M&G revealed a jump in profits and positive net client flows as the firm’s transformation mission continues.
For the half-year to 30 June, the firm posted adjusted operating profits of £390m, up from the £298m posted in the first half of last year.
M&G also saw gross inflows to PruFund UK of £3.3bn, compared to £2.5bn for HY22 – its highest inflows for a six-month period since 2019.
Meanwhile, its wholesale asset management arm pulled in £1.3bn net client inflows, a £500m increase on HY22.
However, the investment firm’s overall assets dropped £332.8bn at the end of June, down from £342bn at the end of last year.
The firm also said it anticipated net client outflows from UK clients as a result of the mini budget, with £1.4bn net client outflows in its institutional asset management business.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “The transformation programme continues at M&G, with a renewed focus on the asset management and wealth businesses. A clearer strategy makes sense, and some needed momentum looks to be building in those two areas despite what continues to be a tricky backdrop.
“Choppy markets are never an easy thing to navigate as an asset manager, made even more difficult when the government steps in and makes things worse – M&G’s still feeling the effects of the failed UK mini-budget as redemptions from institutional clients in the UK impacted results. Nonetheless, the slack was picked up elsewhere. Notably, the popularity of diversified investments through the PruFund range continues to grow.
“Annuities were the standout though, as higher rates made operations more profitable. M&G’s looking to capitalise on the more favourable conditions, back in the bulk purchase market with two deals closing after the half ended. This marks the first business it’s done in the area since closing the annuity book back in 2016 – it’s becoming a hot spot for some of the big insurers so competition is likely to heat up, but nonetheless provides another string to M&G’s bow.”
The asset manager has undergone a series of changes to its leadership in recent months.
Joseph Pinto was appointed CEO of the M&G asset management arm in March, while Caroline Connellan and Clive Bolton joined the firm this month as wealth management CEO and life insurance CEO respectively.
On today’s results, Andrea Rossi (pictured), group chief executive officer, said: “Today’s results demonstrate the underlying strength of our business model, the resilience of our balance sheet, the attractiveness of our propositions as well as the hard work and commitment of our colleagues to deliver for our clients and execute on our strategic ambitions.
“Against the backdrop of ongoing market volatility and uncertainty we have made progress against all three pillars of the strategy that we launched in March – maintaining our financial strength through capital discipline; mobilising the Transformation programme to simplify our business and improve client outcomes; and delivering growth with positive net client inflows.
“As we look ahead, I remain confident we have the right ingredients for success that will enable us to continue to deliver attractive outcomes for our clients and shareholders. We are, however, not complacent and will continue to focus on ensuring that our balance sheet remains strong and we deliver on our purpose and strategic objectives.”