skip to main content
M&G branded scam, click here for further information
Contact
Our websites
United Kingdom
Close Americas

#Menu Text#

#Title#

Go to

20 September 2023

M&G plc half year 2023 results

2023

GOOD OPERATIONAL AND FINANCIAL PERFORMANCE WITH PROGRESS AGAINST CORE STRATEGIC PRIORITIES

£0.7bn
Net client flows excl. Heritage
HY 2022: £1.2bn
£390m
Adjusted Operating Profit
HY 2022: £298m
£505m
Operating Capital Generation
HY 2022: £433m
6.5p
Dividend per Share
HY 2022: 6.2p
199%
Shareholder Solvency II ratio
FY 2022: 199%

Andrea Rossi, Group Chief Executive Officer, said:

“Today’s results demonstrate the underlying strength of our business model, the resilience of our balance sheet, the attractiveness of our propositions as well as the hard work and commitment of our colleagues to deliver for our clients and execute on our strategic ambitions.

“Against the backdrop of ongoing market volatility and uncertainty we have made progress against all three pillars of the strategy that we launched in March – maintaining our financial strength through capital discipline; mobilising the Transformation programme to simplify our business and improve client outcomes; and delivering growth with positive net client inflows.

“As we look ahead, I remain confident we have the right ingredients for success that will enable us to continue to deliver attractive outcomes for our clients and shareholders. We are, however, not complacent and will continue to focus on ensuring that our balance sheet remains strong and we deliver on our purpose and strategic objectives.”

Growth

  • Positive net client flows, excluding Heritage, of £0.7 billion (30 June 2022: £1.2 billion). Net flows remain positive into a third consecutive year despite known headwinds from UK institutional clients.
  • Gross inflows to PruFund UK of £3.3 billion (30 June 2022: £2.5 billion) are the highest for a six-month period since 2019. The launch of all PruFund solutions on our M&G Wealth Platform will support further reach of propositions and underpin flows in H2 and beyond.
  • Re-entered the Defined Benefit pension market through two targeted deals with a combined premium of £617 million which maximise the synergies of our business model and provide a third avenue of growth along with Asset Management and Wealth.
  • Further momentum in Wholesale Asset Management with net client inflows of £1.3 billion (30 June 2022: £0.8 billion) and continued strong investment performance. As of 30 June 2023, 70% of our mutual funds ranked in the upper two performance quartiles over one year (31 December 2022: 68%) and 71% over three years (31 December 2022: 67%).
  • Net client inflows of £0.7 billion in Private Markets; a core area of our Asset Management business accounting for c. 40% of total revenues, with resilient flows and attractive average margins of 55 bps.
  • Expected redemptions from UK clients as a result of the mini budget with net client outflows of £1.4 billion (31 December 2022: outflows of £0.7 billion) in Institutional Asset Management business but encouraging progress with positive net flows in Europe and the in-housing of a £5.5 billion Asian mandate from the internal client.

Transformation and Simplification

  • Good momentum in the first phase of our Transformation programme, creating a leaner and more efficient organisation and improving our ability to serve clients, reduce costs and unlock growth.
  • Cost savings initiatives are expected to deliver a £50 million reduction on our 2023 cost base.
  • Completion of voluntary redundancy scheme with approximately 200 colleague exits in the final quarter of 2023 and early 2024.
  • Appointment of Clive Bolton (CEO, Life Insurance) and Caroline Connellan (CEO, Wealth), who alongside Joseph Pinto (CEO, Asset Management), now provide dedicated leadership for each of our three business areas.

Financial strength

  • Adjusted operating profit before tax of £390 million up 31% (30 June 2022: £298 million), reflecting the strength of our diversified businesses.
  • IFRS profit before tax of £75 million (30 June 2022: IFRS loss before tax of £1,143 million) following a reduction in losses in short-term fluctuations in investment returns.
  • Operating capital generation of £505 million up 17% (30 June 2022: £433 million), with a strong underlying contribution of £352 million (30 June 2022: £386 million) and higher management actions.
  • These results demonstrate our continued focus on proactively managing our capital base as we remain on track to generate our target of £2.5 billion operating capital generation by December 2024 – 18 months into this three-year period we have delivered 53% of the target.
  • Shareholder Solvency II coverage ratio remained strong, and above the top end of our target range, at 199% (31 December 2022: 199%) and our balance sheet remains conservatively positioned, as we experienced no defaults in the first half of the year.
  • The interim ordinary dividend of 6.5 pence per share is up 5%. This means that since listing in 2019, M&G will have returned over £2.5 billion to shareholders. The dividend is payable on 3 November 2023.

Outlook

  • Our focus is to continue the good progress we have made over the last six months in transforming M&G.
  • M&G is well positioned to navigate the current uncertain economic climate due to its diversified business model, international footprint, compelling products and services, investment capabilities and expertise.
  • Our results for the first half of 2023 underpin our confidence in the delivery of our strategic objectives and financial targets.
  • We continue to focus on our programme of business simplification and transformation, aligned to client-driven values, which will unlock growth and enable us to invest selectively, focusing our disciplined approach to capital allocation.
  • We remain on track to achieve our operating capital generation target of £2.5 billion by 2024, and we are making good progress on our 2025 financial targets:
    • Generate £200 million of cost savings, gross of inflation;
    • Reduce core Asset Manager cost to income ratio to sustainably lower than 70%;
    • Deliver increased adjusted operating profit from Asset Management and Wealth to more than 50% of the Group total, excluding Corporate Centrei; and
    • Reduce our leverage ratio to below 30%.
  • Our dividend policy of delivering stable or growing dividends to our shareholders remains unchanged.

