Legal & General hikes dividend after profit rise

 
Michael Bow
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INSURER Legal & General (L&G) yesterday upped its dividend by more than a fifth after a bumper set of half-year profits.

L&G’s board, led by chairman John Stewart, said it would push up the payment due to the group’s ongoing financial strength. It will increase 22 per cent to 2.4p a share, representing a £142m windfall for investors.

It follows a profitable six months for the company, famed for its iconic colourful umbrella logo, after pre-tax profits rose 13 per cent for the six months ending June 2013.

Cash generation, earnings per share and return on equity also enjoyed double digit increases.

“We are successfully evolving our strategy from a post-financial crisis focus on cash, to one based on cash plus growth plus selective acquisitions,” chief executive Nigel Wilson said.

The company has made three acquisitions since the start of the year, Cofunds, Lucida and Cala Homes.

Legal & General Investment Management (LGIM), the insurer’s money management arm led by Mark Zinkula, added to the upbeat figures with a seven per cent growth in assets.

LGIM also attracted £8bn of new money to its funds, double the amount of inflows it achieved in the same period last year. Most of this came from international clients.

Panmure Gordon analyst Barrie Cornes said the group was “firing on all cylinders” and upped its share price target.

Shares rallied to close up 2.3 per cent at 201.9p in yesterday’s trading.