12th Aug 2021 08:49
(Alliance News) - Aviva PLC on Thursday said it will return at least GBP4 billion to shareholders in dividends and buybacks in the next 12 months, after reporting "strong growth in key areas" in the first half of 2021.
Shares were up 2.4% to 415.80 pence in London on Thursday morning.
Total income more than doubled year-on-year to GBP14.78 billion from GBP6.98 billion, as Aviva swung to net investment income of GBP7.35 billion from a net investment expense of GBP1.28 billion.
But pretax profit from continuing operations dropped 46% to GBP396 million from GBP739 million. The company booked a GBP8.45 billion hit on changes in investment contract provisions, having recorded a GBP5.72 billion gain a year ago. Net earned premiums declined by 12% to GBP6.65 billion from GBP7.51 billion a year ago.
Aviva said it has made good progress on all fronts in the 12 months since it launched its new strategy to focus on the UK, Ireland and Canada, having sold operations elsewhere.
The firm declared an interim dividend of 7.35 pence a share, up 5.0% from 7.00p a year before, in line with its policy to grow the dividend by low- to mid-single digits over time. The interim dividend is worth a total of GBP289 million.
What's more, Aviva plans to buy back up to 300 million shares for up to GBP750 million, in a programme starting on Friday. Overall, the company plans to return at least GBP4 billion to investors by the end of the first half of 2022.
Looking ahead, Aviva said its expects growth in UK Savings & Retirement to continue after record flows in the first half, with the bulk purchase annuity business starting the second half strongly. There are "excellent opportunities" for commercial insurance growth, although personal insurance is expected to be hit by a softer rate environment.
"Alongside delivering growth, we continue to focus on reducing controllable costs, which are down 2%. We are on track to deliver our GBP300 million savings target in 2022 and are focused on achieving top quartile efficiency in all our businesses," Chief Executive Amanda Blanc said.
By Ivan Edwards; [email protected]
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