In her final speech as chair of AMP, Debra Hazelton said the transformation of AMP under CEO Alexis George is “the real deal”, but cautioned shareholders it will take time to come to fruition.
Asked by a shareholder when “the cleanup and expense from the banking [royal commission] and dodgy deals” will end, Hazelton said the company has undergone a significant transformation and dealt with major legacy legal issues, but that the transformation requires ongoing patience from shareholders.
“Transformations take time and I’ve got a feeling you might tired of hearing that, so I’m going to make a point here,” Hazelton said at the firm’s AGM on Friday morning in Sydney.
“People like to talk about transformation when they talk about business initiatives. This is the real-deal transformation that AMP has been through. It took a lot of hard work, huge commitment.”
AMP agreed to settle its BOLR class action in November after mediation sessions were hosted that month between both parties, as well as the royal commission shareholder class action being settled late last year as well.
The group announced in February that former Bendigo and Adelaide Bank chief executive Mike Hirst would replace Hazelton, who retired following the AGM.
In her final speech, Hazelton noted the ongoing questions about AMP’s share price (which was over $5 pre-royal commission and $1.18 at market open this morning) and what is being done to ensure the value of the company is better reflected in the share price.
“What I can say is that the board and management drive the performance of the company, through focused and disciplined execution of our strategy,” Hazelton said.
“On the other hand, the share price is determined by a wide range of market factors. Ultimately, if we continue to execute successfully on our strategy and improve the underlying fundamentals of the company in the medium term, this will be reflected in the market value of the company.
“AMP has a bright future – but business transformations take time. We remain absolutely committed to continue to work hard to deliver value for our shareholders.”
Hazelton was asked what legal risk assessment AMP made on taking the BOLR to federal court, given the subsequent loss. She said the company conducted a thorough assessment that included external advice.
“The proceedings were commenced by AMP advisers and we made the decision on that advice to defend them appropriately,” Hazelton said.
“As [AMP CEO Alexis George] said in her speech, this was a really important step forward for us once we had settled this dispute because it’s allowed us to reset our relationship with our valued advisers and that means we can take our strategy forward in the advice space.”
In her address, George said breakeven for advice, as well as “alternative structures” for the network, as previously flagged, are still the main goals for the business.
The advice side of the business posted a $47 million loss in FY23 and is the only one of AMP’s five business lines not generating profit.
“As well as focusing on our existing businesses, we also need to look to the future and create new revenue streams and innovation,” George said.
“This includes progressing digital advice opportunities as well as our digital small business bank to launch in the first quarter of [2025].”
Platforms have seen NPAT increase to $90 million with flows from independent financial advisers grow 33 per cent year on year.
