M&G Warns on Leasehold Reform Impact but Reaffirms Profit and Dividend Targets

An announcement from M&G Plc ( (GB:MNG) ) is now available.

M&G plc has outlined the expected financial impact of the UK Government’s proposed Leasehold Reform Bill, which would cap existing annual ground rents at £250 from 2028 for 40 years before reducing them to zero, on its £722 million portfolio of ground rent assets. The group estimates a one-off reduction of about £230 million in Solvency II Own Funds, a £140 million hit to its Solvency II surplus and a roughly one percentage point fall in its shareholder Solvency II coverage ratio, along with an anticipated £15 million annual reduction in adjusted operating profit and underlying capital generation once the reforms take effect, though it plans mitigating actions such as balance sheet optimisation and tighter cost control. Despite criticising the proposals as disproportionate and warning they could damage the UK’s appeal as a stable investment market and harm savers and institutional investors, M&G stressed its strong financial position and reaffirmed its adjusted operating profit growth and capital generation targets as well as its progressive dividend policy.

The most recent analyst rating on (GB:MNG) stock is a Hold with a £297.00 price target. To see the full list of analyst forecasts on M&G Plc stock, see the GB:MNG Stock Forecast page.

Spark’s Take on GB:MNG Stock

According to Spark, TipRanks’ AI Analyst, GB:MNG is a Neutral.

M&G Plc’s overall stock score is driven by positive technical indicators and strong corporate events that highlight financial resilience and strategic alignment. However, financial performance concerns, including high leverage and cash flow issues, weigh down the score. The high dividend yield offers some compensation for the financial risks.

To see Spark’s full report on GB:MNG stock, click here.

More about M&G Plc

M&G plc is a UK-based savings and investment group, with significant exposure to long-term asset classes through its insurance and asset management businesses, including ground rent assets held in the Prudential Assurance Company shareholder fund. The company targets retail savers, pension funds and institutional investors, and emphasises disciplined capital management, solvency strength and a progressive dividend policy.

Average Trading Volume: 5,682,016

Technical Sentiment Signal: Buy

Current Market Cap: £7.27B

For detailed information about MNG stock, go to TipRanks’ Stock Analysis page.