a4864t
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June, 2024
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation
of registrant's name into English)
13/F, One International Finance Centre,
1 Harbour View Street, Central,
Hong Kong, China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F X
Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b): 82-
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
PRUDENTIAL PLC CAPITAL MANAGEMENT UPDATE
Launch of US$2 billion share buyback
programme1
▪ Return
of capital of US$2 billion to be completed no later than mid
2026.
▪ Progress
towards our 2027 financial objectives2 will
increase the potential for further cash returns to
shareholders.
▪ Strong
capital base to fund organic growth and to continue to invest in
enhancing our capabilities.
CEO Anil Wadhwani, said: "I
am pleased with the progress we continue to make in executing our
strategy, as we drive towards generating growth in both value and
cash returns for shareholders over the long term. The significant
growth opportunity ahead of us has not changed and we remain
focused on realising that opportunity.
"With our strong capital base, strategic progress and the recent
clarification of the rating agencies' treatment of the IFRS17 CSM,
we can now provide a capital management update.
"We will continue to prioritise investment in organic new business
at attractive returns and in enhancing our capabilities as we
execute our strategy. We will pursue selective partnership
opportunities to accelerate growth in our key markets. Investment
decisions will be judged against the alternative of returning
surplus capital to shareholders.
"Consistent with our capital allocation framework, we are today
announcing a US$2 billion share buyback programme to return capital
to shareholders. The buyback will be completed by no later than mid
2026.
"Progress towards our financial objectives will increase the
potential for further cash returns to shareholders. Our dividend
policy remains unchanged, with the Board continuing to expect the
2024 annual dividend to grow in the range of 7-9 per
cent.
"Our outperformance in H1 2023 when the border between Hong Kong
and the Chinese Mainland reopened results in a strong comparator
for H1 2024. Q2 2024 APE sales trends are similar to those in Q1
2024. Given our focus on quality growth in both value and cash and
on account of the progress on execution of our strategy, we have
confidence in our FY2024 new business growth and
in achieving
our 2027 financial and strategic objectives."
Free surplus ratio3
At our 2023
Half Year Results, we set out our capital allocation framework.
Certain elements of the shareholder GWS capital surplus only become
available as cashflows for distribution to the holding company over
time. The Group's free surplus (excluding intangibles) metric,
which excludes these future flows, is therefore our preferred
measure of distributable shareholder capital.
We are now able to provide additional guidance as to how we assess
the deployment of free surplus, in the context of the Group's
growth aspirations, leverage capacity and our liquidity and capital
needs. Going forwards, we will express this guidance based on the
free surplus ratio, defined as the Group's capital resources, being
Group free surplus (excluding intangibles) plus the EEV required
capital of the life business, divided by the EEV required capital
of the life business.
Free surplus ratio operating range
Our historic focus on "with profit" savings, unit-linked and health
and protection business results in a relatively low volatility of
free surplus to stress events. Based on our current risk profile
and our business units' applicable capital regimes, we seek to
operate with a free surplus ratio of between 175%-200%. If the free
surplus ratio is above the operating range over the medium term,
and taking into account opportunities to reinvest at appropriate
returns and allowing for market conditions, capital will be
returned to shareholders.
At the end of 2023, our free surplus ratio was 242%.
Accordingly, and after taking into account the 2023 second Interim
dividend, we have determined that we will return US$2 billion to
shareholders.
Terms of proposed share buyback programme
The terms of the proposed share buyback programme will be in
accordance with the relevant shareholder approval obtained at the
2024 AGM, and subsequently with the terms of any similar approval
to be obtained at the 2025 AGM.
The pace and timing of and the form of the proposed return of
capital will be subject to market conditions and execution
considerations, including discretion given to a third party for
execution during close periods and the completion of regulatory
processes. Repurchases of shares will be made on the London Stock
Exchange and/or other venues but will be treated as being bought
back by the company on the London Stock Exchange4.
Shares repurchased under the proposed buyback programme are
expected to be cancelled.
We intend to continue our existing practice of neutralising the
dilutive effects of Share Scheme and other share issuance on the
Hong Kong Stock Exchange (including the possible issuance of future
scrip dividends) through repurchases on the London Stock Exchange
and/or other venues4.
Such repurchases would be in addition to the proposed share buyback
programme of up to US$2 billion announced
today.
The person responsible for arranging the release of this
announcement on behalf of Prudential plc is Tom Clarkson, Company
Secretary.
Prudential plc expects to publish its Half Year Results for 2024 on
Wednesday 28 August 2024.
Contact:
Media
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Investors/Analysts
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Simon Kutner
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+44 (0)7581 023260
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Patrick Bowes
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+852 2918 5468
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Hui-Yi Kho
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+852 6298 9676
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William Elderkin
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+44 (0)20 3977 9215
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Janice Wong
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+852 6188 6381
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Darwin Lam
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+852 2918 6348
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A Q&A call for analysts and investors will be held on Monday,
24 June at 2.30pm HKT - 7.30am UKT - 2.30am ET.
The accompanying presentation slides and script are available on
Prudential plc's website under the following
link: https://www.prudentialplc.com/en/investors/results-centre.
