(Recasts with shares, media call)
By Carolyn Cohn
LONDON, Nov 12 (Reuters) - Shares in Legal & General
fell more than 3% on Thursday as the British life
insurer kept its final dividend payment for 2020 flat due to the
coronavirus pandemic and cut its dividend growth target for the
next five years.
L&G has not suffered a major impact from the pandemic but
executives told reporters that housing sales dropped in Britain
following the country's first lockdown in March, while U.S. life
insurance claims increased due to the virus. L&G is a direct
investor in housing and commercial real estate.
L&G is also a major player in the market for annuities,
which pay pensioners a fixed income for life. It also invests in
infrastructure and is one of the largest investors in the UK
stock market.
On the 2020 dividend, Chief Financial Officer Jeff Davies
said: "We felt that a pause year was a good balance between
rewarding shareholders - where many aren't rewarding at all -
versus holding back for potential uncertainty."
L&G paid its final dividend for 2019, unlike other British
insurers such as Aviva and RSA.
L&G aims to generate eight to nine billion pounds
($10.56-$11.88 billion) in combined cash and capital, paying
dividends of 5.6-5.9 billion pounds over 2020-2024, it said in a
statement ahead of an investor day on Thursday on the group's
new five-year targets.
L&G said it aimed for earnings per share to grow faster than
dividend growth, which it targeted at 3-6% annually.
Barclays analysts said the dividend growth target was lower
than growth of 7% seen in 2015-2019, adding the targets "fell
short of our expectations." The bank retained its "overweight"
rating on L&G's stock, but cut its price target to 311 pence
from 320 pence.
L&G's shares were trading at 228 pence at 0938 GMT, down
3.5% and were among the worst performers in the FTSE 100 index
.
($1 = 0.7579 pounds)
(Reporting by Carolyn Cohn, editing by Sinead Cruise and Jane
Merriman)
