LONDON (ShareCast) - (Sharecast News) - Financial services and asset management group Legal and General on Wednesday posted interim operating profit that beat analyst forecasts, driven by higher annuity sales.
The company said profit for the half rose 1% to £849m, better than analyst forecasts of £834m and added that it expected 2024 core operating earnings to grow by mid-single digits year-on-year. It also lifted its interim dividend by 5% to 6p a share.

Profit after tax fell to £223m from £377m a year ago and assets under management were also lower at £1.14 trln from £1.17 trln.

Annuity sales more than doubled to £1.2bn as higher interest rates made the fixed income pension product more attractive.

"Record levels of retail annuity business helped push operating profit past expectations as people have been snapping up higher-rate annuity deals in anticipation of rates coming back down," said Hargreaves Lansdown analyst Matt Britzman.

"Legal & General is a leader in the market and managed to increase market share over the half and plump up its own results. The pension risk business (bulk annuity) was a little soft over the half, but a surge after the period ended was welcome news. This will remain a medium-term driver of growth as pension plans look to shift their liabilities to insurance giants like L&G."

"The next challenge is to deliver improved performance from the refreshed asset management division, which will carry some execution risk. There's plenty to like here; the balance sheet is strong, and total returns to shareholders are attractive with a growing dividend and ongoing buybacks too."

Reporting by Frank Prenesti for Sharecast.com

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