M&G (LON:MNG) Posts Quarterly Earnings Results

Key Points

• Operating profit rose 15% year over year to £435 million, driven by 24% growth in asset-management profit and 9% growth in Life profit.
• Open-business net inflows improved to £2.4 billion, while M&G’s BPA+ with-profits annuity generated £1.7 billion in sales since its February launch.
• M&G maintained strong capitalisation with a 247% Solvency II ratio, although underlying capital generation declined and annuity profit fell 7% due to lower surplus-asset returns.

M&G (LON:MNG - Get Free Report) posted its quarterly earnings results on Thursday. The company reported GBX (7.10) earnings per share for the quarter, Digital Look Earnings reports. M&G had a negative net margin of 0.44% and a negative return on equity of 3.86%.

Here are the key takeaways from M&G's conference call:

• Operating profit rose 15% year over year to GBP 435 million, M&G’s best first-half result since its 2019 listing. Asset management profit increased 24%, while Life profit grew 9% as capital-light with-profits earnings expanded.
• Net inflows from open business improved to GBP 2.4 billion, including GBP 2.2 billion in asset management and GBP 200 million in Life. Management highlighted GBP 1 billion of additional asset-management inflows in July, a GBP 7.8 billion private-markets capital queue, and continued international and wholesale demand.
• The new BPA+ with-profits annuity product generated GBP 1.7 billion of sales since its February launch, with management targeting GBP 3 billion–GBP 4 billion of annual BPA volumes by 2027. M&G expects with-profits solutions to attract at least GBP 50 billion of assets and contribute at least GBP 100 million of annual operating profit by 2030.
• Capital strength remained substantial, with a Solvency II ratio of 247% and a GBP 5 billion surplus, keeping M&G on track for its GBP 2.7 billion cumulative capital-generation target. Management said the strong balance sheet supports further investment in growth, although it indicated that near-term distributions are likely to remain aligned with current market expectations.
• Underlying capital generation fell GBP 27 million year over year, and annuity operating profit declined 7% to GBP 105 million because of lower returns on surplus assets. Management also maintained guidance for a modest GBP 10 million annual operating-profit impact from ground-rent reforms from the end of 2028.

M&G Stock Up 1.3%

Shares of MNG traded up GBX 4.60 during trading hours on Friday, reaching GBX 355.80. The stock had a trading volume of 14,375,778 shares, compared to its average volume of 34,100,438. M&G has a 52 week low of GBX 248.60 and a 52 week high of GBX 367.10. The firm has a 50-day moving average of GBX 350.81 and a 200 day moving average of GBX 320.86. The company has a market cap of £8.48 billion, a P/E ratio of 28.93, a P/E/G ratio of -2.76 and a beta of 0.95.

Analyst Upgrades and Downgrades

A number of research firms recently commented on MNG. JPMorgan Chase & Co. upped their price objective on M&G from GBX 315 to GBX 325 and gave the company a "neutral" rating in a report on Friday, May 8th. Citigroup boosted their target price on M&G from GBX 2,880 to GBX 2,950 and gave the stock a "neutral" rating in a research report on Tuesday, June 9th. Finally, Jefferies Financial Group reaffirmed a "buy" rating and issued a GBX 215 price target on shares of M&G in a research note on Friday. Three equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus price target of GBX 677.86.

About M&G

M&G plc is a leading savings and investments business, managing investments for both individuals and for large institutional investors, such as pension funds, around the world. We have a single corporate identity, M&G plc, and two customer-facing brands: Prudential and M&G Investments. Prudential offers savings and insurance for customers in the UK and Europe and for asset management in South Africa. M&G Investments manages assets for clients globally. With roots stretching back more than 170 years, we have a long history of finding innovative solutions for our customers' changing needs.