M&G plc half year 2021 results
Results show good progress on strategy and strong total capital generation
John Foley, Chief Executive, said:
“Today's results show good progress on our actions to reposition the business for sustainable growth and continued strong total capital generation.
“Institutional assets under management reached a record £89.7 billion following net client inflows of £2.2 billion, primarily from European clients.
“In Retail Asset Management, net client outflows more than halved as investment performance improved, with 63% of funds in the top two quartiles over one year.
“In July, we launched PruFund Planet, the UK's first smoothed savings proposition that offers positive societal and environmental outcomes.
“The dividend of 6.1 pence per share takes the cumulative payout since our shares were listed in October 2019 to 40.1 pence per share.”
H1 financial highlights
– Adjusted operating profit before tax of £327 million, up 6% on the first half of 2020
– IFRS loss after tax of £248 million; impacted by short-term fluctuations in the fair value of the surplus assets in our annuity portfolio and derivatives used to hedge the Solvency II balance sheet caused by increasing yields and rising equity markets
– Assets under management and administration increased to £370.0 billion, with positive market movements and net client inflows to Institutional Asset Management more than offsetting net client outflows in other areas of the business
– Total capital generation of £869 million, on track for target of £2.2 billion by the end of 2022
– Shareholder Solvency II coverage ratio strengthens to 198%
– Interim dividend of 6.1 pence per share (estimated to be £155 million) in line with our policy of paying one-third of the previous year's total dividend
H1 operational highlights
– Record level of £89.7 billion in institutional public and private assets under management following net client inflows of £2.2 billion
– Improvement in fund performance in Retail Asset Management, with 63%1 of funds in upper two performance quartiles over one year (2020: 20%)
– Retail Asset Management net client outflows reduced by 56% to £3.4 billion, with sales in Europe and Asia returning to net positive territory in May and June
– M&G Wealth formed a new software partnership to develop hybrid advice for UK savers, with the launch scheduled for later this year
– Started process to convert EUR 15 billion of European mutual fund assets to meet articles 8 and 9 of the EU's Sustainable Finance Disclosure Regulations, and in July launched PruFund Planet in the UK
– On track to achieve annual run-rate shareholder cost savings of £145 million through business transformation and modernisation by 2022
1 As at 30 June 2021.
Outlook
– Optimistic about the recovery in Retail Asset Management in light of continued action on investment performance, net inflows into our new generation of thematic funds and improved value-for-money for customers
– Institutional Asset Management well-placed for strong growth, with £4 billion of committed client capital and a further £5.5 billion of client wins yet to be funded
– Good pipeline of new propositions, with sustainable investment offerings gaining increased traction among clients
– Strong balance sheet continues to underpin capital generation and dividend policy
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For the six months ended 30 June |
For the six months ended 30 June |
For the year ended 31 December |
|
Performance highlights |
2021 |
2020 |
2020 |
|
Adjusted operating profit before tax (£m) |
327 |
309 |
788 |
|
IFRS (loss)/profit after tax (£m) |
(248) |
826 |
1,142 |
|
Assets under management and administration (£bn) |
370.0 |
338.7 |
367.2 |
|
Savings and Asset Management net client flows (£bn) |
(2.0) |
(4.1) |
(6.6) |
|
Total capital generation (£m) |
869 |
(202) |
995 |
|
Shareholder Solvency II coverage ratio (%) |
198 |
164 |
182 |