Legal & General (LGEN)

[simoan]

These have got to be excellent results by almost any measure with after tax profit up 28% and EPS up 72% (How did they manage that? I do not remember any share buybacks?) EPS took a beating in 2020 and they are looking at an increase in EPS from 2019 (the last 'normal' year I suppose) of 19%

Dod

You've answered your own question! EPS growth is 72% because EPS "took a beating" in FY20. Comparisons with FY19 are probably more useful in that respect. I have been judging results based on how companies have recovered in FY21 and comparing with FY19 for that reason. Most share prices have strongly recovered from the lows of 2020, so need to be judged on the last "normal" full year.

All the best, Si

[Dod101]

These have got to be excellent results by almost any measure with after tax profit up 28% and EPS up 72% (How did they manage that? I do not remember any share buybacks?) EPS took a beating in 2020 and they are looking at an increase in EPS from 2019 (the last 'normal' year I suppose) of 19%

Dod

You've answered your own question! EPS growth is 72% because EPS "took a beating" in FY20. Comparisons with FY19 are probably more useful in that respect. I have been judging results based on how companies have recovered in FY21 and comparing with FY19 for that reason. Most share prices have strongly recovered from the lows of 2020, so need to be judged on the last "normal" full year.

All the best, Si

I suppose so but even so the disparity between profit and EPS increase is out of kilter and I do not remember any share changes. Anyway, they obviously feel the same as they have specifically quoted a comparison between 2021 and 2019.

Dod

[77ss]

These have got to be excellent results by almost any measure with after tax profit up 28% and EPS up 72% (How did they manage that? I do not remember any share buybacks?) EPS took a beating in 2020 and they are looking at an increase in EPS from 2019 (the last 'normal' year I suppose) of 19%

Dod

You've answered your own question! EPS growth is 72% because EPS "took a beating" in FY20. Comparisons with FY19 are probably more useful in that respect. I have been judging results based on how companies have recovered in FY21 and comparing with FY19 for that reason. Most share prices have strongly recovered from the lows of 2020, so need to be judged on the last "normal" full year.

All the best, Si

I suppose so but even so the disparity between profit and EPS increase is out of kilter and I do not remember any share changes. Anyway, they obviously feel the same as they have specifically quoted a comparison between 2021 and 2019.

Dod

Like simoan, I look at most current results vis-a-vis the 2019 results.

wrt to LGEN, the 72% EPS growth over 2020 has got nothing to do with any share changes. It is a change in Adjusted EPS.

Reported EPS growth was just 27%. The reasons for the difference are apparent from their RNS.

[Dod101]

Like simoan, I look at most current results vis-a-vis the 2019 results.

wrt to LGEN, the 72% EPS growth over 2020 has got nothing to do with any share changes. It is a change in Adjusted EPS.

Reported EPS growth was just 27%. The reasons for the difference are apparent from their RNS.

OK thank you. My quick skin of the results do not pick up on that.

Dod

[77ss]

Like simoan, I look at most current results vis-a-vis the 2019 results.

wrt to LGEN, the 72% EPS growth over 2020 has got nothing to do with any share changes. It is a change in Adjusted EPS.

Reported EPS growth was just 27%. The reasons for the difference are apparent from their RNS.

OK thank you. My quick skin of the results do not pick up on that.

Dod

You're welcome Dod!

I don't, to be honest , think that management trumpeting the 72% figure is very helpful. A somewhat misleading headline.

[Dod101]

Like simoan, I look at most current results vis-a-vis the 2019 results.

wrt to LGEN, the 72% EPS growth over 2020 has got nothing to do with any share changes. It is a change in Adjusted EPS.

Reported EPS growth was just 27%. The reasons for the difference are apparent from their RNS.

OK thank you. My quick skin of the results do not pick up on that.

Dod

You're welcome Dod!

I don't, to be honest , think that management trumpeting the 72% figure is very helpful. A somewhat misleading headline.

I agree and tend to ignore these 'adjusted' figures because, presumably subject to agreement from the auditops, they can be just about what the Directors want them to be.

Dod

[Dod101]

At this time of year I look at which of my remaining certificated shares I will place in my ISA for the next tax year. L & G comes up since it is easily the highest yielder and the idea is to protect dividend income from tax.

