After some self-inflicted pain, AMP Limited (ASX: AMP) appears to be turning the corner.
CEO Francesco De Ferrari looks to have surprised the market, announcing the company’s first dividend since 2018, a special payment of 10 cents per share. The dividend was accompanied by an on-market share buyback of $200 million, which should support the share price.
AMP’s long-awaited exit from life insurance has placed the company in an enviable position, with some $1.4 billion surplus capital even after accounting for these capital initiatives.
Looking closely, underlying profit fell 42% to $149 million from $256 million, a solid result despite the headwinds that have followed.
Every business line contributed to the result, with wealth management delivering $59 million, despite cutting the costs of its AMP North platform and losing $1.3 billion in super accounts; assets under management finished at $121 billion.
AMP Bank remains a growth driver, increasing customer deposits by 18% and delivering $50 million in profit, whilst AMP Capital remains the core profit centre, $72 million, even as performance-related fees on infrastructure and property assets fell 40% for the financial year. Management clearly sees the value in this business, repurchasing the 15% it doesn’t own from Mitsubishi UFJ Trust, a Japanese institutional investor.
My take: AMP delivered a solid result with clear signs the company has bottomed.
For a detailed write-up on AMP’s report, check out this article from Rask Media’s Owen Razskiewicz: AMP Limited (ASX:AMP) share price jumps 12% on special dividend
This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.
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