The AMP Limited (ASX: AMP) share price is down 7.5% to $2.35 this morning after the Royal Commission-hit financial services group revealed it expects profit for reported fiscal 2018 to come in at $30 million, down 96% on the $848 million delivered across calendar year 2017.
The good news is that the company expects to report an underlying or adjusted profit of around A$680 million, however once you add in costs around the Royal Commission findings, advice remediation, increased investment in risk, compliance, governance and other areas you arrive at the paltry figure of $30 million.
The fallen financial services giant had one final kick in the teeth for shareholders with news that it intends to pay a final dividend of just 4 cents per share, compared to the 14.5 cents per share delivered in the prior corresponding half-year period.
Total dividends for 2018 will be just 14 cents and calendar year 2019’s dividends are unlikely to be a big improvement on the existing result.
AMP already warned today of further upcoming costs in 2019 including “MySuper” pricing changes ($35 million hit), costs around the Resolution Life sale ($85 million hit) and “stranded group office costs of $40 million”.
Another cloud on the horizon is that the Royal Commission is due to hand in its final recommendations into reforms of the financial services industry this February.
AMP will hand in its 2018 profit report on February 14, 2019.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.