Legal & General has raised its dividend by 22% after unveiling bumper annual results that saw pre-tax profits surge by 10% to £1.1 billion.
The group’s fund arm, Legal & General Investment Management (LGIM), attracted net inflows of £9.3 billion, which helped push total assets under management to £450 billion at the end of 2013, up 11% from £406 billion year-on-year.
LGIM’s operating profit rose by 12% to £304 million. The group said LGIM America’s liability driven investment and active fixed income capabilities were key drivers of asset flows, which it expects to continue into this year. L&G bought Global Index Advisors last month, which added $15.6 billion of passive assets.
‘We expect LGIM’s international net inflows to accelerate, and over time for maturing UK DB net outflows to be offset by growth in retail and DC,’ the group said.
L&G group chief executive Nigel Wilson said: ‘Disciplined investment in growth, effective management and rigorous cost control has enabled us to more than triple net cash since the financial crisis: it has grown from £320 million in 2008 to £1.002 billion in 2013. We have grown dividends again by over 20% and due to the strength of the business intend to move dividend cover from 1.8 towards 1.5 times over the next two years.
‘Legal & General moved up another gear in 2013, delivering record financial results and accelerating growth across all areas. Net inflows were £17 billion including £9 billion in LGIM and £8 billion into Cofunds. LGIM now has £450 billion of AUM, and Cofunds, with £64 billion of assets is the UK’s largest savings platform.’