AMP Chart, page-137

Like the analysts I have now had a chance to look more at the results. In short the negative view that supports current price rather than a jump in price is.......

Profit down
Cashflow for higher margin products negative
Margin compression
Cost reductions include one off savings of $22m by not paying staff bonuses - that should get them fixing things better and working harder - and abou $16m in project cost savings which means they were either over spending before or under spending now. Either way it is a 7% to 8% variance in underlying profit when factored in.
Adviser numbers down.
Reduced capital reserves.
Legal actions that could cost money in addition to provisions.
The rest was just too complicated for me.

The positive view is.....

The new CEO will either succeed or not look too bad if they fail to make a big difference so hopefully someone will take the job.

The race is now on to see what can take longer. The arrival of a new CEO or any meaningful statement about selling any of the businesses that AMP have been out there trying to offload. My money is on a new CEO first, followed by a further year of “we are progressing our strategic review” as they try to sell what no one wants to pay enough for.

AMP’s guidance is for $950m this year. If you knock off the one off savings then you get about $880m. Is this a high, medium low or negative growth stock? 15 times would seem a real stretch. 12 times gets you just about where we are today. It does make me happy that the market is logical in its own way.