Buoyant L&G beats the forecasts

The firm said in a trading statement yesterday total sales for the group were up nearly a third from a year earlier to £555m during the three months to March 31, well ahead of market forecasts of £499m.

Net cash generation rose by a fifth to £249m, also ahead of a £244m forecast, as L&G’s businesses gained scale globally.

Management said the firm wants to invest in more expansion in foreign markets, seeking to harness trends such as ageing populations, the retreat of governments from pension provision and a more internationalised investment industry.

The quarter saw L&G make two merger deals: buying out the 75 per cent of investment fund supermarket Cofunds it did not already own, and the acquisition of a 46.5 per cent stake in UK housebuilder Cala Group from Lloyds Banking Group.

The firm is on the lookout for more such transactions, chief executive Nigel Wilson said, though he stressed any deals will be bolt-on, rather than transformational.

“We have successfully executed two M&A deals and we have the capital, the capability and the appetite to do more to enhance growth,” he said.

Mr Wilson said the company is also looking to make direct infrastructure investments in the UK, providing capital at a time when banks are retrenching in the wake of the financial crisis.