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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.”


Injecting QE into house building will work

Those of us in the house building world have been in the doldrums long enough now to grasp the straws of hope when we see them. And this year, thanks to the perfect storm of house building figures being at least 50,000 below target, the general economic malaise and rising unemployment particularly among young people, my long-suffering peers and I have a growing sense that next week’s Budget might just be the one to deliver for the industry.

Bob Young

Avoid past mistakes and B2L is a good bet

It is no secret that buy-to-let is showing strength at present and the latest data on rates from shows just how promising the picture is.

Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.


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