AMP NZ profit up 8.8 per cent in 2004

Australasian financial services giant AMP's New Zealand business notched up a $60.3 million profit for the year to December - up 8.8 per cent on the previous year.

AMP financial services acting managing director Stephen White said record insurance sales and continuing strength in the corporate superannuation market had driven the result.

Also contributing were a better performance in the retail superannuation market, tighter expense management and a one-off write-back.

In 2004 the company achieved a net cash outflow of $61 million, an improvement on the net outflow of $169 million the previous year.

Mr White said the challenge for AMP NZ in the present year was to achieve a net inflow of funds in a difficult environment, "characterised by New Zealand's low savings rate".

Mr White said he hoped AMP's leading 25 per cent share of corporate superannuation market along with its recent launch of new retail savings and investment products would help this year.

"In addition, we look forward to any Government initiative that will encourage New Zealanders to save more for their future."

AMP said its insurance sales rose 6 per cent on the previous year and total premium income rose 14.6 per cent to $78.33 million against overall growth in the sector of 8.1 per cent.

Mr White said AMP had improved its already market leading ability to hang on to insurance customers. Its customer retention rate for the year was 93.4 per cent.
Mr White said expense management over the year had seen AMP NZ trim its overall cost to income ratio to 41.9 per cent from 42.4 per cent in 2003.


Meanwhile AMP's approximately 88,000 New Zealand shareholders are to get A40c ($44.38c) a share under plans for a A$750 million ($832.22 million) return to investors announced today.


The company which also said it expected to hand back further funds next year, said the payout annouced today would likely be treated as a dividend for NZ tax purposes.


Across all of its operations AMP today posted net profit for the 2004 calendar year of A$934 million compared to a net loss of A$5.54 billion in the previous year.


Last year the company was badly mauled by writedowns associated with its demerger from its ailing British operations, HHG plc.


AMP said the jump in profit in 2004 was mainly due to the booming share market which lifted its investment income by 129 per cent to A$503 million for the full year.


AMP shares were trading 32c higher at 852 on the NZSX this morning in advance of the Australian market's open.


- NZPA