12th Mar 2026 09:25
(Alliance News) - M&G PLC on Thursday reported strong full-year results with assets under management, net flows, adjusted operating profit and operating capital generation are all ahead of expectations.
"2025 was a year of strong commercial momentum and strategic progress for M&G. We continued to invest in our business, setting it up for long-term growth and expanding our international distribution and investment capabilities," said M&G Chief Executive Andrea Rossi.
The London-based investment manager said adjusted operating pretax profit edged up to GBP838 million in 2025 from GBP837 million the year prior, ahead of GBP820 million company consensus.
This reflected growth in Life and higher fee-based earnings in Asset Management, offset by lower performance fees in Asset Management and lower investment income in both Asset Management and Corporate Centre, M&G said.
Life adjusted operating profit increased 2.4% to GBP764 million from GBP746 million on-year, but fell 3.1% in Asset Management to GBP280 million from GBP289 million.
The IFRS result after tax was GBP314 million, swung from a GBP347 million loss. This was mainly driven by improved short-term fluctuations in investment returns and reduced "mismatches" arising on application of IFRS 17, M&G explained.
Assets under management and administration increased 8.7% to GBP375.9 billion from GBP345.9 billion, ahead of GBP372 billion company compiled consensus.
Net flows from open business totalled GBP7.8 billion compared to outflows of GBP1.9 billion the year prior, above consensus cited by RBC Capital Markets of GBP4.6 billion.
Total net outflows were GBP1.9 billion, ahead of GBP2.1 billion consensus, easing from GBP9.5 billion in 2024.
CEO Rossi said the improvement of nearly GBP10 billion year-on-year, was driven by a strong performance in Asset Management and a return to growth in Life.
In Asset Management, M&G generated GBP7.0 billion of net inflows from external clients, corresponding to 4.4% of opening assets under management and administration. In Life, M&G said it "materially" increased bulk purchase annuity volumes, and brought PruFund back into sustained net inflows in the second half.
Rossi said M&G expects this momentum across the business to continue in 2026.
Operating capital generation fell to GBP765 million from GBP933 million, but beat GBP729 million consensus. Total capital generation declined to GBP833 million from GBP1.11 billion.
The solvency II coverage ratio improved to 242% from 223%, ahead of 233% consensus.
M&G said it achieved GBP250 million cost savings from the transformation programme in 2025, beating the upgraded target.
Looking ahead, M&G said it is "firmly committed" to delivering an average annual growth in adjusted operating pretax profit of at least 5% over 2025 to 2027, and expects a "meaningful" acceleration in AOP growth in 2026.
The firm has a target cost-to-income ratio of 70% by the end of 2027, "which we are confident to meet through sustained net inflows, strong revenue growth and continued cost discipline."
M&G also said it is "on-track" to achieve the target of GBP2.7 billion cumulative OCG excluding new business strain over 2025 to 2027.
M&G declared a second interim dividend of 13.8 pence per share, up from 13.5p a year ago. This takes the total payout to 20.5p, up 2.0% from 20.1p, in line with consensus.
Shares in M&G were 0.8% lower at 298.09p each in London on Thursday morning but have risen 39% in the last 12 months. The wider FTSE 100 was down 0.5%.
By Jeremy Cutler, Alliance News reporter
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