AMP hits near 11-month high as profit rises on demand for investment platforms
Shares up as much as 12.8%
Cost control aids earnings - analysts
Partnership with Entireti for Advice business
Rewrites throughout, adds share moves, background and details, analyst comments
By Rishav Chatterjee and Sneha Kumar
Aug 8 (Reuters) -Australia's AMP AMP.AX reported a higher first-half profit on Thursday, reflecting underlying strength in its investment platforms and resilient cost savings, sending the money manager's shares to a near 11-month high.
The AMP stock hit its highest since late September 2023 and was on track for its best session since April 2022. It rose as much as 12.8% to A$1.275.
"The financial results highlight AMP's efforts to streamline operations and strengthen its market position," said Mark Gardner, head of equities advisory at MPC Markets.
The more than 170-year-old wealth manager reported underlying net profit after tax of A$118 million ($76.88 million) for the six-month period ended June 30, compared with A$112 million a year ago.
The first-half earnings beat market estimates, which analysts at Citi attributed to lower costs, especially from its Platforms and Superannuation & Investments businesses.
"Although much of the earnings beat appears to be cost rather than revenue driven, variable costs are lower than expected and we believe the stock is likely to trade higher on the result," Citi said in a note.
The wealth manager also announced a partnership for its AMP Advice operation with Entireti and AZ NGA. Entireti would acquire AMP's financial advice licensees, with the Australian fund manager retaining a 30% stake in a new joint venture.
"AMP's financial results demonstrate progress in executing strategic initiatives, managing costs, and positioning the company for future growth, particularly through strategic partnerships and diversification efforts," added Gardner.
AMP declared an interim dividend of 2 Australian cents apiece while continuing with its capital management program. It has now returned A$963 million to its investors out of a planned A$1.1 billion.
AMP's banking unit, however, posted a 38.6% drop in half-year profit to A$35 million, impacted by falling margins.
($1 = 1.5344 Australian dollars)
Reporting by Sneha Kumar, Rishav Chatterjee and Adwitiya Srivastava in Bengaluru; Editing by Shilpi Majumdar, Anil D'Silva and Rashmi Aich
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
