Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Aviva (AV.)

Share latest information on individual companies and hot news discussions. LSE Main Market companies only
Forum rules
No penny shares or promotional posts
dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Aviva (AV.)

#399209

Postby dealtn » March 26th, 2021, 1:06 pm

GoSeigen wrote:
dealtn wrote:
GoSeigen wrote:
I don't see that they're different. As a shareholder I want to acquire shares at a low price, and have them bought off me at a high price. Struggling to see what is strange about that.

As a preference shareholder I'd not be so pleased, but they (pref holders) have already made clear they don't want their capital returned so I guess they will need to accept whatever scraps are thrown to them by way of a dividend... and at 6 yield they need 14 years of payments to get their money back.

GS


As a shareholder they are spending my money, so I much prefer them to be buying at a lower price.

As a shareholder I want to be buying low and "having them bought off me at a high price" too. Who is buying them from me, in the secondary market is irrelevant.


??? They're NOT spending your money, they're returning your capital! It's the opposite of spending your money.

Why should the buyer be someone in the secondary market? Why can't it be the issuing company? They're either going to buy your shares off you or give the capital back some other way. Better they buy them at a high price surely? [Quite apart from the fact that you voted and authorised them to buy the shares in the first place!]

GS


We clearly have completely different ideas about what they are doing in that case.

If I don't participate in the buyback as a seller of shares (to them) my participation in the "return of capital" is through their purchase of shares (and cancelling them). Clearly the lower the price they do this the more shares they buy. Consequently my proportion of the remaining ownership increases, and does so by more the lower the share price of that buyback. My preference is for the exercise to take place at the lowest share price possible.

Now do I want, as an owner, the shares to be low or high? High, and at a price I deem no longer worth holding I sell and take my profit. But, as I said, these are different things.

(Imagine the ridiculous scenario where there are 100,000 shares at £20 each and they want to "return" £1mio. Let's assume the market cap of £2mio perfectly matched the assets for simplicity) If they bought 1000 shares at £1,000 and I wasn't one of the lucky sellers, there would be £1mio of assets left and 99,000 shares, and in a perfect market each share is now worth £10.10. Alternatively they used that £1mio to buy back shares at £12.50, there would be 20,000 shares left and assets of a £1mio so my unsold shares are worth £50.

This is a ludicrously exaggerated example, but as a non-seller I would prefer the outcome to be one where my shares were left at £50, not £9.90.)

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Aviva (AV.)

#401361

Postby monabri » April 3rd, 2021, 1:01 pm

https://www.investegate.co.uk/aviva-plc ... 00023015U/

"Aviva plc ("Aviva") today announces that it has completed the sale of its entire 80% shareholding in the Italian life insurance joint venture, Aviva Vita S.p.A. ("Aviva Vita"), to its partner UBI Banca.

Aviva received €453m (£386m1) in cash consideration, which includes €40m received for the replacement of a subordinated loan provided by Aviva Italia Holding S.p.A. to Aviva Vita.

The sale of Aviva's shareholding in Aviva Vita was announced on 23 November 2020."

( November announcement.)
https://www.investegate.co.uk/aviva-plc ... 00081397G/

idpickering
The full Lemon
Posts: 11275
Joined: November 4th, 2016, 5:04 pm
Has thanked: 2468 times
Been thanked: 5761 times

Re: Aviva (AV.)

#409720

Postby idpickering » May 6th, 2021, 7:21 am

Aviva completes exit from Turkey

Aviva plc ("Aviva") today announces it has completed the sale of its entire 40% shareholding in the Turkish life insurance and pensions joint venture, AvivaSA Emeklilik ve Hayat AS ("AvivaSA"), to Ageas Insurance International NV.

Aviva received £122 million in cash consideration, which includes a £3 million dividend from AvivaSA received in March 2021.

The sale of Aviva's shareholding in AvivaSA was announced by Aviva on 24 February 2021.


https://www.investegate.co.uk/aviva-plc ... 00036847X/

daveh
Lemon Quarter
Posts: 2191
Joined: November 4th, 2016, 11:06 am
Has thanked: 409 times
Been thanked: 807 times

Re: Aviva (AV.)