Having looked at the figures in detail, the capital performance is almost non existent, notwithstanding the good results normally announced by this company. The share price was at the current level back in 2015. It has consistently paid decent dividends but overall, like Shell (see the comments on its thread) HSBC and Unilever, the capital results have been poor. I am surprised that my portfolio has done as well as it has on the capital front, and I am thinking of trimming L & G although of course the 6.5% yield, especially in an ISA, is attractive. It is a well run company, has a high yield and good results and yet the share price goes nowhere.

Just musing on a dull afternoon.

Dod

[idpickering]

At this time of year I look at which of my remaining certificated shares I will place in my ISA for the next tax year. L & G comes up since it is easily the highest yielder and the idea is to protect dividend income from tax.

Having looked at the figures in detail, the capital performance is almost non existent, notwithstanding the good results normally announced by this company. The share price was at the current level back in 2015. It has consistently paid decent dividends but overall, like Shell (see the comments on its thread) HSBC and Unilever, the capital results have been poor. I am surprised that my portfolio has done as well as it has on the capital front, and I am thinking of trimming L & G although of course the 6.5% yield, especially in an ISA, is attractive. It is a well run company, has a high yield and good results and yet the share price goes nowhere.

Just musing on a dull afternoon.

Dod

I do agree with your sentiments re LGEN Dod. In fact, they're now my largest holding, in capital value terms, of my 28 share HYP. I last topped up my holdings of LGEN in Mar 2020. I'm happy to continue holding LGEN in my HYP, as imho, they give me a solid bedrock for my HYP, although nothing's a given of course. I'm not planning on buying more LGEN currently, and have no intention of selling my LGEN shares either.

ian.

[77ss]

......
Having looked at the figures in detail, the capital performance is almost non existent, notwithstanding the good results normally announced by this company. The share price was at the current level back in 2015. It has consistently paid decent dividends but overall, like Shell (see the comments on its thread) HSBC and Unilever, the capital results have been poor. I am surprised that my portfolio has done as well as it has on the capital front, and I am thinking of trimming L & G although of course the 6.5% yield, especially in an ISA, is attractive. It is a well run company, has a high yield and good results and yet the share price goes nowhere.....

Dod

Not as bad as that - and certainly better than ULVR - both on the capital and yield front.

The share price bobs up and down, and if you can be bothered it does offer profitable tinkering opportunities.

I have topped-up twice so far this year and it is now my second largest holding - just behind RIO.

Not shooting the lights out, but it does seem to be a reliable performer and I am happy to hold at the moment.

[Dod101]

......
Having looked at the figures in detail, the capital performance is almost non existent, notwithstanding the good results normally announced by this company. The share price was at the current level back in 2015. It has consistently paid decent dividends but overall, like Shell (see the comments on its thread) HSBC and Unilever, the capital results have been poor. I am surprised that my portfolio has done as well as it has on the capital front, and I am thinking of trimming L & G although of course the 6.5% yield, especially in an ISA, is attractive. It is a well run company, has a high yield and good results and yet the share price goes nowhere.....

Dod

Not as bad as that - and certainly better than ULVR - both on the capital and yield front.

The share price bobs up and down, and if you can be bothered it does offer profitable tinkering opportunities.

I have topped-up twice so far this year and it is now my second largest holding - just behind RIO.

Not shooting the lights out, but it does seem to be a reliable performer and I am happy to hold at the moment.

As always it depends on what period you cover (if better than Unilever) It is a better business or at least a more reliable business than Unilever or HSBC but the fact is that the share price has gone nowhere for years. Better than many on the yield front and that of course is worth money, currently about 6.5% of the share price, not to be sneezed at.

Dod

Moderator Message:
The last few posts have been off-topic. No more discussion of Dod's own particular LGEN dilemma, please. -- MDW1954

[idpickering]

Morning all.

Heads up! The LGEN CEO is being interviewed on Bloomberg TV at 0930hrs UK time today.

Ian.

[idpickering]

Notice of AGM

Following the release of the Company's 2021 Annual Report and Accounts on 16 March 2022, the Company announces that it has today made available to shareholders the following documents:

· Notice of Annual General Meeting 2022; and

· Proxy Letter

The Company's 2022 AGM will be held at The British Medical Association, BMA House, Tavistock Square, Bloomsbury, London, WC1H 9JP on Thursday 26 May 2022 at 11.00am with additional facilities for shareholders to join and vote electronically.

