AMP bounces back

By Phil Boeyen, ShareChat Business News Editor

Wednesday 28th February 2001

Insurance and financial services company AMP (NZSE: AMP) has achieved a strong financial comeback, reporting an after tax profit of A$1.152 billion compared with the previous year's A$424 million loss.

AMP chief executive, Paul Batchelor, says the result for the year to the end of December is a positive one for shareholders.

"Driven by the consistent execution of our strategy throughout 2000, the result shows strong growth in our core businesses worldwide and the effectiveness of strong cost and capital management."

Mr Batchelor says an increase in earnings per share for the year to A$1.05 from A39 cents last year underpinned the company's improved share price and final dividend of A24 cents, taking the full year dividend to A47 cents per share.

During the year the company's Financial Services arm contributed a 25% increase in operating margins to A$370 million, while its Henderson Global Investors division contributed A$315 million, up 148% on the previous year.

The company says it General Insurance business also continued momentum, turning an A$1 million loss the previous year into a $39 million surplus.

Mr Batchelor says the company also exceeded its initial two-year savings target for its GIO investment.

The company had budgeted for synergy savings of A$140 million by the end of 2001, but ended the 2000 year with savings of A$177 million. These are expected to rise another A$23 million by the end of this year.

In its UK operation's the company also realised considerable consolidation savings of $A176 million.

AMP is also touting its core operating margins, which increased by 65% over the previous year to A$981 million, as evidence it is on the right growth track.

It says operating margins now contribute more than 61% of the company's total earnings, up from 41% in 1999, meaning there is less reliance on investment income to boost the bottom-line.

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