#415512

Postby daveh » May 27th, 2021, 10:26 am

First Qtr update:
https://www.investegate.co.uk/aviva-plc ... 00039605Z/
trategic delivery and continuing momentum as we look forward with growing confidence

Record quarterly Savings & Retirement net flows and highest Q1 sales1 in General Insurance for a decade

• Core Life PVNBP of £8.3bn (Q120: £8.3bn) with growth in Savings & Retirement and lower volumes of Annuities & Equity Release in a subdued market compared to a strong start in 2020

• Core General Insurance gross written premiums (GWP) up 4% to £2.0bn (Q120: £1.9bn) and COR 90.6% (Q120: 118.7%)


Strategic delivery with 8 businesses sold for £7.5bn with proceeds expected by end of 2021

• Now completed disposals of Aviva Vita and Turkey and signed the Sale & Purchase Agreement in France following conclusion of the consultation processes

• Substantial return of capital to shareholders following completion of the announced transactions

Significant financial strength

• Solvency II shareholder cover ratio of 209% (FY20: 202%) and centre liquidity (Apr 21) of £2.9bn (Feb 21: £4.1bn)

• Solvency II debt leverage ratio of 28% (FY20: 31%) reflecting successful £1bn tender in Q121 with a further reduction of 2% reflecting £0.9bn of upcoming maturities expected in the second quarter

Greater focus on improving the performance of the business

• Core controllable costs2 (excluding cost reduction implementation and IFRS 17 costs) of £720m (Q120: £725m) on track to achieve savings of £300m relative to our 2018 baseline in 2022

• Investment in organic growth and simplifying the business where we see clear benefits for shareholders



Interesting results and they mention a substantial return of capital to shareholders. This is one share I hold partially outwith my ISAs. If they plan to do this return via a special dividend I may need to bed and ISA it soon as I don't have much headroom with the dividend allowance.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Aviva (AV.)

#415548

Postby absolutezero » May 27th, 2021, 11:58 am

daveh wrote:Interesting results and they mention a substantial return of capital to shareholders. This is one share I hold partially outwith my ISAs. If they plan to do this return via a special dividend I may need to bed and ISA it soon as I don't have much headroom with the dividend allowance.

Wise to keep it in an ISA. But like you, I own Aviva outside my ISA (I had better candidates to put inside there)

But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)

I'd not worry too much about dividend tax (if you are a basic rate payer) as after £2,000 you only pay 7.5%.

daveh
Lemon Quarter
Posts: 2191
Joined: November 4th, 2016, 11:06 am
Has thanked: 409 times
Been thanked: 807 times

Re: Aviva (AV.)

#415569

Postby daveh » May 27th, 2021, 12:43 pm

absolutezero wrote:
daveh wrote:Interesting results and they mention a substantial return of capital to shareholders. This is one share I hold partially outwith my ISAs. If they plan to do this return via a special dividend I may need to bed and ISA it soon as I don't have much headroom with the dividend allowance.

Wise to keep it in an ISA. But like you, I own Aviva outside my ISA (I had better candidates to put inside there)

But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)

I'd not worry too much about dividend tax (if you are a basic rate payer) as after £2,000 you only pay 7.5%.



Yes I know but its 7.5% Tax I can avoid if I move the shares into my ISA. Thanks to covid I have more headroom before I reach £2000 pounds of unsheltered dividends, but with a number of companies reinstating dividends, this years unsheltered dividends are pushing back towards the £2k mark. At any rate AV. have now moved to the top of the list for a bed and ISA. Fortunately the unsheltered holding isn't too large and will easily fit within the ISA allowance. Also I've just done some back of the envelope calculations on the number of shares in issue and max capital they might return and it looks like a one off special might just about fit in the remaining dividend allowance headroom unless some of the reinstated dividends are bigger than I'm expecting. My income is also quite close to the Scottish 41% tax band.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Aviva (AV.)

#415615

Postby absolutezero » May 27th, 2021, 5:17 pm

daveh wrote:
absolutezero wrote:
daveh wrote:Interesting results and they mention a substantial return of capital to shareholders. This is one share I hold partially outwith my ISAs. If they plan to do this return via a special dividend I may need to bed and ISA it soon as I don't have much headroom with the dividend allowance.

Wise to keep it in an ISA. But like you, I own Aviva outside my ISA (I had better candidates to put inside there)

But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)

I'd not worry too much about dividend tax (if you are a basic rate payer) as after £2,000 you only pay 7.5%.



Yes I know but its 7.5% Tax I can avoid if I move the shares into my ISA. Thanks to covid I have more headroom before I reach £2000 pounds of unsheltered dividends, but with a number of companies reinstating dividends, this years unsheltered dividends are pushing back towards the £2k mark. At any rate AV. have now moved to the top of the list for a bed and ISA. Fortunately the unsheltered holding isn't too large and will easily fit within the ISA allowance. Also I've just done some back of the envelope calculations on the number of shares in issue and max capital they might return and it looks like a one off special might just about fit in the remaining dividend allowance headroom unless some of the reinstated dividends are bigger than I'm expecting. My income is also quite close to the Scottish 41% tax band.

