M&G plc full year 2021 results
Continued strengthening of operational performance
Strong capital generation to support £500m share buy-back programme
Improved fund flows and investment in growth underpin longer-term confidence
John Foley, Chief Executive, said:
“It has been another year of robust operational and financial performance, as we have delivered on all our demerger commitments including total capital generation of £2.8 billion over two years, well ahead of our original target.
“In light of this performance and our strong capital generation we are able to announce today £500 million to be returned to shareholders by way of a buy-back programme, expected to start shortly. Together with dividends paid, we will have returned £1.8 billion of capital to shareholders, equivalent to 32% of M&G's market value at demerger. Alongside this, we have achieved our annual shareholder cost savings target of £145 million one year ahead of schedule.
“We have also accelerated our strategy for growth in Asset Management and M&G Wealth through a series of targeted investments and strategic acquisitions in the UK and Europe. These included an agreement for majority control of Swiss sustainable private assets manager responsAbility, the purchase of independent adviser Sandringham and a digital consumer partnership with Moneyfarm.
“Our focus remains on delivering long-term sustainable growth and attractive returns to shareholders through a balanced approach to capital management, while investing in priority areas alongside further internationalisation and modernisation of the business. I am confident that 2022 will be an inflection point for us.”
Operational improvements underpin encouraging financial performance
- Adjusted operating profit before tax of £721 million (2020: £788 million), with the reduction in part due to lower benefits from changes to longevity assumptions
- Assets under management and administration increased 0.8% year on year to £370 billion, including strong net client inflows of almost £6 billion from the Institutional Asset Management franchise and continued improvement in Retail Asset Management flows
Shareholder Solvency II coverage ratio strengthened to 218%, its highest level since demerger
£500 million to shareholders by way of a share buy-back programme, which is expected to start shortly
Second interim dividend of 12.2 pence per share, in line with our policy of stable or increasing dividends
Key demerger targets completed ahead of schedule: capital generation of £2.8 billion over two years, versus original target of £2.2 billion by end 2022. Annual shareholder cost savings of £145 million achieved a year earlier than planned
Investing for growth: expanding wealth & asset management in UK and Europe
- In early 2022 we strengthened M&G Wealth with the acquisition of IFA Sandringham Financial Partners, a partnership with digital wealth platform Moneyfarm, and the acquisition of TCF Investment, a provider of model portfolio services
- Building sustainable investing capability following agreement to acquire leading impact investor responsAbility (AUMA: £3 billion) as announced in January 2022
- Expanding in Italy through the launch of Future+, a European version of our UK PruFund proposition
Governance
- Edward Braham will become Chair of the Board from 14 March 2022, and subject to regulatory approval, Kathryn McLeland will join as Chief Financial Officer in May 2022
Outlook
- Growth prospects strengthened by pipeline of new propositions, including sustainable investment offerings and Future+ in Europe – competitive differentiators to deepen relationships with key distributors
- Latest target for operating capital generation of £2.5 billion over the next three years to the end of 2024
- Shareholder Solvency II coverage ratio and operating capital generation underpin future dividend policy