Shares in UK insurer and asset management firm M&G (MNG) surged by 12% to 200p following the release of better than expected full year results for 2021.
Investors also took encouragement from the announcement of a £500 million share buy-back.
Operating profit declined 9% to £721 million in the year to December 31, which M&G said was due to “lower benefits from changes to longevity assumptions”. However, this was ahead of a consensus expectation of £686 million.
Assets under management of £370 billion was ahead of forecast. This was reflected in the net client inflows for the year of £600 million. It marked an improvement on the net outflows of £6.6 billion in 2020.
STRONG CAPITAL GENERATION FACILITATES BUYBACK PROGRAMME
M&G has secured capital generation of £2.8 billion over two years, ahead of its original target of £2.2 billion by the end of 2022. Moreover, cost savings of £145 million have been delivered a year earlier than anticipated.
Chief executive John Foley said: ‘It has been another year of robust operational and financial performance, as we have delivered on all our demerger commitments, including total generation of £2.8 billion over two years, ahead of our original target’.
This strong performance has enabled the group to announce a £500m share buy back programme.
Together with dividends the group will have returned £1.8 billion of capital to shareholders. This is equivalent to 32% of the group’s market capitalisation at the time of the demerger.
ACQUISITION
M&G recently announced the acquisition of Kent based TCF Investment in a move designed to provide access to the model portfolio service provider space.
TCF Investment has an excellent long-term performance track record and a scalable platform for the management of model portfolios. This complements M&G plc’s existing investment capability.
Asset mangers are increasingly looking at methods of accessing the retail market as institutional mandates come under increasing fee pressure.
