Insurance and wealth management giant AMP today dished out a $750 million booty to long-suffering shareholders, having posted a consolidated bottom line profit of close to a billion dollars for the year to December 31, 2004.
The capital return to shareholders – a substantial chunk of this year’s profit of $934 million – marks a turnaround in fortunes for AMP shareholders who, in 2003, bore the brunt of the group’s mishaps in the United Kingdom.
Both arms of the company performed strongly in 2004 with AMP Financial Services which includes AMP Financial Planning and AMP Life recording an increase in operating margins of 15 per cent to $475 million. The company’s wholesale funds management arm, AMP Capital Investors also performed well with 86 per cent of assets under management meeting or exceeding benchmarks in 2004.
Overall, investment income for the company rose by 129 percent to $503 million.
Mohl predicted that operating margins for AMP financial services would grow moderately in 2005, while at AMP Capital Investors, Mohl predicted “solid growth” in operating margins.
Thanks to a series of UK writedowns and accounting losses associated with the demerger with its UK operations, AMP Henderson, the group posted a bottom line loss of $5.54 billion for the corresponding period in 2003.
According to AMP chief executive, Andrew Mohl, the impressive 12 month, $6.4 billion turnaround can be attributed to improved operational efficiency and bullish investment markets.
“Following the demerger of our UK operations in 2003, we were clear about the task at hand: to run the company better than it’s ever been run before,” said Mohl.
“Our focus on improving operational efficiency of the business positioned us well in the favourable investment market conditions of the past year.”
