Legal & General Half Year Report

[idpickering]

From part 1;

Financial highlights

· OPERATING PROFIT1 FROM DIVISIONS2 UP 7% TO £1,059M (H1 2017: £994M), increases in 5 out of 6 businesses since H1 2017

· OPERATING PROFIT1 OF £909M, up 5% (H1 2017: £862m excluding mortality release) after increased investment in the business

· EARNINGS PER SHARE3 DOWN 8% TO 13.00P (H1 2017: 14.19P), impacted by financial markets

· PROFIT AFTER TAX DOWN 19% TO £772M (H1 2017: £952M)

· RETURN ON EQUITY1 AT 20.3% (H1 2017: 26.7%)

· INTERIM DIVIDEND4 OF 4.60P PER SHARE (H1 2017: 4.30P)

· SOLVENCY II COVERAGE RATIO5 OF 193% (H1 2017: 186%)

· SOLVENCY II OPERATIONAL SURPLUS GENERATION UP BY 11% TO £0.7BN (H1 2017: £0.6BN)

Later;

Dividend

Legal & General has a progressive dividend policy reflecting the Group's expected medium term underlying business growth, including net release from operations and operating earnings. There is no change to our dividend policy.

In line with Group's policy of using a formulaic approach to setting the interim dividend, being 30% of the prior year full year dividend, the Board has declared an interim dividend of 4.60p per share.

Ex div 16 Aug 18.

Div paid 27 Sep 18.

https://www.investegate.co.uk/legal---3 ... 00092668X/

Part 2 - https://www.investegate.co.uk/legal---3 ... 00162643X/

Part 3 - https://www.investegate.co.uk/legal---3 ... 00232646X/

[monabri]

An increase of 6.9% on last year's interim dividend.

[Walrus]

An increase of 6.9% on last year's interim dividend.

That will do for me

[Raptor]

An increase of 6.9% on last year's interim dividend.

That will do for me

As a recent purchaser, good news.

Raptor

[idpickering]

An increase of 6.9% on last year's interim dividend.

That will do for me

As a recent purchaser, good news.

Raptor

I've held LGEN since 19 Jun 2006, and consider them a mainstay in my HYP. As of now they account for 3.6% in capital value terms of my HYP.

Ian

[mike]

An increase of 6.9% on last year's interim dividend.

That will do for me

As a recent purchaser, good news.

Raptor

Just to dampen the enthusiasm a bit (!), the increase is stated in many places as

A formulaic approach is used to set the interim dividend, being 30% of the prior year full year dividend.

rather than being an indication that the full year dividend will be a 6.9% increase.

Mike

[Arborbridge]

This is a company which has done very well for me over a long time, and I might even have a further top up before this XD. My reservation is that I already have an investment of around 1.2x median: but since this is one of my "winner's" maybe that's not a bad thing.*
One of Dod's stalwarts, and I'm grateful for his encouragement to build up my holding (as ever, one must add "so far").
*An alternative for receiving capital is SLA, which is one of my "losers" but with potential.
Arb

[idpickering]

This is a company which has done very well for me over a long time, and I might even have a further top up before this XD. My reservation is that I already have an investment of around 1.2x median: but since this is one of my "winner's" maybe that's not a bad thing.*
One of Dod's stalwarts, and I'm grateful for his encouragement to build up my holding (as ever, one must add "so far").
*An alternative for receiving capital is SLA, which is one of my "losers" but with potential.
Arb

I'm unable to invest further with LGEN before the ex divi date, but if I could....maybe, but I'm up to my limit with them. I am toying with topping up my SLA holdings soon, again, maybe.

Ian.

[daveh]

This is a company which has done very well for me over a long time, and I might even have a further top up before this XD. My reservation is that I already have an investment of around 1.2x median: but since this is one of my "winner's" maybe that's not a bad thing.*
One of Dod's stalwarts, and I'm grateful for his encouragement to build up my holding (as ever, one must add "so far").
*An alternative for receiving capital is SLA, which is one of my "losers" but with potential.
Arb

I'm unable to invest further with LGEN before the ex divi date, but if I could....maybe, but I'm up to my limit with them. I am toying with topping up my SLA holdings soon, again, maybe.

Ian.

I'm in a similar position - decent results, decent yield, but L&G is coming up to 5% of my portfolio and my limit for any one company is set at 2x median which is ~5.5%. I've also got a limit of 10% in any sector and my insurance holdings (AV. PRU and LGEN) is above that at 11% and a limit of 20% in any super sector (in this case financials) where I have a bit of head room, so I'm limited to banks or perhaps other financials if I want to make purchases in the financials super sector.

[Arborbridge]

That's another problem: too much in one sector. It seems that financials have been too attractive in the past couple of years.

Mind you, many fund managers of stalwart ITs don't baulk at having 30% or so financials.

[daveh]

That's another problem: too much in one sector. It seems that financials have been too attractive in the past couple of years.

Mind you, many fund managers of stalwart ITs don't baulk at having 30% or so financials.

I was bitten in the past. I held a decent tranche of financials just before the financial crisis consisting of AV., LLOY, RBS, PRU and BB. (Bradford and Bingley, from demutualisation, fortunately I didn't buy more or reinvest dividends, so I did gain some money from them). A quick look suggests they were ~22% of my portfolio at the time. My HYP took a reasonably bad capital hit, falling 37% (acc units) or 40% (inc units) in 2008 and an ~18% fall in actual dividends (but 27% and 30% in dividend per acc. or income unit respectively) the following year.

From that experience I have decided to set super sector limits at a maximum of 20% to limit the possibility of me going OTT in any one area when that area is offering a lot of HY candidates.

[idpickering]

Wise words indeed. It is all to easy to get carried away, but at least we are aware of the risks, and are managing them. Hopefully any young gun HYPers out there are heeding our words of wisdom.

Ian.

[monabri]

Article in the DTekegraph today ( no firewall)

https://www.telegraph.co.uk/business/20 ... xpectancy/

LGEN expects to be £400m "better off" as a result of people dying earlier than expected.

Mr Wilson ( CEO)

"The chief executive said that Blackpool, Edinburgh, Newcastle, Leeds, Birmingham, Sheffield, Belfast and Bath are among the cities the firm is currently investing in or hoping to invest in. "

He cites reasons for investing in these areas

I can see why Blackpool might be high on the list having experienced the NHS ( Blackpool Victoria Hospital) in that area. I might save the stories for the end of October.

[Reebus]

And if the CEO thinks that Blackpool is a city, then we perhaps need a new CEO.

[Gengulphus]

LGEN expects to be £400m "better off" as a result of people dying earlier than expected.

Mr Wilson ( CEO)

"The chief executive said that Blackpool, Edinburgh, Newcastle, Leeds, Birmingham, Sheffield, Belfast and Bath are among the cities the firm is currently investing in or hoping to invest in. "

Sounds like a warning about places not to live - in more than one sense! ;-)

Gengulphus

[IanTHughes]

From that experience I have decided to set super sector limits at a maximum of 20% to limit the possibility of me going OTT in any one area when that area is offering a lot of HY candidates.

Very sensible in my opinion, I set my Industry Concentration limit at 20% of portfolio value or cost. It does not prompt a sale but does stop me overloading with Financials for example

Ian

[langley59]

Hargreaves Lansdown view on L&G:

"Longer term, L&G appears well set, operating in markets which benefit from wider economic and demographic trends. The capital position is solid, and the shares offer an attractive prospective yield of 6.6%, with analysts expecting steady dividend increases from here."

https://www.hl.co.uk/shares/share-resea ... Override=1