M&G H1 Results: Profit Mises Consensus Estimate Despite Strong Net Flows

M&G plc (LON:MNG) shares fell around 3% in early Wednesday trading despite delivering a robust set of half-year results for 2025, highlighted by a significant turnaround in net flows from open business, as its adjusted operating profit came in below the company-compiled analyst consensus estimate.

The company reported positive net flows of £2.1 billion, a substantial improvement from the £(1.1) billion outflow in H1 2024.

However, adjusted operating profit before tax came in at £378 million, above the £375 million reported in H1 2024, but below the £398 million consensus expectation.

Headline Numbers:

• Net Flows from Open Business: £2.1bn (H1 2024: £(1.1)bn)
• Adjusted Operating Profit Before Tax: £378m (H1 2024: £375m)
• Operating Capital Generation: £408m (H1 2024: £486m)
• Shareholder Solvency II Ratio: 230% (YE 2024: 223%)
• Total Dividend per Share: 6.7p (H1 2024: 6.6p)

The operating profit number was achieved despite an £8 million foreign exchange loss within the Asset Management division.

M&G's capital generation remained strong at £408 million, although slightly lower than the £486 million reported in H1 2024.

Excluding new business strain, operating capital generation is in line with the company's target of £2.7 billion for 2025-2027. The shareholder Solvency II ratio improved to 230%, reflecting strong capital management. The interim dividend per share was increased to 6.7p, in line with the progressive dividend policy.

The results indicate a firm commitment to shareholder value through dividend growth and a strong solvency position. M&G's ability to maintain a high Solvency II ratio provides a buffer against market volatility and supports future growth initiatives.

Driver Breakdown:

• Asset Management Net Inflows: £2.6 billion net inflows from external clients.
• International Expansion: International clients now account for 58% of Asset Management's third-party AUMA, up from 37% five years ago.
• Cost Efficiency: Asset Management cost-to-income ratio improved to 75% from 77%.

CEO Andrea Rossi stated: “I am pleased with our progress over the first six months of the year. A key highlight is the positive £2.1 billion net flows from open business…This is a strong result underpinned by £2.6 billion net inflows from external clients in Asset Management.”

Rossi reinforced the company’s focus on international growth and efficiency.

The company's outlook remains positive, with management expressing confidence in delivering on strategic priorities and financial targets.

M&G is focusing on maintaining financial strength, simplifying the business, and achieving profitable growth both in the UK and internationally.