The Notice of Annual General Meeting ('AGM') is now available on the Company's website at Annual General Meetings (AGMs) | Legal & General (legalandgeneral.com)

Printed copies of the 2021 Annual Report and Accounts will be mailed today to those shareholders who have previously selected hardcopy as their communication preference, together with the Company's 2022 Notice of Annual General Meeting. Copies of the documents mentioned above have been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanis

https://www.investegate.co.uk/legal---3 ... 00064029I/

[idpickering]

Trading Statement.

Cash and capital generation ahead of ambition.

Legal & General Group Plc ("Legal & General" or "the Group") has had a good start to 2022. Operating performance is in line with our expectations. Solvency is strong, and we expect to deliver double-digit growth in cash and capital generation at H1.

· LGRI (Legal & General Retirement - Institutional) has transacted £4.5 billion of global PRT business to 30 June 2022 (£3.1bn at H1 2021). This comprises £3.8bn of UK PRT (£3.0bn at H1 2021) and £0.7bn of International PRT (£0.1bn at H1 2021).

In the UK, highlights include:

o A £2bn+ follow-on transaction with a large UK pension scheme, executed under an umbrella agreement;

o c£370m buy-in with Heathrow's British Airports Authority (BAA) Pension Scheme, securing benefits for more than 1,400 retirees;

o c£225m buy-in with Newell Rubbermaid UK Pension scheme, securing benefits for c1,700 retirees.

For our International business, highlights include:

o Writing our largest ever US transaction (over $550m), our third transaction with this client;

o A third Canadian deal for CAN$230m, as we start to build momentum through our strategic partnerships in Canada.

Volumes have been written at margins and capital strain that are in line with or better than our long-term average, largely driven by good asset origination and reinsurance terms.

We have a strong pipeline for the second half of the year and into 2023. Demand for global PRT is growing, as rising interest rates and widening credit spreads reduce pension deficits and allow more funds to consider de-risking. We have achieved self-sustainability on the UK annuity portfolio in 2020 and 2021, and expect it to be self-sustaining again this year.

https://www.investegate.co.uk/legal---3 ... 00086002R/

Ian.

[idpickering]

L&G Half Year Results 2022 ( nb 3 parts)

H1 2022 Results: Continued strong performance -8% growth in Operating profit and EPS, 21% ROE and
SII coverage ratio of 212%

Continued delivery of strong financial performance[1]

· Operating profit of £1,160m, up 8% (H1 2021: £1,079m)

· Earnings per share of 19.28p, up 8% on H1 2021 (17.78p)

· Profit after tax[2] of £1,153m (H1 2021: £1,065m) and R eturn on equity of 21.3% (H1 2021: 22.0%)

· Solvency II coverage ratio[3] of 212% (H1 2021: 182%)

· Interim dividend of 5.44p, up 5% (H1 2021: 5.18p)

Growing contribution to our five-year (2020-2024) ambitions[4]

· Cash generation of £1.0bn, up 22% year on year. Capital generation of £0.9bn, up 14% year on year

· Cumulative cash and capital generation of £4.3bn and £4.1bn respectively , against our ambition of £8.0-9.0bn by 2024

· Cumulative dividends declared £2.5bn (H1 2022: £324m, 2020-21 £2,147m) against our ambition of £5.6-5.9bn by 2024

Strong PRT new business volumes and LGIM net flows

· Global PRT new business premiums of £4.4bn (H1 2021: £3.1bn), including our largest ever US transaction

· LGIM record H1 external net flows of £65.6bn (H1 2021: £27.4bn), with AUM down to £1.3tn due to market movements

· Protection premiums of £1,605m (H1 2021: £1,500m) and Individual annuity premiums of £453m (H1 2021: £483m)

A strong and resilient balance sheet

· No defaults in H1 or for the last 13 years. £2.7bn credit default provision remains unutilised[5]

· 99% investment grade £73.2bn annuity bond portfolio

· 100% of scheduled cashflows received from our Direct Investments

· Strong and growing IFRS and Solvency II balance sheet

Long-term, growth-oriented, and highly synergistic business model

· An established track record: HY11 to HY22 CAGR of 11% in EPS, 11% in DPS and 8% in book value per share

· Highly synergistic: four focused divisions that create a virtuous circle of internal demand and supply, supporting c20% ROE

· Long-term and predictable value creation : 40+ year duration business with earnings driven by a growing stock of assets

· Attractive global growth markets: retirement solutions ($57tn), asset management ($149tn), climate change ($20tn)[6]

