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12 August 2020

M&G plc half year 2020 results

2020

M&G plc delivers a resilient performance in a challenging market

Highlights

  • Adjusted operating profit of £309 million and IFRS profit after tax of £826 million
  • Shareholder Solvency II coverage ratio of 164%, comfortably above risk appetite
  • Assets under management and administration (AUMA) reduced to £339 billion, reflecting negative market movements in March
  • £2.8 billion of net inflows into Institutional Asset Management and £0.8 billion of net inflows into Retail Savings, partially offsetting £7.7 billion of outflow from Retail Asset Management
  • Completion of the acquisition of Ascentric scheduled for 1 September following FCA approval of change in control
  • Interim dividend of £155 million equal to 6.00p per share, in line with our policy of paying one-third of the previous year’s final dividend

John Foley, Chief Executive of M&G plc, commented: "This has been a resilient performance in extremely difficult times, with the value of our diversified business mix coming through strongly.

“Earnings from our Heritage Business have remained steady, our balance sheet is robust and credit quality remains high. Over 98% of the debt securities held by the shareholder annuity portfolio are investment grade and only 15% are BBB.

“Despite the disruption caused by the pandemic, net new money has flowed into our Institutional Asset Management business, while our UK retail savings franchise, anchored on our unique PruFund offering, has remained in positive net inflow.

“Outflows in Retail Asset Management declined in the second quarter, as performance rallied. Work is underway here to further improve returns and customer value, while the acquisition of Ascentric will, once completed, bolster our position in the UK market and take us into high-value wealth management.

“Obviously, this is not the backdrop we would have wished as a newly independent company, but I have been hugely impressed by how my colleagues have responded to the challenge of continuing to serve our customers and clients during the pandemic.

“Given our continued financial strength and resilient performance in the first half of 2020, we are declaring an interim dividend of 6.00 pence per share, in line with our dividend policy.”

   For the six months ended 30 June  For the year ended 31 December
Performance Highlights  2020  2019 2019
Adjusted operating profit before tax (£m) 309  714  1,149
IFRS profit after tax (£m) 826  795  1,065
Savings and Asset Management net client flows (£bn) (4.1)  (1.4)  (1.3)
Total capital generation (£m) (202)  930  1,509
Assets under management and administration (£bn) 339  341  352
Shareholder Solvency II coverage ratio(i) 164%  n/a  176%
(i) 30 June 2019 comparatives have not been included within this interim financial report.

Media enquiries

Investors/Analysts

Spencer Horgan

Director of Investor Relations

Notes to editors

Open1.
The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting ('IAS 34'), as endorsed by the European Union ('EU'), and the Disclosure and Transparency Rules of the Financial Conduct Authority based on the consolidated financial statements of M&G plc.
Open2.
All key performance measures relate to continuing operations.
Open3.
The shareholder view of the Solvency II coverage ratio as at 30 June 2020 assumes transitional measures on technical provisions which have been recalculated using management’s estimate of the impact of operating and market conditions at the valuation date.
Open4.
Total number of M&G plc shares in issue as at 30 June 2020 was 2,599,906,866.
Open5.

A Q&A webcast will be hosted by John Foley (CEO) and Clare Bousfield (CFO) on Wednesday 12 August at 10:30 BST. The session can be viewed at https://www.investis-live.com/mandg-plc/5f08cbe58ade18100081bd9c/obdf.

The presentation will also be available to replay afterwards using the following link https://global.mandg.com/investors/results-reports-and-presentations

Open6.

Ordinary dividend to be paid in September 2020

Ex-dividend date  August 20, 2020
Record date
August 21, 2020
Payment of dividend
September 30, 2020

M&G plc is an international savings and investments business, managing money for both individual savers and institutional investors in 28 markets. As at 30 June 2020, we had £339 billion of assets under management and administration, around 5 million retail customers and more than 800 institutional clients.

With a heritage dating back more than 170 years, M&G plc has a long history of innovation in savings and investments, combining asset management and insurance expertise to offer a wide range of solutions. We serve our savings and insurance customers under the Prudential brand in the UK and Europe and for asset management in South Africa, and under the M&G Investments brand for asset management clients globally.

M&G plc, a company incorporated in the United Kingdom, is the ultimate parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.

This announcement may contain certain ‘forward-looking statements’ with respect to M&G plc and its affiliates (the “M&G Group”), its plans, its current goals and expectations relating to its future financial condition, performance, results, operating environment, strategy and objectives. Statements that are not historical facts, including statements about M&G plc’s beliefs and expectations and including, without limitation, statements containing the words ‘may’, ‘will’, ‘should’, ‘continue’, ‘aims’, ‘estimates’, ‘projects’, ‘believes’, ‘intends’, ‘expects’, ‘plans’, ‘seeks’, ‘outlook’ and ‘anticipates’, and words of similar meaning, are forward-looking statements. These statements are based on plans, estimates and projections as at the time they are made, and therefore persons reading this announcement are cautioned against placing undue reliance on forward-looking statements.

By their nature, all forward-looking statements involve inherent assumptions, risk and uncertainty, as they generally relate to future events and circumstances that may be beyond the M&G Group’s control. A number of important factors could cause M&G plc’s actual future financial condition or performance or other indicated results to differ materially from those indicated in any forward-looking statement.

Such factors include, but are not limited to, UK domestic and global economic and business conditions (including the political, legal and economic effects of the UK’s decision to leave the European Union and the impact of the Covid-19 pandemic); market-related conditions and risk, including fluctuations in interest rates and exchange rates, the potential for a sustained low-interest rate environment, corporate liquidity risk and the future trading value of the shares of M&G plc; investment portfolio-related risks, such as the performance of financial markets generally; the policies and actions of regulatory authorities, including, for example, new government initiatives; the impact of competition, economic uncertainty, inflation and deflation; the effect on M&G plc's business and results from, in particular, mortality and morbidity trends, longevity assumptions, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; the impact of internal projects and other strategic actions, such as transformation programmes, failing to meet their objectives; the impact of operational risks, including risk associated with third party arrangements, reliance on third party distribution channels and disruption to the availability, confidentiality or integrity of M&G plc's IT systems (or those of its suppliers); the impact of changes in capital, solvency standards, accounting standards or relevant regulatory frameworks, and tax and other legislation and regulations in the jurisdictions in which the M&G Group operates; and the impact of legal and regulatory actions, investigations and disputes. These and other important factors may, for example, result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits.

Any forward-looking statements contained in this document speak only as of the date on which they are made. M&G plc expressly disclaims any obligation to update any of the forward-looking statements contained in this document or any other forward-looking statements it may make, whether as a result of future events, new information or otherwise except as required pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK Disclosure and Transparency Rules, or other applicable laws and regulations. Nothing in this announcement shall be construed as a profit forecast, or an offer to sell or the solicitation of an offer to buy any securities.

LEI: 254900TWUJUQ44TQJY84 Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State
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M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.

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M&G plc, incorporated and registered in England and Wales. Registered office: 10 Fenchurch Avenue, London EC3M 5AG. Registered number 11444019. M&G plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.

M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.

M&G plc は、イングランド及びウェールズで設立・登録。本社登録地は10 Fenchurch Avenue, London EC3M 5AG。登録番号11444019。M&G plcは持ち株会社で、その子会社の一部はPRA(健全性監督機構)及びFCA(金融行為規制機構) に認可され、それらの規制対象となっています。

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M&G plc, incorporated and registered in England and Wales. Registered office: 10 Fenchurch Avenue, London EC3M 5AG. Registered number 11444019. M&G plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.

M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.