Smiles return at AMP

By PAULA OLIVER

Encouraging cashflow figures for AMP's first quarter have put a smile on the face of its long-suffering leader.

Andrew Mohl, the Australia-based chief executive of AMP who led the financial services giant through its painful demerger process last year, was in Wellington this week for the first AMP Life board meeting to be held in the capital.

He told the Business Herald he was confident of being able to deliver a half-year profit for AMP - after three negative results that took losses to more than $6 billion.

"All the red ink in AMP reflected the losses in the UK. Now that the UK is separated, what you're going to see in the half and full year is the underlying performances of the Australian and New Zealand businesses. They are high-performing businesses that continue to strengthen, benefiting from improved markets," Mohl said.

First-quarter cashflow figures for AMP's Financial Services business showed the beginning of a turnaround.

A net outflow of A$266 million ($305.7 million) in the corresponding quarter last year had been turned into a positive inflow of A$88 million.

The level of outflow was still significant, totalling A$1.97 billion. The difference was that inflows had picked up to A$2.06 billion.

The figures also showed that the New Zealand arm of the business was not unaffected by AMP's problems last year, despite its consistently returning a profit as its parent bobbed around in a sea of red ink.

The New Zealand arm reported a net outflow of A$38 million in the first quarter of last year, but improved that to A$1 million this year.

Mohl said that the results were particularly encouraging because a 22 per cent improvement in cash inflow was better than AMP's competitors.

Mohl is candid about his experience at the top of a company that has undergone what he calls "as big a stabilisation programme as you could get".

"As horrible as it was, it was a job worth doing," he said. "We had 91 board meetings last year, which is probably a record. Although National Australia Bank's been trying hard to beat us," Mohl said, referring to the organisation that has endured a damaging boardroom brawl and a foreign exchange trading scandal.

NAB also bungled a market raid on AMP last year.

AMP wants faster growth from its New Zealand arm. It is moving some distribution staff from Wellington to Auckland, and sees the retirement savings industry as an area of potential growth.

The company had not been scared off investing overseas again after its disastrous British foray, Mohl said, but it was very much focused on the transtasman market.

"There's no pressure on us to move outside our border in terms of delivering growth and value for shareholders," he said. "If we have excess capital because of the earnings power of the group, then we'll return that to shareholders after we've reached our debt reduction target. Rather than just blindly heading north into whatever opportunities that might cross our path."