The largest pension fund manager in the U.K. – Legal & General Group Plc – announced that it has increased its annual dividend by more than a fifth as its cash flow rose and L&G managed to post an increased operating profit.
Legal & General Group Plc made an official statement today, saying that its full-year payout rose from 7.65 pence a share in 2012 to 9.30 pence per share, beating analysts average estimates of 9.24 pence a share. The 2013 operating profit of L&G increased by 7% and reached 1.16 billion pounds (1.9 billion dollars), matching analysts estimates.
The net profit of the company increased from 810 million pounds to 893 million pounds, and its net inflow amounted to 15.7 billion pounds, which means it more than doubled. The shares of L&G increased by 52% during the past year, which resulted in boosting the companys market capitalization to 14.2 billion pounds.
Mr. Nigel Wilson, Chief Executive Officer of Legal & General Group Plc, said in the statement, which was cited by Bloomberg: “We expect to increase the proportion of net cash we return to our shareholders as dividends while maintaining a strong but efficient balance sheet. Our business has continued to perform strongly in the first two months of 2014 but external risks to the broader economy and markets remain.”
However, as the Financial Times reported, when it comes to the perspectives of U.K.s recovery, Mr. Wilson said: “The single largest risk to economic progress remains the persistent backdrop of political and regulatory uncertainty, which could undermine the confidence of businesses to invest for long-term growth in the U.K.”
Recently, Legal & General Group Plc has become more focused on making acquisitions due to the fact that the company benefits from the changes on global pension systems and aging populations. In February 2014, L&G made its first acquisition in the U.S. as it reached an agreement to purchase Global Index Advisors, boosting its assets in North America to more than 50 billion dollars.
Mr. Wilson commented for Bloomberg: “Pension provision is a business that we are very confident in and can continue to be successful at. All markets that we compete in are competitive. We’ve managed to get an incredible client base already in the U.S.”
Legal & General Group Plc fell by 2.00% in London by 13:19 GMT to 235.70 pence, marking a one-year change of +44.87%. The company is valued at 14.23 billion pounds. According to the Financial Times, the 20 analysts offering 12-month price targets for Legal & General Group Plc have a median target of GBX 238.00, with a high estimate of GBX 276.00 and a low estimate of GBX 156.00. The median estimate represents a -1.04% decrease from the previous close of GBX 240.50.
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