Aviva Share Discussion Threads

[anthony100] 27/11/2020 14:00

Thanks muscletrade for the CFO blather.

So "sustainable cash flow" must mean dividends paid up to the parent UK company....I wonder what a "debt incentive "cost could be? Must be a typo for interest cost.

So no other entity outside the UK and Canada has any prospect of making a material recurring earnings based dividend contribution.

Mmm...the sooner they raffle off assets the better this statement reads as a "for sale" notice if one were needed.

[karv1] 27/11/2020 13:59

You never know the DOW could drag us into the blue today. It is slowly heading that way.

[karv1] 27/11/2020 13:34

I still would not be surprised if something along those lines happens in one of the so-called 3 core locations that are overpriced and with far lower profits than what we have given up.
You never know the french government might save the french unit for us from being sold.

[muscletrade] 27/11/2020 13:28

I was taking the poiss

[karv1] 27/11/2020 13:23

Probably sell those assets that make 700 million for 5 to 7 billion then borrow and buy Phoenix for 9 to 10 billion that makes 350 million profit. I would not be surprised at all.

[huncher] 27/11/2020 13:19

I am out of the market but on the General side I understand the market is hardening rapidly (Beazely comments et al)and RI is sky rocketing (double edged sword). So we should be approaching a very profitable point in the cycle (Unless someone goes for share big time - but with RI must be constrained) = profitable growth next few years but not necessarily in GWPI terms.

[muscletrade] 27/11/2020 13:15

"how are we ever going to see those large profits again?"

You won't.. There will be slower growth from a smaller but stronger Aviva light. You will be compensated by return of excess capital from disposals.

Unless of course they decide to redeploy the disposal capital by buying something that fits their core uk/Ireland/Canada strategy.

Maybe Amanda want to buy Phoenix!!!!

[karv1] 27/11/2020 13:03

Thanks This does not add up to me or make sense on interim results after everything is taken out we made 876million so you could argue 1.732 billion this year. Are they suggesting we are going to lose 732 million in profits per year from the current profits which are low due to the pandemic? We could be a lot higher next year if we still held everything? They may pay off some debt and save 100 million interest if they pay off 2.5 billion. That means the rest of the asset sales money has to make us a minimum of 632 million per year from the 3 to 5 billion. If they then do buyback and specials in the short term how are we ever going to see those large profits again?

[muscletrade] 27/11/2020 12:46

@Anthony

Extact from CFO comments yesterday

"What I want to do with this slide is explain why we expect the 2020 dividends at £0.21 per share. To do that, we set out the expected cash generation from our core business units, essentially using the same targets from last year’s Investor Day. You can see that the sustainable cash flow from our core businesses is expected to be in the region of £1.6 billion per year. Once we allow for debt incentive costs we have £1 billion of excess cash flow. And please remember this is after growth and investment in the business. This allows for £0.21 dividend with a comfortable £200 million of headroom. There are additional levers to drive up headroom, including better performance for the core businesses, lower expenses, the reduction in interest costs from reductions in ’21 and ’22 and possible options to reduce our share count".


Thats my secretarial work done for the day.

[muscletrade] 27/11/2020 12:41

@karv1

Extract from AB comments during conf call yday

"Once we have reached a sub 30 Solvency II leverage ratio, we expect to return excess capital to shareholders when the cover ratio is above 180%. This approach is consistent with maintaining our strong credit rating metrics. In terms of how we think about deployment of excess capital, we are absolutely committed to generating strong and sustainable shareholder value. We will look to reduce debt, return capital to shareholders and continue to invest in our core businesses where we see attractive opportunities to do so. We will carefully balance those priorities. And I will remind you that we already have a substantial amount of capital deployed within our core businesses to support growth".

[karv1] 27/11/2020 12:25

Did anyone asks yesterday would they consider looking for takeover targets yesterday? or did they suggest anything along those lines?

[dbadvn] 27/11/2020 12:22

I think AB’s short term strategy is good.

1.quickly tidy up the bits of the business that are peripheral.
2. Build cash.

This gives her every option for the longer term and in the short term if there is an offer so be it.

Not sure about the longer term story, that’s where the weakness is.

[muscletrade] 27/11/2020 12:09

Times extract

"Investors will rightly question whether Ms Blanc can do what each of her predecessors over the last 20 years have failed to".

As far as I can determine her predecessors didn't so much fail to transform Aviva, they never wanted to or had the insight to try in the first place.

[jordaggy] 27/11/2020 11:28

Culmer was instrumental in turning Lloyds around! Got rid of £200billion derivative debt off the books.

[dr biotech] 27/11/2020 11:20

Times says there are doubts about whether AB can push through all the plans - ie selling France is not simple - does make the point that so far she has done what she said with Singapore and Italy and scepticism due to AVs history of inaction.

Perhaps best summed up

"Gordon Aitken, analyst at Royal Bank of Canada, said: “Amanda Blanc has the opportunity to transform this conglomerate which has struggled for direction. Investors will rightly question whether Ms Blanc can do what each of her predecessors over the last 20 years have failed to. We believe she can; driving radical change together with the new chairman George Culmer.”

[woodhawk] 27/11/2020 11:15

whatsup32, I think this is what you're referring to

hxxps://www.pensionsage.com/pa/Aviva-Staff-Pension-Scheme-completes-875m-buy-in-with-Aviva.php

[linton5] 27/11/2020 11:11

Take over price for aviva would be £5.50 no probs

[whatsup32] 27/11/2020 10:09

The Times today .
Full page right up on Aviva mostly positive

[heialex1] 27/11/2020 09:52

Makes more sense than current share price. In this interest environment current yield is excellentThis is one of many fundamentally cheap U.K. shares, and like so many others is so cheap because overseas money hasn't been coming in for years because of brexit.... if they can find a way of avoiding a total catastrophe then many of these shares should hopefully re rate next year.But if they drive then bus off the cliff, then next year will be ugly

[adelwire2] 27/11/2020 09:10

I'd accept that share price

[carpingtris] 27/11/2020 09:02

My price target 400p - as good as any other bankers guesses..

[dr biotech] 27/11/2020 08:09

Aviva : Berenberg cuts target price to 453p from 477p

I’d accept that though...

[adhowes1970] 27/11/2020 08:02

Morgan Stanley raises its target price on Aviva to 376p.