Legal & General’s performance in its H1 21 release came with a certain satisfaction. Most of it is attributable to an improving rates environment and strong performances, finally, from LGC and LGI.
Companies: Legal & General Group Plc
L&G reported an operating profit from continuing divisions (excluding Mature Savings and General Insurance businesses) of £1,128m, -2.2% yoy. The COVID-19-related cost was £129m. LGR posted a growing operating profit to £721m. Net profit amounted to £290m vs. £874m a year before, being affected by the reduced discount rate used to calculate LGI reserves. The Solvency II ratio stood at 173%. The Board recommended an interim dividend of 4.93p/share, stable relative to H1 19.
L&G posted a rare update of its main figures in Q1 20, as it usually only releases half-year results. The company said it is in a good shape, with a developing Pension Risk Transfer business (transactions of £1.2bn with a business pipeline of £26bn). Annuity sales are growing and the asset management business recorded net inflows of £10.6bn. The insurer will issue Tier 2 subordianted debt and said its capital position remains solid. This announcement confirms our estimates for the 2020 performan
L&G released operating profit from continuing divisions of £2,514m, up 17% yoy. All business units posted an upward trend in earnings. The profit excludes the mortality release of £155m and the Mature Savings and General Insurance businesses (£11m). Net profit stood at £1,834m. The proposed dividend is 12.64p/share, bringing the annual dividend to 17.57p. The Solvency II ratio stood at 184%. We keep our positive opinion on L&G, the business model of which allows it to benefit from increasing num
L&G’s operating earnings improved significantly in the H1 19 (5.6% to £1,005m). This performance was better than expected. The insurer will revise its mortality hypothesis in the H2 with an additional £200m on operating earnings by the end of the year. The reduction in the capital position is not particularly a source of concerns and it should recover in the H2. The increased interim dividend to 4.93p/share and the growing business confirm the solidity of the Group.
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L&G reported FY18 operating profit from divisions of £2,231m, 1% above estimates. All business lines posted an improvement in profitability, mainly L&G Retirement which recorded a 21.8% increase in its operating earnings to £1,115m. AuM crossed the threshold of £1tn. Net profit reached £1,827m, -3% yoy, as the prior year recorded a one-off US tax benefit of £246m, and perfectly in line with estimates. The proposed final dividend is 11.82p. We keep our positive opinion on the company.
According to Sky News, L&G has instructed Fenchurch Advisory Partners to sell its general insurance business. This is a small business unit that has no significant impact on the insurer’s operating earnings. The revealed valuation matches our figures. However, this sale may be difficult to achieve, as the general insurance market remains tough.
L&G reported an operating profit of £909m, up 5% year-on-year. Except for General Insurance, all business lines posted an improvement in profitability. The Solvency II surplus reached £6.9bn and the coverage ratio stood at 193%. The Board recommended an interim dividend of 4.6p/share vs. 4.3p the year before. We will increase the full-year dividend as we expected only a 2.6% increase compared to FY 17. Our opinion remains positive on the insurer.
The Financial Times revealed in an article that several employees at Legal & General Investment Management (LGIM) have accused the asset manager of a series of compliance and risk failures that potentially cost its clients millions of pounds. The risk culture within the group was qualified as “toxic” and “is reaching crisis levels”.
The insurer said that it has taken these issues seriously. In the months since these allegations were first made, it has conducted a full investigation using exter
L&G posted excellent figures: an increase in its operating profit by 32% to £2,055m, in pre-tax profit by 32% to £2,090m and in net profit by 50% to £1,902m. This exceptional performance is due to the positive impact of the mortality release (£332m) and the one-off US tax benefit (£246m). The proposed final dividend is 11.5p/share, bringing the total dividend to 15.35p/share. Excluding exceptional items, no major changes are expected in our model. We keep a positive opinion on the insurer.
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Agronomics is an investment company focused on investing in the cellular agriculture sector. The sector is responding to global mega-trends driving increased demand for animal protein, which in turn could lead to negative environmental effects. Cultivated meat, for example, uses cell culture technology to grow cells in bioreactors producing differentiated cells (such as muscle and fat cells) that can be formed into consumer food products. These technologies have the promise of producing animal p
Companies: Agronomics Limited
Duke's H1/22A results give evidence that FY22E will be a record year, with a strong rebound from Covid-19 disruptions, with impressive YoY growth across all metrics. Having already completed all forecast deployments for FY22E, our forecasts are well underpinned and upgraded by +9% today. Comments of Duke having its healthiest ever pipeline with near-term deals likely, suggests further upgrades could be possible this year. If seen, any improvement in FCF p/s is likely to drive DPS uplifts, in add
Companies: Duke Royalty Limited
We update our forecasts to take account of (1) Group 2020/2021 Annual Report & Accounts released in September (2) 1Q IMS released in October (3) End October 2021 FUM update in early November. Key points include:
Group Funds Under Management “FuM” remain circa US$11 bn; in October there was a small uptick which may indicate small net inflows.
