AMP share price: interim results preview

Diversified and beleaguered financial services company AMP is set to hand down its interim results to the market this Thursday, August 12.

The stock has been in a clear downtrend for some time – over both the long and short term. In the last 5-years the stock has shed over 80% of its value; and year-to-date, the picture is hardly improved, with AMP down 32% since January.

Despite that share price weakness, analysts remain mixed on the stock overall, with AMP commanding a Hold on average, according to Market Index.

On a more granular level, that average rating is made up of one Buy rating, five Holding ratings and two Sell ratings, also according to Market Index.

Share price moves aside, AMP management continues to try and shake things up, recently announcing the sale of AMP Capitals's Global Equities and Fixed Income (GEFI) business to financial heavyweight Macquarie.

The sale price for GEFI could reach as high as $185 million, should a number of milestones be met over the coming two years. That deal is part of a broader strategic re-think, with AMP looking to focus more keenly on 'high growth opportunities’ with management saying that the sale highlight's the firm's focus on 'high-growth opportunities' within private markets.

All up, the initial cash payment to be made to AMP stands at $110 million; though the post-tax gain was flagged by AMP to be 'broadly neutral', when accounting for costs and other adjustments.

Elsewhere, AMP completed its CEO-transition at the start of the month, with Alexis George on August 2, replacing Francesco De Ferrari in the top spot.

Revisiting the past

Beyond those sales and c-suite shakeups – with the company posting a set of relatively resilient Q1 results, investors will likely be keen to see those trends remain intact or for reported growth levels to accelerate in the coming half.

Here were the key results for the first quarter of FY21:

• Australian wealth management assets under management reached $125.7 billion, while outflows totalled $1.5 billion
• AMP Capital's assets under management fell 1.7%, while external net outflows hit $1.3 billion
• AMP Bank's loan book increased by approximately $200 million to come in at $20.8 billion

Final points

In light of the AMP’s share price weakness, a point made by Shaw & Partners analysts in 2020 bears repeating, with it at the time being argued that:

‘While [AMP’s] losses may well disappear one day, they can be expected to be replaced by even lower revenue margins in AWM and potentially declining assets under management for both AWM and AMP Capital as net cash outflows possibly worsen.’

More to come.

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