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Investing.com -- Shares of M&G Plc (LON:MNG) fell more than 2% on Wednesday after the asset manager reported weaker-than-expected profits, even as assets under management and capital levels came in ahead of forecasts.
M&G said total adjusted operating profit for the first half was £378 million, 5.1% below consensus expectations of £398.4 million.
Asset management profit came in at £128 million, 9.9% under estimates, while life profit was £344 million, 2.2% short of forecasts.
Corporate center costs were slightly better than expected at negative £94 million compared with negative £95.4 million.
Assets under management and administration reached £354.6 billion, 0.8% above consensus of £351.8 billion.
Asset management AuMA was £168.8 billion, exceeding expectations by 3%. Life AuMA fell short at £184.8 billion, down 1.1% from forecasts, while corporate center AuMA was in line at £1 billion.
Total net outflows of negative £2.5 billion were 18.1% better than expected, compared with consensus of negative £3.1 billion.
Asset management net inflows stood at £2.6 billion, nearly four times the £0.7 billion expected. Life net outflows were deeper than anticipated at negative £5.1 billion, compared with forecasts of negative £3.7 billion.
The company’s Solvency II ratio rose to 230%, five percentage points above consensus of 225%.
Operating capital generation totaled £408 million, 4.3% higher than expectations, while underlying capital generation was £331 million, up 4.2% from forecasts.
Total capital generation was £354 million, 6.2% below consensus of £377.5 million. The ordinary dividend per share was 6.7p, in line with estimates.
Flows in M&G’s PruFund business were negative earlier in the period, with 36% of the outflows recorded during April market volatility.
Flows turned positive in June and July. Wholesale and institutional net flows were also positive.
Annuity flows remained negative, with £0.2 billion of bulk annuities sold as industry-wide sales slowed. M&G plans to launch its With-Profits Bulk Annuity proposition in early 2026.
“In our view, M&G remains on track with its ambitions, with assets under management and net flows both materially improving,” said analysts at Jefferies in a note.