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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Legal & General Group Plc | LGEN | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -1.40 | -0.60% | 232.20 | 16:35:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 233.40 | 231.20 | 234.00 | 232.20 | 233.60 |
| Industry Sector |
|---|
| LIFE INSURANCE |
| Top Posts |
|---|
Posted at 20/1/2025 10:07 by gregmorg Ever since the retired CEO departed, and on his departure announcement, this stock has reversed into poor performance. The former chap actually knew what he was doing!The new CEO obviously likes himself, looking at the write up in Yesterday's papers, unfortunately investors think otherwise! Pity as it had been such a great performer. Still invested but keep asking myself "why?" |
Posted at 19/1/2025 10:54 by skinny Simoes might be looking for some empathy himself given that shareholders have given a far from enthusiastic response to his first year in charge. His strategy day in June was greeted with a 5 per cent fall in the share price, and the stock is now down 3.5 per cent since he arrived.The main part of his plan at L&G is to put the company’s giant asset management business at the heart of its future growth. This has meant merging Legal & General Investment Management (LGIM), which largely invests in stock market companies, with Legal & General Capital, which backs private projects such as clean energy. He has also installed a new boss, the American Eric Adler, to run the business, replacing LGIM’s popular leader Michelle Scrimgeour. Operations not key to the strategy will be ditched, and housebuilder Cala Homes has already gone under the hammer. The idea is that two other divisions will fire up the asset management powerhouse: retail, which has 12.5 million UK policyholders or workplace pension members; and bulk purchase annuities, the arm that buys companies’ pension schemes, taking the risks away from the employer. Both divisions are targeting expansion in the US. The negative stock market reaction to L&G has largely been caused by a change to its dividend policy. Wilson had shunned share buybacks but Simoes was under pressure from some investors to introduce them. So, he came up with a compromise: a £200 million buyback but a reduction in the growth of future dividends. “I had spoken to many shareholders, so I knew on the day I was going to disappoint a few people,” he says. “But that had to be done. I went into it with my eyes open. I wanted something that was ambitious and visionary but realistic in terms of delivery.” Simoes believes the new strategy will give him more flexibility to invest in the business than the previous dividend policy would have allowed. “Would I prefer the share price to go up? Yes! I don’t think I’ve meet a CEO that wouldn’t. But it will come,” he explains. |
Posted at 17/1/2025 18:25 by vickiitwo2 L&G managed to do its best to hold back the FTSE 100 again today. It certainly participates more in noae dives. Perhaps the UK needs less self centred investors who do their bit to invest in growth instead of this tripe for a few percent gain over a saving account. |
Posted at 09/1/2025 04:59 by jordaggy Old now but maybe? worth a re-read...Capital markets days are usually sedate events. Companies give presentations at the stock exchange, there is generally a decent lunch, and investors and lenders get to rub shoulders with the management and ask a few tame questions. By contrast, the recent capital markets day for Legal & General (LGEN) was an altogether more surprising affair, with new chief executive António Simões handed the unenviable task of telling investors that their dividends are not going to grow as fast over the next couple of years as expected. The market did not take the news well on the day, sending the shares down 5 per cent. Legal & General has recovered slightly since then, but the shares are still down 8 per cent in the year to date. The news allowed two impressions to form. Firstly, that Simões had been given a hospital pass by his much-lauded predecessor Sir Nigel Wilson. Secondly, that Legal & General is perhaps not as cash-generative as many analysts and investors had assumed. The new chief executive, who is a banker by training and headed Santander Spain before joining L&G, at least handled the task well, coming across as business-like during his presentation and as someone who has already taken some difficult decisions. 'Lacks ambition' Simões said buybacks would "more than offset" the lower dividend growth plans. "Having listened to shareholders, I believe that the combination of dividend growth... share buybacks is the right solution," he added. Still, Berenberg analyst Thomas Bateman articulated the market’s doubts over the implications of its new dividend policy: “The new 2 per cent [dividend] growth target implies that the total cash outlay will rise at 1 per cent annually in 2024-27. This signals to investors that the cash generation of the business is not increasing and it is at odds with the volume growth and [earnings per share] growth of the business.” This confirms some of our doubts over the sustainability of L&G’s dividend expressed at the end of last year. There were also issues with the new asset management operating profit target of £500mn-£600mn by 2028, which implies a compounded annual growth rate of 2 per cent, something that “lacks ambition” in Bateman’s view. Ultimately, the bulk annuities business should generate cash flow, but this is still ramping up and is some way off maturing; the company has been building this division up and completed £13.7bn of bulk annuities underwriting last year. Bateman wondered whether there should be concerns over the margins in this business, but also said that cash generation should “explode” However, it is still the speed at which L&G can turn assets added to its pension transfers business into cash flow that analysts will puzzle over. One measure to watch is 'store of future profit' projections under IFRS 17 – for every £10bn of business it writes, L&G expects to earn £800mn in future profits, notwithstanding changes in interest rates, according to the company. Current projections are that capital generation will be an annualised £1.8bn between 2024 and 2027, based on a total of £5bn-£6bn, slightly higher than the previous target. Currently, this easily covers the dividend of £1.1bn, plus the projected £200mn of buybacks for this year. The buybacks will play an important role in bridging the gap where the mid-single-digit growth in the dividend had been. Is asset management worth the cost? Aside from Berenberg's worries, reforms to the company’s asset management divisions generally attracted more positive commentary, with a new single entity taking over from a private markets division and the LGIM asset manager arm. This was generally welcomed as proof that L&G is serious about improving its asset management offering, although the lack of a heavyweight chief executive to oversee the new combination once it