 

i Based on IFRS 4 Insurance Contracts and financial segmentation as relevant at the time of the 2022 full year results.

 

Performance highlightsi For the six months ended 30 June 2023 For the six months ended 30 June 2022 For the year ended 31 December 2022
 Adjusted operating profit before tax (£m)ii       390    298     625
 IFRS profit/(loss) after tax (£m)ii         75  (1,143)  (2,055)
 Assets under management and administration (£bn)    332.8    348.9     342.0
 Net client flows (excluding Heritage) (£bn)        0.7       1.2     0.3
 Operating capital generation (£m)       505

   433

   821
Total capital generation (£m)         73     24   (397)
 Shareholder Solvency II coverage ratio (%)   199%  214%    199%

i Definitions of key performance measures are provided in the Supplementary information section of the Interim Financial Report on page 85.

ii Comparative numbers restated as a result of the introduction of IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments).

 

 

Media enquiries

Irene Chambers

Media Relations

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
The 2022 comparative results, which were previously prepared under IFRS 4, have been restated following the adoption of IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments from 1 January 2023.
Open3
On 20 July 2023 we published indicative restated adjusted operating profit before tax for the year ended 31 December 2022. Since then we have revised the calculation of the amortisation factor applied to the with-profits Contractual Service Margin which is the unearned profit on this business and made some refinements to our adjusted operating methodology. As a result of these changes the indicative restated adjusted operating profit for the year end 31 December 2022 published previously of £552 million has since been revised to £625 million.
Open4
The shareholder view and regulatory view of the Solvency II coverage ratio as at 30 June 2023 assume 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,and include the impact of the Own Funds restriction.
Open5
Total number of M&G plc shares in issue as at 30 June 2023 was 2,374,712,121.
Open6

A live webcast of the Half Year 2023 Results presentation and Q&A will be hosted by Andrea Rossi (CEO) and Kathryn McLeland (CFO) on Wednesday 20th September at 09:00 BST. Register to join at: https://mngresults.connectid.cloud/register

Or dial in by phone in the UK: 0800 358 1035 or +44 20 4587 0498 Access code: 291856

For global dial-in numbers see: https://www.netroadshow.com/events/global-numbers?confid=55138

The Results presentation will be available to download from 07:00 BST on our Results, reports and presentations web page:
https://www.mandg.com/investors/results-reports-and-presentations


Ex-dividend date 28 September 2023
Record date 29 September 2023
Payment of dividend 3 November 2023

M&G plc is a leading international savings and investments business, managing money for around 5 million retail clients and more than 800 institutional clients in 26 markets. As at 30 June 2023, we had £332.8 billion of assets under management and administration. 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 retail and savings clients under the M&G Wealth and Prudential brands in the UK and Europe, 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 M&G plc 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 M&G plc 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.
Investor relations

The information in this section of the site is intended for investment professionals only.

This section of the website is for the sole use of investment professionals. It should not be relied on by private investors and the information should not be construed as a financial promotion under the Financial Conduct Authority’s (FCA) Conduct of Business rules.

Press Releases
The information in this section of the site is intended for journalists and media professionals only.

This section of the website is for the sole use of journalists and media professionals. It should not be relied on by private investors or advisers and the information should not be construed as a financial promotion under the Financial Conduct Authority’s (FCA) Conduct of Business rules.
M&G Investments

You are about to enter the website of M&G Investments, a direct subsidiary of M&G plc.
Click here to proceed.

Prudential Financial, Inc.,

If you are looking for the affiliates of Prudential Financial, Inc., whose principal place of business is in the United States of America, click here to proceed.

Prudential plc

If you are looking for the affiliates of Prudential plc, an international group incorporated in England and Wales, click here to proceed.

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 Investments

You are about to enter the website of M&G Investments, a direct subsidiary of M&G plc.
Click here to proceed.

M&G plcの直接子会社であるM&G Investments(M&Gインベストメント)のウェブサイトにアクセスするには、
こちらをクリックしてください。

Prudential Financial, Inc.,

If you are looking for the affiliates of Prudential Financial, Inc., whose principal place of business is in the United States of America, click here to proceed.

アメリカ合衆国を主たる事業領域とするPrudential Financial, Inc.(プルデンシャル・ファイナンシャルInc.)の関連会社をお探しの場合は、こちらをクリックしてください。

Prudential plc

If you are looking for the affiliates of Prudential plc, an international group incorporated in England and Wales, click here to proceed.

イングランド及びウェールズで設立された国際グループ企業であるPrudential plc(プルデンシャル・ピーエルシー)の関連会社をお探しの場合は、こちらをクリックしてください。

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。

M&G plc は、イングランドを登録地、及び主たる事業領域とする会社で、その関連会社は有数の貯蓄・投資機関として基盤を確立しています。M&G plcは、Prudential Assurance Company Limited(プルデンシャル・アシュアランス・カンパニー・リミテッド)の直接親会社です。なお、Prudential Assurance Company Limitedは、アメリカ合衆国を主たる事業領域とするPrudential Financial, Inc.(プルデンシャル・ファイナンシャルInc.)またはイングランド及びウェールズで設立された国際グループ企業であるPrudential plc(プルデンシャル・ピーエルシー)とは一切関係がありません。

Prudential Portfolio Managers (South Africa) (Pty) Limited

You are about to enter the website of MandG Investments Southern Africa (Pty) Ltd a direct subsidiary of M&G plc. Click here to proceed.

Prudential plc

If you are looking for the affiliates of Prudential plc, an international group incorporated in England and Wales, click here to proceed.

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.