Insurance and asset management group Legal & General (LON:LGEN) said it was on track to meet or beat its strategic targets. The comments from CEO Antonio Simoes came as the firm posted H1 core operating profit well above analysts’ forecasts.
Profit beats consensus
For the first six months of 2026, core operating profit rose 7% to £918, comfortably ahead of the £883 million consensus. Core operating EPS rose 11%, also above forecasts, and FY growth is expected to exceed the top end of the firm’s 6% to 9% target.
While the group didn’t break down the increase in operating profit, all three divisions showed progress in H1. Institutional retirement grew its prension book, asset management grew assets and margins and the retail business grew assets under administration.
The firm announced a 2% rise in the interim dividend to 6.24p per share and is continuing with its £1.2 billion share buyback. Altogether L&G plans to return more than £5 billion to shareholders between 2025 and 2027 via dividends and buybacks.
L&G has made good progress in becoming a simpler, more focused and more profitable business under CEO Simoes. This is reflected in strong fee and asset growth across the group and now raised earnings guidance for FY26.
The stock is a staple in most UK equity income funds and an individual holding for many investors. Even after gaining 15% this year, the shares still offer an attractive yield of 7.3% against around 3% for the FTSE 100 index.
The 2% increase in the interim dividend is slightly disappointing, given FY operating earnings are likely to be up double digits. However, it does give the group scope to increase the FY payout which is currently forecast at 22.2p per share.
Disclaimer: The author owns shares in Legal & General
