M&G (MNG) H2 2025 earnings summary

Executive summary

• Achieved £7.8bn net inflows from open business, a £10bn improvement year-over-year, driven by Asset Management and Life segment growth, with record net inflows and international expansion.

• Entered a strategic partnership with Dai-ichi Life HD, now the largest shareholder, generating £0.4bn inflows and supporting international growth, with a target of $6bn over five years.

• Delivered resilient performance and £250m cost savings, exceeding transformation programme targets and fully offsetting inflation.

• Shifted Life new business to a fee-based, capital-light model, targeting £50bn+ in assets by 2030.

• Solvency II coverage ratio increased to 242%, reflecting robust capital generation and balance sheet strength.

Financial highlights

• Adjusted operating profit before tax (AOP) was £838m, broadly unchanged year-on-year, with 73% from capital-light sources and strong With-Profits contributions.

• Asset Management fee-related earnings grew 12% year-on-year to £261m, despite a 3% decline in total AOP due to lower performance fees.

• Life segment AOP rose 2% to £764m, driven by 17% growth in PruFund profits and 16% in Traditional With-Profits; annuities AOP declined 8%.

• IFRS profit after tax rose to £314m from a £347m loss in 2024, mainly due to improved investment returns and reduced mismatches under IFRS 17.

• Operating capital generation before new business strain was £928m, supporting a Solvency II ratio of 242%.

• Total dividend per share increased to 20.5p (2024: 20.1p), up 2% year-on-year, with a second interim dividend of 13.8p payable in April 2026.

Outlook and guidance

• Committed to delivering at least 5% average annual AOP growth over 2025-2027, with meaningful acceleration expected in 2026.

• Targeting a cost-to-income ratio of 70% by end-2027 and £2.7bn cumulative OCG (excluding new business strain) over 2025-2027.

• BPA sales targeted at £3-4bn annually by 2027.

• Expecting up to £150m investment in new business in 2026, primarily supporting BPAs and PruFund sales.

• Fee-based Life products expected to deliver 10-15 basis points profit margin on £50bn assets by 2030.