M&G beats forecasts with 2024 adjusted profits

(Sharecast News) - Investment manager M&G swung to an annual loss in 2024 but posted a small, unexpected increase in adjusted earnings profits, helped by strong growth in asset management and cost cutting. The reported loss before tax totalled £347m, compared with a profit of £309m in 2023, which was dragged down by unrealised fair value losses on surplus assets in the annuity portfolio and fair value losses on interest rate hedging, M&G said.

However, on an adjusted basis, operating profit before tax totalled £837m, up 5% on the year before, reflecting a 19% increase in asset management profits, which made up for a flat performance in the life and corporate centre divisions. The company-compiled consensus estimate was for an adjusted pre-tax operating profit of £769m, down from £797m in 2023.

Looking ahead, M&G expects to grow adjusted pre-tax operating profit by an average of 5% or more per annum between 2025 and 2027.

Operating capital generation totalled £933m in 2024, down from £996m the year before but ahead of the £916m expected by the market. M&G expects to generate £2.7bn of operating capital over the next three years.

Net outflows from open business were £1.9bn, compared with inflows of £1.7bn in 2023 but lower than analysts' expectations. Assets under management and administration increased to £345.9bn from £343.5bn.

M&G announced a final dividend of 13.5p per share, taking the full-year payout to 20.1p, up from 19.7p previously, as it moved to a new progressive dividend policy.

"Increased geopolitical uncertainty and market volatility continue to weigh on client sentiment and pose a significant challenge to financial institutions across the globe. At M&G, we are confident that we can navigate this uncertain environment by leveraging our balanced and integrated business model which we believe will remain a source of competitive advantage,: the company said in an outlook statement.

The stock was 3.1% higher at 228p in early deals on Wednesday.