Strong investment performance across CLIG’s investment strategies (Exhibit 3 shows performance over 5 years relative to peers and benchmarks).
Companies: City of London Investment Group PLC
Companies: Oakley Capital Investments
Evidencing the strength of Belvoir’s long-term growth strategy and the very buoyant conditions in the UK housing market in 2021, the company has detailed that trading in the ten months to the end of October was ahead of expectations. Lettings income was up 21% and Housing Sales income up 65%, driving total Property gross profit up 29%. Financial Services gross profit increased 39%. We have upgraded FY 2021E EPS by 3%. While we maintain our view that next year will likely see more normal housing
Companies: Belvoir Group PLC
i(x) Net Zero, the investing company which focusses on Energy Transition and Sustainability in the Built Environment, announces its intention to join AIM. Following Admission, the Company intends to use the net proceeds of the proposed Fundraising to provide development and expansion capital to certain of its investee companies, for future investments in companies that fall primarily within its areas of interest in Energy Transition and Sustainability in the Built Environment and to provide work
Companies: TGN AFC COIN COIN HL/ OMI
Liontrust has reported a strong, in line H1 performance (+93% adj. PBT) on continued organic growth including £2.1bn net inflows YTD, as well as a full period contribution from Architas. The H1 outturn has covered 47% of our FY adj. PBT estimate, which we leave unchanged. AuM has continued to grow: +2.2% to £36.5bn in Q3 so far – momentum has been sustained. We think the valuation is not challenging given the outlook for growth. We set a 2450p 12m Target Price (18x FY23e PER) and a BUY recommend
Companies: Liontrust Asset Management PLC
Gore Street Energy Storage Fund (GSF) has announced that Kilmannock, one of the Company’s ROI
assets in construction, has secured an additional grid connection volume allocation of 90MW (in
addition to the 30MW). The initial 30MW benefits from a six-year fixed price contract, while the
remaining capacity can primarily derive revenues from extra capacity which could be used forwholesale
trading or the volume uncapped DS3 market (Delivering a Secure Sustainable Electricity System). GSF
Companies: Gore Street Energy Storage Fund PLC
Companies: Chrysalis Investments Limited
Mercia reported a strong rise in the NAV of its Northern Venture Trust (NVT) subsidiary, reflecting the IPO of musicMagpie and other successful exits, leading to Mercia receiving a net performance fee of £1.6m. As a result, together with Mercia’s substantially recurring management fees, management expects H122 PAT to exceed £10m, with the FY22 adjusted operating profit (excluding the NVT net performance fee) expected to be materially ahead of market forecasts. The shares trade at a larger discou
Companies: Mercia Asset Management PLC
Gore Street’s confirmation of a 90MW capacity increase at Kilmannock is a clear positive in our view and takes the fund’s portfolio to over 600MW of projects either operating or under construction. These are split between the GB market and the all-Ireland market with the fund now owning the largest portfolio of storage assets in Ireland. In the GB market price volatility continues to be strong and we expect the fund’s assets to be benefiting from this.
Avation is a lessor of 42 commercial aircraft to a diversified airline client base. This morning, the group has provided an update to coincide with its AGM, that illustrates the further progress made and wider developments in the first five months of the current financial year. The group presently has three ex-Virgin Australia ATR 72-600 aircraft subject to a sale agreement with Aegean Airlines, three further ATR 72-600 aircraft that may be sold or leased and an A320 due to transition from Air F
Companies: Avation PLC
We have published research on TMT Investments recent News flow, which is attached and a snapshot of the research is below.
The venture capital company investing in high-growth technology companies has seen its share price fall some 23% to US$7.25 over the last week, against a backdrop of weak global equity markets, concerns over the emergence of the Omicron Covid-19 variant and signs of tightening monetary policy. However, since the publication of HY June 2021 results on 18 Augus
Companies: TMT Investments
Companies: Equals Group Plc
A key focus for the company in 2021/22 was to de-gear the Balance Sheet with sales at or above book value. Two separate property sales in Bristol, One Castle Park (£20m) and 135 Aztec West (£3.9m), have been agreed well ahead of their March 2021 book value and when the former completes in mid-December pro forma net LTV will reduce to c29%. Further sales of assets where the company has carried out its business plan can be expected, which would provide even greater financial firepower for acquisit
Companies: Circle Property Plc