Legal & General first quarter net cash generation rises 8%

6th May 2015 07:46

Legal & General reported an 8% increase in first-quarter net cash generation to £326m, with operational cash generation up 11% at £330m.The company posted a 19% rise in annuity sales for the quarter and said it was on track to deliver £80m of operating cost savings across the group in 2015.The value of total assets was up 17% to £736.8bn compared with £630.9bn.The pensions giant said it was benefitting from leveraging its position in pension de-risking, expanding its footprint in the US and Asia and its entry into the private rental sector in 2015.Group chief executive Nigel Wilson said: "Our business is aligned to long term macro growth trends. We are adapting well to regulatory and political challenges, for example, managing the switch to 'pension freedom' with a new range of cash and retirement products, which now includes lifetime mortgages."Individual annuity sales dropped to £99m from £244 following 2014 budget changes, while sales of bulk annuities - which transfer pension risk from companies to insurers - also fell, to £655m from £3.05bn.Nomura said that Legal & General has reported a "good first quarter with cash developing well.""We believe the underlying investment thesis for L&G remains intact, namely a strong yield accompanied by strong dividend growth. We continue to believe there is operational momentum in the group, and its market-leading position in bulk annuities is a differentiator when compared with peers," it added.