Shares in M&G PLC (LSE:MNG) rose to a year's high after the life insurer and asset manager reported solid results, with capital generation better than expected.
Helped by strong net inflows to its asset management arm of £1.1 billion, up 450% year-on-year, operating capital generation in the second half of the year came in at £491 million, which was £85 million better than City analyst expectations.
Management maintained guidance for £2.5 billion of cumulative capital generation by the end of 2024.
This implies £683 million for this year, said analysts at UBS, which is below consensus of £932 million, as per Visible Alpha.
The solvency ratio was nine percentage points better than expectations, though in line with UBS's forecasts
"Based on FY23 markets, we estimate M&G still need to redeem £700m of debt to bring the ratio within targets, this will be higher given the YTD rise in interest rates," analysts said.
Group cash at £1 billion was in line with forecasts, as was the dividend per share of 19.7p, as the company remains focussed on deleveraging.
UBS said the focus on de leveraging implies at least £700 million of debt aims to be repaid by 2025 based on current markets, "which may impact near-term dividends".