Aviva’s adjusted operating profit up 17% to £725m
Aviva (LON:AV) confirmed it will return £4bn to shareholders by next June as its new chief executive is carrying out big changes to the insurance business.
The announcement comes as Aviva’s operating profit rose by 17% to £725m over the first half of the year.
However, it came in below the company-provided consensus of £781m.
The FTSE 100 insurance firm also raised its interim dividend by 5% to 7.35p per year.
Aviva has carried out a series of disposals over the past year, allowing the company to focus its efforts on the key UK, Ireland and Canada markets.
The disposals, not all of which are yet complete, will bring in a total of £7.5bn. The money not returned to shareholders will be used to pay down debt.
“While we’ve got more to do, our half-year results show we have what it takes to drive growth in our businesses,” Chief Executive Amanda Blanc said in a statement.
James Andrews, senior personal finance expert at money.co.uk, said: “Aviva has continued to show promising growth in Q2 having previously reported its highest Q1 sales in General Insurance for a decade.”
“Aviva is also both richer and less risky than it was, following disposals of eight non-core businesses – including Aviva Vita, Turkey and France – to free up cash to invest in the core markets of the UK, Ireland and Canada.”
“Looking ahead, Aviva needs to demonstrate it’s got a functioning plan for turning its huge cash inflows into ongoing returns for shareholders – as well as navigating changing risks as climate change sees protection claims rise – to continue the impressive share price growth seen in the past 12 months,” Andrews said.
The Aviva share price is up by 2.88% during the morning session on Thursday.