AMP (ASX:AMP) listed in 1998 and the price immediately spiked to $29.64 (adjusted for dilution). It immediately dropped back to around $12 and then began its multi-decade descent to today’s level of $1.26. There have been some brief periods of cheer, most notably in the early 2000s, but for the most part it has been pretty miserable.
And then came the Banking and Financial Services Royal Commission in 2018. Sensational revelations of charging fees to deceased people pummeled their reputation and heads rolled, including the CEO and Chairman. Since then the business has endured further travails with subsequent chairman and CEO both compelled to resign.
Two years ago Alexis George was appointed to the top job and commenced a program of trying to simplify the business and focus on their core strengths. These include the bank and the wealth management business. AMP Capital and the Life Insurance business have been sold. They have not yet given up on the financial advice business although it continues to operate at a loss.
The changes at AMP have been quite extraordinary. Revenue in 2013 was over $19 billion. It is forecasted to be $1.3 billion in 2023. Profit has fallen from $672 million to a forecast of $210 million. Profit over the last 10 years peaked in 2015 at $971 million. The breakdown of net profit from the first half of 2023, as shown in the table below, shows how the composition of the business has changed. The Bank is now the largest contributor and Advice has been operating at a loss.
We have just completed a report detailing the gravity of change of factors for all ASX 200 stocks. AMP was one of the top performers in terms of the magnitude of change in a positive direction. The table below shows the magnitude of change for each factor ranking as well as the overall StockRank. (Note, the change is measured from the 5th of August to the 5th September. AMP reported their half year results on the 10th of August.)
Quality | Value | Momentum | StockRank | |
Pre report | 26 | 77 | 57 | 55 |
Post report | 51 | 76 | 91 | 82 |
Change | 96% | -1% | 60% | 45% |
The recent half year result was the first sign that they may have turned…
