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M&G PLC on Thursday reported a drop in assets in the first half, driven by a volatile investment market, but was pleased to record net inflows in the period.
M&G ended June 30 with assets under management & administration at £348.9 billion, sliding from £370.0 billion six months earlier, which was also the figure at the same point a year prior. The drop was blamed on ‘adverse market movements’.
‘This is an encouraging set of results and provides evidence that M&G is continuing to build momentum. Improved client flows underpinned a resilient operational and financial performance despite a period of volatility when many investors reduced their exposure to markets,’ Chief Executive John Foley said.
The London-based investment manager recorded net inflows in the first half of £1.2 billion, reversing from the £2.0 billion outflows seen the year before.
‘The turnaround in flows builds on the progress we made in 2021,’ Foley continued. ‘Importantly, Wholesale Asset Management achieved net client inflows for the first time since 2018 totalling £800 million.’
In the first half of 2022, it sunk to a pretax loss of £1.74 billion versus a £74 million profit the year before. M&G booked a negative fluctuation return of £1.45 billion versus a £549 million loss last year.
Fee-based revenue rose to £653 million from £607 million. Total revenue, net of reinsurance, was negative £8.20 billion, reversing sharply from the positive £9.21 billion a year prior. The significant drop was pinned on a £11.58 billion negative investment return.
It declared an interim dividend of 6.2 pence, which it said is in line with its policy of paying one-third of the previous year's total dividend.
M&G's Solvency II coverage ratio improved to 214% from 198% a year prior.
It added: ‘We have delivered a consistently strong investment performance set against a challenging period for our sector. We expect this trend to continue through the remainder of the year.
‘The shift from net client outflows to net client inflows - excluding Heritage - was a key moment for us and we aim to build on this going forward. We believe that M&G Wealth now has all the building blocks required to progress on its journey to becoming a major player in the UK Wealth market.’
Shares in M&G were 2.1% higher in London on Thursday morning at 222.30 pence each.
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