The asset manager and insurer reported adjusted pre-tax profit of £309m for the six months to June, well below the £714m posted for the same period last year after heavy net client outflows from its savings and investment business caused fee revenues to drop by nearly 9 per cent.
Net outflows totalled £4.1bn, as the market volatility and economic uncertainty unleashed by the pandemic sent investors fleeing. Total assets under management and administration declined from £352bn to £339bn over the period.
The results cap a turbulent time for M&G as it approaches its first anniversary as an independent, listed company. It was originally part of Prudential, but was spun off last year as part of a demerger of the group’s UK insurance and investment business.
“Obviously, this is not the backdrop we would have wished as a newly independent company,” said chief executive John Foley. Despite this, he said M&G would pay an interim dividend of 6p in light of its “continued financial strength and resilient performance”.
M&G said that the demerger, which led to head office costs of £48m and interest on US dollar subordinated debt of £79m, contributed to its fall in profits. Excluding this and market volatility as a result of Covid-19, adjusted operating profits remained largely stable