In the wake of reporting a 16% boost to underlying profit last week at its interim results release, shares in the leading financial services provider AMP Limited (ASX: AMP) have surged to a new 52-week high.
The recent gains have added to an already strong 12-month period for the widely-owned blue-chip company. One-year gains are 21.4%, which is a great return compared with the 9.8% delivered by the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO).
Highlights from the results included a turnaround in AMP's wealth protection business which posted a near 50% rise in profit to $91 million. The board also saw fit to raise the pay-out by 1 cent per share (cps), announcing an interim dividend of 12.5 cps.
More to come
AMP is well positioned for future growth thanks to its vertically integrated business model. This model incorporates Australia's largest financial planning network with a massive funds management capability. Although the outlook for the wealth protection business remains somewhat clouded and the effects of competition and particularly the MySuper regulations will continue to squeeze profit margins. However, the long-term tailwind of a growing superannuation system coupled with its high market share is a massive benefit to AMP.
Another potential big growth opportunity for the group is its recent focus on Asia. The revenue growth opportunity of successfully entering markets such as China where AMP has already had early success is obvious and an exciting direction for the group to be taking.