AMP (NZX:AMP): Is it a dividend-paying stock?

Highlights

• AMP witnessed an improved performance in 1H21.
• AMP plans to complete the demerger of AMP Capital's private Markets business by Q1 of 2022.
• The Group did not announce an interim dividend for 2021 and plans to review this after the demerger is completed in 1H22.

AMP Limited (NZX:AMP; ASX:AMP) is a leading wealth management firm, which has operations in Australia and New Zealand. The Group’s business is divided into 3 areas- AMP Australia, AMP Capital and NZ wealth management.

AMP experienced a stronger H1 of FY21 with improvement in economic and market conditions, and transformation plan delivery propelling a 57% increase in underlying earnings. The Group reported a higher NPAT of AU$181 million during the period showing strong costs, higher investment income and increased earnings in AMP Bank.

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AMP’s investment income stood at AU$57 million, majorly from Group Office, up AU$48 million on 1H20.

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AMP also declared its decision to undertake the demerger of the AMP Capital private markets business and step forward on the transfer of Multi-Asset Group (MAG) to AMP Australia on 23 April.

AMP also announced the sale of AMP Capital’s GEFI business to Macquarie Asset Management for the consideration of up to AU$185 million on 8 July, expected to be completed by Q1 of 2022.

Capital management and dividend

AMP is well capitalised with AU$452-million eligible capital above target requirements as of 30 June 2021.

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On 13 August 2020, AMP announced the return of capital of up to AU$544 million to shareholders, which included a AU$344-million fully franked special dividend paid in October 2020 and up to AU$200 million in the form of an on-market share buyback. The share buyback was completed on 30 June 2021.

AMP Board did not declare any interim dividend and kept a conservative approach to capital management. The Group plans to review its dividend payments and capital management approach after the completion of the demerger in 1H22.

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On 22 September, AMP Limited declared a quarterly dividend of AU$1.2755 per share on AMPPA security, due to be paid on 21 December 2021. On 16 September, AMP also declared a quarterly dividend of AU$1.1251 per share on AMPPB security, due to be paid on 16 December 2021.

On 29 September, at the time of writing, AMP was trading at NZ$1.04, down 2.8%.

Bottom Line

AMP remains on track to deliver on strategic priorities of reshaping and simplifying the business. The Group will prioritise completing its demerger in Q1 of 2022.