Legal & General Group (LGEN) H1 2025 earnings summary

Executive summary

• Core operating EPS rose 9% year-over-year to 10.94p, at the top end of the 6-9% target range, with strong growth across Institutional Retirement, Asset Management, and Retail segments.

• Core operating profit increased 6% to £859m, supported by segment growth and operational surplus generation up 3% to £729m.

• Solvency II coverage ratio remains robust at 217% after buybacks and dividends, supporting capital strength.

• Interim dividend per share increased 2% to 6.12p; £500m share buyback is 90% complete, with over £5bn to be returned to shareholders by 2027.

• Strategic initiatives include the sale of the US protection business, partnership with Meiji Yasuda, acquisition of Proprium Capital Partners, and partnership with Blackstone to enhance private credit and real estate capabilities.

Financial highlights

• Institutional Retirement operating profit up 11% to £618m, with £5.2bn PRT volumes and strong back book optimization.

• Asset management fee revenues up 2% to £500m, despite lower average AUM, driven by higher-margin business and positive net new revenue of £15m.

• Retail operating profit rose 3% to £237m, with workplace DC net flows up 21% to £4bn and assets under administration surpassing £100bn.

• Back book optimization generated over £150m profit; management actions expected to exceed £300m for the year.

• IFRS profit before tax up 28% to £406m; operating ROE surged to 54.6% from 35.4% year-over-year.

Outlook and guidance

• On track to deliver full-year core operating EPS growth of 6-9% and strong capital generation.

• OSG per share forecast to grow over 5% in FY25, covering dividend and new business strain.

• Buybacks and capital returns to continue, with £1bn earmarked from the Meiji Yasuda transaction.

• Asset management revenue momentum and new partnerships (e.g., Blackstone) expected to drive future growth.

• Retail annuity sales and workplace business profitability expected to strengthen in the second half.