AVIVA PLC THIRD QUARTER UPDATE

[idpickering]

9M20 operating highlights


Trading

· Life PVNBP £32.1 billion (9M19: £32.4 billion)

· Value of new business (VNB)‡ 714 million (9M19: £828 million)

· General insurance net written premiums (NWP) £7.1 billion (9M19: £7.0 billion)

· Controllable costs‡ £2.8 billion (9M19: £3.0 billion)


Dividend

· 2020 interim dividend of 7.0 pence per share

· 2020 final dividend expected to be 14.0 pence per share, 21.0p total, subject to a board decision in March 2021

· No 2019 final dividend (2019 total dividend:15.5 pence per share)

Dividend policy and capital framework

· We are announcing a new dividend policy and capital framework that align with the Group's strategy to focus on the core markets of the UK, Ireland and Canada.

· As we focus the portfolio, we expect to build excess capital over time. We will deliver further value to shareholders by returning excess capital over a 180% Solvency II cover ratio# once our debt leverage target of <30% has been reached. We expect to exceed our original target of £1.5 billion debt deleveraging by 2022.

· The Board has declared a 7.0 pence per share interim dividend in respect of the 2020 financial year, which will be paid in January 2021. The Board expects to recommend a FY20 final dividend of 14.0 pence per share subject to a final decision to be taken in March 2021. This level of dividend is sustainable and resilient in times of stress, and is covered by the capital and cash generated from the core markets of the UK, Ireland and Canada. Future dividends per share are expected to grow by low to mid-single digits over time.

· A second interim dividend of 6 pence per share in respect of 2019 was paid in the third quarter of 2020. There will be no further payment in respect of FY2019.

https://www.investegate.co.uk/aviva-plc ... 00055450G/

[Dod101]

At least the new CEO seems to be being decisive this time round and it all sounds good. How many times have we heard that from Aviva of course? Still, with RSA going, for anyone wanting a general UK insurer there is now not a lot of choice.

Dod

[scrumpyjack]

7p Dividend xd 10/12, pay 21/1/21 per website

[Arborbridge]

7p Dividend xd 10/12, pay 21/1/21 per website

That's cruel for anyone with A J Bell: cheap dealing day will be the 10th too.

[monabri]

Table of dividends from dividend data.

https://www.dividenddata.co.uk/dividend ... py?epic=AV.



So, the 2020 dividend interim will be 7p followed by a final of 14p....the drop in annual dividend being from 30p to 21p. (Pre -Covid, pre PRA).

Dividend data refer to the 2019 as a "final" whereas Aviva call it an interim.....let's just call it 6p to bring the 2019 total to 15.5p.

Current yield for new buyers/ top ups is 6.4% ( shareprice 325p).

[uspaul666]

7p Dividend xd 10/12, pay 21/1/21 per website

That's cruel for anyone with A J Bell: cheap dealing day will be the 10th too.

Sorry for butting in. I asked youinvest if there was a cheap dealing day facility a while back and they denied there was any such thing. Can you tell me more please?

[IanTHughes]

7p Dividend xd 10/12, pay 21/1/21 per website

That's cruel for anyone with A J Bell: cheap dealing day will be the 10th too.

Sorry for butting in. I asked youinvest if there was a cheap dealing day facility a while back and they denied there was any such thing. Can you tell me more please?

A J Bell (YouInvest) do not have a "Cheap Dealing Day" but they do have what they call "Regular Investment": https://www.youinvest.co.uk/our-service ... nvestments

The details are laid out here: https://www.youinvest.co.uk/sites/defau ... ervice.pdf

The idea being that a regular monthly investment - on the 10th day of each month - is set up and left alone to slowly build up a position in one's chosen share. The cost of each such purchase is £1.50. Because one is allowed to amend or cancel, at any time, the monthly amount being invested, and the share being invested in, one can easily use it as a monthly "Cheap Dealing Day", for purchases anyway. However, one does have to accept that one must set up the purchase(s) being made by midnight the day before purchase date and one cannot amend it after that time, whatever the market does.


Ian

[monabri]

"As we focus the portfolio, we expect to build excess capital over time. We will deliver further value to shareholders by returning excess capital over a 180% Solvency II cover ratio# once our debt leverage target of <30% has been reached. We expect to exceed our original target of £1.5 billion debt deleveraging by 2022."

I wonder in what form the return will be ?

[Arborbridge]

7p Dividend xd 10/12, pay 21/1/21 per website

That's cruel for anyone with A J Bell: cheap dealing day will be the 10th too.

Sorry for butting in. I asked youinvest if there was a cheap dealing day facility a while back and they denied there was any such thing. Can you tell me more please?

I'm sorry if that was confusing: see Ian's post for a complete explanation.

Arb.

[Gengulphus]

7p Dividend xd 10/12, pay 21/1/21 per website

That's cruel for anyone with A J Bell: cheap dealing day will be the 10th too.

