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Legal & General reports pre-tax profits of £956m

Legal & General has reported a pre-tax profit of £956m for 2011, slightly down from a £1.1bn profit in 2010.

Its full year operating profits were up at £1.1bn, compared to £1bn in 2010.

L&G also reported a 12% increase in cash generation from £840m in 2010 to £940m in 2011.

It is offering a full-year dividend of 6.4 pence per share, compared to 4.75 pence in 2010.

In terms of its mortgage business, Legal & General Network captured a 20% share of the intermediated mortgage market, up from 16% in 2010, equivalent to £15.7bn of lending.

Its results say it continued to diversify into more specialist areas of the market with 13% growth in high net-worth protection and 48% growth in direct business.

Group protection new business sales were down by 19% to £46m, compared to £57m in 2010, with increased focus on retaining existing schemes.

In general insurance, new business premium income grew by 38% to £110m, from £80m in 2010.

Tim Breedon, group chief executive of L&G, says: “Legal & General had a strong 2011. All four of our operating business divisions – risk, savings, investment management and international – delivered increased sales, cash generation and profits. Our balance sheet is strong, and our outlook for 2012 positive.

“Following the combination of growth and strong cash generation the Board is recommending a full year dividend of 6.40p per share – a 35% increase. At this enhanced level, the dividend is 2.25 times covered by net cash generation.

“Legal & General has significant scale: seven million customers and assets under management of over £370bn. Our broad product range, diversified distribution and ability to deliver will enable us to grow the business, further enhance shareholder value, and take advantage of the opportunities created in a fast-changing market.”

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