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(Alliance News) - Aviva said Thursday it will sell its remaining Italian life and general insurance businesses for EUR873 million in cash and promised to return the proceeds of its programme of streamlining the company to shareholders.
Aviva will sell its general insurance business in Italy to Allianz for EUR330 million and life insurance business to French insurance firm CNP Assurances for EUR543 million.
Aviva said it expects to use the increased capital and cash to support debt reduction, investment for long-term growth, and the return of excess capital to shareholders.
For 2020, the insurer posted adjusted operating profit of GBP3.16 billion, down 0.6% from GBP3.18 billion in 2019. The insurer declared a 2020 total dividend of 21 pence, up 35% from 15.5p per share in the prior year.
Chief Executive Officer Amada Blanc said: "Our performance in 2020 demonstrates the resilience of our core businesses and our growth potential. We delivered record sales in group protection; record sales of bulk purchase annuities; and record net flows in savings and retirement, where we are the largest provider of workplace pensions in the UK.
"Aviva is financially strong and following the completion of the major disposals, we will be in a position to make a substantial return of capital to our shareholders. We are also announcing today an GBP800 million debt tender offer. This allows us to accelerate our debt reduction plans and lower debt by a total of GBP1.7 billion in the first half of this year."
Aviva shares were up 3.0% early Thursday morning.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 6,641.20
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Hang Seng: down 2.1% at 29,246.01
Nikkei 225: closed down 2.1% at 28,930.11
DJIA: closed down 121.43 points, 0.4%, at 31,270.09
S&P 500: closed down 1.3% at 3,819.72
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EUR: down at USD1.2060 (USD1.2077)
GBP: down at USD1.3968 (USD1.3988)
USD: up at JPY107.12 (JPY106.87)
Gold: down at USD1,719.52 per ounce (USD1,722.45)
Oil (Brent): up at USD64.67 a barrel (USD64.16)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
OPEC and non-OPEC ministerial meeting
0930 GMT UK CIPS-Markit construction PMI
0930 CET Germany construction PMI
1000 CET EU construction PMI
1100 CET EU unemployment
1100 CET EU retail sales
0730 EST US challenger job-cut report
0830 EST US jobless claims
1030 EST US EIA weekly natural gas storage report
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UK Chancellor of the Exchequer Rishi Sunak has vowed to build a "fairer and more just" country in the memory of those who lost their lives to coronavirus, after setting out plans to begin repairing the nation's finances after the pandemic. Sunak used Wednesday's government budget to extend the furlough scheme and Universal Credit increase as part of a GBP65 billion lifeline for an economy still battered by the Covid crisis. But taxes on business profits are set to rise from 2023, while income tax thresholds will be frozen, meaning more than a million extra people will be dragged into paying it as wages increase. It will take the UK's tax burden to its highest level since the 1960s, according to the Office for Budget Responsibility. Further analysis of the budget will be published on Thursday, while Sunak will be interviewed on ITV's The Martin Lewis Money Show Live during a round of broadcast interviews.
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Demand for new cars in the UK fell by 36% last month compared with February 2020, preliminary figures showed. Only around 51,000 new cars were registered in the UK last month as showrooms remained shut, the Society of Motor Manufacturers & Traders said. February is traditionally a slow month for car sales as many motorists wait for new number plates to be released in March. But last month was the industry's worst February since 1959. Final figures will be released by the SMMT at 0900 GMT on Thursday.
