The UK-based investment management and pensions group reported resilient half-year earnings despite challenging market conditions
Legal & General (L&G) shares slid 2% lower in early morning trading, but the stock is capable of trending higher in the weeks ahead after the company reported a ‘resilient’ set of half-year (H1) earnings on Wednesday.
The UK-based investment management and pensions group announced it will maintain its interim dividend of 4.93p in its H1 results, despite regulators advising financial institutions to consider cancelling pay-outs to bolster balance sheets amid the economic fallout from Covid-19.
L&G also saw strong profits despite the challenging market conditions, with the company reporting £1.13 billion in operating profit, only slightly lower than last year.
In H1, Legal & General delivered resilient operating profits, a robust balance sheet and highly relevant products and services, L&G Group CEO Nigel Wilson said. Our ambition is for a similar performance in H2.
L&G is trading at 214p per share, with the stock down 31% year-to-date.
The UK-based investment management and pensions group has remained a strong dividend play for investors at a time of great uncertainty.
Unlike many other companies on the FTSE 100, L&G opted not to suspend its dividend in an effort shore up its balance sheet amid rising costs and increased pressure from regulators.
In fact, the company’s current total dividend pay-out for 2020 stands at 17.6p per share which represents an impressive yield of 8.4%.
L&G has also grown to become one of Europe’s largest investment management firms, with asset under management worth more than £1 trillion.
Despite regulators tightening capital ratios, the company was able to retain its dividend pay-out to shareholders because of its strong Solvency II capital ratio of 184%, along with boasting earnings per share of 30.9p.
Legal & General Retail Retirement has agreed a new partnership within its Retirement Income business to provide annuities to PensionBee customers.
For many retirees, we believe annuities continue to play an important role, especially for those seeking financial security, Emma Byron, managing director at L&G General Retail Retirement. We are therefore really pleased to partner with PensionBee to offer customers the option of a guaranteed income from an annuity.
This new partnership has partly been driven by forthcoming Investment Pathways regulations, which include a pathway toward a guaranteed income product, such as a lifetime annuity, L&G said in a statement.
While Covid-19 has delayed the implementation of the FCA’s rules until February 2021, we believe savers need to be better informed of their choices today and recognise that for some, an annuity can offer peace of mind, particularly in periods of market turbulence. PensionBee CEO Romi Savova said.