is completed is a worry until an appointment is confirmed. LGIM’s current highly experienced chief executive, Michelle Scrimgeour, who joined LGIM in 2019 after a long career at some of the market’s largest asset managers, will step down after the changes are implemented. One regular gripe with asset management is that the investment arm has pushed up the cost-to-income ratio to 70 per cent in the last set of results without generating the same level of profit. Fielding questions from analysts, the chief executive explained the rationale for keeping the business: “The advantage of asset management is that it compounds all the time. If we keep the mandates, then fees will keep compounding. It takes longer but eventually through to 2028 the business becomes a bigger portion of the whole business.” The other noteworthy reform was L&G's goal for its private markets division – the company plans to double the amount of private assets on the balance sheet from the current £48bn to £85bn by 2028. Given that new management has only been in place a few months, it seems likely that Simões will be given the time he needs to complete the restructuring of the company and manage everyone’s expectations over the dividend. The reason the reaction was so forceful reflects L&G’s status as one of the top five dividend payers on the London market, a cornerstone for many an income investor or pension fund. Investors may have more choice when it comes to income from insurance companies, however. Phoenix (PHNX) has made an aggressive push to be the preferred income insurance share after renouncing mega-acquisitions and bringing in a progressive dividend policy earlier this year. Still, if L&G’s restructuring is to be ultimately successful, that will reinforce the payout. |
Posted at 30/12/2024 11:40 by pj84 Most wanted shares of 2024: AI boom puts Nvidia top of the treeInvestors clamoured for a piece of the American chip designer this year, knocking British companies down the leader board The following is from the above article "DIY investors expressed a strong preference for high-yielding shares, with the London-listed insurer Legal & General ranking second among customers of Hargreaves Lansdown and Interactive Investor, and third at AJ Bell. The stock, which was the most popular investment on Hargreaves and AJ Bell last year, is one of the highest-yielding stocks in the FTSE 100 at 9.2 per cent." |
Posted at 05/12/2024 17:08 by marktime1231 I can understand private investor enthusiasm for a special even though that would be a one off. But actually I am very happy with the already splendid ordinary dividends. Analysts, brokers and institutional investors all want a meaningful buyback, which should put the share price back in healthy territory more permanently, and perhaps enhance the dampened prospects for future dividend growth. The priority for surplus capital is to provide the seed for future PRT deals and more private market investment, I think that is where Cala proceeds are mostly destined. Any spare I'm pretty sure will then go to a buyback, the hint of which is why the share price is responding so positively now. |
Posted at 04/12/2024 12:34 by marktime1231 Hmmmn. Another buyback is a powerful carrot to dangle, albeit unquantified and not until next year, shows how keen (corporate?) investors are on that strategy. Shows that the first £200M was too trivial.Not sure how to react, as an investor in UK markets, to the news that new PRT business is being covered predominantly by (boring steady low return) gilts. What happened to the pressure to get UK financial institutions to support UK stocks again? And how does that square with the hire of fresh leadership at LGEN Asset Management in order to cut through historically complacent underperformance and put funds to work harder? So apart from lower than planned capital strain from a quick reading the rest of the update was unchanged in-line stuff. Spot any nuggets in the presentation? |
Posted at 04/12/2024 07:59 by netcurtains adam: 10% dividend is great but the USA offers 100% profits etc - new investors tend to be going to the USA.... Hopefully we have reached the tipping point and some funds will come back to the UK....I feel Starmer has tried to explain that "the budget" was the kitchen sink budget and things can only get better from now on.... Touchwood. If so LGEN will do great otherwise it might just carry on giving us 10% and nothing much else. I think the UK will recover loads by the spring, and investors will buy in early to get the recovery. So should be rising about now. Touchwood. |
Posted at 24/10/2024 14:55 by pj84 This is an investment forum for investors who wish to take control of their own investments and if anyone on here is naive enough to NOT realise that both the capital value and the dividends of any share can both rise and fall. They shouldn’t be investing in individual shares.I am not sure who these supposed naïve investors are, that you are trying to protect by being pedantic and considering Goldgeezer’s original post as a purely factual statement and I doubt if there are any such naïve investors reading this forum. There are no certainties when it comes to investing which is always dependent on unknown events in the future and even investing in government gilts by buying at issue and holding to redemption which is probably the closest you can get to a completely risk free investment, is still not entirely without risk and I am sure we can both think of events where the future interest payments or the final redemption could be affected by an unknown event no matter how unlikely. In my view, given the current level of interest rates which are predicted to fall, I believe the current share price and dividend represents an excellent time to invest on a long-term view and whilst I hope both the share price and dividends do increase over the next 7 plus years. I have no problem with the general thrust of Goldgeezer’s statement that even if they don’t this will still be a relatively low risk investment even if there is no growth in the share price or the dividend, current shareholders are still likely to be well rewarded over the longer term. |
Posted at 10/5/2024 11:54 by anhar Turvart: ...What I'm trying to say in basic layman terms is this IFRS 9 & 17 accounting is hard to understand for most investors and it skews the EPS & PE figures, then by skewing the figures and investors no longer understand how to read results etc they will probably avoid buying...I doubt very much that small investors understand much of insurance company accounts at all, whatever the prevailing accounting standards. Pros will though and they are all that matters in share pricing, not the likes of us who are irrelevant. For historical reasons I can read accounts but am usually not bothered to do so in great detail. That's because as purely an income investor I'm concerned primarily with divis and I don't need to delve into the minutiae for this purpose. |
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