TIDMMNG
RNS Number : 0188C
M&G PLC
08 June 2023
8 June 2023
M&G plc Q1 2023 trading statement
Continued positive momentum across all three Group priorities:
Financial strength, Simplification and Growth
Delivered positive net flows and strong investment performance
across both the Asset Management and Wealth businesses
Completed the first phase of the Transformation programme, and
maintained a strong and conservatively positioned balance sheet
Q1 net client Q1 Shareholder
flows Q1 AUMA Solvency II
excl. Heritage ratio
GBP344bn
GBP0.4bn 200%
2022 YE:
2022 FY: GBP0.3bn GBP342bn 2022 YE: 199%
Andrea Rossi, Group Chief Executive Officer, said:
"M&G started the year building on our strong momentum from
2022. At Full-Year Results we identified three priorities for the
Group: maintain financial strength through capital discipline,
simplify the business, and deliver profitable growth focusing on
Asset Management and Wealth. I am pleased to say we have made good
progress on each of those fronts and are on track to deliver on our
ambitious targets.
"I am particularly encouraged by the GBP1.0 billion net client
inflows achieved in Wholesale Asset Management in just three
months. Thanks to this success, we more than offset the expected
redemptions from institutional clients and drove inflows into
high-margin propositions. Much of this growth has come from our
home market, the UK, where we were amongst the 'top five' managers
by net flows in the period(1) , ending a long period of subdued
performance.
(1) Source: The Pridham report
"In Institutional Asset Management, despite known headwinds in
the UK, we have continued to expand our presence in Europe, winning
large mandates in the Netherlands and Switzerland, where we secured
GBP0.8 billion in funding from the Swiss Investment Fund for
Emerging Markets.
"Turning to M&G Wealth, we continue to see good momentum,
with PruFund sales growing to GBP1.6 billion in Q1. In May we
launched PruFund Growth, PruFund Cautious and PruFund Risk Managed
versions on our digital platform, further expanding the reach of
this unique proposition. Making the wider PruFund range more
accessible to financial intermediaries will support flows in the
second half of the year and beyond.
"Looking ahead, I'm both confident and excited about the
prospects for M&G, as we execute on the strategy outlined at
Full-Year Results. I am enthused by the progress to date and remain
focused on delivering operational efficiencies to benefit both
clients and shareholders. Notwithstanding an uncertain external
environment, we are building on the inherent strengths of our
differentiated business model, delivering profitable growth
alongside attractive shareholders returns."
Growth
- Despite volatile markets, achieved net client inflows of GBP0.4
billion (excluding Heritage), absorbing expected redemptions
from UK institutional clients that were triggered in September
2022 by the 'mini-budget crisis', which were highlighted at
Full-Year Results
- After returning to net client inflows in 2022, momentum in Wholesale
Asset Management accelerated further, with net client inflows
of GBP1.0 billion in Q1 and continued strong investment performance.
As of March, 68% of our mutual funds ranked in the upper two
performance quartiles over one year and 75% over three years
- Wealth and Other Retail & Savings delivered net inflows of GBP0.3
billion, driven by strong investment performance. After achieving
GBP5.4 billion gross sales in 2022 (+42% year-on-year), PruFund
volumes further improved in Q1 with gross inflows of GBP1.6
billion
Simplification
- We are moving at pace on the Transformation programme, continuing
to identify opportunities to streamline the business and achieve
our cost saving target while delivering better outcomes to our
clients and colleagues
- The Voluntary Redundancy programme launched in March is now
closed, with over 200 accepted applications, corresponding to
c. 4% of the total workforce. The majority of these exits are
expected to become effective between Q4 2023 and Q1 2024
- We are right sizing our office footprint to reflect the needs
of the business. During the first half of the year we have concluded
sub-leases on surplus space in our London estate. Work will
continue on reviewing our footprint in the second half of the
year
Financial strength
- Despite continued volatility in financial markets, Shareholder
Solvency II coverage ratio improved to 200% (2022: 199%) even
after factoring in the GBP310 million 2022 final dividend announced
in March (corresponding to a seven percentage points reduction)
- Our shareholder annuity portfolio continues to perform resiliently
and remains conservatively positioned, with a clear focus on
high credit quality. 98% of the assets are investment grade,
with no defaults experienced in Q1 and a very low level of downgrades
- We remain committed to our disciplined capital management framework
and policy of stable or increasing dividends per share
Group AUMA movements 31 December 2022 to 31 March 2023
GBPbn As at Gross Gross Net Market/Other As at
