The AMP Ltd (ASX: AMP) share price has cratered on Thursday after the financial services company dropped its full-year FY25 results.
AMP is the biggest faller on the S&P/ASX 200 Index (ASX: XJO) today after the wealth manager missed market expectations.
The AMP share price is currently $1.21, down 30.66%.
According to The Australian, this is the biggest one-day fall in the AMP share price since 2003, when it experienced a 36% plunge.
The wealth manager reported a 20.8% lift in underlying net profit after tax (NPAT) to $285 million.
AMP said strong North platform cash flows and a 9% increase in total assets under management (AUM) to $161.7 billion contributed to the rise in underlying profit.
But the statutory NPAT was $133 million, which represented an 11.3% decline. AMP said this reflected legacy legal settlements.
There was a 25.6% lift in the underlying earnings per share (EPS) to 11.3 cents per share.
AMP declared a final FY25 dividend of 2 cents per share with 20% franking, taking the full-year dividend to 4 cents per share.
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Broker Macquarie dubs full-year report 'weak'
In a post-results note, broker Macquarie commented (courtesy The Australian):
Initial impressions are weak with guidance far below Visible Alpha consensus expectations across all items.
There was no buyback, dividend outlook missed in FY26/27.
In addition, revenue margins in both the S&I (Superannuation & Investments) and Platforms divisions continue to grind lower against consensus expectations of roughly flat.
Let's address each of these points.
AMP dividend outlook
During the earnings call with investors, AMP CFO Blair Vernon said he anticipates a 4-cent per share dividend in FY26 and FY27.
On the issue of potential future capital returns to shareholders, Vernon said:
In the absence of a compelling alternative use of capital, our preferred method of capital return to shareholders beyond our current dividend approach would be via on-market buyback.
AMP CEO Alexis George made the point that AMP has already given $1.1 billion in capital back to shareholders over the past five years.
Revenue margins
AMP reported a 9.3% increase in the Platforms underlying NPAT to $106 million, with net cash flows (excluding pensions) up 85.2%.
The AUM-based revenue margin for the Platforms business was 42bps, down from 45bps in FY24.
AMP said this reflected the interaction of AUM growth and tiered fee structures, as well as the growth in Managed Portfolios.
Looking ahead to FY26, Blair said he expects that, subject to market conditions, the Platforms margin would be lower again at between 40 and 41bps.
The Superannuation & Investments segment delivered a 14.8% uplift in underlying NPAT to $62 million.
The segment's AUM-based revenue margin of 62bps was also lower, down 1bps on FY24.
AMP said this was due to AUM growth and fee caps offset by lower investment management expenses.
Blair provided revenue margin guidance of 60 to 61bps for this segment in FY26.
What did management say?
AMP CEO Alexis George said:
2025 was an important year for AMP with resolution of legacy items and stabilisation of the portfolio.
This enabled renewed focus on winning in the segments we play, growing the wealth businesses, and building on the vision to be the place that customers come to plan for a dignified retirement…
We have a clear strategic focus and a strong balance sheet. This means we are well positioned to continue to drive organic growth, while also having the capacity to participate in inorganic opportunities when they arise.
