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Summary
- UK-based life insurance giant Aviva PLC announced a final dividend declaration for FY 2020 on 4 March after reporting a 1 per cent fall in annual profits.
- The insurance company also announced its exit from Italy, which led to sharp rise in share prices
UK-based life insurance giant Aviva PLC (LON: AV) announced its preliminary FY 2020 results, reporting a 1 per cent fall in annual profits and announcing its strategic exit from Italy. However, the company also announced a final dividend at 14 pence per share despite lower profits.
The company’s reported adjusted operating profit fell by 1 per cent to £3.16 billion for the year to the end of December 2020 from £3.18 billion a year ago. Moreover, its core business unit’s operating profit fell by 3 per cent to £2.5 billion from £2.6 billion in FY 2019.
Strategic sale
The Aviva Italy sale is worth up to €873 million in cash, with the Aviva Life insurance bought by CNP Assurances for €543 million and Aviva General insurance sold for €330 million to Allianz. Thus, Aviva is expected to realise over €1.3 billion of cash from its sale of Italian insurance businesses, including the company’s proceeds from earlier announced sales.
The exit comes on the back of its sale of Aviva France announced in February to focus on its core businesses. The company had previously announced sales of its Singapore, Vietnam, Hong Kong, Indonesia, and Turkey businesses. The exit from various geographies is expected to boost the company’s excess capital by approximately £3.0 billion and centre cash by about £3.9 billion.
Want to know more? Also read: What Prompted Aviva To Sell Aviva France To Macif's Aéma Groupe
Final dividend payout
The company announced a final dividend declaration of 14.0 pence per share for its ordinary shares, which will be payable on 14 May, subject to approval. Besides, the insurance major also declared a dividend of 4.375 per cent per share NET on 8.75 per cent of Cumulative Irredeemable Preference Shares payable on 30 June.
Aviva’s shares were trading at GBX 397.50, up by 3.61 per cent as of 4 March at 8:24 am GMT+1 following the announcements. Comparatively, the broader index FTSE 100 was at 6,628.16, down by 0.71 per cent for the same period.
