AMP upbeat despite 18 per cent profit decline
AMP Limited has experienced a strong boost in revenue as a result of its merger with AXA Asia Pacific, but nonetheless experienced an 18 per cent decline in first half net profit after tax attributable to shareholders to $349 million.
However, the company chose to point to the 3 per cent increase in underlying profit to $455 million as being a more reliable measure, and reinforced the fact that AMP had the largest adviser and planner network across Australia and New Zealand.
It said the merged business had 4,020 planners and advisers at 30 June, with the merged group having 4,048 planners, representing a fall of six advisers from 31 December, last year.
"Ongoing strong growth in AMP planner numbers was offset by lower recruitment for AXA advisers, particularly in the first quarter of 2011, against a background of heightened uncertainty for AXA advisers ahead of the final merger outcome," AMP chief executive, Craig Dunn, said in a statement released to the Australian Securities Exchange (ASX).
"We are very pleased with AXA adviser retention post the merger," he said. "As of today, around 97 per cent of the value of the adviser network in AXA and Charter Financial Planning has been retained."
The AMP release to the ASX revealed that AMP Financial Services operating earnings increased 2 per cent to $329 million for the half, which the company said reflected strong results from AMP Bank, Contemporary Wealth Protection and higher net cash flows into AMP Flexible Super.
It said that its Contemporary Wealth Management division, which includes financial planning, superannuation, pensions and banking businesses, operating earnings had increased by 5 per cent to $157 million.
The announcement said AMP Capital Investors' operating earnings were down slightly to $41 million.
Discussing the outlook for the company, Dunn said the European debt crisis and uncertainty over the US recovery was likely to remain a source of investment market volatility for some time to come, while closer to home, Australian households remained cautious and continued to prefer increasing their savings through bank deposits over increasing discretionary contributions to superannuation.
Recommended for you
In this episode of Relative Return, host Laura Dew speaks with Daniel Bower, chief product officer at FinClear, and Bill Keogh, chief executive of Transact1 (a FinClear subsidiary) to discuss cash as an asset class.
In this episode of Relative Return, host Maja Garaca Djurdjevic is joined by shadow treasurer Angus Taylor to discuss the current state of the financial advice sector, the economy, the housing affordability crisis and more.
In this episode of Relative Return, host Laura Dew speaks with Andrew Mitchell, director and senior portfolio manager at Ophir Asset Management, about why he loves working in fund management and the lessons he’s learnt in a decade of running a firm.
In this episode of Relative Return, host Laura Dew speaks with Blackwattle Investment Partners managing director and chief investment officer, Michael Skinner, about setting up an asset manager and what he looks for in an investment team.