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Legal & General IFRS operating profit up 87 per cent

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Legal & General’s IFRS operating profit rose by 87 per cent to GBP1,109m at the end of 2009 from GBP592m a year earlier.

The final dividend is up by 33 per cent to 2.73p per share, while net cash rose 118 per cent to GBP699m (2008: GBP320m).

The company’s international IFRS operating profit rose 115 per cent to GBP127m from GBP59m in 2008.

Legal & General has made an annual cost reduction of GBP69m versus its GBP50m target.

EEV operating profit rose 51 per cent to GBP1,319m (2008: GBP875m), while worldwide EEV new business contribution rose ten per cent to GBP328m (2008: GBP297m).

The IGD surplus rose by GBP1.3bn to GBP3.1bn (2008: GBP1.8bn).

Tim Breedon (pictured), group chief executive, says: “IFRS operating profit of GBP1.1bn is considerably higher this year and the balance sheet has been further strengthened with an IGD surplus of GBP3.1bn after accruing for an increased final dividend of 2.73 pence per share. This increased dividend reflects underlying growth in net cash and the board’s confidence in its sustainability over the medium term.

“Today’s results demonstrate the significant progress we continue to make in transforming the group into a lower cost, capital efficient, cash generative business.  This focus has helped us to exceed our full year target for net cash generation by nearly GBP250m in 2009. In difficult markets, sales were down seven per cent in 2009 but each of our businesses delivered higher profits and generated more cash than in 2008.
 
“We expect modest growth in the UK economy in 2010. However, UK risk and savings markets which were depressed in 2009 are expected to rebound. These results show that Legal & General is in excellent health and is ideally placed to take advantage of new opportunities as they emerge in a financial services sector which is undergoing rapid change.”

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