M&G targets 'progressive' dividend as operating profit beats forecast
M&G PLC on Wednesday said it is moving to a ‘progressive’ dividend policy after delivering a mixed set of annual results with operating profit ahead of expectations but net flows missing projections.
In response, shares in M&G were up 3.7% at 229.37 pence each in London on Thursday morning.
The London-based asset manager reported a pretax loss of £332 million in 2024, compared to a profit of £421 million in 2023, despite revenue growing 1.5% to £1.01 billion from £995 million.
This was largely driven by a £643 million loss on short-term fluctuations in investment returns, widened from a £171 million loss the year before.
Adjusted operating profit increased 5.0% to £837 million from £797 million, 8.8% ahead of £769 million company compiled consensus, reflecting a 19% increase in the Asset Management contribution and stable results from the Life and Corporate Centre segments.
Assets under management & administration at December 31 was £345.9 billion, 0.7% higher than £343.5 billion at the same time a year prior, a touch below £347.2 billion consensus.
Total net client outflows were £9.5 billion in 2024, more than double last year’s £4.7 billion, and worse than £7.2 billion consensus.
The Solvency II coverage ratio improved to 223% at December 31 from 203% a year ago, ahead of 216% consensus.
M&G set its total dividend for the year at 20.1 pence per share, up 2.0% on-year from 19.7p. This includes a second interim dividend of 13.5p, up 2.3% from 13.2p last year.
Rossi said the increase was the first step in a new ‘progressive’ dividend policy.
Chief Executive Officer Andrea Rossi said M&G delivered strategic and operational momentum in 2024 despite a tough market environment. It is now entering a ‘new phase’, he added.
Rossi introduced two new financial targets for 2025 to 2027: to grow adjusted operating pretax profit on average by 5% or more per annum, and to generate £2.7 billion of operating capital.
M&G is also seeking further cost savings, upgrading its target, for the second time, to £230 million from £220 million by the end of 2025.
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