Aviva to return £4.75 billion: ‘shows our confidence in the business’

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Aviva plc (LON: AV) on Wednesday said it will return £4.75 billion ($6.34 billion) to shareholders, including the existing stock repurchase programme worth £1.0 billion.

We’ve now got a very strong position. We sold eight businesses last year for £7.50 billion, and with the reduction in debt, and the £4.75 billion return, we will have returned the money to shareholders that we said we would.

Important points in Aviva 2021 financial report

Shares jumped 4.0% this morning but submitted the entire intraday gain before closing bell as the full-year pre-tax profit came in sharply lower than last year.

Pre-tax profit of £801 million was down roughly 56% on a year-over-year basis.
At £8.80 billion, gross premiums hit a record high in over a decade.
Adjusted operating profit slid from £1.81 billion to £1.63 billion, as per the press release.

Solvency II ratio stood at 244% versus 202% at the end of the previous year.
Declared 14.7 pence of final dividend, bringing total to 22.05 pence.

Also on Wednesday, Aviva said it will acquire Succession Wealth for £385 million.

Dividend and CEO Blanc’s remarks

According to the British multinational, it will raise its per-share dividend by 40% in 2022 to 31.5 pence. For fiscal 2023, it forecasts another 5.0% or less increase in dividend. On CNBC’s “Squawk Box Europe”, CEO Amanda Blanc said:

We’ve got three new targets this morning. One is an upgrade on our cost reduction target to £750 million. We have a new target for operating funds generated of £1.50 billion by 2024. And we’re upgrading our cash remittance target to over £5.40 billion by 2024. It shows confidence we have in the business.

The global central banks are likely to be less hawkish in raising rates and addressing inflation this year, now that Russia has started a war in Ukraine. As per the chief executive, the numbers account for such impact related to the geopolitical tensions.

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