When it comes to wealth management in Australia, AMP Limited (ASX: AMP) is a veritable giant within the industry.
AMP operates its financial year on a calendar year basis which means that investors have just had the opportunity to review the group's full year results for 2014.
Those results were well received by the market and investors sent AMP's share price up to a new 52-week high of $6.83 – it is currently trading at $6.65 – this marks the highest price level for AMP in over five years.
Despite the strong share price appreciation which has seen the stock rally 38% over the past year, there are a number of reasons to remain positive on the outlook for AMP…
- Underlying profit jumped 23% to $1.045 billion driven by double-digit growth in operating earnings across all contemporary businesses
- The final dividend was raised by 17% to 13.5 cents per share (cps)
- The cost-to-income ratio was tightly managed and declined to 44.8% from 49.4% a year earlier
- Assets under Management (AUM) rose 9% to $109.5 billion
- Underlying return on equity (ROE) expanded by 23% to 12.7% compared with 10.7% in 2013
These results were solid and a credit to management, particularly the improved performance of the wealth protection business which has been a major problem for the group in the past. AMP also continued to maintain its strong capital surplus position with $2 billion in capital above the minimum regulatory requirements.
Looking forward, management has provided guidance to the market for costs to continue to be tightly controlled and for a dividend pay-out ratio of 70% to 80% of underlying profit to be targeted.
