M&G plc Half Year 2025 Results

Andrea Rossi, Group Chief Executive Officer, said:

“I am pleased with our progress over the first six months of the year. A key highlight is the positive £2.1 billion net flows from open business, a £3.2 billion improvement from the same period last year. This is a strong result underpinned by £2.6 billion net inflows from external clients in Asset Management.

“This growth has been supported by our market leading investment performance and continued international expansion. Today, 58% of our Asset Management third party AUMA comes from International clients, up from 37% five years ago. This cements our position as a leading international active asset manager, with an established footprint in Europe and growing access to attractive Asian markets.

“In May, we also announced a long-term strategic partnership with Dai-ichi Life, becoming their preferred asset manager for Europe. We expect this collaboration to generate at least $6 billion of new business flows over the next five years, and to further support our international growth ambitions.

“In Asset Management, while growing, we also continue to focus on efficiency, as we reduced the cost-to-income ratio from 77% to 75%. We expect this positive trend to continue, as we further improve our operating leverage through cost discipline and top-line growth.

“We are broadening our product offering in Life, with the planned launch of our With-Profits Bulk Purchase Annuity (BPA) early next year. This solution will be a key competitive advantage in the UK retirement market. PruFund continues to deliver strong investment outcomes and, thanks to the smoothing mechanism, protected its clients from the market volatility in April. This performance has generated increased client demand, improved sales, and has led to positive net inflows since June.

“The balanced and diversified nature of our business model, as well as the momentum across our Asset Management and Life businesses, gives me confidence for the future. We continue to build on our strong foundations to deliver long-term growth for our customers, clients and shareholders, which is high-quality and diversified across products, segments, and markets.”
 

Financial highlights

• Adjusted operating profit of £378 million (30 June 2024: £375 million) improved year-on-year due to underlying positive momentum, despite an £8 million foreign exchange loss in Asset Management.
• Increased Asset Management revenue of £514 million (30 June 2024: £499 million) and stable costs of £388 million, absorbing the impact of inflation and of investment in the business to support growth, led to a cost-to-income ratio of 75%. The resulting £15 million higher core result offset lower performance fees and investment income.
• In Life, adjusted operating profit improved for both PruFund and Traditional With-Profits to £112 million (30 June 2024: £98 million) and £120 million (30 June 2024: £108 million) respectively. This fully offset a lower contribution from shareholder annuities of £113 million (30 June 2024: £132 million) following a decrease in the return on excess assets.
• Profit after tax of £248 million increased meaningfully year-on-year (30 June 2024: £56 million loss). This was primarily driven by a significant improvement in short-term fluctuations in investment returns and mismatches arising on application of IFRS 17.
• Operating capital generation of £408 million (30 June 2024: £486 million) continued to be strong, with the underlying result of £331 million increasing by 11% compared to the same period last year. Operating capital generation excluding new business strain of £443 million is in line with the new 2025-2027 cumulative target of £2.7 billion.
• Strong operating capital generation led to an improved Shareholder Solvency II coverage ratio of 230% (31 December 2024: 223%) after absorbing the impact of paying the 2024 second interim dividend in May.
• The 2025 first interim dividend of 6.7 pence per share (30 June 2024: 6.6 pence per share) is in line with our progressive dividend policy. The first interim dividend is payable on 17 October 2025.

Operational highlights

• Continued to drive international expansion and broadened the product offering in both Asset Management and Life, to position the Group for long-term sustainable growth that is high-quality and diversified across products, segments, and markets.
• Delivered strong investment performance to clients. As of 30 June 2025, 75% of our mutual funds ranked in the upper two performance quartiles over three years and 71% over five years; in Institutional Asset Management, over 80% of funds by AUMA outperformed their benchmarks on a three and five-year basis.
• Reduced net client outflows in UK Institutional Asset Management to £1.3 billion (30 June 2024 net outflows of £2.4 billion), while continuing to achieve strong and improving net client inflows in International Institutional Asset Management of £3.2 billion (30 June 2024 net inflows of £1.9 billion).
• Improvement in Wholesale Asset Management, with net inflows of £0.7 billion (30 June 2024 flat flows), across both Public Fixed Income and Equity funds, as well as across the UK OEIC and international SICAV range.
• Integrated PruFund on FNZ technology, which will enable access to the £0.7 trillion UK digital platform market, and also completed the whole-of-market launch of our new individual Fixed-Term Annuity product.
• Continued to build Bulk Purchase Annuity (BPA) capabilities, improving our ability to quote on deals and optimise pricing, while progressing the development work to bring to market a With-Profits BPA with a planned launch for early 2026.
• Continued to progress our transformation programme, achieving £213 million of cost savings since launch, almost 95% of the total upgraded cost saving target of £230 million.

Outlook

• M&G is well positioned to navigate the current uncertain economic and geopolitical environment due to its diversified business model, international footprint, compelling products and services, investment capabilities and expertise.
• The progress achieved in the first six months of the year underpins our continued confidence in the delivery of our strategic priorities and financial targets, as we remain focused on delivering great customer, client and shareholder outcomes.
• Our strategic priorities are clear: Maintain our financial strength, build on the progress already achieved in simplifying the business, and deliver profitable growth in the UK and internationally.

ⁱ Net flows from open business consist of net client flows in Asset Management, PruFund, Shareholder annuities and the elements of Other Life which are open to new business.

^{i. Definitions of key performance measures are provided in the Supplementary information section of the Interim Financial Report on page 64.
ii. Net flows from open business represent gross inflows less gross outflows and provides useful insight into the growth of the business. Gross inflows are new funds from clients. Gross outflows are money withdrawn by clients during the period. Net flows from open business consist of net client flows in Asset Management, PruFund, Shareholder annuities and the elements of Other Life which are open to new business.}