M&G (MNG) H2 2024 earnings summary

Executive summary

• Delivered strong financial performance in 2024, with group operating profit up 5% year-over-year to £837m, driven by a nearly 20% increase in Asset Management operating profit and stable contributions from Life and Corporate Centre.

• Exceeded upgraded capital generation target, generating over £2.75bn for 2022-24 and lifting the solvency ratio to 223%.

• Announced a shift to a progressive dividend policy, with a 2% DPS increase for 2024 to 20.1p, marking the first increase in dividend cash spend since listing in 2019.

• Transformation and cost discipline efforts yielded £188m of savings to date, with the cost target upgraded to £230m by end of 2025 and cost-to-income ratio in Asset Management improved from 79% to 76%.

• Leverage ratio reduced to 33% following £461m debt reduction.

Financial highlights

• Adjusted operating profit reached £837m, up 5% year-over-year; Asset Management profit up 19%, Life down 1%.

• Operating capital generation for 2024 was £933m, with a three-year total of £2,749m, exceeding the upgraded target.

• Closing AUMA stood at £346bn, up £2bn year-over-year, with market movements offsetting net outflows.

• Asset Management net outflows of £900m were driven by U.K. institutional segment, while international net inflows reached £2.8bn.

• Net flows from open business were negative £1.9bn, but showed improvement in H2.

Outlook and guidance

• Refreshed three-year guidance targets £2.7bn of operating capital by 2027, with management actions expected to contribute £100–200m per annum.

• Committed to ongoing cost discipline and further simplification beyond 2025.

• Expecting improved momentum on flows, especially internationally and in the BPA market, and continued positive operating jaws in Asset Management.

• PruFund and annuities expected to see gradually improving flows as savers move out of cash.

• Up to £150m available to invest in Life new business, especially in the UK BPA market.