L&G cuts dividend to 1.1p

Legal and General (L&G) has cut its dividend from 2.01p to 1.11p after profits under traditional accounting rules fell from £391m to £31m.

Financial highlights (2008 in brackets)

• IFRS operating profit £31m (£391)
• IFRS loss from ordinary activities after tax £91m (£27)
• Interim dividend 1.11p (2.01p)
• EEV operating profit £657m (£589)
• EEV loss/profit from ordinary activities after tax -£720m (£73m)

Group chief executive, Tim Breedon, said: “We have made strong progress in improving our net cash generation, strengthening our balance sheet and reducing costs.

“Management actions in the first half ensured that Risk and Investment management remain strongly cash generative and the Savings business has turned the corner. We have strengthened the balance sheet with proforma IGD surplus at £2.2bn and we expect to realise annualised cost savings of £50m by the end of 2009.

“IFRS operating profit has been reduced by £351m of negative investment variances in the period.

Outlook

“We have the right strategy and our model, grounded in our three key businesses, is in place. At the same time our strategic execution is progressing well despite difficult markets. We are very clear on the sort of business we want to be and we are making good progress in the markets that are important to us.”