M&G beats profit forecasts with 28% profit growth

21st Mar 2024 07:11

(Sharecast News) - Savings and investments firm M&G beat analysts' forecasts with its 2023 results, with net client flows, adjusted profits and operating capital generation all up materially on the previous year.

Adjusted operating profit before tax totalled £797m, up from £625m in 2022, which the firm put down to a resilient performance in Asset Management, and improved contributions from Life, Wealth and Corporate Centre. This was well ahead of the consensus forecast of £750m, according to UBS.

The IFRS profit after tax came in at £309m, compared with a loss of £2.1bn previously, due to a big reduction in losses relating to short-term fluctuations in investment returns.

"M&G has performed very well in 2023. Today's results show positive business momentum and meaningful improvements across key financial metrics," said chief executive Andrea Rossi.

M&G saw net client inflows (excluding the Heritage business in Life) of £1.1bn, up from just £0.2bn in 2022, as big inflows in International Institutional Asset Management and Wholesale Asset Management were able to offset £6.2bn of net client outflows in UK Institutional Asset Management, triggered by the 2022 mini-budget crisis and the ongoing de-risking of Defined Benefit pension funds.

Operating capital generation rose 20% year-on-year to £996m, taking the total generated over the past two years to £1.8bn, as the company works it way to a three-year cumulative operating capital generation target of £2.5bn by the end of 2024.

The company proposed a second interim dividend of 13.2p per share, taking the total payout to 19.7p for the year, up just 0.1p from last year.