Legal and General’s share price fell by a little over 6% on March 11, 2026, ending the day at 242p. This decline comes as the company reported core operating profit figures that, while showing a year-on-year increase, fell short of market expectations.

The core operating profit for 2025 was reported at £1.62 billion, reflecting a 6% increase from the previous year. However, this figure was below the consensus forecast of £1.65 billion, raising concerns among investors about the company’s performance. Additionally, the share price is now approximately 14% below its highs for 2026, indicating a challenging market environment.

In terms of financial health, Legal and General reported a full-year Solvency II coverage ratio of 210%, which also fell short of the expected 219%. This ratio is a critical measure of an insurance company’s ability to meet its long-term obligations, and the shortfall may have contributed to investor unease.

On a more positive note, the company announced a 2% increase in its dividend, raising it to 21.79p per share. This decision aligns with Legal and General’s ongoing strategy to return value to shareholders, which is further underscored by the announcement of a £1.2 billion share buyback. The dividend yield now stands at about 9% on a trailing basis, which may attract income-focused investors.

Core operating earnings per share (EPS) for 2025 were reported at 20.93p, and the trailing price-to-earnings (P/E) ratio is currently at 11.6. These metrics provide a snapshot of the company’s profitability and valuation relative to its earnings, although the recent share price drop may alter perceptions among potential investors.

Legal and General has consistently increased its dividend per share and launched significant share buybacks in recent years, which have been well-received by the market. However, the latest financial results suggest that the company may face challenges in maintaining this momentum, particularly in light of the missed profit forecasts and lower-than-expected solvency ratios.

Observers will be closely monitoring how Legal and General navigates these challenges in the coming months, especially as the market reacts to the recent financial disclosures. Details remain unconfirmed regarding the long-term impact of these results on the company’s strategy and investor confidence.

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Legal and General has reported a strong financial performance for 2025, with core operating profit rising by 6% to a total of £1.6 billion. This growth reflects the company’s strategic focus on long-term investments and retirement income.

Core earnings per share also saw a notable increase of 9% over the past year, indicating a solid return for shareholders. Profit before tax reached £807 million, marking a remarkable 143% increase compared to previous periods.

What are the implications of these results?

In a significant move, Legal and General announced a £1.2 billion share buyback, the largest in its history. This initiative is part of the company’s broader strategy to enhance shareholder value, with total planned returns of £2.4 billion over the next year.

António Simões, the CEO, stated, “Today we’re reporting a strong financial performance for 2025, and meaningful progress in reshaping L&G.” He emphasized that the company is on track to achieve its financial targets and aims to accelerate momentum while maintaining discipline.

How has the company performed in asset management?

Legal and General’s asset management division has also shown impressive growth. Workplace defined-contribution assets under administration increased by 21% to £114 billion. Additionally, private markets assets rose by 32% to £75 billion, underscoring the company’s strong position in the market.

The Solvency II coverage ratio stood at 210% on a pro forma basis, reflecting the company’s robust financial health and ability to meet regulatory requirements.

What does the future hold for Legal and General?

Simões described Legal and General as “a sharper, more focused business” following a year of restructuring. The results were broadly in line with analyst forecasts at the operating level, though there were some notable shortfalls.

Legal and General is well-positioned to capitalize on the structural, growing demand for long-term investments and retirement income, but details remain unconfirmed regarding specific future strategies and market conditions.

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