Dial-in details
A dial-in facility will be available to access the conference call
and ask questions: please allow 15 minutes ahead of the start time
to join the call (lines open half an hour before the call is due to
start, i.e. from 2.00pm HKT - 7.00am UKT - 2.00am ET).
United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 800 358 1035
Hong Kong (Local): +852 5803 3413
Hong Kong (Toll-Free): +852 800 908 350
Global Dial-In Numbers: https://www.netroadshow.com/events/global-numbers?confId=66208
Access Code: 028956
Registration to listen to the Q&A event online
To register to listen to the event and submit questions online,
please do so via the following link: https://www.investis-live.com/prudential/667403701c01ae0c0015587a/ctatr
The conference call will be available to listen to afterwards using
the same link.
Transcript
Following the call a transcript will be published on the results
centre page of Prudential's website on Wednesday, 26
June.
Playback facility
Please use the following for a playback facility: +44 (0) 20 3936
3001 (UK and international), replay code 748025. This will be
available until 6.59am HKT on Tuesday, 9 July - 11.59pm UKT -
6.59pm ET on Monday, 8 July.
1 The
terms of the proposed share buyback programme will be in accordance
with the relevant shareholder approval obtained at the 2024 AGM,
and subsequently with the terms of any similar approval to be
obtained at the 2025 AGM.
2 Financial
objectives: To grow new business profit to 2027 at a rate of
15-20 per cent compound annual growth from the level achieved in
2022; and, for the same period, to deliver double digit compound
annual growth in operating free surplus generated from in-force
insurance and asset management business. These objectives assume
exchange rates at December 2022 and economic assumptions made by
Prudential in calculating the EEV basis supplementary information
for the year ended 31 December 2022, and are based on regulatory
and solvency regimes applicable across the Group at the time the
objectives were set. The objectives assume that existing EEV and
Free Surplus methodology at December 2022 will be applicable over
the period.
3 Free surplus ratio is
defined as the sum of Group total free surplus, excluding
distribution rights and other intangibles, and the EEV required
capital of the life business, divided by the EEV required capital
of the life business. Group total free surplus, excluding
distribution rights and other intangibles, consists of the free
surplus of the insurance business combined with the free surplus of
asset management and other non-insurance operations, as defined on
page 347 of the Group's 2023 Annual Report. Group total free
surplus forms part of the EEV shareholder's equity as set out in
the audited EEV basis results within the Group's 2023 Annual
Report. EEV shareholders' equity is reconciled to IFRS
shareholders' equity in note II(viii) of the additional financial
information to the Group's 2023 Annual Report. Given the differing
basis of preparation for he IFRS and EEV results, individual EEV
and IFRS line items are not directly
comparable.
4 Expected
to include Aquis Exchange Europe, CHI-X, BATS and any multilateral
trading facility operated by Turquoise Global Holdings
Limited.
About Prudential plc
Prudential plc provides life and health insurance and asset
management in 24 markets across Asia and Africa. Prudential's
mission is to be the most trusted partner and protector for this
generation and generations to come, by providing simple and
accessible financial and health solutions. The business has dual
primary listings on the Stock Exchange of Hong Kong (2378) and the
London Stock Exchange (PRU). It also has a secondary listing on the
Singapore Stock Exchange (K6S) and a listing on the New York Stock
Exchange (PUK) in the form of American Depositary Receipts. It is a
constituent of the Hang Seng Composite Index and is also included
for trading in the Shenzhen-Hong Kong Stock Connect programme and
the Shanghai-Hong Kong Stock Connect programme.
Prudential is not affiliated in any manner with Prudential
Financial, Inc. a company whose principal place of business is in
the United States of America, nor with The Prudential Assurance
Company Limited, a subsidiary of M&G plc, a company
incorporated in the United Kingdom.
https://www.prudentialplc.com/
Forward-Looking Statements
This announcement contains 'forward-looking statements' with
respect to certain of Prudential's (and its wholly and jointly
owned businesses') plans and its goals and expectations relating to
future financial condition, performance, results, strategy and
objectives. Statements that are not historical facts, including
statements about Prudential's (and its wholly and jointly owned
businesses') beliefs and expectations and including, without
limitation, commitments, ambitions and targets, including those
related to sustainability (including ESG and climate-related)
matters, and statements containing the words 'may', 'will',
'should', 'continue', 'aims', 'estimates', 'projects', 'believes',
'intends', 'expects', 'plans', 'seeks' and 'anticipates', and words
of similar meaning, are forward-looking statements. These
statements are based on plans, estimates and projections as at the
time they are made, and therefore undue reliance should not be
placed on them. By their nature, all forward-looking statements
involve risk and uncertainty.
A number of important factors could cause actual future financial
condition or performance or other indicated results to differ
materially from those indicated in any forward-looking statement.
