M&G Well Positioned to Navigate Challenging Market Despite Operating Profit Decline

M&G plc (LON: MNG) posted what it described as a resilient financial performance for the first half of 2024 despite reporting a decline in adjusted operating profit and net client flows.

Adjusted operating profit before tax decreased slightly from £390 million in the first half of 2023 to £375 million in the same period this year. In addition, the company suffered net client outflows of £1.5 billion during the period.

However, M&G's financial strength remains robust. The company's shareholder Solvency II coverage ratio improved to 210% from 203%, and it reduced its debt by £461 million.

M&G has also made significant strides in simplifying its business operations. It said it has delivered £121 million in cost savings so far and announced an upgrade to its capital generation and cost savings targets.

The company is combining its Life and Wealth operations to support its growth plan in the UK retail market.

Andrea Rossi, Group Chief Executive Officer of M&G, said he is confident in the company's long-term outlook.

“Against the backdrop of a challenging market environment in the first half of the year, we have delivered another resilient financial performance,” he said. “The strong foundations we have built give me confidence in the long-term outlook for M&G.”

The company believes its strong capital generation and progress on its strategic priorities position it well to navigate the current uncertain market environment.

Despite the challenging market conditions, M&G remains committed to delivering profitable growth and maintaining its financial strength.

Looking ahead, it said it is “well positioned to navigate the current uncertain economic climate due to its diversified business model, international footprint, compelling products and services, investment capabilities and expertise.”

Given the progress it is making, M&G upgraded two of its financial targets. Operating capital generation is now seen at £2.7 billion by the end of 2024 from £2.5 billion and the company's cost savings target is now £200 million to £220 million by the end of 2025.