AMP share price: what to expect from its 2019 interim report

Of Australia's large financial companies, AMP Ltd was the hardest hit by the Hayne Royal Commission, having seen its share price fall 46% off the back of this wide-reaching inquiry.

Now, with AMP set to report its 2019 interim results on August 8, investors will likely be eager to see if there are any signs that the beleaguered wealth management firm has began to turn its prospects around.

What to expect from AMP’s interim results

As we previously reported, AMP’s last major announcement to the market involved the revelation that the much-anticipated, A$3.3 billion sale of AMP Life had fallen through.

This was joined by comments that it was unlikely that AMP would pay an interim dividend.

AMP Ltd shares fell 16% off the back of that news.

Even though AMP’s interim dividend is unlikely to be paid, investors will almost certainly be keen to see an update on AMP’s weakened cash position.

For example, in its Q1 update to investors, AMP noted that it experienced net cash outflows of A$1.8 billion – of which A$538 million was related to regular pension payments.

Speaking of these outflows, AMP’s CEO, Francesco De Ferrari noted:

‘Cashflows in Australian wealth management continued to be challenged given the post-Royal Commission environment.’

Given that the company also pointed out that it expects continued ‘weakness in inflows and higher outflows in the post-royal Commission environment,’ investors are liable to closely scrutinise updated cashflow figures following AMP's upcoming interim results.

Can AMP’s record share price low last?

AMP’s management remains confident in the firm’s long-term prospects, arguing that, ‘we remain focused on transforming our business model in Australian wealth management to compete more effectively.'

AMP Ltd is also optimistic that it can find a way to salvage the A$3.3 billion AMP Life sale – in some form, at least.

Investors and analysts have taken a less positive view on the firm in the wake of the Royal Commission.

According to the Wall Street Journal, the overwhelming sentiment surrounding AMP is a negative one. Of the 12 analysts covering the stock, only 1 rate it as a buy, while six rate it a hold and four rate it a sell.

AMP going forward

Ultimately, AMP Ltd remains in an interesting position. While true, that in terms of share price, AMP remains at record lows, as Paul Rickard, from the Switzer Report, aptly points out:

‘I would like to say that the AMP is a “buy”, but I am not convinced the knife has stopped falling.’

With Mr Rickard adding, ‘I just have a sneaky feeling that we might see $1.50 before we get back to $2.00.’

The central question that investors likely now have is: can AMP actually turn around its wealth management business in the long-term?

Such questions and associated concerns are likely to come into greater focus as we draw closer to AMP’s interim results, scheduled for August 8.