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(Alliance News) - Aviva's core general insurance gross written premiums rose 4% annually to GBP2.0 billion in the first quarter of 2021, it said Thursday.
The insurer saw "record" net flows in its Savings & Retirement arm, up 31% year-on-year to GBP2.98 billion. Sales at the unit grew 23% to GBP6.17 billion.
Aviva has also made progress in its debt-reduction plans, Chief Executive Amanda Blanc highlighted.
"We made very good progress in the first quarter. We concluded the refocus of our portfolio, selling eight non-core businesses which will generate total cash proceeds of GBP7.5 billion once completed. We have made excellent headway in reducing leverage with debt reduction of GBP1.9 billion in the first half of 2021, and we expect the leverage ratio to be around 26% at the half year," Blanc explained.
She added: "Our positive trading performance in the first quarter of 2021 reinforces our confidence in the targets we announced earlier in the year."
Aviva has been selling non-core operations to focus on the UK, Ireland and Canada as part of a strategy put in place by Blanc, who became chief executive in July of last year.
Aviva shares were up 2.0% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 3.37 points at 7,030.30
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Hang Seng: down 0.2% at 29,120.54
Nikkei 225: closed down 0.3% at 28,549.01
DJIA: closed up 10.59 points at 34,323.05
S&P 500: closed up 7.86 points, or 0.2%, at 4,195.99
Nasdaq Composite: closed up 80.82 points, or 0.6%, at 13,738.00
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EUR: down at USD1.2205 (USD1.2214)
GBP: soft at USD1.4121 (USD1.4125)
USD: up at JPY109.09 (JPY109.01)
Gold: down at USD1,899.89 per ounce (USD1,904.70)
Oil (Brent): soft at USD68.52 a barrel (USD68.64)
(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
0830 EDT US initial jobless claims
0830 EDT US advance report on durable goods
0830 EDT US 2nd estimate gross domestic product
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US and Chinese trade negotiators have made contact over the two countries' ongoing trade dispute for the first time since US President Joe Biden took office. The new US trade representative Katherine Tai and China's Vice Premier Liu He spoke on Thursday, both sides said in separate statements. "The two sides had frank, pragmatic and constructive exchanges," China's trade ministry said. The US gave a similar evaluation, noting a "candid exchange" between the two. The choice of words in diplomatic scenarios usually indicates there were some differences of opinion during discussions. The US side that during an "introductory virtual meeting," Ambassador Tai discussed "the guiding principles of the Biden-Harris Administration's worker-centred trade policy and her ongoing review of the US-China trade relationship, while also raising issues of concern."
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Service firms in the UK are more optimistic about recruiting staff, making profits and making investments, a new study suggests. The Confederation of British Industry said its research indicated that optimism across the service sector improved significantly in the past three three months. Firms in business and professional services, and consumer services saw a big improvement, according to a survey of almost 170 companies. Employment showed signs of "significant" improvement, with consumer services experiencing the strongest growth since the end of 2015, said the CBI.
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BROKER RATING CHANGES
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HSBC RAISES SEVERN TRENT TO 'BUY' ('HOLD') - TARGET 2,780 (2,570) PENCE
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BARCLAYS RAISES AVEVA TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 4,060 (3,730) PENCE
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LIBERUM INITIATES CENTAMIN WITH 'SELL' - TARGET 82 PENCE
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COMPANIES - FTSE 100
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HSBC Holdings said it is exiting the retail and small business banking market in the US, in line with its strategy to refocus on corporate and investment banking in Asia. The London-headquartered, Asia-focused giant intends to "focus on the banking and wealth management needs of globally connected affluent and high net worth clients," it said in a statement. Of its 148 US branches, 90 are to be sold, including to Citizens Bank and Cathay General Bancorp. The bank plans to turn about 20 locations into international centres dedicated to high net worth individuals, and gradually wind down the remaining 35 to 40 branches. "They are good businesses, but we lacked the scale to compete," said Chief Executive Noel Quinn. HSBC had announced earlier this year that it intended to restructure its US retail and small business operations. In France, according to Les Echos, HSBC is preparing to pay more than EUR1 billion to the American fund Cerberus to sell all of its retail banking activities, a network of 230 bank branches and 4,000 employees.
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United Utilities raised its annual dividend by 1.5%, in line with its policy, to 43.24 pence per share from 42.60, as full-year pretax profit jumped by 82% to GBP551.0 million from GBP303.2 million despite a 2.8% slip in revenue to GBP1.81 billion from GBP1.86 billion. On an underlying basis, however, pretax profit declined by GBP75 million to GBP460.0 million.
