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10 August 2021

M&G plc half year 2021 results

2021

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

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

 

Performance highlights 

For the six months ended 30 June

2021

For the six months ended 30 June

2020

For the year ended 31 December

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 
1 As at 30 June 2021.

Media enquiries

Investors/Analysts

Luca Gagliardi

Director of Investor Relations

Notes to editors

Open1.
The condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting ('IAS 34'), as adopted by the UK, 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 and regulatory view of the Solvency II coverage ratio as at 30 June 2021 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 2021 was 2,599,906,866.
Open5.
5. A Q&A webcast will be hosted by John Foley (CEO) and Clare Bousfield (CFO) on Tuesday 10 August at 10:30 GMT. You can register for the Q&A and view the investor presentation here (the presentation will be available from 07:00 GMT): https://mngresults.connectid.cloud/register
Dial in: UK freephone 0800 640 6441/ All other locations +44 203 936 2999 Participant code: 095776
Open6.

Ordinary dividend to be paid in September 2021

Ex-Dividend date  August 19, 2021 
Record date  August 20, 2021 
Payment of dividend  September 29, 2021 
M&G plc is a leading international savings and investments business, managing money for both individual savers and institutional investors in 28 markets. 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 in the rest of the world.
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); 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, 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 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.