Mar 8, 2018
Opening Quote: Aviva strategy ‘paying dividends’. Geddit?
Aviva is to to increase its full-year dividend by 18 per cent - against some analysts estimates for a 13 per cent increase - with £500m to be used for capital returns, which may include share buy-backs or a special dividend. Aviva said it dividend payout ratio would be 50 per cent of earnings for 2017, up from 42 per cent in 2015, and to reach 55-60 per cent by 2020. News of the higher payouts come the group's full year operating profit rises 2 per cent year-on-year to £3.1bn, as had been forecast, and operating earning per share reaches 54.8p - against estimates of 53p. Operating profit from the life insurance and pensions business rose 9 per cent overall, to £2.9bn. In the UK, performance was driven by an 11 per cent increase in operating profit from annuities and equity release products, to £725m. This was partly thanks to a 58 per cent increase in new business volumes to £4.3bn, mainly as a result of selling more bulk purchase annuities to companies. Operating profits from Aviva Investors, the group's fund management business, rose by 19 per cent to £164m. But operating profit at the general insurance and health group fell 16 per cent to £700m, as the combined ratio of claims to premiums jumped 9 percentage points in Canada, to 102.2 per cent. Security company G4S has had its strategy in running prisons and other detention centres roundly criticised by the BBC Panorama programme and by MPs. But the way it operates its wider business appears to be paying off: total revenue increased by 3 per cent last year to £7.8bn, and pre-tax profits was up 30 per cent to £386m. In November, the group - best known for its security work - had warned that sales would be weaker than analysts had expected.
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