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M&G PLC on Tuesday announced a £500 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 £370.0 billion in assets under management & administration, up 0.8% from £367.2 billion at the same point a year prior.
Its Asset Management unit booked £2.0 billion in net inflows, resulting in AuMA rising to £156.7 billion from £144.4 billion. The Retail & Savings unit, however, suffered £8.3 billion in net outflows following a £9.6 billion asset transfer to Rothesay Life PLC as part of the firm's Heritage business run-off. Retail & Savings AuMA fell to £211.1 billion from £221.6 billion.
Excluding its Heritage disposal, net client inflows were £600 million in 2021, compared to outflows totalling £6.6 billion in 2020.
Total revenue, net of reinsurance, amounted to £17.77 billion, up 17% from £15.22 billion in 2020. Pretax profit, however, declined 56% to £707 million from £1.61 billion.
Total charges, also net of reinsurance, climbed 26% to £17.15 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 £500 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 £1.8 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 £1.8 billion capital return aim, M&G also has delivered annual shareholder cost savings of £145 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 £2.8 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.
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