Willcox raises AMP fortunes

Just over two years ago former oil executive Peter Willcox took over as chairman of Australia's biggest life insurer, AMP, as it was bleeding from a series of disasters in Britain and Downunder.

"AMP is no longer in crisis," Willcox, 59, told shareholders at yesterday's annual meeting, announcing he would retire this year. The company was "stable and performing well" and had learned from its mistakes, he added.

AMP posted its first full-year net profit of A$934 million ($1 billion) in three years in February, compared with a 2003 loss of A$5.54 billion, Australia's second-worst corporate loss.

Its share price rose to a 28-month high of A$8 in February, up from lows below A$3.50 a share just 20 months ago.

"He arrived in the darkness and leaves in the dawn," AMP chief executive Andrew Mohl told shareholders.

The meeting was a calm affair compared with last year, when the board faced furious shareholders outraged over a plummeting share price.

A string of crises, from top-level resignations, a boardroom shake-up, the costly acquisition of general insurer GIO in 1999 to heavy writedowns on securities losses in Britain, had stung the 156-year-old company, which demutualised seven years ago.

The share price plunged, leading to the resignation of the chairman and chief executive and the appointment of Willcox and Mohl as a new team to restore the group's fortunes.

AMP jettisoned its struggling British operations in 2003, and has ruled out overseas acquisitions in the life insurance business because there is plenty of opportunity to grow its existing businesses in Australia and New Zealand.

 

Mohl said a new chairman would be installed by the end of the year, with an internal appointment likely.

Shareholders approved a A$750 million cash return flagged three months ago, while AMP said it was still planning to return more capital to shareholders next year.

"It is possible that our capital management strategies will embrace potentially on market buybacks and/or higher special dividends as well as a tax-free capital return," Mohl said.

Shares in AMP rose as much as 4.5 per cent to A$6.97 after the company maintained its February guidance for moderate growth in underlying profit in its financial services division in 2005, solid growth in underlying profit in its capital investors business and strong growth in the value of new business.

AMP has slashed debt by 64 per cent to A$1.55 billion at December 31. Credit ratings agency Standard & Poor's has restored its rating on AMP to "A-minus" from "triple B-plus".