final dividend has been hiked by a third to 2.73p from 2.05p. 'We expect modest growth in the UK economy in 2010. However, UK Risk and Savings markets which were depressed in 2009 are expected to rebound,' said Tim Breedon, chief executive of Legal & General. 'These results show that Legal & General is in excellent health and is ideally placed to take advantage of new opportunities as they emerge in a financial services sector which is undergoing rapid change,' Breedon added.