NZ small but strong for AMP

AMP says although its New Zealand operations are small in context of the group they are highly profitable.

Chief executive Paul Batchelor says AMP New Zealand, which includes AMP Financial Services, Henderson Global Investors and the general insurance division, produced a net profit of A$24.5 million in the six months ending June 30.

Speaking after announcing the half-year result in Sydney yesterday Batchelor said that the New Zealand operations had one of the highest returns on equity in the group.

He says net policy cashflows more than doubled to $110 million in the year ending June 30.

One of his key messages to analysts and media was that AMP is no longer a staid old life insurance.

The company's strategic focus is on the wealth management area, and much of that focus is around its highly-regarded asset manager AMP Henderson Global Investors.

Batchelor says the group is focussing on higher margin, value-added wealth creation and protection products and services.

AMP Henderson is developing new products such as hedge funds, and it is in the process of rolling out mutual funds in the United States.

Currently the company is selling off its non-core businesses such as general insurance. AMP has sold the manufacturing of its Australian general insurance business to Suncorp-Metway, and its UK business to Churchill group.

To find out what it is doing in New Zealand check out the Insurance News section of Good Returns.

For the record AMP's net profit after tax in the six month period fell 23.3% to A$403 million. Batchelor described this result as being "solid" when viewed against the volatile world markets.

One of the appealing things about the result is that core recurring operating margins were up 20% to A$486 million.

Earnings per share fell from A0.48c in the corresponding period last year to A0.36c, however the dividend has increased from A0.23c to A0.25c.

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