THE chief executive of AMP, Craig Dunn, has declared the wealth manager is better placed than ever to tackle the structural challenges facing the retirement savings industry, with integration efforts from last year's $4 billion buyout of AXA Asia-Pacific almost completed.
Mr Dunn also suggested he was eyeing further expansion into Asian markets after gaining ground from existing investments in China and Japan. However, any further move would be on a long-term basis.
"Your approach to each [Asian] market has to be different and you have to be very patient. You can waste a lot of money if you move too quickly," he said yesterday.
Mr Dunn was speaking as AMP delivered a 7 per cent rise in underlying profit to $491 million. The result for the six months to the end of June came in slightly better than expected and was helped by tight cost control.
Shares in AMP rose more than 4 per cent to a five-month closing high of $4.36 as the result eased investor concerns about Australia's biggest superannuation manager, ranging from capital to falling demand for wealth products.
Since the financial crisis, superannuation managers have been grappling with households turning their back on stockmarkets and putting more savings into lower-risk areas such as bank deposits and bonds.
The combination of the AXA businesses was a major contributor to the lift in profit, delivering higher fee income and greater cost savings.
"There is no doubt in my mind that the merger means the new AMP, or [that the] combined business, is much more competitive and much stronger, can grow more quickly and deliver real value to shareholders," Mr Dunn said.
But with surplus capital, and the integration of AXA running six months ahead of schedule, the wealth manager was now looking to tap faster-growing areas of the retirement savings industry such as self-managed superannuation.
"Clearly the [financial crisis] has had a very significant impact on markets. I think the biggest change is on how consumers are changing their preferences - they're more cautious than they once were, they're looking for greater value and they're more selective," he said.
Despite the rise in profits, AMP opted to cut its first-half dividend by 1.5? to 12.5? a share.
A Deutsche Bank analyst, Kieren Chidgey, said AMP had delivered a solid profit result, helped by improved wealth management fund flows and margin trends.
AT A GLANCE
2012 2011
Revenue $7.03b $3.92b
Profit $383m $346m
EPS 13.5? 14.4?
Dividend 12.5? 14?
Frequently Asked Questions about this Article…
What did AMP say about completing the AXA Asia-Pacific acquisition?
AMP's chief executive Craig Dunn said integration efforts from last year’s roughly $4 billion buyout of AXA Asia‑Pacific are almost completed, and the integration is running about six months ahead of schedule.
How did AMP’s latest profit result affect its share price?
AMP reported a 7% rise in underlying profit to $491 million for the six months to the end of June, which eased investor concerns and helped AMP shares rise more than 4% to a five‑month closing high of $4.36.
Why did AMP cut its first‑half dividend and by how much?
Despite the rise in profits, AMP reduced its first‑half dividend by 1.5 cents to 12.5 cents per share; the article notes the cut was made even as the underlying result improved.
How has the AXA deal contributed to AMP’s financial performance?
The combination of the AXA businesses contributed to the lift in profit by delivering higher fee income and greater cost savings, making the combined AMP business more competitive and stronger, according to Craig Dunn.
Is AMP planning to expand further into Asian markets like China and Japan?
AMP is eyeing further expansion into Asian markets and has existing investments in China and Japan, but the company says any additional moves would be long‑term and require a patient, market‑specific approach to avoid costly mistakes.
What growth areas is AMP targeting after the AXA integration?
With surplus capital and integration ahead of schedule, AMP indicated it is looking to tap faster‑growing areas of the retirement savings industry, including self‑managed superannuation.
How has consumer behaviour changed since the financial crisis and what does that mean for AMP?
The article notes households have shifted some savings away from stockmarkets into lower‑risk options like bank deposits and bonds; consumers are described as more cautious, value‑seeking and selective, which affects demand for wealth products that AMP offers.
What did analysts say about AMP’s recent performance and drivers of the result?
Deutsche Bank analyst Kieren Chidgey described AMP's profit result as solid, highlighting improved wealth management fund flows and positive margin trends as contributing factors.
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