It's cruel that they'll be buying at a price 7p cheaper than what it would probably otherwise have been? And even if it turns out that they buy at a higher price than that, bearing in mind that they of their own free will have chosen to use a purchasing method that commits them to buying whatever the price turns out to be, isn't it at least partly self-inflicted cruelty?

Gengulphus

[Dod101]

Unless you are investing peanuts, the saving on cheap dealing days is very little in fact. Mere market noise which happens all the time so I do not understand the emphasis on cheap dealing days, and as Gengulphus implies, no one is telling investors they have to use them.

Dod

[minerjoe]

Why not just use freetrade? You pay £3 per month and all the buying/selling is free.

[Arborbridge]

Why not just use freetrade? You pay £3 per month and all the buying/selling is free.

Because I have a SIPP with A J Bell???

[Arborbridge]

Unless you are investing peanuts, the saving on cheap dealing days is very little in fact. Mere market noise which happens all the time so I do not understand the emphasis on cheap dealing days, and as Gengulphus implies, no one is telling investors they have to use them.

Dod

Quite right, but the difference between, say, £25 and £2 or £3 does come as a shock.

I think the main reason I started doing it was that at one time I was overtrading, and the trading day imposed a certain regular habit of monthly intervals.

Interesting, I notice last year was lower for number of trades than this year which came as a bit of a surprise.

I'm sure why anyone should think I've been "told to" use a cheap trading day, clearly not. It occurred to me that buying at XD might be an interesting experiment - I'm never convinced that the reduction in price is at all predictable.

And, BTW, my comment was general, since I haven't thought about what, or if, I will top up next month.

Arb.

[IanTHughes]

Unless you are investing peanuts, the saving on cheap dealing days is very little in fact.

Meaning of course that if you are investing "peanuts" - however one defines that - the savings on charges can be quite significant

Mere market noise which happens all the time so I do not understand the emphasis on cheap dealing days

Market noise has absolutely nothing to do with it, as even the most inexperienced investor will surely know. The point is how much of a percentage of the investment amount is being paid away at the time of purchase.

An investment of £1,000 with a charge of £10 loses 1.00% immediately on purchase. The same investment with a charge of £1 only loses 0.10% - the market noise will be exactly the same in either case.

Which would you prefer?


Ian

[scrumpyjack]

"As we focus the portfolio, we expect to build excess capital over time. We will deliver further value to shareholders by returning excess capital over a 180% Solvency II cover ratio# once our debt leverage target of <30% has been reached. We expect to exceed our original target of £1.5 billion debt deleveraging by 2022."

I wonder in what form the return will be ?

Probably a share buyback, which makes sense with the SP as low as it is.

Glad to see they may dispose of the French business and hopefully finally get rid of Max-Herve and his golden ticket
https://www.independent.co.uk/news/busi ... 82998.html
This saga has been going on for many years and in spite of Aviva rubbishing his claims, he has won every round in court so far.

[Dod101]

"As we focus the portfolio, we expect to build excess capital over time. We will deliver further value to shareholders by returning excess capital over a 180% Solvency II cover ratio# once our debt leverage target of <30% has been reached. We expect to exceed our original target of £1.5 billion debt deleveraging by 2022."

I wonder in what form the return will be ?

Probably a share buyback, which makes sense with the SP as low as it is.

Glad to see they may dispose of the French business and hopefully finally get rid of Max-Herve and his golden ticket
https://www.independent.co.uk/news/busi ... 82998.html
This saga has been going on for many years and in spite of Aviva rubbishing his claims, he has won every round in court so far.

I thought the Max-Hervie business was why they still held their French business. No one wants to buy it with that hanging around?

Dod

[scrumpyjack]

Dare I say that if Aviva France was owned by a French company, the french courts might look at his claim more critically?

Even in a worse case scenario it is probably still fairly small compared to the size of Av France, but might mean it sold for a low price.

Anyway at least they seem to be looking at disposing of it, per today's RNS

[ADrunkenMarcus]

The issue with Aviva is that it's a serial dividend-slasher. Historically, slashing the dividend was what they did. A habit! I see the dividend data back to 2011 has been provided, however if my memory is right they had dividend cuts c. 2002, c. 2009, 2012-13 and 2019. The dividend today on a nominal basis is below what it was twenty years ago.

Best wishes

Mark.

[kempiejon]

The issue with Aviva is that it's a serial dividend-slasher. Historically, slashing the dividend was what they did. A habit! I see the dividend data back to 2011 has been provided, however if my memory is right they had dividend cuts c. 2002, c. 2009, 2012-13 and 2019. The dividend today on a nominal basis is below what it was twenty years ago.

Best wishes

Mark.

Yup, Aviva is one of mine bought 2007 or 8 with a 5 year history and forecast increase dividend, then a cut and a few more as noted above and never received above my first year's income.