The PruFund suffered £1.4bn in outflows last year which M&G blamed on competition and the pandemic.
In its full year results released today (March 8), the company said the losses experienced in the 12 months to December 31 were due to “competitive pressures” and pandemic-related restrictions on face-to-face advice.
PruFund's assets under management and/or administration increased by 5 per cent to £58.4bn as a result of positive investment returns.
Last year the group launch its PruFund Planet offering, giving customers the opportunity to access the same “smoothed returns” and risk profile as the PruFund, alongside “positive environmental and social outcomes” from their investment.
It also launched Future+, a similar offering to the PruFund, in two European wholesale markets.
The group announced a share buyback today worth £500mn which is expected to start shortly, and a second interim dividend of 12.2p will be paid.
In the full year, the company saw a fall in pre-tax profit, despite a reversal in fortune for its overall fund flows.
Profits dropped to £721mn in the year to December 31, down from £788mn in 2020 which M&G said was due to “lower benefits from changes to longevity assumptions”.
Net client inflows for the year were £600mn, compared with net outflows of £6.6bn in 2020.
Post-tax profit crashed from £1.1bn to £92mn, which the company said was due to a £537mn loss from “short-term” fluctuations and a £73mn rise in restructuring costs.
John Foley, chief executive of M&G, said it had been another year of “robust operational and financial performance”.
Foley said together with dividends paid, the company will have returned £1.8bn of capital to shareholders, equivalent to 32 per cent of M&G’s market value at demerger.
"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."
The company has undertaken a number of acquisitions in the past few months, moving into the model portfolio space with the purchase of TCF Investment in February, leading a £44.1mn funding round in digital investment app Moneyfarm in January, and buying advice firm Sandringham last summer.
In the results today, the group said it has a pipeline of new propositions, including sustainable investment offerings.
sally.hickey@ft.com
