More pain for AMP

By Bruce Brammall
04mar03

Published on March 4, 2003

WEEKEND pessimism from AMP chief executive Andrew Mohl did nothing to give the company a floor for its share price yesterday.

The market again thumped the insurer and funds manager, sending it sharply lower before a slight afternoon recovery.
Its shares fell to as low as $6.60, down 40c from Friday's $7 close. It clawed back some ground to finish at $6.77, down 23c, or 3.3 per cent.

Nearly one million AMP shareholders are now wondering when AMP will bottom - just a year ago the shares were trading above $19.

Over the weekend, Mr Mohl claimed AMP was fighting for its own survival. He also said it would be a battle for AMP to restore its brand integrity with investors and customers.

AMP announced a boardroom purge last week ahead of its worst profit results.

The company said five directors would go, including chairman Stan Wallis, who left immediately.

Mr Mohl announced last week that AMP had posted a full-year loss of nearly $900 million, heavily influenced by writedowns and restructuring costs.

Yesterday's share price fall showed the full extent of investor concern over AMP.

AMP's share price has been largely hurt by its reliance on the tanking British stock markets, where two-thirds of its assets are tied up.

Mr Mohl said last week AMP had insured itself against further falls in London. But that will also limit any upside it might have to a rising FTSE.

Mr Mohl said AMP had been too ambitious in Britain since its demutualisation in 1998 and warned that 2003 would be even tougher than 2002.

At the results presentation, Mr Mohl refused to give an earnings outlook for this year, leading many broking houses to cut their expectations.

Merrill Lynch cut its 2003 profit forecast by 14 per cent to $819 million and JP Morgan Chase lowered its 2003 estimate, before one-time items, by 7 per cent to $983 million.