Aviva Share Discussion Threads

[edmundshaw] 08/3/2018 18:16

"the fourth year of double digit dividend growth - and I think a lot of people forget that". Erm...

Not to pour cold water on good results, but the dividend is now - finally, after five years - above what it was before Mark became CEO (by 5.5%). In real terms, not yet there. And I think a lot of people forget that too.

However, Aviva is now in much better shape and with a greatly better outlook than it was 6 years ago, when the 26p dividend looked unsustainable (which was why the yield was then over 8%). On top of that Aviva is returning £500m in capital to investors (around 12p per share).

I just did't want to let any CEO go unchallenged when they pull the "slash the dividend on arrival" trick and then boast about the dividend increase during their tenure.

Much more relevant is the fact that the share price is 60% up from around 320p, and we have had over 30% of dividends too in that 5-6 years, giving a shareholder annualised compound return in (as Mark is fond of saying) double digits (around 12%). Hence I am in fact a fan of Mark's. But, erm, not of marketing fluff.

[yf23_1] 08/3/2018 17:56

I find it inconceivable that the prefs could trade at way above par for so many years if they could be redeemed simply by a vote involving ordinary shareholders.

[edmundshaw] 08/3/2018 17:31

Thanks speedy, haven't seen the presentation yet, but the fact that those securities are subject to cancellation was not in the articles of association (I looked at a recent version - 2017), so how is an investor to know?? It puts me right off the very idea of buying prefs, if they can just spring that on you without any warning.

[speedsgh] 08/3/2018 16:33

@edmund - They confirmed in their results presentation to analysts this morning (available via webcast from their website) that the prefs are redeemable at par (see GACA thread for full text or relevant bits).

"we note that these securities are subject to cancellation at par upon a capital reduction approved by ordinary and preferred shareholders voting as a single class..." [CFO]

[otemple3] 08/3/2018 15:41

Thanks Skinny, looks an over reaction to me but not brave enough to jump in...

[grahamburn] 08/3/2018 15:34

Presumably due to the comments in the results about buying back some of the preference shares.

[otemple3] 08/3/2018 15:31

Why are the prefs falling??

[edmundshaw] 08/3/2018 15:25

Ouch!!! But nope, not me, sorry speedy! :-)

[speedsgh] 08/3/2018 15:10

Don't suppose you hold any of their prefs (AV.A, AV.B, GACA, GACB)? That might wipe some of the smile off your face ;o)

[edmundshaw] 08/3/2018 14:56

I am in smug mode now, having bought some first thing at 495p in the face of institutional selling. Probably unbearable.

But no worries, I am sure something will come along soon enough to improve my social acceptability.

[villarich] 08/3/2018 14:33

Bloody hell we're blue!!

[edmundshaw] 08/3/2018 12:02

CB7, that is wrong. Ex dividend date is April 5th, as mentioned before.

[zho] 08/3/2018 11:40

Results being discussed at

[fangorn2] 08/3/2018 11:13

On the dip today post results...

Only comment I've found to explain such is this:

"JPM - Focus on miss in Canadian Life Insurance business"

[cordwainer] 08/3/2018 10:57

I thought by now AV. ought to be more popular as a relatively safe haven with a nice dividend.

[mo123] 08/3/2018 10:46

Richard Hunter, head of markets at interactive investor, commented: “The muted share price reaction to the results cannot detract from what is generally a sparkling set of numbers.”

He added: “Disappointments are few and far between, although committed bears may point to a slightly softer General Insurance operating profit, an uptick in operating expenses and a ‘disappointing”’ contribution from Canada.

“Nonetheless, overall Aviva has shown its strength in terms of growth, capital stability and an improved outlook statement.“

[cb7] 08/3/2018 10:46

Just to be clear the dividend record date is the 6/4, but the share will go xd on 4/4, so holders at the close of business on 3/4 will get the divi.

[cordwainer] 08/3/2018 10:12

5.5% yield for the past year + progressive dividend policy going forward + probable share buybacks.

[speedsgh] 08/3/2018 10:09

@CC2014 - All in good time, although I believe the company has previously stated that any capital returns are more likely to be via share buyback, which for me is less preferable.

I am unsure as to what they mean by 'liability management'? Anybody shed any light?

From today's results
"Our priorities for deployment remain unchanged. Our objective is to use surplus cash to deliver sustainable benefits to our shareholders. For 2018, we have outlined our intent to repay approximately £900 million of expensive hybrid debt, saving more than £60 million in annual pre-tax interest expense. We have allocated approximately £600 million for bolt-on M&A, which includes the €130 million already committed to the Friends First acquisition in Ireland. And we have indicated that in excess of £500 million will be used for capital returns, which may include liability management, share buy-back or special dividends."

[cc2014] 08/3/2018 09:45

Very disappointed this morning. I think some were hoping for a special dividend?

[edmundshaw] 08/3/2018 09:42

It's true Canada business is having a tough time, with COR 102.2%, but surely that will be fixed up over the next two years. Meanwhile the rest of the business is doing pretty well.