Provider of life insurance, superannuation, pensions and other financial services in Australia and New Zealand.
AMP Ltd has reported a significant decline in profit for FY24, with net income nearly halving to $150 million from the prior year. Despite this, CEO Alexis George emphasised that the result reflects the firm’s ongoing business simplification strategy, including the divestment of its financial advice arm. Cost reduction remains a key focus, with AMP achieving a 6.1% decrease in controllable costs year-on-year, aligning with its cost-cutting targets.
The company’s wealth platforms and superannuation divisions showed strong performance, with underlying profit rising 15% to $236 million. The North platform, in particular, continues to gain traction among financial advisers, with increasing adoption of its retirement products and managed portfolios, which has driven positive net inflows. In contrast, AMP Bank’s underlying profit declined by over 20% to $72 million, reflecting the challenges of managing lending volumes and interest margins while developing its new digital banking offering. Management noted improving trends in the bank’s mortgage book in the second half of the year, signalling a potential turnaround.
AMP declared a final dividend of 1¢ per share, down from 2¢ last year, disappointing investors and contributing to a 14% drop in share price—the largest single-day decline since November 2023. The sharp market reaction highlights investor concerns about AMP’s lower-than-expected dividend and cautious guidance for FY25, with further downward pressure on revenue margins expected.
Looking ahead, AMP aims to further streamline operations, targeting a 7.4% reduction in costs for FY25, focusing on property expenses and vendor contracts. The firm anticipates absorbing cost increases from inflation while continuing to invest in its key growth areas. Despite weaker profit, AMP’s underlying return on equity improved to 6.4%, up from 5.2% in FY23, indicating improved capital efficiency within its core operations.
While AMP’s simplification strategy and cost control measures are positioning it for long-term growth, the near-term outlook remains challenging. A softer dividend forecast and declining platform revenue margins suggest further headwinds for earnings. Given today’s sharp share price decline, AMP’s position in the ASX Growth portfolio—determined by relative price momentum—is now at risk. With the portfolio set for its next rebalance on February 16th, AMP’s performance in the coming weeks will be critical in determining whether it remains included.
