M&G generated £2.8bn, exceeding the investment management firm’s goals for capital generation, resulting in a share buyback of £500m.
M&G shares were trading up 13.8% to 202.9p on Tuesday morning after news of shares buyback.
Adjusted operating profit before tax dropped by £67m to £721 in 2021 as a result of reduced benefits from changes in lifespan estimates. Retail and savings segment contributed £660m to that figure whereas the corporate centre took away £254m.
Mergers and Demergers
Targets for mergers have reached fruition ahead of schedule with capital generation targets met, and investor cost reduction of £145 million were realised a year ahead of schedule.
IFA Sandringham Financial Partners was acquired by M&G Wealth in early 2022. Highlights of their acquisitions include a stake in Moneyfarm, a digital wealth platform and the buyout of TCF Investment, model portfolio services provider.
A controlling stake of 90% in responsAbility, an impact investing firm, has been agreed upon for M&G to continue growth in their sustainable investing capacity. The remaining 10% will be acquired in due course.
The group plans to expand into Italy with Future+. Future+ is a European version of M&G’s UK PruFund proposition.
John Foley, Chief Executive Officer, M&G said, “it has been another year of robust operational and financial performance, as we have delivered on all our demerger commitments including total capital generation of £2.8 billion over two years, well ahead of our original target.”
“In light of this performance and our strong capital generation we are able to announce today £500 million to be returned to shareholders by way of a buy-back programme, expected to start shortly. Together with dividends paid, we will have returned £1.8 billion of capital to shareholders, equivalent to 32% of M&G’s market value at demerger. Alongside this, we have achieved our annual shareholder cost savings target of £145 million one year ahead of schedule.”
The second interim dividend amounts to 12.2p, in line with M&G’s ‘stable or increasing’ dividends policy.