On a like for like basis, AMP’s underlying profit for 1H 11 was up 3 per cent on 1H 10. Underlying profit is AMP’s preferred measure of profitability as it removes some of the impact of investment market volatility and is the basis on which the Board determines the dividend payment.

Net profit before AXA merger adjustments and accounting mismatches was A$450 million3, while net profit attributable to shareholders was A$349 million3. The interim dividend has been set at 15 cents per share, the same level as 1H 10 and will be 30 per cent franked with the unfranked amount being declared conduit foreign income. The dividend represents a payout ratio of 81 per cent of underlying profit.

AMP remained strongly capitalised as at 30 June 2011 with A$2.2 billion capital above minimum regulatory requirements, up from A$1.4 billion as at 30 June 2010.

Integration update
AMP has appointed the senior management teams to lead the merged business and has determined how the two companies’ products, services and platforms will come together.

“The merger of AXA and AMP is on track and we remain firmly focused on our overriding integration objectives, which are to maintain business momentum, sharpen our competitive edge by delivering synergies and drawing on the strengths of both companies, and to build a stronger
growth platform for the combined company,” Mr Dunn said.

The synergy target has increased 17 per cent to A$140 million post tax from A$120 million, due to a range of factors, including the removal of additional IT infrastructure duplication and contract renegotiations with external suppliers. This will see a one off increase in expected project
integration costs of 9 per cent to A$310 million post tax, to be incurred over three years.

Advisers and financial planners
The merged business had 4,020 planners and advisers at 30 June 2011, making it the largest network of financial planners across Australia and New Zealand. AMP Financial Planning is Money Management’s Institutional Dealer Group of the Year, while licensees in the AXA Financial Advice Network were voted the 1st, 2nd and 3rd most attractive licensees to work with in CoreData’s 2011 annual licensee survey.

As at 31 July 2011, the merged group had 4,048 planners, a fall of six advisers over the period from 31 December 2010. Ongoing strong growth in AMP planner numbers was offset by lower recruitment for AXA advisers, particularly in the first quarter of 2011, against a background of
heightened uncertainty for AXA advisers ahead of the final merger outcome.

“We are very pleased with the AXA adviser retention post the merger. As of today, around 97 per cent of the value of the adviser network in AXA and Charter Financial Planning has been retained.

“With financial advice at the very core of what we do, the merged group continues to innovate and lead the industry in the advice space,” Mr Dunn said.

The AMP Horizons Academy, a front runner in planner education and recruitment, is now being expanded to include AXA financial planning groups. The Horizons Academy is a major source of new advisers across the AMP Group, as is AXA’s Discovery Program, which successfully
transitions salaried advisers into self-employed advisers.

AMP has recently launched one of the industry’s first scaled advice programs – My Money Choices, with more than 500 planners now offering simple, cost effective advice to address the specific needs of customers.

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