8th Mar 2022 08:40
(Alliance News) - M&G PLC on Tuesday announced a GBP500 million buyback, as the wealth manager delivered on all its demerger plans, achieving cost savings a year ahead of schedule.
M&G shares rose 11% to 198.85 pence each in London on Tuesday morning. M&G was the third best large-cap performer, below Evraz PLC and Polymetal International PLC, stocks playing catch up after being sold off following the Russian invasion of Ukraine.
M&G ended 2021 with GBP370.0 billion in assets under management & administration, up 0.8% from GBP367.2 billion at the same point a year prior.
Its Asset Management unit booked GBP2.0 billion in net inflows, resulting in AuMA rising to GBP156.7 billion from GBP144.4 billion. The Retail & Savings unit, however, suffered GBP8.3 billion in net outflows following a GBP9.6 billion asset transfer to Rothesay Life PLC as part of the firm's Heritage business run-off. Retail & Savings AuMA fell to GBP211.1 billion from GBP221.6 billion.
Excluding its Heritage disposal, net client inflows were GBP600 million in 2021, compared to outflows totalling GBP6.6 billion in 2020.
Total revenue, net of reinsurance, amounted to GBP17.77 billion, up 17% from GBP15.22 billion in 2020. Pretax profit, however, declined 56% to GBP707 million from GBP1.61 billion.
Total charges, also net of reinsurance, climbed 26% to GBP17.15 billion, hurting profit.
M&G declared total dividends of 18.3 pence in 2021, up marginally from 18.2p in 2020.
In addition, M&G plans to return GBP500 million to shareholders through a share buyback. This will start shortly.
"Together, the interim dividend and share buy-back programme announced today will result in us returning a total of GBP1.8 billion of capital generated to shareholders since the establishment of M&G as an independent listed company just over two years ago, roughly equivalent to 32% of the company's market capitalisation at the time of demerger," the company said.
In addition to meeting the GBP1.8 billion capital return aim, M&G also has delivered annual shareholder cost savings of GBP145 million. The cost saving target was delivered a year earlier than planned, it noted.
Chief Executive John Foley 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 GBP2.8 billion over two years, well ahead of our original target.
"Our focus remains on delivering long-term sustainable growth and attractive returns to shareholders through a balanced approach to capital management, while investing in priority areas alongside further internationalisation and modernisation of the business. I am confident that 2022 will be an inflection point for us."
M&G demerged from Prudential PLC back in October 2019.
By Eric Cunha; [email protected]
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