The FTSE 100 insurer saw new business tick up to £388m in first quarter results that broke through analyst forecasts. Sales of retail items such as ISAs powered the numbers, rising 23 per cent to £144m. The group’s asset management arm, L&G Investment Management, reported gross inflows of £10.9bn which brought its total firepower to £330bn.
In a statement, chief executive Tim Breedon predicted a subdued UK housing market for the remainder of the year but staked his hopes on an ongoing recovery in L&G’s core risk and savings market.
He said: “We aim to capitalise on our market-leading positions in risk, further build the LGIM franchise, deliver additional improvements in savings and continue to develop our existing international portfolio.”
Breedon said L&G would deliver £600m cash in 2010.
Despite a generally positive reaction from analysts, shares in L&G fell two per cent to 81.1p. Some observers were concerned the improvement in sales was due to the increase in the minimum retirement age from 50 to 55 at the end of last month, which may have prompted a flurry of one-off purchases. L&G’s top-line numbers also disguised some weakness in unit-linked bonds and with-profits.
Shore Capital analyst Eamonn Flanagan maintained his “buy” rating on the stock. Flanagan said the three-monthly performance was “excellent”, adding that it “made a mockery” of L&G shares’ recent trading range.
L&G’s shares closed 2.1 per cent down at 81.1p.