Such factors include, but are not limited to:
●
current
and future market conditions, including fluctuations in interest
rates and exchange rates, inflation (including resulting interest
rate rises), sustained high or low interest rate environments, the
performance of financial and credit markets generally and the
impact of economic uncertainty, slowdown or contraction (including
as a result of the Russia-Ukraine conflict, conflict in the Middle
East, and related or other geopolitical tensions and conflicts),
which may also impact policyholder behaviour and reduce product
affordability;
●
asset
valuation impacts from the transition to a lower carbon
economy;
●
derivative
instruments not effectively mitigating any exposures;
●
global
political uncertainties, including the potential for increased
friction in cross-border trade and the exercise of laws,
regulations and executive powers to restrict trade, financial
transactions, capital movements and/or investment;
●
the
longer-term impacts of Covid-19, including macro-economic impacts
on financial market volatility and global economic activity and
impacts on sales, claims (including related to treatments deferred
during the pandemic), assumptions and increased product
lapses;
●
the
policies and actions of regulatory authorities, including, in
particular, the policies and actions of the Hong Kong Insurance
Authority, as Prudential's Group-wide supervisor, as well as the
degree and pace of regulatory changes and new government
initiatives generally;
●
the
impact on Prudential of systemic risk and other group supervision
policy standards adopted by the International Association of
Insurance Supervisors, given Prudential's designation as an
Internationally Active Insurance Group;
●
the
physical, social, morbidity/health and financial impacts of climate
change and global health crises, which may impact Prudential's
business, investments, operations and its duties owed to
customers;
●
legal,
policy and regulatory developments in response to climate change
and broader sustainability-related issues, including the
development of regulations and standards and interpretations such
as those relating to sustainability (including ESG and
climate-related) reporting, disclosures and product labelling and
their interpretations (which may conflict and create
misrepresentation risks);
●
the
collective ability of governments, policymakers, the Group,
industry and other stakeholders to implement and adhere to
commitments on mitigation of climate change and broader
sustainability-related issues effectively (including not
appropriately considering the interests of all Prudential's
stakeholders or failing to maintain high standards of corporate
governance and responsible business practices);
●
the
impact of competition and fast-paced technological
change;
●
the
effect on Prudential's business and results from mortality and
morbidity trends, lapse rates and policy renewal
rates;
●
the
timing, impact and other uncertainties of future acquisitions or
combinations within relevant industries;
●
the
impact of internal transformation projects and other strategic
actions failing to meet their objectives or adversely impacting the
Group's operations or employees;
●
the
availability and effectiveness of reinsurance for Prudential's
businesses;
●
the
risk that Prudential's operational resilience (or that of its
suppliers and partners) may prove to be inadequate, including in
relation to operational disruption due to external
events;
●
disruption
to the availability, confidentiality or integrity of Prudential's
information technology, digital systems and data (or those of its
suppliers and partners) including the Pulse platform;
●
the
increased non-financial and financial risks and uncertainties
associated with operating joint ventures with independent partners,
particularly where joint ventures are not controlled by
Prudential;
●
the
impact of changes in capital, solvency standards, accounting
standards or relevant regulatory frameworks, and tax and other
legislation and regulations in the jurisdictions in which
Prudential and its affiliates operate; and
●
the
impact of legal and regulatory actions, investigations and
disputes.
These factors are not exhaustive. Prudential operates in a
continually changing business environment with new risks emerging
from time to time that it may be unable to predict or that it
currently does not expect to have a material adverse effect on its
business. In addition, these and other important factors may, for
example, result in changes to assumptions used for determining
results of operations or re-estimations of reserves for future
policy benefits. Further discussion of these and other important
factors that could cause actual future financial condition or
performance to differ, possibly materially, from those anticipated
in Prudential's forward-looking statements can be found under the
'Risk Factors' heading of Prudential's 2023 Annual Report,
available on Prudential's website at www.prudentialplc.com.
Any forward-looking statements contained in this announcement speak
only as of the date on which they are made. Prudential expressly
disclaims any obligation to update any of the forward-looking
statements contained in this announcement or any other
forward-looking statements it may make, whether as a result of
future events, new information or otherwise except as required
pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK
Disclosure Guidance and Transparency Rules, the Hong Kong Listing
Rules, the SGX-ST Listing Rules or other applicable laws and
regulations.
Prudential may also make or disclose written and/or oral
forward-looking statements in reports filed with or furnished to
the US Securities and Exchange Commission, the UK Financial Conduct
Authority, the Hong Kong Stock Exchange and other regulatory
authorities, as well as in its annual report and accounts to
shareholders, periodic financial reports to shareholders, proxy
statements, offering circulars, registration statements,
prospectuses, prospectus supplements, press releases and other
written materials and in oral statements made by directors,
officers or employees of Prudential to third parties, including
financial analysts. All such forward-looking statements are
qualified in their entirety by reference to the factors discussed
under the 'Risk Factors' heading of Prudential's 2023 Annual
Report.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: 24 June
2024
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PRUDENTIAL
PUBLIC LIMITED COMPANY
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By:
/s/ Tom Clarkson
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Tom
Clarkson
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Company
Secretary
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