Shares in Legal & General fell after the group reported full-year results that were mixed, with some key metrics coming short of market views.
Legal & General stock was around 5.6% lower after results, making it one of the worst performers of the FTSE 100.
The British provider of life insurance, pensions, retirement and investment services on Wednesday posted non-operating items, IFRS equity, solvency own funds, and a solvency ratio that were below analysts’ estimates. The impact of negative market environment was worse than expected and could hurt shares, Keefe, Bruyette & Woods said in a research note.
The stock traded around 5.6% lower at 244 pence in morning exchanges and was one of the worst performers of the FTSE 100 index.
RBC Capital Markets noted that further asset management write-downs contributed to the profit miss. It added that Legal & General’s contractual service margin was also below views, while margins for new pension risk transfer business fell again.
These figures took the edge off L&G’s results elsewhere, namely its operating profit and outlook. For the year ended Dec. 31, the group posted a 3% rise in operating profit to 1.76 billion pounds ($2.36 billion). However, core operating profit was a touch below consensus—despite rising 6% to 1.62 billion pounds—due to a weaker performance in its institutional retirement arm as well as in its asset management business, along with slightly heavier debt costs.
Solvency II coverage ratio—a key measure of balance-sheet strength—stood at 210%, missing consensus’s 221% partly due to higher capital strain from new business. It guided for a medium term operating range of between 160% and 190%, which also contributed to the disappointment as expectations are above that range.
“We are on track to achieve the financial targets set out in our strategy,” said Chief Executive Antonio Simoes. The group guided for 2026 core operating earnings per share growth at the top end of its 6% to 9% three-year target range.
L&G has been simplifying its structure as part of an overhaul since Simoes took the helm in 2024 and recently announced the sale of its U.S. protection business to Japan’s Meiji Yasuda, following the disposal of U.K. housebuilder Cala. The company also bought Proprium Capital Partners and signed a long-term private credit partnership with Blackstone.
The London-listed group declared a dividend of 21.79 pence a share and announced a larger-than-usual 1.2 billion-pound share buyback program on the back of the U.S. deal.
