Legal & General sets out refreshed strategy and financial targets
Group shares vision for a growing, simpler and better-connected business, focused on three core divisions[1], and announces £200m share buyback for 2024 as first step of plan to increase returns to shareholders.
Sustainable growth
· Institutional Retirement: Grow Pension Risk Transfer (PRT) volumes, writing £50-65bn in the UK by year-end 2028[2], increasing store of future profit[3] and generating permanent capital to catalyse asset management growth
· Asset Management: Invest to drive scale and profitability, achieving cumulative Annualised Net New Revenues of £100-150m (2025-28) and growing Private Markets platform assets under management to £85bn by FY 2028
· Retail: Strengthen lifetime Retail proposition, including by leveraging growing Workplace DC platform for customer acquisition, targeting £40-50bn of cumulative net flows in Workplace DC (2024-28)
Sharper focus
· Create single Asset Management division, bringing LGIM (Legal & General Investment Management) and LGC (Legal & General Capital) together as a unified, global, public and private markets asset manager
· Embed revised Capital Allocation policy across the Group, aligning investment to rigorous assessment of performance and strategic fit
· Maximise the value of non-strategic assets through a new Corporate Investments Unit
Enhanced returns
· Target 6-9% core operating EPS CAGR (2024-27) at an operating return on equity of over 20%[4]
· £5-6bn cumulative Solvency II operational surplus generation across 2025, 2026 and 2027
· The Board intends to return more to shareholders over 2024-27[5], through a combination of dividends and buybacks, with 5% DPS growth to FY24 and a first share buyback of £200m in 2024, followed by 2% DPS growth per annum out to FY27 and further similar buybacks[6]
Group Chief Executive Officer, António Simões, and Group Chief Financial Officer, Jeff Davies, will present the Group's strategy at a Capital Markets Event at 930am (BST). A link to the presentation webcast is here. Slides will be made available shortly before 930am.
Legal & General Group CEO, António Simões said:
"Over the last 5 months we have rigorously reviewed our business, listening to investors, customers, partners and employees. This work has deepened my belief in our strong foundations and excellent potential.
L&G is in prime position to respond to and benefit from major structural and societal changes. Changing demographics, climate transition, economic uncertainty and technology are driving demand for trusted, experienced investors that can manage risk through the cycle, originate productive assets, and deliver returns for savers.
Our vision is for a growing, simpler, better-connected L&G, focused on three core business divisions, and set apart by our shared sense of purpose and powerful synergies.
By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society's changing investment needs, and shift towards fee-based earnings at higher returns on capital. We will make the most of our international business opportunities, with a particular focus on the US.
The strategy and targets set out today signal L&G's ambition and commitment to invest to grow our business, and reward our shareholders for their support."
https://www.investegate.co.uk/announcem ... nt/8254447
Also posted on Company News here; viewtopic.php?p=668525#p668525
LGEN are a mainstay in my HYP, in fact a double holding, and I know others here hold them too, so this may be of interest here.
Ian.