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Specialty chemicals firm Johnson Matthey posted mixed results for the year to March 31. Revenue rose 7.5% to GBP15.67 billion from GBP14.58 billion, though pretax profit dropped 22% to GBP238 million from GBP305 million. Major impairment and restructuring costs amounted to GBP171 million, rising 22%. "Following a challenging first half, we recovered strongly in the second half helped by a strong recovery in our end markets and higher precious metal prices," CEO Robert MacLeod said. Looking ahead, Johnson Matthey said that should precious metals remain at their "current high level", the company will see a net benefit of GBP120 million for the current financial year. It also said capital expenditure will amount to up to GBP600 million, and it expects a GBP25 million profit hit due to foreign exchange movements. "In 2021-22, assuming our end-markets remain robust, we expect low to mid-teens growth in underlying operating performance at constant precious metal prices and constant currency," the company added.
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GlaxoSmithKline and Sanofi said they have started enrolment in a phase three study of their Covid-19 vaccine candidate. The global study will recruit more than 35,000 volunteers from several countries, including the US, Asia, Africa and Latin America. The primary endpoint is the prevention of symptomatic Covid-19 in "SARS-CoV-2 naive adults", with secondary endpoints of preventing severe and asymptomatic infection. The phase three study follows interim phase two results which showed that the adjuvanted recombinant Covid-19 vaccine candidate achieved high rates of neutralising antibody responses in all adult age groups. In a two-stage approach, the phase three study will at first investigate the efficacy of a vaccine formulation targeting the original D.614 virus before then evaluating a second formulation targeting the B.1.351, or South Africa, variant.
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COMPANIES - MAIN MARKET AND AIM
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Financial administration outsourcer Equiniti received a firm takeover offer from Siris Capital, which its board has accepted. Equiniti received a 180p per share offer from Earth Private Holdings, a newly formed company owned by funds managed or advised by Siris Capital. The takeover bid values Equiniti at GBP673 million on a fully diluted basis, Siris said. The 180p offer is a 56% premium to Equiniti's 116p share price at the close of play on February, the day before initial press reports of a potential bid for the company. Equniti's directors backed the offer.
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Morgan Stanley Infrastructure confirmed press reports that it is considering a possible takeover offer for West Yorkshire-based waste management firm Augean. MSI said there can be no certainty that an offer will be made for the AIM listing or on what terms. Augean shares were up 16% early Thursday. It has a market capitalisation just under GBP300 million.
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Daily Mail & General Trust edged its interim payout higher, despite a fall in earnings with virus lockdowns hitting its events arm. Revenue for the six months to the end of March dropped 15% year-on-year to GBP546.8 million from GBP641.5 million. Pretax profit fell 45% to GBP42.4 million from GBP77.0 million, the Daily Mail newspaper owner said. It was a first half that saw the media company sell its education technology unit Hobsons for USD410 million. CEO Paul Zwillenberg added: "We created significant value for our shareholders during the first half, through active management of the portfolio and continued strong operational execution." Daily Mail & General inched its interim payout up 1.3% to 7.6p per share from 7.5p.
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COMPANIES - GLOBAL
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Novartis said it and Molecular Partners have started the global Empathy clinical trial for Covid-19 treatment ensovibep. The phase two and three study will explore the use of novel DARPin therapeutic candidate ensovibep for the treatment of Covid-19, recruiting infected patients and aiming to prevent worsening symptoms and hospitalisation. Novartis will be conducting the clinical trial programme and Moelcular Partners sponsor. If initial results are "convincing", this would pave the way for Novartis to seek expedited approval via the US Food & Drug Administration's Emergency Use Authorization programme.
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Thursday's Shareholder Meetings
BMO Private Equity Trust PLC - AGM
Bodycote PLC - AGM
Bonhill Group PLC - AGM
Cambridge Cognition Holdings PLC - AGM
Curtis Banks Group PLC - AGM
Deltex Medical Group PLC - AGM
Ferrexpo PLC - AGM
Glenveagh Properties PLC - AGM
Great Western Mining Corp PLC - AGM
Hochschild Mining PLC - AGM
Inchcape PLC - AGM
Independent Investment Trust PLC - AGM
International Public Partnerships Ltd - AGM
Nucleus Financial Group PLC - AGM
Oxford BioMedica PLC - AGM
Resolute Mining Ltd - AGM
Restore PLC - AGM
ValiRx PLC - AGM
Vectura Group PLC - AGM
Xeros Technology Group PLC - AGM
XLMedia PLC - AGM
Yu Group PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
