M&G on track to accomplish targets after strong start to 2023
M&G transformation plans ‘on track’ as wholesale inflows reach £1bn and 200 workers take voluntary redundancies
- M&G reported net customer inflow of around £400m for Q1 2023
- The company’s Solvency II ratio – a measure of capital strength – ticked up to 200%
M&G’s boss has claimed the asset manager is “on track” to meet the targets of its transformation plan, after wholesale inflows surged and headcount cuts.
The FTSE 100 group reported a net inflow of customers, excluding its heritage business, of approximately £400m for the first three months of 2023, compared to £300m for FY 2022.
This was achieved on the back of net asset management inflows of £1bn, offsetting £900m in outflows from institutional clients, which the firm blamed for last September’s ‘mini-budget crisis’.
Performance: M&G reported net customer inflow, excluding the historic business, of approximately £400m for Q1 2023, compared to £300m for FY 2022
In its full-year results, published in March, M&G outlined a transformation plan with the core goals of financial strength through capital discipline, simplification and profitable growth focused on wealth and asset management.
CEO Andrea Rossi said on Thursday that the group has made “good progress on each of these fronts and is on track to meet our ambitious targets.”
The Solvency II ratio – a key measure of capital strength – tipped to 200 per cent even after paying a £310 million dividend to shareholderswhile assets under management increased by £2bn to £344bn.
M&G further announced that more than 200 employees had filed for voluntary redundancies, representing approximately 4 percent of the workforce.
These job cuts, most of which are expected to occur in late 2023 or early 2024, are part of measures to cut the company’s costs by £200m over the next two years.
The company announced the staff reduction program in March after assets under management fell by £28bn last year due to ‘adverse market movements’.
Adjusted operating income before tax fell by more than a quarter last year, primarily due to a substantial charge related to maturity mismatch losses in the annuity portfolio and foreign exchange losses on US dollar subordinated debt.
M&G Shares were 1 percent lower Thursday morning at 201.9 p, about 20 percent below the pre-pandemic high.
Richard Hunter, Head of Markets at Interactive Investor, said: ‘The industry in which M&G operates is becoming increasingly competitive and the group has a lot of work to do to achieve its golden goal of more assets under management.’
M&G was part of Prudential until the insurer split off its European and UK operations at the end of 2019 to focus on growing its Asian business.