M&G, a prominent financial services firm listed on the FTSE 100, saw its share prices rise by 3.8% on Wednesday, trading at 206.9p. This surge followed the release of the company's first-half earnings report, which surpassed market expectations.
The company reported an adjusted operating profit of £390 million (£1 = $1.24) for the first half of 2023, exceeding analysts' forecasts by over £100 million. This figure also represents a significant increase from the previous year's £298 million. M&G's robust performance comes despite a challenging economic environment marked by rising interest rates, uneven economic data, increased market volatility, and decreased investor confidence.
Despite these headwinds, M&G managed to attract client inflows exceeding market expectations, reaching £700 million excluding Heritage. However, this figure is lower than the £1.2 billion recorded during the same period in 2022. The firm's assets under management and administration fell slightly to £332.8 million from £348.9 million.
In a show of confidence in its financial stability, M&G increased its half-time dividend to 6.5p per share, up by 0.3p from the previous period.
The company has also made significant progress in streamlining its operations as part of a transformation program aimed at creating a leaner and more efficient organization. The initiative is designed to enhance client service, reduce costs, and unlock growth potential. M&G remains on track to achieve its goal of generating an operating capital of £2.5 billion by next year.
M&G announced progress towards other financial objectives as well, including achieving £200 million in cost savings excluding inflation and increasing adjusted operating profit from its Asset Management and Wealth divisions to account for over 50% of the group's total excluding its Corporate Centre unit.
In a strategic move to diversify growth channels, M&G announced two bulk annuity purchases this month, marking its first such action since the mid-2010s. The company views this as a crucial part of its strategy, creating a third growth pathway alongside Asset Management and Wealth.
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