L&G Interim Results Part 4

Legal & General Group PLC 24 July 2003 Part 4 Legal & General Investment Management - supplementary information. During the first half of 2003, Legal & General Investment Management consolidated its position as the UK's leading index fund provider and made substantial progress in developing its active fund management business, particularly in the fixed interest area. This was underlined by the achievement of a number of awards, including Fixed Interest Manager of the Year and Gold Star Award for Best Group of the Year from Professional Pensions, together with Bond Fund Manager of the Year from Lipper. Legal & General's retail multi asset Distribution Fund was named by Standard & Poors' as the leading fund in its sector (over 1 and 5 years); the Fund continued to grow strongly and reached £1bn in June 2003. Profits - MSS basis Operating profit from institutional fund management was up 9% to £25m (1H02: £23m). Total new business for the first half of 2003 was £6.0bn (1H02: £7.2bn). Corporate Pensions profitability increased 6% from £16m to £17m. Fund management revenue remained broadly stable despite weak equity markets worldwide and there was an increased contribution from transition management fees. The new business sales mix was favourable with active bonds representing 12% (1H02: 3%) of the new business won in the period. Gross new business for the first half of 2003 was £5.6bn (1H02: £6.8bn). Client numbers at the end of June were 2,330 compared to 2,131 at the end of June 2002, an increase of 9%. Costs were marginally lower on the equivalent period in 2002. Legal & General Ventures, the private equity arm, completed one new investment and one exit and generated profits of £2m (1H02: £3m). The Property fund management subsidiary continued to grow its asset base through the creation of new property partnerships. Total funds under management increased by 6% to £123bn (1H02: £116bn). Profits - Achieved Profits basis Managed pension fund business is written as a long-term contract and so the results of the business are also presented on an Achieved Profits basis. The embedded value assumptions are detailed in Part 2 of this announcement. Operating profit from institutional fund management was £37m (1H02: £40m). Profit before tax increased to £40m (1H02: £16m) reflecting the impact of stronger investment markets relative to embedded value assumptions. The new business contribution was £12m (1H02: £15m) reflecting a favourable sales mix on lower new business levels. The contribution from in-force business was higher at £17m (1H02: £16m). Fund Performance Legal & General Investment Management continued to deliver solid investment performance across its range of funds. Index funds met their tracking parameters. Pooled corporate pension fund performance was robust and two-thirds of actively managed retail investment funds achieved above median performance over the six-month period. Part 4 Legal & General Investment Management P1 Consolidated Profit and Loss Account - Modified Statutory Solvency Basis Six months ended 30 June 2003 -------------------------------------------------------------------------------------------------------------- Full year 30.6.03 30.6.02 2002 £m £m £m Profit on continuing operations Corporate pensions 17 16 34 Ventures 2 3 5 Property 1 1 2 Other external income 1 1 1 Other operational income 4 2 8 ------- ------- ------- Profit on ordinary activities before tax 25 23 50 Tax charge on profit on ordinary activities (7) (7) (14) ------- ------- ------- Profit for the financial period 18 16 36 ======= ======= ======= These financial statements were approved by the Group Board on 23 July 2003 and have been prepared for long term business using the Modified Statutory Solvency basis. The Achieved Profits results are included in page 4. The results for the six months to 30 June 2003 and 30 June 2002 are unaudited, but have been subject to a review by the auditors and constitute non-statutory accounts within the meaning of Section 240 of the Companies Act 1985. They have been prepared on a basis which is consistent with the financial statements for the year ended 31 December 2002. The results for the year ended 2002 have been taken from the financial statements for the year ended 2002 which have been filed with the Registrar of Companies and include an auditors' report which is unqualified and does not contain a statement under either sections 237(2) or 237 (3) of the Companies Act 1985. ================================================================================================================ Legal & General Investment Management P2 Funds under management Six months ended 30 June 2003 ---------------------------------------------------------------------------------------------------------------- At 30.6.03 At 30.6.02 At 31.12.02 £m £m £m Total investments 122,583 115,666 113,992 ======= ======= ======= Represented by Index tracking funds: - UK equities 38,442 39,045 35,940 - Overseas equities 