· A longstanding commitment to Inclusive Capitalism and a leader in ESG : rated #1 Life & Health insurer by ShareAction

"We've made a good start to the year, with operating profit and EPS up 8%, cash and capital generation up double digits, DPS up 5% and a return on equity of 21%. We have delivered for our institutional clients and retail customers, while generating good volumes and margins in a buoyant PRT market and continuing to scale LGC at pace - both in the UK and now also in the US - originating assets for our own business and for third parties, whilst also delivering a positive outcome for the economies where we invest. Our balance sheet is strong and highly resilient, with a solvency ratio of 212% and with 100% of cash flows received from our Direct Investments. We are committed to providing financial security for our customers and colleagues in a tough economic climate and remain confident in our ability to grow profits sustainably and at attractive returns over the long-term."

Sir Nigel Wilson, Group Chief Executive.

https://www.investegate.co.uk/legal---3 ... 00043247V/

Part 2;

https://www.investegate.co.uk/legal---3 ... 00073227V/

Part 3;

https://www.investegate.co.uk/legal---3 ... 00083229V/

Ian.

[idpickering]

Further to the above, and for ease of reference;

Dividend 5.44p per share. ex Div 18 Aug 22, paid 26 Sep 22.

As a footnote, I hold these in my HYP, and they're my third largest holding in capital value terms. I think they're a class act, and as much as I'd like to buy more of their shares, I think I've enough already.

Ian.

[Dod101]

Further to the above, and for ease of reference;

Dividend 5.44p per share. ex Div 18 Aug 22, paid 26 Sep 22.

As a footnote, I hold these in my HYP, and they're my third largest holding in capital value terms. I think they're a class act, and as much as I'd like to buy more of their shares, I think I've enough already.

Ian.

Thanks ian. In the absence of any other comments, I too think they are a great share, but again, I wonder why they are not better recognised by the market? Incidentally I do not know if anyone has noticed but they pay their Final for one yearand Interim for the next year within a four month window which I think is fairly unusual.

Dod

[dealtn]

You need to scroll down a fair but ...

https://www.investegate.co.uk/legal---3 ... 00043247V/

Sensitivity analysis on capital generation, with a 6 monthly £500m increase on an assumed 100bps increase in the risk free rate. In the context of an operating profit of £1,160m, or arguably more importantly a Solvency II capital surplus of £9bn, that's not insignificant.

[idpickering]

Thanks Ian. In the absence of any other comments, I too think they are a great share, but again, I wonder why they are not better recognised by the market? Incidentally I do not know if anyone has noticed but they pay their Final for one yea rand Interim for the next year within a four month window which I think is fairly unusual.

Dod

You're welcome Dod. tbh, I hadn't noticed that gap between the dividend dates. I agree regarding your musings about them not being recognised in the market. Over five years the sp is pretty much flat I think. Effectively, they've become a bond proxy perhaps? Either way, I'm not selling and will retain my Legal & General shares until I snuff it. (I'm 61 on 3 Oct 22 fwiw.)

[simoan]

You need to scroll down a fair but ...

https://www.investegate.co.uk/legal---3 ... 00043247V/

Sensitivity analysis on capital generation, with a 6 monthly £500m increase on an assumed 100bps increase in the risk free rate. In the context of an operating profit of £1,160m, or arguably more importantly a Solvency II capital surplus of £9bn, that's not insignificant.

Yep. Especially when you compare it to the effect of a 25% fall in equity markets and 15% fall in property. Even if all those things happen you get a net 7% gain in the Solvency II coverage ratio.

All the best, Si

[dealtn]

You need to scroll down a fair but ...

https://www.investegate.co.uk/legal---3 ... 00043247V/

Sensitivity analysis on capital generation, with a 6 monthly £500m increase on an assumed 100bps increase in the risk free rate. In the context of an operating profit of £1,160m, or arguably more importantly a Solvency II capital surplus of £9bn, that's not insignificant.

Yep. Especially when you compare it to the effect of a 25% fall in equity markets and 15% fall in property. Even if all those things happen you get a net 7% gain in the Solvency II coverage ratio.

All the best, Si

The real point though is that few professional, let alone amateur, investors even look at this stuff, and it has happened. Unlike a potential 25% fall in equities, we have had, and can observe, an increase in interest rates, and most commentators expect more (although this should reflect the yield curve and not short term interest rates - so rate expectations are already "in the price" from here).