31 Dec Inflows outflows client movements 31 Mar
2022 flows 2023
Wholesale Asset
Management 53.9 4.6 (3.6) 1.0 1.3 56.2
Institutional
Asset Management 99.2 4.5 (5.4) (0.9) (1.2) 97.1
Other Asset Management 1.1 - - - - 1.1
========================= ========= ========== =========== ========= ============== =========
Total Asset Management 154.2 9.1 (9.0) 0.1 0.1 154.4
========================= ========= ========== =========== ========= ============== =========
Wealth 83.4 2.2 (2.0) 0.2 1.2 84.8
- Of which PruFund
UK 52.3 1.6 (1.1) 0.5 0.7 53.5
Heritage 94.1 0.0 (1.5) (1.5) 1.4 94.0
Other Retail and
Savings 8.9 0.3 (0.2) 0.1 0.1 9.1
========================= ========= ========== =========== ========= ============== =========
Total Retail
and Savings 186.4 2.5 (3.7) (1.2) 2.7 187.9
========================= ========= ========== =========== ========= ============== =========
Corporate assets 1.4 - - - 0.3 1.7
========================= ========= ========== =========== ========= ============== =========
Total AUMA 342.0 11.6 (12.7) (1.1) 3.2 344.0
========================= ========= ========== =========== ========= ============== =========
Group AUMA movements 31 December 2021 to 31 December 2022
GBPbn As at Gross Gross Net Market/Other As at
31 Dec Inflows outflows client movements 31 Dec
2021 flows 2022
Wholesale Asset
Management 52.7 16.0 (15.5) 0.5 0.7(2) 53.9
Institutional
Asset Management 103.1 13.1 (13.8) (0.7) (3.2)(3) 99.2
Other Asset Management 0.9 - - - 0.2 1.1
========================= ========= ========== =========== ========= ============== =========
Total Asset Management 156.7 29.1 (29.3) (0.2) (2.3) 154.2
========================= ========= ========== =========== ========= ============== =========
Wealth 84.2 8.0 (7.8) 0.2 (1.0)(4) 83.4
- Of which PruFund
UK 52.4 5.4 (4.9) 0.5 (0.6) 52.3
Heritage 117.8 0.2 (6.2) (6.0) (17.7) 94.1
Other Retail and
Savings 9.1 0.9 (0.6) 0.3 (0.5) 8.9
========================= ========= ========== =========== ========= ============== =========
Total Retail
and Savings 211.1 9.1 (14.6) (5.5) (19.2) 186.4
========================= ========= ========== =========== ========= ============== =========
Corporate assets 2.2 - - - (0.8) 1.4
========================= ========= ========== =========== ========= ============== =========
Total AUMA 370.0 38.2 (43.9) (5.7) (22.3) 342.0
========================= ========= ========== =========== ========= ============== =========
(2) Includes GBP2.2bn additional AUMA due to process
improvements from the AUMA elimination methodology process
review
(3) Includes cGBP2.9bn additional AUMA from the acquisition of
responsAbility in H1 2022
(4) Includes cGBP2.4bn additional AUMA from the acquisition of
Sandringham in H1 2022
Net client flows (excluding Heritage) in Q1 2023 and comparison
with Q4 2022 (quarter-on-quarter) and Q1 2022 (year-on-year)
Q1 2023 Q4 2022 Q1 2022
============================ ============================ ============================
GBPbn Gross Gross Net Gross Gross Net Gross Gross Net
inflows outflows client Inflows outflows client Inflows outflows client
flows flows flows
Wholesale Asset
Management 4.6 (3.6) 1.0 4.0 (3.6) 0.4 5.1 (4.4) 0.7
Institutional
Asset Management 4.5 (5.4) (0.9) 3.5 (5.1) (1.6) 3.0 (1.9) 1.1
Wealth 2.2 (2.0) 0.2 2.1 (2.0) 0.1 1.8 (2.0) (0.2)
- Of which PruFund
UK 1.6 (1.1) 0.5 1.5 (1.3) 0.2 1.1 (1.3) (0.2)
Other Retail and
Savings 0.3 (0.2) 0.1 0.2 (0.1) 0.1 0.2 (0.2) -
===================== ======== ========= ======= ======== ========= ======= ======== ========= =======
Client flows
(excl. Heritage) 11.6 (12.7) 0.4 9.8 (10.8) (1.0) 10.1 (8.5) 1.6
===================== ======== ========= ======= ======== ========= ======= ======== ========= =======
Asset Manager AUMA and flows by client type
GBPbn As at Net Market/Other As at
31 Dec client movements 31 Mar
2022 flows 023
Wholesale 53.9 1.0 1.3 56.2
Institutional 99.2 (0.9) (1.2) 97.1
Internal 149.9 3.3 153.2
====================== ========= ========================= =========
Total Asset Manager
AUMA 303.0 306.5
====================== ========= ========= ============== =========
Asset Manager AUMA and flows by asset class
GBPbn As at Net client Market/Other As at
31 Dec flows movements 31 Mar
2022 2023
Private assets
- External clients 46.5 0.9 (0.4) 47.0
Private assets
- Internal 30.1 (0.7) 29.4
====================== ========= ============================ =========
Total Private
AUMA 76.6 76.4
====================== ========= ============ ============== =========
Public assets -
External clients 106.6 (0.8) 0.5 106.3
Public assets -
Internal 119.8 4.0 123.8
====================== ========= ============================ =========
Total Public AUMA 226.4 230.1
====================== ========= ============ ============== =========
Total Asset Manager
AUMA 303.0 306.5
Enquiries:
Media Investors/Analysts
+44(0)20 8162 +44(0)20 8162
Jonathan Miller 1699 Luca Gagliardi 7307
Irene Chambers +44(0)7825 696815
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END
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