REPORTING SEASON: AMP Limited (AMP)

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Figure 1: AMP Limited 12 month chart

 

AMP Limited (AMP) on the track to recovery led by its wealth unit.

·         Provider of life insurance and other financial services AMP Limited (AMP) posted a 2.8% fall in statutory earnings to $382Million but thrilled investors by still paying out a solid dividend up 8.7% over the year

·         Underlying profit was up by 16% (Y/Y) although the valuation of its AMP share portfolio fell. AMP’s controllable costs lifted by 6% however the cost to income ratio did improve over the year. AMP’s business efficiency program costs came in at $49Million and AXA integration generated costs of $11Million

·         Total accounts under management (AUM) lifted by 4% over the year to $205Billion helped buy a lift in the AMP bank loan book up 4.8% and wealth management AUM increased by 3% to $104Billion. New Zealand financial services were up 20%, AMP Capital up 12% and Australian mature up 2% on 1H13 respectively

·         AMP’s life insurance division is still under pressure as payout ratios remain high and the industry struggles with lower take up and a reduction in renewal rates. Wealth management, AMP’s largest business unit, delivered a 16% gain in profit to $183Million

·         AMP will pay a 1H dividend of $0.125, representing an interim dividend payout ratio of 73% of underlying profit, within AMP’s target payout range of 70-80% of underlying profit. The 1H dividend will be paid out to investors on the 10th of October 2014

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,