Diversified wealth manager AMP (ASX: AMP) has released its interim results for the half year ending June 2013. The company has beaten the recent June guidance which had downgraded expectations for underlying profit to a range between $415 million to $435 million.
Here are the results:
- Underlying net profit after tax (NPAT) of $440 million compared with $488 million in the previous corresponding period (pcp)
- Underlying return on equity of 11.2% down from 13.4% in the pcp
- Interim dividend down 1 cent to 11.5 cents per share (cps)
- Assets under management of $131 billion up from $123 billion a year earlier
- Total number of financial advisors across Australia and New Zealand up by 10 to 4,286
Highlights from the interim results included:
- The massive AXA integration project is nearing completion (approximately 93% complete) with CEO Mr Craig Dunn stating that the integration has met expectations for the delivery of synergies.
- The AFS Wealth Management division had a very strong half, however this was more than offset by the previously identified poor trading results within the AFS Wealth Protection division, which saw earnings cut in half compared with the pcp.
- Good growth and market leader status attained in the newly established Self-Managed Super Fund administration business.
- Off-shore expansion doing well with both retail and institutional wins including a $200 subscription from a Hong Kong-based investor.
- Announcement of a new efficiency program to deliver recurring cost savings of $200 million (pre-tax) by the end of 2016. The program will require $320 million in one-off implementation expenses.
- After six years in the CEO roll Mr Dunn announced his retirement. Mr Meller, who is currently the MD of the AMP Financial Services division, has been appointed at Mr Dunn's replacement from the start of January 2014.
Foolish takeaway
There was some investor concern leading in to AMP's results due to the June downgrade. The interim results have provided comfort that the overall business is tracking well and importantly the issues within the Wealth Protection division are under control. With peers Challenger (ASX: CGF), Suncorp (ASX: SUN) and IAG (ASX: IAG) all due to report next week, shareholders may be feeling more positive about what to expect from these firms too.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
