Asset manager M&G saw its pre-tax profits plunge by more than half in the first six months of the year amid falling fee revenue and the pandemic-induced market turmoil.
In its half year results published this morning (August 12) the company said its adjusted operating pre-tax profit had fallen to £309m, down 57 per cent on the £714m posted in the first six months of last year.
The listed company, which last year demerged its UK and European business from M&G Prudential, warned its fee-based revenue was lower as a result of client outflows and pressure on its retail margins.
M&G also said it had been impacted by the decline in the financial markets as a result of the pandemic earlier this year.
The company pointed to costs arising from its demerger from Prudential as also squeezing its profits, including £48m of head office costs.
But John Foley, chief executive of M&G, said the company would still be paying an interim dividend this year.
Mr Foley said: "Obviously, this is not the backdrop we would have wished as a newly independent company, but I have been hugely impressed by how my colleagues have responded to the challenge of continuing to serve our customers and clients during the pandemic.
"Given our continued financial strength and resilient performance in the first half of 2020, we are declaring an interim dividend of 6.00p per share, in line with our dividend policy.”
M&G is currently pursuing a five-year transformation programme it hopes will deliver an annual shareholder cost saving of £145m by the end of 2022.
The programme originally included plans to reduce staff costs by 10 per cent this year, helped by a voluntary redundancy scheme, but the company said it had deferred the target to “reassure colleagues” amid the uncertainty of the pandemic.
rachel.mortimer@ft.com
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