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Date : 16/03/2022

AMP Ltd. (ASX: AMP) shares regaining lost ground

AMP Ltd. (ASX: AMP) is a 173-year-old Australian retail wealth management, banking, and financial services company. The company was founded in 1849 and is headquartered in Sydney, Australia. Australia and New Zealand are the company’s primary markets.

The company started its business as a life insurance provider. Today, it has diversified its business into offering different financial services such as superannuation and investment products, financial advice, and banking products, including home loans and savings accounts. The business employs more than 4,100 employees and delivers services to over 1.5 million people.

The company’s stock is currently on a surge despite no significant announcement by the company. However, AMP recently announced its fiscal 2021 results and has declared that the board has decided on no dividend payment in this fiscal year. In 2020, the company had announced a dividend of 10 cents per share.

AMP currently trades at $0.93, gaining more than 2.20% from yesterday’s closing price. The trading volume was around 17.46 million shares. The market cap of the company is around 3.04 billion AUD.

AMP: Fiscal 2021 Key Financials

AMP recently announced its fiscal 2021 results, and despite the decrease in revenue and profitability, its stock is surging. The reason could be linked to the share consolidation expected to be presented in the annual general meeting.

AMP Shares Trends Forecast

  1. AMP’s revenue declined by 2.9% to reach $2.2 billion in fiscal 2021 compared to $2.3 billion in fiscal 2020.
  2. Its net loss is $252 million in fiscal 2021 compared to the net profit of $177 million in fiscal 2020.
  3. AMP announced a loss per share of 7.6 cents in fiscal 2021. In fiscal 2020 its EPS was 5.2 cents.
  4. Its profit margin was -7.6% declining by 246% in comparison with 2020’s profit margin of 5.21%.
  5. As of fiscal 2021, the company had cash and cash equivalents of $2.3 billion.

AMP: Dividend Update

The company is advancing towards its August announcement. Therefore, the board has decided to maintain its conservative approach to capital management and will not distribute a full-year dividend in March 2022 to assist with the demerger and the transition of AMP.

Even while the company believes that this is frustrating for shareholders, it is a reasonable strategy at a time when AMP is undergoing substantial transformational change. Following the conclusion of the demerger later this year, they will evaluate dividend distributions.

AMP Demerger Update

On 23 April 2021, AMP said that it would demerge its Private Markets division by 1H 2022. AMP Capital’s Private Markets unit is being operationally separated ahead of the demerger in 1H 2022. An outline has been set with the sale of the GEFI business, the announcement of the sale of infrastructure debt, and the transfer of the MAG and CLAMP to AMP Limited. The addition of Shawn Johnson as CEO of AMP Capital in June 2021 and Patrick Snowball and Andrew Fay as Chairman and Deputy Chairman significantly boosts its demerger preparation.

The demerger will occur in 1H 2022, subject to final board approval, regulatory approvals, consents, and shareholder approval.

AMP: Share Consolidation

Shareholders of AMP are expected to vote on a consolidation proposal at the company’s 20 May 2022 annual meeting. Assuming it is granted, the consolidation will result in an 8-for-1 exchange ratio, which will result in a smaller AMP share count for everyone who holds it. AMP’s trading share price can be brought to a level equivalent to that of its peers by implementing the consolidation process.

Conclusion

AMP Ltd. (ASX: AMP) is currently gaining in the market. The company is taking enough measurements to increase its share value and thus planned a share consolidation program, demerger and no dividend. All these decisions are attempts to help the company to grow with an impressive growth rate.

 

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