AMP Limited has posted a solid full-year result with the net profit attributable to shareholders up 5 per cent to $775 million and the company reporting a 2.5 per cent growth in its planner numbers to 1,812.
However, the company also reported to the Australian Securities Exchange today that its preferred measure of profitability, underlying profit, had actually declined by 2 per cent.
AMP chose to describe the result as “solid in a subdued market”.
The highlights in the AMP result appeared to mainly emanate from its contemporary wealth management division and superannuation, notwithstanding the fact that the AMP Financial Services business unit reported a 1 per cent decline in operating earnings to $639 million.
The company said that contemporary wealth management had turned in a strong performance, which had been offset by a negative claims experience in the contemporary wealth protection business.
It said controllable costs had increased 3 per cent to $545 million, which mainly reflected an increase in expenditure on growth initiatives designed to expand AMP’s distribution capability and enhance planner productivity.
The results announcement said the company had continued to achieve robust planner growth, with numbers now having reached 1,812 planners and planner practice numbers up 64 to 880.
Looking at the contemporary wealth management division, AMP said that net cash flows had remained subdued compared with previous years, consistent with an industry-wide reduction in discretionary superannuation contributions.
It said that AMP’s market share in superannuation had grown marginally over the 12 months ending 30 September, 2010, to 17.2 per cent.
AMP said contemporary wealth protection operating earnings were down 16 per cent to $138 million, reflecting higher than expected income protection and group risk insurance policy claims.
However, it said there had been strong sales momentum with an overall lift in individual risk insurance, including a 30 per cent increase in risk insurance through independent financial advisers and alliances.
Commenting on the result, AMP chief executive Craig Dunn (pictured) said the company had worked hard to position itself ahead of the regulatory curve in product, distribution and capital management, while investing in targeted growth initiatives including the expansion of its Australian distribution footprint and the rollout of its investment management business into Asia.
“These growth initiatives, along with the proposed merger with AXA’s Australia and New Zealand business, place AMP in a very strong competitive position for the future,” he said.
