Legal and General posts 18% rise in first-half operating profit, lifts dividend

(ShareCast News) - Insurer Legal & General posted a 6% rise in first-half pre-tax profit and an 18% increase in operating profit on the back of strong organic growth in the UK and US, as it raised its interim dividend despite a fall in annuities.Pre-tax profit for the six months ended 30 June came in at £672m from £636m in the first half of last year, while operating profit was £750m, up from £636m. Net cash generation grew 11% to £629m and the interim dividend was lifted by 19% to 3.45p per share from 2.90p.The growth came despite a 62% drop in annuity sales to £1.3bn from £3.5bn in the same period of last year, as a result of changes to UK pension rules which mean pensioners have more freedom over how they choose to invest their savings.Chief executive Nigel Wilson said: "Legal & General continues to deliver strong organic growth in the UK and the US from both our developing and established, market leading businesses. In addition we are disposing of, or closing non-core businesses and reducing costs in real and nominal terms."The actions that we are taking allow us to focus on our chosen markets, enable us to continue to deliver low prices and better value for our increasing customer base and deliver attractive returns for our shareholders."The company said it was on track to deliver £80m in savings in 2015 and remains confident in delivering the operational cash guidance given at the time of the 2014 full-year results.Nomura said the results were "strong" with beats across the board. It said net cash generation was 4% higher than consensus expectations, while operating profit was 8% ahead and the interim dividend came in 3% higher than expected. The bank reiterated its 'buy' rating on the stock and said L&G's dividend growth story is intact. At 09:07, shares were up 2.9% at 271p.