M&G PLC (LSE:MNG)’s higher-than-expected operating capital generation and improving solvency ratio marked the positives of the fund manager’s interim results, according to analysts.
At £486 million and 210% respectively, the figures were above consensus expectations, UBS analysts said in a note, leaving M&G in line to hit strengthened targets.
M&G had reported a £1.5 billion net outflow for the six months to June on Wednesday morning, against an inflow of £0.7 billion a year earlier.
UBS analysts noted the results were largely better than expected though, with management cost-saving efforts prompting better capital generation and in turn fueling M&G’s solvency ratio.
M&G signalled aims to hit £220 million worth of cost savings by 2025 in Wednesday’s results, against £200 million previously.
A new £2.7 billion operating cash generation target, compared to £2.5 billion beforehand, then brought the group’s own aims in line with market expectations, UBS added.
UBS reiterated a ‘neutral’ rating for M&G following the results, alongside a 218p share price target.
Shares fell 1% to 213.90p on Wednesday.