Legal & General beats forecasts, raises interim dividend by 21%

Growth of 20% in the stock of annuity assets to £38.5bn in the first six months of the year drove a 9% rise in profits after tax at insurance group Legal&General, to reach £507m. Operating profits improved by 11% to hit £636m. That was slightly better than the £631m which the analyst consensus had pencilled in. As a result, the group increased its interim dividend by 21% to 2.9p per share (consensus: 2.81p). "We will possibly need to revise upwards our final 2014 full year dividend forecast given that L&G are moving towards a 1.5 times dividend cover by 2015 subject to Solvency II," analysts at Panmure Gordon wrote to clients in a research note. Assets under management (AuM) at the firm's investment management arm grew 7% to £465.1bn. The company's annualised return on equity improved to 17.6% from 16.8%. Operational cash generation grew by 8% to £578m, coming in ahead of the 569m forecast by analysts. AB