Legal & General share price drops as investors digest results

on Mar 6, 2019
Updated: Oct 21, 2019

Shares in Legal & General Group (LON:LGEN) have fallen deep into the red in today’s session as the company disclosed that its profit after tax and return on equity had fallen last year. The blue-chip asset manager, however, revealed a rise in operating profit and hiked its payout to shareholders.

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As of 10:25 GMT, Legal & General’s share price had lost 4.82 percent to 272.40p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.08 percent higher at 7,189.09 points. The group’s shares have added about six percent to their value over the past year, as compared with about a 0.5-percent gain in the Footsie.

L&G posts full-year results

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Legal & General announced in a statement this morning that its operating profit had grown 10 percent to £1.9 billion, while its earnings per share of 24.74p, up seven percent, were impacted by reductions in asset markets. The group’s after-tax profit meanwhile came in at £1.82 billion, down from £1.89 billion in the prior-year period. L&G reported return on equity of 22.7 percent, down from 25.6 percent in 2017, while hiking its full-year dividend seven percent to 16.42p per share.

“2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly,” the asset manager’s chief executive Nigel Wilson commented in the statement. “Our strategy positions us well despite the broader environment, our current trading is strong and we expect this momentum to continue in 2019.”

Analysts weigh in on update

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“A lower than hoped for Solvency ratio, and a miss on cash generation, hit Legal & General’s share price immediately after results were announced, but we think the underlying trends remain supportive of the long term investment case,” Nicholas Hyett, equity analyst at Hargreaves Lansdown, commented, as quoted by Proactive Investors.

As of 10:41 GMT, Wednesday, 06 March, Legal & General Group Plc share price is 272.40p.

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