12th Aug 2020 08:24
(Alliance News) - Savings and investments business M&G PLC on Wednesday said first half performance was "resilient" amidst the global economic impact of the Covid-19 pandemic, but the company does not intend to raise shareholder payouts while the "threat of Covid-19 remains".
M&G, which was demerged from Prudential PLC in 2019, however added that it remains committed to its dividend policy of stable or increasing payouts. It has declared an interim dividend of 6.00 pence per share, in line with its policy of paying one-third of the previous year's final dividend.
The London-based company posted pretax profit of GBP665 million for the six months to June 30, down 53% from GBP1.43 billion profit recorded a year ago.
Gross premiums fell year-on-year to GBP3.46 billion from GBP5.91 billion. Earned premiums, net of reinsurance from continuing operations, were down 44% at GBP3.02 billion.
First half adjusted operating profit before tax - the company's preferred profit measure - totaled GBP309 million, down 57% from GBP714 million a year ago.
"Adjusted operating profit before tax for the first half of 2020 has been impacted by the decline in financial markets and by the known costs arising from the demerger, including the interest on subordinated debt and head office expenses," M&G explained.
The company's assets under management and administration reduced to GBP339 billion from GBP341 billion, reflecting negative market movements in March.
M&G saw GBP2.8 billion of net inflows into the Institutional Asset Management division and GBP800 million of net inflows into its Retail Savings unit, partially offsetting GBP7.7 billion of outflows from the Retail Asset Management division.
"Despite the difficult market conditions, I remain optimistic about the outlook for M&G plc. In the short term, as a leading savings and investment business, we are well-placed to be the partner of choice for households looking for better returns on the large cash savings they have accumulated during the pandemic.
"Longer term, we will continue to position the business for sustainable growth, building on our first-half actions to revitalise our UK retail franchise, deepen our presence in Europe, and expand our international and institutional businesses."
Shares in FTSE 100-listed M&G were up 2.0% at 177.35 pence each in London on Wednesday morning.
By Tapan Panchal; [email protected]
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