M&G Plc - Business Update
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M&G plc business update for the 2020 Annual General Meeting
M&G plc provides the following business update in advance of its Annual General Meeting, scheduled for 10am today.
Throughout the COVID-19 crisis, our priority has been the well-being and safety of our colleagues, the continued service to our customers and clients, and the long-term resilience of our business.
- M&G plc is financially strong. Our shareholder Solvency II coverage ratio has remained comfortably above our risk appetite throughout this crisis, and stood at 168% at 31 March 2020
- Given our financial strength and the importance of dividends to investors, we will pay our dividends of £410m (comprising an ordinary dividend of 11.92 pence per share and a special demerger dividend of 3.85 pence per share) on 29 May as previously announced
- M&G's 6,000 colleagues will continue to serve our customers and manage their assets from their homes until it is safe for them to return to our offices. No colleague has been put on furlough and we have not taken any government financial assistance related to COVID-19
- Total assets under management and administration (AUMA) were £323bn as at 31 March 2020, compared with £352bn at the end of 2019. The fall largely reflects the shock to markets in March from the disruption associated with the outbreak of COVID-19
- Our Institutional Asset Management business continues to perform well through the crisis, attracting net inflows of £2.1bn during the first quarter. Similarly, in the UK, our Retail Savings franchise saw net inflows of £0.7bn. These positive movements were offset by Retail Asset Management net outflows of £5.6bn in the quarter.
- Adjusted operating profit of £134m reflected strong underlying business performance, offset by negative mark to market impacts
- Our Heritage segment - the Prudential UK life insurance and annuity book which is closed to new customers - continues to generate steady cashflow
- High quality credit book: 98% of our shareholder annuity debt portfolio is investment grade
- We continue to be sharply focused on costs, and remain committed to our target of £145m of annual shareholder cost savings by the end of 2022
- The rating agencies Moody's and Fitch have affirmed M&G's insurance financial strength ratings at 'Aa3' and 'AA-' respectively, with stable outlooks, following the assessment of coronavirus impact on UK insurers
- Further details on our financial performance for the first quarter of the year are provided below
- M&G also announces today an agreement with Royal London to acquire its digital wrap and wealth management platform for UK independent financial advisers, Ascentric
John Foley, Chief Executive, says:
"I've been through a number of financial crises, but none has been like this terrible pandemic. It is testing all of us, in many different ways.
"Fortunately, M&G is a resilient business and I am proud of how my colleagues have risen to the challenge of continuing to serve, from their homes, the millions of customers we have around the world.
" Our financial strength means we can also do the right thing by our shareholders, and make good on our announced intention to pay dividends totalling £410m. Many of our shareholders are income funds or individual savers who rely on these payments for part of their retirement income.
"While markets have recovered from their March lows, I expect volatility to continue, but as an asset owner of scale we are well positioned to acquire assets at competitive prices. In the meantime, we will continue to manage the business in a prudent way, with our usual disciplined approach to capital management."