Can the company’s shares stage a rebound in the second-half?
The post The AMP (ASX:AMP) share price has fallen another 7% in a month. What’s next? appeared first on The Motley Fool Australia. –
The AMP Ltd (ASX: AMP) share price has continued to decline over the past month. This comes despite the financial services company not releasing any new market sensitive news since its half-year results last month.
At the time of writing, AMP shares are edging 0.19% to $1.037. It’s worth noting that the company’s share price is nearing its all-time low of $1.04 reached on 30 July.
What is going on with AMP shares?
It has been a challenging period for AMP shareholders, with no indication of when the heavy selling will stop.
The company’s financial scorecard produced a largely positive performance.
Net Profit After Tax (NPAT) grew to $181 million, up 57% on the prior corresponding period. This was mainly driven by an increase in Australian wealth management assets under management (AUM) of $121 billion, up 8%.
In addition, Australian wealth management net cash outflows came to $2.7 billion. A massive improvement compared to the $4 billion in net cash outflows recorded in first-half of FY20.
Controllable costs excluding AMP Capital, stood at $387 million, down 6% caused by lower disciplined cost management.
Nonetheless, the AMP share price has been trading at record lows since ASIC commenced proceedings against the company in May.
According to financial regulator, AMP wilfully deducted life insurance premium and advise service fees from superannuation accounts of deceased customers.
The company stated that action has since been taken to correct the error. It has been conducting a thorough review of its policies and processes. The matter was later covered in the financial services royal commission.
So, what’s the outlook for the FY21 full year for AMP?
Looking ahead, the group is projecting controllable costs of $775 million, which is in line with the prior guidance.
AMP is expecting the Global Equities and Fixed Income (GEFI) and Multi-Asset Group (MAG) to internally separate in FY21. The demerger program is scheduled for completion by the middle of FY22. This will see the transition of MAG from AMP Capital to AMP Australia, creating a superannuation and investment platform business.
Loan growth momentum for AMP Bank is expected to continue to run into the second half while AMP Capital earnings are forecasted to decline. The group stated that this is due to lower performance and investment returns.
AMP share price snapshot
The last 12 months have been yet another disappointing result for AMP shares, falling by more than 30%. When looking at the last 5 years, these losses are magnified even greater, dropping around 80% in value.
Based on today’s price, AMP presides a market capitalisation of roughly $3.38 billion and has 3.2 billion shares on issue.
Should you invest $1,000 in AMP right now?
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.