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BROKER RATING CHANGES
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JPMORGAN RAISES MELROSE INDUSTRIES TARGET TO 210 (185) PENCE - 'OVERWEIGHT'
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JPMORGAN RAISES AVIVA PRICE TARGET TO 447 (383) PENCE - 'OVERWEIGHT'
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JPMORGAN RAISES WHITBREAD TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 4,000 (2,400) PENCE
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JPMORGAN CUTS INTERCONTINENTAL HOTELS TO 'UNDERWEIGHT' ('NEUTRAL') TARGET 4,000 (4,400) PENCE
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COMPANIES - FTSE 100
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Building materials firm CRH said it delivered a robust performance in a challenging environment due to Covid-19 related disruption in key construction markets of North America and Europe. For 2020, revenue was USD27.6 billion, down 1.8% from USD28.1 billion in 2019 and profit before tax from continuing operations was USD1.66 billion, down 24% from a restated USD2.18 billion. CRH raised its annual dividend 25% to 115.0 cents with 93.0 cent final payout and said it plans to resume its share buyback programme with USD0.3 billion by end of June. "Our 2020 performance is testament to the commitment of our people and the strength and resilience of our business model. Through the repositioning of our business in recent years and our relentless focus on continuous business improvement, we have delivered record levels of profitability, margins and cash generation. Although the near-term outlook remains uncertain, our unique portfolio of businesses together with the strength of our balance sheet leaves us well positioned to capitalise on the growth opportunities that lie ahead," said Chief Executive Officer Albert Manifold.
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Schroders said it delivered strong results with a focus on cost discipline and good client inflows, despite the challenging conditions. For 2020, net income was GBP2.18 billion, up from GBP2.12 billion in 2019, while pretax profit fell to GBP610.5 million from GBP624.6 million. Schroders said it generated net flows of GBP42.5 billion, and assets under management increased 15% to a record high of GBP574.4 billion from GBP500.2 billion in 2019. The asset manager declared a 2020 total dividend 114.0p per share, unchanged from 2019. "The group is increasingly balanced towards the higher growth areas of Private Assets & Alternatives, Solutions and Wealth Management. We believe the macro-economic environment will accelerate demand for these areas going forward and we are well positioned to service clients around the world with the solutions they need. We maintain a strong capital position and are confident our diversified business model will continue to generate value for our clients, shareholders and wider stakeholders," the company said.
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Melrose Industries swung to a pretax loss of GBP523 million in 2020 from a profit of GBP55 million, due to restructuring charges and lower revenue. Adjusted pretax profit was GBP120 million, down from GBP699 million. Revenue declined to GBP8.77 billion from GBP10.97 billion. Melrose said trading was at the top end of management expectations throughout the second half of 2020. Proposes 0.75 pence final dividend to resume payouts. "Whilst the Covid-19 crisis has had a major detrimental effect this year, Melrose has generated record cash flows and continued to invest to improve our businesses," Chair Justin Dowley said. "All of this positions the group well for a good recovery and strong performance in the future."
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COMPANIES - FTSE 250
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Wetherspoon is to open beer gardens, rooftop gardens and patios at 394 of its pubs in England when the lockdown continues to ease from April 12, the company has announced. The pubs will be open from 9am to 9pm from Sunday to Thursday and 9am to 10pm on Fridays and Saturdays, although some will have restrictions on closing times. They will offer a slightly reduced menu, with food available from 9am to 8pm seven days a week. Customers will be able to order and pay through the Wetherspoon app, and staff will be able to take orders and payment at the table. The pubs will not be operating a booking system. Customers will be able to enter the pubs to gain access to the outside areas and use toilets, while test and trace will be in operation and hand sanitisers will be available.
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COMPANIES - OTHER
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Deliveroo has confirmed it has picked London for a potential listing as it looks set to become one of the latest in a flurry in recent stock market floats, PA reports. The takeaway delivery company is eyeing a listing on the London Stock Exchange just eight years after it was founded in the city by Will Shu. It was reported last month the company hired six investment banks to work on the floatation, which could value it at up to GBP7.5 billion. Deliveroo said its intent to go public in London underlines its commitment to make the UK its "long-term home" despite global growth ambitions. It comes after the company saw demand soar during the pandemic as hundreds of restaurants across the UK sought to join its platform after sites were closed to dine-in customers.
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Thursday's Shareholder Meetings
Chemring Group PLC - AGM
ECO Animal Health Group PLC - AGM
Europa Oil & Gas Holdings PLC - GM re placing and broker option
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
