Listed financial services company AXA has reported a 14% lift in profits for the 12 months to December 31, and has made good progress on hitting its "aspirational" K5 targets.
The targets, set in April 2000, relate to transforming the group from a mutual-based insurance company to a modern financial services organisation.
The key points in the targets are to reposition the business through improved operational efficiency, enhanced product distribution capability and a strategic move into the financial advice business.
AXA chief financial officer Andy Penn says good progress has been made in meeting the targets. For instance the company is getting close to being in the top five in terms of retail funds flow, it has significantly reduced its management expenses and has already exceed its service and employee satisfaction targets.
AXA's overall funds flow in Australia and New Zealand was good with net flows up 12% during the year.
However, New Zealand's contribution was static due to the lack of a mandated retirement savings scheme, and structural and tax disadvantages for pooled equity investment vehicles.
Figures show that the net funds flow figures for New Zealand was an outflow of $3 million ($561 million in and $564 million out).
One of the biggest surprises is that funds flow at Spicers, which AXA bought in November 2001, have dried up.
Spicers funds under advice declined 7% in the 12 months to December 31 falling from A$1.55 billion to A$1.45 billion. During this time through net funds flow decreased 90% from A$29 million to A$3 million.
AXA says this result reflects the fact that Spicers focuses on post-retirement, equity-backed products.
"The impact of negative equity markets during the period (has) led to increased outflows."
Penn says he is reasonably happy with AXA's New Zealand funds flow results, and says that analysis done by the company shows that AXA's results are "better than the market average".
Overall the AXA group produced a bottom line profit of A$215 million for the year. Operating earnings were up 50% over the corresponding 12-month period to A$126 million. However, investment earnings were down 15% to A$44 million. This figure was boosted by an A$27 million foreign exchange gain on asset held in New Zealand.
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