AMP Limited shares (ASX: AMP) suffered their worst single-day decline in over two decades, plummeting 26.65% to A$1.28 today despite the wealth manager posting a 20.8% increase in underlying net profit, as markets reacted negatively to shrinking revenue margins and cautious forward guidance.
The AMP share price ended the day at A$1.28, its lowest level since June 2025, and marking the steepest one-day fall for the ASX 200-listed wealth manager since 2003. The dramatic sell-off erased hundreds of millions in market capitalisation and cemented AMP’s position as the worst-performing stock on the benchmark index for the session. Trading volumes surged significantly above the daily average as markets reassessed their positions following the company’s full-year results announcement.
The Print
AMP reported underlying net profit after tax (NPAT) of $285 million for FY25, representing a 20.8% increase from the prior year. The company attributed the improvement to strong cash flows from its North platform and a 9% rise in total assets under management (AUM) to $161.7 billion. Underlying earnings per share climbed 25.6% to 11.3 cents per share.
However, the headline numbers masked significant challenges. Statutory NPAT declined 11.3% to $133 million, weighed down by legacy legal settlements that continue to burden the company’s bottom line. The divergence between underlying and statutory profit highlighted the ongoing cost of resolving historical issues that have plagued AMP for years.
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The company’s Platforms business, a key revenue driver, reported a 9.3% increase in underlying NPAT to $106 million, with net cash flows excluding pensions surging 85.2%. Yet the AUM-based revenue margin for this segment contracted from 45 basis points in FY24 to 42 basis points in FY25. Management attributed the compression to the interaction of AUM growth with tiered fee structures and the expansion of Managed Portfolios.
AMP declared a final FY25 dividend of 2 cents per share with 20% franking, bringing the full-year payout to 4 cents per share. During the earnings call, CFO Blair Vernon indicated the company anticipates maintaining a 4-cent per share dividend in both FY26 and FY27.
On the critical question of capital management, Vernon outlined the company’s preferred approach.
“In the absence of a compelling alternative use of capital, our preferred method of capital return to shareholders beyond our current dividend approach would be via on-market buyback,”.
Notably, no immediate buyback was announced, disappointing markets that had anticipated more aggressive capital returns given the company’s balance sheet position.
Looking ahead to FY26, Vernon projected further margin pressure in the Platforms business, forecasting the AUM-based revenue margin would decline to between 40 and 41 basis points, subject to market conditions. This guidance signalled that the structural headwinds facing the business would persist into the new financial year.
The absence of a buyback and the missed dividend expectations for FY26 and FY27 were identified as particular concerns. Analysts also highlighted the continued decline in revenue margins across both the Superannuation & Investments and Platforms divisions as a structural negative.
CEO Alexis George attempted to frame the results more positively, describing 2025 as a pivotal year for the company. She emphasised that AMP had resolved legacy issues and stabilised its portfolio, expressing confidence in the company’s strategic focus and strong balance sheet to drive organic growth and pursue inorganic opportunities.
The market’s harsh reaction reflects deep-seated concerns about AMP’s ability to defend margins in an increasingly competitive wealth management landscape. While AUM growth and strong cash flows demonstrate the company retains a substantial client base, the persistent compression in revenue margins raises questions about pricing power and the sustainability of profit growth. With further margin erosion already flagged for FY26, AMP faces an uphill battle to restore market confidence and justify a higher valuation multiple.