19,813 20,044 17,999 - Fixed interest 15,051 13,432 15,107 - Index linked 8,666 7,490 7,481 - Cash/deposits 293 342 328 ------- ------- ------- Total index tracking funds 82,265 80,353 76,855 Actively managed funds 40,318 35,313 37,137 ------- ------- ------- 122,583 115,666 113,992 ======= ======= ======= By fund management approach Indexed equities 58,255 59,089 53,939 Active bonds (including index linked funds) 26,911 22,870 25,035 Indexed bonds (including index linked 24,010 21,264 22,916 funds) Active equities 7,336 7,440 6,526 Property 5,614 4,506 5,137 Private equity (ventures) 457 497 439 ------- ------- ------- 122,583 115,666 113,992 ======= ======= ======= By source of business Institutional funds under management *: - Managed pension funds pooled 64,600 62,522 60,397 - Managed pension funds segregated 6,980 5,702 6,308 - Other 3,084 2,632 2,662 ------- ------- ------- Total institutional funds under management 74,664 70,856 69,367 UK Operations (unit trusts - excluding life fund investment) 6,150 5,325 5,094 UK Operations (life and general insurance funds) 41,769 39,485 39,531 ------- ------- ------- 122,583 115,666 113,992 ======= ======= ======= * Excludes institutional investments in unit trust funds. ============================================================================================================== Legal & General Investment Management P3 New business Six months ended 30 June 2003 -------------------------------------------------------------------------------------------------------------- 6 months 3 months 3 months 6 months 3 months 3 months 30.6.03 30.6.03 31.3.03 30.6.02 30.6.02 31.3.02 £m £m £m £m £m £m Managed pension funds * - Pooled funds 5,207 2,456 2,751 6,325 3,777 2,548 - Segregated funds 359 347 12 477 57 420 ------- ------- ------- ------- ------- ------- 5,566 2,803 2,763 6,802 3,834 2,968 Other funds 414 349 65 415 379 36 ------- ------- ------- ------- ------- ------- 5,980 3,152 2,828 7,217 4,213 3,004 ======= ======= ======= ======= ======= ======= Full year 30.6.03 30.6.02 2002 £m £m £m Managed pension funds * - Pooled funds 5,207 6,325 12,359 - Segregated funds 359 477 1,039 ------- -------- -------- 5,566 6,802 13,398 Other funds ** 414 415 569 ------- -------- -------- 5,980 7,217 13,967 ======= ======== ======== By fund management approach Active equities 1.4% 0.1% 0.1% Active bonds (including cash) 11.6% 2.9% 0.5% Indexed equities 51.4% 65.9% 73.0% Indexed bonds (including cash) 31.6% 29.3% 25.0% Property 3.6% 1.4% 1.1% Private equity 0.4% 0.4% 0.3% ------- -------- -------- 100.0% 100.0% 100.0% ======= ======== ======== * New monies from pension fund clients of Legal & General Assurance (Pensions Management) Ltd. Corporate pensions gross new business excludes £1.0bn (1H02: £0.7bn; FY02: £2.1bn) which is held on a temporary basis, generally as part of a portfolio reconstruction. ** Other includes segregated property, property partnerships, ventures and institutional clients excluding trusts. ============================================================================================================== Legal & General Investment Management P4 Consolidated Profit and Loss Account - Achieved Profits Basis Six months ended 30 June 2003 -------------------------------------------------------------------------------------------------------------- Full year 30.6.03 30.6.02 2002 Profit on continuing operations £m £m £m Managed pension funds: Contribution from: - New business 12 15 32 - In-force business - expected return 6 7 15 - experience variances 1 7 14 - operating assumption changes 10 2 16 - Development costs 0 (1) (1) - Shareholder net worth 3 2 7 ------- ------- ------- Total 32 32 83 Ventures 2 3 5 Property 1 1 2 LGIM 1 1 2 Other operational income 1 3 - ------- ------- ------- Operating profit from institutional fund management 37 40 92 Variation from longer term investment return* 3 (24) (48) ------- ------- ------- Profit on ordinary activities before tax 40 16 44 Tax charge on profit on ordinary activities (12) (5) (12) ------- ------- ------- Profit for the financial period 28 11 32 ======= ======= ======= * The variation from longer term investment return represents the effect of the investment performance in respect of shareholder net worth and in-force business, compared with embedded value assumptions at the beginning of the period. Managed pension funds embedded value Full year 30.6.03 30.6.02 2002 £m £m £m At 1 January 262 252 252 Profit after tax 25 6 25 Distributions and capital movements - - (15) ------- ------- ------- At 31 December 287 258 262 ======= ======= ======= comprising: Value of in-force business 142 129 132 Shareholder net worth 145 129 130 ------- ------- ------- 287 258 262 ============================================================================ ======== ======== ======= This information is provided by RNS The company news service from the London Stock Exchange BE

Companies

Legal & General Group (LGEN)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today