Legal & General share price: what’s the outlook as insurance business sold?
The British financial services group ended last year on a high that helped give its balance sheet the strength necessary to deliver another strong performance.
Legal & General Group (L&G) has remained consistent with its strategy, building market leading businesses via a mix of organic and inorganic growth, supported by a strong balance sheet.
Over the last eight years, L&G has managed to deliver compound annual profit growth of over 10% amid a myriad of macroeconomic headwinds, with the financial services sector contending with political uncertainty in the form of Brexit, asset market declines and slowing economic growth.
But despite the challenging environment, L&G has remained resilient and performed well, with investors optimistic about the company’s outlook in 2019.
Legal & General sell general insurance to Allianz
Last week, L&G announced that it will sell its general insurance business to German insurer Allianz in a deal valued at £242 million.
The deal, which is still subject to regulatory approval, is expected to complete later this year, according to a recent press release by L&G.
The cash raised from the sale will be allocated towards growing L&G’s core businesses, the company said.
‘Selling the general insurance business is the right decision for our customers and shareholders,’ L&G Group CEO Nigel Wilson said. ‘We continue to focus on delivering against our strategy, allocating shareholders' capital rigorously.’
‘We are market leaders in 10 UK markets and have a growing presence in the USA and an emerging presence in Asia.’
Legal & General expands built-to-rent venture
Last Month, L&G revealed that its joint-venture with PGGM into the UK built-to-rent (BTR) market is being expanded after the pair acquired sites in London for a £500 million development.
L&G said the site will provide around 1,000 homes and 85,000sqft of commercial space.
‘This latest acquisition is another great example of Legal & General investing in a location with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive socioeconomic impact,’ Managing Director for principal investing at L&G Capital Paul Miller said.
‘The location is highly desirable for renters and, with 1,000 units planned for the site, demonstrates Legal & General’s ambition to make a real impact on the delivery of new homes within the UK.’
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