Legal & General commits to returning £5 billion to shareholders amid profit surge

Legal & General, a prominent financial services group based in the United Kingdom, has announced a robust strategy to return more than £5 billion to its shareholders over a three-year period. This decision follows a successful year in which the company reported a notable 6% increase in its annual core operating profit, reaching £1.62 billion for the fiscal year ending in 2024. This growth aligns with City forecasts and is attributed to record volumes in retail annuities sales, showcasing the company's effective operational capabilities. In a broader effort to enhance shareholder value, Legal & General has embarked on a £500 million share buyback initiative, which is set to take place in 2025. This buyback, alongside dividends and other shareholder returns, constitutes approximately 40% of the company's total stock market valuation, marking a significant commitment to its investors. The announcement comes as the company seeks to simplify its operations after strategic asset sales and a refocusing of its business model under the leadership of Chief Executive Antonio Simoes. Antonio Simoes has been steering the group towards a clearer focus by disposing of non-core assets, including the sale of its US life assurance business for £1.8 billion and its housebuilding division, Cala, for £1.35 billion. This restructuring aims to concentrate on the company’s three primary business areas: institutional retirement, asset management, and UK retail pensions and protection, while optimizing their operational structure. Legal & General is also pursuing strategic partnerships and has launched a new corporate investments division to manage portions of the business that are earmarked for sale or offloading. Looking ahead, Simoes has expressed optimism regarding the company's direction, emphasizing a solid capital allocation framework that supports the planned shareholder returns. He believes that the company's growth momentum will be maintained as they continue executing their strategy with determination and agility. Legal & General's shareholders can thus expect substantial returns, driven by the company's ongoing commitment to delivering value, growth, and stability in the financial markets.