AMP boasts billion dollar turnaround

By Phil Boeyen, ShareChat Business News Editor

Thursday 24th August 2000

Insurer AMP has delivered a strong turnaround in its half-yearly result with net profit up more than a NZ$1 billion on the same period last year.

Its tax paid net profit for the six months to the end of June stood at A$525 million and compares with its A$398 million loss for the 1999 first half.

CEO, Paul Batchelor, says six months ago the company set clear priorities to get itself back on track and the latest results are evidence it has reached its goals, and positioned AMP for future growth.

"We have consolidated our acquisitions and delivered results faster than previously announced. We have driven the business hard. We have delivered improved profits. We have strengthened our market positions in Australia and the UK and we have invested in future growth opportunities."

Mr Batchelor says that the result was delivered by focusing on sustaining the momentum in AMP's core businesses, effective cost reductions across the group and generating investment income that exceeded benchmark returns in a volatile market.

"The encouraging aspect of this result is that we are delivering in accordance with our strategy. AMP occupies a unique position in the wealth creation market in Australia and New Zealand, and has similar potential in the UK. Our progress in the half year provides us with a greater sense of optimism for the future".

The company says its banking operation in Australasia continued to make good progress in first half 2000 and is on track to be profitable in 2001.

Cost saving from the integration of GIO into AMP is also highlighted in the annual results, and greatly exceeded expectations. The company says it has now locked in total savings of A$145 million, exceeding the original two-year target in just seven months, and is now targeting cost savings of A$200 million across the group by the end of 2001.

In the UK the insurer says a full scale business reconstruction is taking place under which all UK businesses - Pearl,NPI and London Life - are being brought together as a single business unit and should deliver annualised savings of 80 million pounds by end of 2001.

AMP's earnings per share stands at 48.1 cents compared with negative 36.9 cents in the first half last year. It has announced an unfranked dividend of 23 cents per share.

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