Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Why AMP (ASX:AMP) Shares Were Unmoved After Its June 19 Report

AMP Limited (ASX:AMP) shares went into a trading halt as the diversified financials business released its June 2019 report. 

AMP Limited (ASX: AMP) shares went into a trading halt as the diversified financials business released its June 2019 report.

AMP is a diversified financial services company which has its primary operations in financial advice, including financial planning and wealth management. A big part of its business is licensing other planning groups to provide advice. AMP also has capabilities in investing (AMP Capital), banking and insurance.

What Did AMP Announce?

AMP reported a half year net loss of $2.3 billion, largely due to a $2.35 billion impairment after tax to address legacy issues and position AMP for the future.

Looking at the business units, all of them except AMP Capital experienced a fall in their operator earnings. Total operating earnings dropped by 31% to $347 million.

As part of the plan to reinvigorate the business, AMP is asking shareholders for $650 million in the form of a capital raising to immediately get on with its plans.

However, AMP did announce that it has a revised agreement for the sale of AMP Life to Resolution Life with updated terms. It will consist of a $3 billion consideration with $2.5 billion in cash and $500 million of equity interest in Resolution Life Australia. This is expected to complete in the first half of AMP’s FY20. But this remains subject to regulatory approvals in Australia, New Zealand and China.

The new AMP strategy will take three years and will include a shift to direct-to-client channels and digital solutions. it will also fix its legacy issues by reshaping aligned advice through buyback changes and with fewer & more productive advisers. This will hopefully fix some of the issues raised in the Royal Commission.

AMP Dividend

The AMP Board has decided not to pay a first half dividend and will maintain a consistent approach until the completion of the sale of AMP Life.

After the sale, AMP expects to target dividend payout ratio of 40% to 60% of net profit after adjustments.

Is AMP A Buy?

It’s good to hear the AMP is taking some of the painful steps needed to turn the business around. However, investors taking part in the capital raising will be hoping they are not throwing good money after bad.

AMP has a long road ahead and it’s not on my watchlist due to all of the issues, I think there are other options to consider that could provide a better ride for investors such as the shares in the free report below.

[ls_content_block id=”14945″ para=”paragraphs”]

[ls_content_block id=”18380″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content