Legal & General Shares Drop Despite H1 Earnings Beat

Legal & General (LON:LGEN) shares fell on Wednesday despite the company reporting stronger-than-expected half-year results and reaffirming its strategic momentum.

In early trading, the stock has declined more than 3% to around 252.6p per share. However, it is up over 10% for the year-to-date and over 16% in the last 12 months.

The insurer and asset manager posted a 9% rise in core operating earnings per share to 10.94p, beating the analyst consensus of 10.50p.

Core operating profit rose 6% to £859 million, above the £816 million expected. IFRS profit before tax surged 28% to £406 million.

CEO António Simões said the group had “an excellent six months,” highlighting double-digit growth in Institutional Retirement profits and positive momentum in Asset Management.

Workplace assets in the Retail division surpassed £100 billion, while customer numbers grew to 12.4 million.

“We are growing and making the most of the synergies between our three businesses,” Simões said. He added that the company is “firmly on track” to meet financial targets, with over £5 billion set to be returned to shareholders through dividends and buybacks over three years.

Strategic developments during the period included the agreed sale of L&G’s U.S. protection business and a $2.3 billion partnership with Meiji Yasuda. The firm also announced the acquisition of Proprium Capital Partners and a long-term tie-up with Blackstone.

LGEN also announced a 2% increase in the interim dividend to 6.12p. The Solvency II capital coverage ratio came in slightly below expectations at 217%, versus the analyst consensus of 220%.

L&G said it had completed 90% of its £500 million share buyback programme announced earlier this year.