Macquarie Analysts.18 August 2004AMP: 2004 Result BreakdownAMP...

Macquarie Analysts.

18 August 2004

AMP: 2004 Result Breakdown

AMP this morning reported a strong full year result, announcing a net profit of $378m and a dividend of 13c, both of which exceeded market expectations. Despite the solid result the AMP share price has dipped this morning, crashing to an intra-day low of $6.22, before bouncing back to $6.30. Macquarie Research Equities (MRE) maintain an outperform recommendation.

MRE point out that the result highlighted the resilience and rapid recovery of the AMP brand and distribution franchise following the UK furore last year. The 'new' AMP also benefited from improved conditions in the wealth management market, helping new business flows increase 21%.

Result Highlights include:

AMP Financial Services (AFS) reported a 29% lift in business profits to $225m from $174m last year. This result reflects a significant turnaround in net new cashflows and fixed cost leverage.
Funds management delivered business profits of $35m, up $1m on last year, with the impact of rising asset values on fee income and net new cashflows, largely offset by the loss of fee income associated with the sale of AMP's listed property trust business in 2003.
MRE believe that that the domestic franchise is rebounding strongly, as evidenced by strong rebound in new sales, net new inflows and persistency. Management also delivered further cost efficiencies during the half. MRE maintain their outperform recommendation and forecast a 12 month price target of $7.23