M&G delivers a positive financial performance in a challenging market

Savings & investments

M&G plc (LON:MNG) has today announced its full year 2019 results.

Performance highlights

–         Assets under management and administration increased to £352 billion, principally reflecting strong investment returns over the year

–         Modest net client outflows in Savings and Asset Management of £1.3 billion, with net client inflows into UK Retail Savings, which includes PruFund, mostly offsetting net client outflows in Retail Asset Management

–         Adjusted operating profit before tax1 of £1,149 million in line with our expectations and IFRS profit after tax from continuing operations of £1,065 million

–         Total capital generation of £1,509 million and shareholder Solvency II coverage ratio of 176%2

–         On track to deliver annual run-rate shareholder cost savings of £145 million by 2022 through our five-year transformation programme

–         Ordinary dividend of 11.92 pence per share and special demerger dividend of 3.85 pence per share

John Foley, Chief Executive, said: “We have achieved much in 2019. As well as executing a successful demerger, we have maintained a clear focus on the day-to-day management of our business as indicated by a positive set of financial results in a challenging market. Adjusted operating profit before tax of £1,149 million and total capital generation of £1,509 million for the year represent a resilient performance in line with our expectations.

“Total assets under management and administration increased to £352 billion, largely reflecting investment returns over the year.  Across Savings and Asset Management, we saw modest total net client outflows of £1.3 billion. Flows into our UK Retail Savings business, including PruFund, largely offset flows out of our Retail Asset Management business. This demonstrates the value of our diversified business model and the appeal of our smoothed investment propositions.

“We have made a good start to life as an independent business and we are strongly positioned for growth. Our diversified investment capabilities, coupled with our client relationships in 28 markets, mean we are well positioned to meet the growing global demand for savings and investment solutions, supported by favourable long-term economic and social trends that offer growth opportunities for many years to come.”

Global markets continue to be unnerved by a series of factors, including most recently the spread of COVID-19 and its potential economic impact. While there remains significant uncertainty, our balance sheet continues to be resilient. As at 6 March 2020, our shareholder Solvency II coverage ratio was estimated at 166%23, which is firmly within our risk appetite.

Performance highlights20192018
Adjusted operating profit before tax (£m)1,149  1,621
IFRS profit after tax (£m)1,065 811  
Assets under management and administration (£bn)352  321
Savings and Asset Management net client flows (£bn)(1.3(1.7)
Total capital generation (£m)1,509 2,369
Shareholder Solvency II coverage ratio176%170%

Notes to Editors

1.        The results in this preliminary announcement are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and are based on the consolidated financial statements of M&G plc.

2.        All key performance measures relate to continuing operations4.

3.        Total number of M&G plc shares in issue as at 31 December 2019 was 2,599,906,866.

4.        A presentation for analysts and investors will be held on 10 March 2020 at 11am (UK time) in the Auditorium at M&G plc, 10 Fenchurch Avenue, London EC3M 5AG.  The presentation will be webcast live and available to replay afterwards using the following link https://www.investis-live.com/mandg-plc/5e304f4cf079ed0b0099e78e/bida

To register attendance in person please send an email to IR@MandG.com

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

5.        Ordinary dividend and special demerger dividend to be paid in May 2020

Ex-dividend date16 April 2020
Record date17 April 2020
Payment of dividend29 May 2020

6.        About M&G plc

M&G plc is a savings and investment business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G Investments, the international asset manager. Following the completion of its demerger from Prudential plc, M&G plc shares were admitted to trading on the London Stock Exchange on 21 October 2019. As an independent company, M&G plc has a single corporate identity and continues with two customer-facing brands; Prudential for savings and insurance customers in the UK and Europe and for asset management in South Africa and M&G Investments for asset management clients globally.

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7.        Additional Information

M&G plc, a company incorporated in the United Kingdom, 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 the United Kingdom.

8.        Forward-Looking Statements

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.

1Adjusted operating profit before tax is IFRS profit before tax excluding short-term fluctuations in investment returns, profit/(loss) on disposal of business and corporate transactions, restructuring and other costs, and profit/(loss) before tax from discontinued operations.

2The shareholder Solvency II coverage ratio is the ratio of own funds to SCR, excluding the contribution to own funds and SCR from the Group’s ring-fenced With-Profits Fund.

3After an assumed recalculation of transitional measures on technical provisions.

4Continuing operations excludes our Asia insurance operations and treasury services provided to Prudential plc which are presented as discontinued operations.

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