L&G set to beat £600m cash target

L&G generated £526m of cash in the nine months to September 30, putting it on course to exceed its £600m target for the year as a whole, the company said.

L&G, Britain's fourth-biggest life insurer by market value, has been at the forefront of a drive by the industry to boost cash generation by reducing commission payments to brokers and focussing on less capital-intensive products.

The move has helped allay investor worries about the industry's ability to pay dividends after some insurers, including L&G, cut their payouts to preserve capital during the financial crisis.

Hide Ad
Hide Ad

L&G CFO Nigel Wilson said the company had scope for further dividend increases, building on a 33 per cent hike at the end of last year and a 20 per cent rise halfway through 2010. "We're very well placed to continue to grow the dividend," he said.

L&G halved its final payout of 2008 amid concerns over the industry's capital strength.

The company's strong cash generation "reinforces our view that the dividend prospects are better than the market is currently factoring in", Panmure Gordon analyst Barrie Cornes wrote in a note.

L&G also confirmed that its worldwide sales for the first nine months of the year were up 27 per cent at 1.347bn.

The company published the bulk of its sales figures for the third quarter on October 22, two weeks earlier than scheduled, after they were inadvertently e-mailed to analysts.

Related topics: