AMP Limited (ASX: AMP) provides life insurance, superannuation, asset management products, pensions, retirement planning and other diversified financial services throughout Australia and New Zealand. The Company services individual customers, small businesses, corporations and associated superannuation funds.
The company has through a release on ASX stated that it had completed an assessment of the impact of the federal government’s Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018. The Bill needs last consent in the House of Representatives and hence remains subject to possible additional amendment. Based on the amendments passed in the Senate earlier as on 14 February 2019, the suggestive operational earnings effect on the company’s retained businesses in FY 19 is anticipated to be circa $10 Million, with an annualized impact of up to $30 million after-tax from 2020. These approximations are beforehand considering to a number of possible mitigants, including counterweighing activities to hold clienteles and income, administrative cost optimizations and the consolidation of low balance super accounts from other industry participants into company’s active accounts. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The earnings effect will be majorly on the Australian wealth management business. This vertical, which will be required as per the regulation to transfer circa 370,000 low balance superannuation accounts to the ATO. The impact on AMP Capital is not material in this regard.
The company had also reported its FY 18 results. The FY 18 statutory net profit came in at A$28 million as compared to A$848 million for FY 17. The underlying profit for FY18 came in at A$680 million which was driven by positive momentum in AMP Capital and AMP Bank. The Australian wealth management operating earnings stood at A$363 million with a net cash outflow of A$3,968 million vis-à-vis A$931 million net cash inflows for FY 17, which reflected a range of factors including the reputational impact of the Royal Commission.
The capitalized losses and adverse claims experience in wealth protection led to A$3 million operating loss in businesses sold to Resolution Life.
The company has been able to maintain its balance sheet strength and thus has a substantial capital surplus of A$1.65 billion which is certainly above the minimum regulatory requirements. The FY 18 final dividend was declared at 4 cents per share, which has been franked up to 90 per cent. This distribution is in recognition of the company’s 2H 18 performance, the capital impacts and post considering various market uncertainties.
Now, let us have a quick look at AMP Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $2.15, down by 1.376% during the day’s trade and the market capitalization stood at ~$ 6.4 Bn. The counter opened the day at $ 2.170, reached the day’s high of $ 2.190 and touched the day’s low of $ 2.120 with a daily volume of 18,972,403. The stock has provided a YTD return of -10.66% & also posted returns of -36.44%, -13.83% & -15.18% over the past six months, three & one-months period respectively. It had a 52-week high price of $ 5.470 and touched 52 weeks low of $ 2.120, with an average volume of 11,958,824 approximately.
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