I agree.
I'd rather not pay the 7.5% but I would prefer the dividend (and 7.5% tax) rather than them toileting millions in a share buyback.

scrumpyjack
Lemon Quarter
Posts: 4809
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2673 times

Re: Aviva (AV.)

#415636

Postby scrumpyjack » May 27th, 2021, 7:16 pm

This argument has been played out many times, but again some shareholders will get pushed into the loss of PA band and pay nearly 60% tax.
The cash is undeniably capital in nature as it arises from selling parts of the business, so logically the payment should be structured as capital not income. It is administratively simplest for the company just to pay it as a dividend, however inequitable that is.
I think I will write to the CFO this time to point this out, having been forced to sell my Tesco shares recently before they paid out 25% of the company's market cap as taxable income.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Aviva (AV.)

#415643

Postby absolutezero » May 27th, 2021, 7:49 pm

scrumpyjack wrote:This argument has been played out many times, but again some shareholders will get pushed into the loss of PA band and pay nearly 60% tax.
The cash is undeniably capital in nature as it arises from selling parts of the business, so logically the payment should be structured as capital not income. It is administratively simplest for the company just to pay it as a dividend, however inequitable that is.
I think I will write to the CFO this time to point this out, having been forced to sell my Tesco shares recently before they paid out 25% of the company's market cap as taxable income.

Don't expect any sympathy.
They will just garble on about an ISA - and then flush the money on buybacks.
Remember, they don't care about you. You aren't a big institutional investor.

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Aviva (AV.)

#415666

Postby monabri » May 27th, 2021, 9:17 pm

A good start would be to (i) pay the withheld dividends that the nice Mr S Woods of the PRA ( boo!) pulled the plug on.

Share buybacks....pfft! :roll:

monabri ( not holding breath)

GoSeigen
Lemon Quarter
Posts: 4349
Joined: November 8th, 2016, 11:14 pm
Has thanked: 1590 times
Been thanked: 1579 times

Re: Aviva (AV.)

#415848

Postby GoSeigen » May 28th, 2021, 2:10 pm

absolutezero wrote:But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)


It's not theory, it's fact, which really should not be misrepresented... It's a return of capital in company law, in accounting, and in practice -- just as an issue of shares is a raising of capital (a transfer to capital to the company).

GS

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Aviva (AV.)

#415930

Postby absolutezero » May 28th, 2021, 8:20 pm

GoSeigen wrote:
absolutezero wrote:But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)


It's not theory, it's fact, which really should not be misrepresented... It's a return of capital in company law, in accounting, and in practice -- just as an issue of shares is a raising of capital (a transfer to capital to the company).

GS

How much of this capital return (assuming it is in the form of a share buyback) do you expect to see then?
How much of it will turn up in your portfolio or bank account?

scrumpyjack
Lemon Quarter
Posts: 4809
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2673 times

Re: Aviva (AV.)

#415935

Postby scrumpyjack » May 28th, 2021, 8:37 pm

I very much hope to see none of it and so not be taxed on it, but instead for the share price to reflect the benefit of reducing the number of shares in issue at a price significantly lower than embedded value. The last thing I would want is to be paid capital but for it to be taxed as income. I would rather make my own decisions on when to turn the capital I have in Aviva back into cash in my bank account.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Aviva (AV.)

#415961

Postby absolutezero » May 29th, 2021, 12:03 am

scrumpyjack wrote:I very much hope to see none of it and so not be taxed on it, but instead for the share price to reflect the benefit of reducing the number of shares in issue at a price significantly lower than embedded value. The last thing I would want is to be paid capital but for it to be taxed as income. I would rather make my own decisions on when to turn the capital I have in Aviva back into cash in my bank account.

Very much hoping butters no parsnips.

You have avoided the question.
Your answer is academic, outlining the basic theories (that do not always survive contact with the real world) and based in what *should* happen, but what if it doesn't?

What happens if they 'return capital to shareholders' in the form of a buyback and then the share price drops? Oops.
Is it not possible ( maybe even likely?) that the 'return of capital to shareholders' could actually destroy rather than create wealth?
So in that situation, 'the last thing you would want' is cash in the bank. Rather odd.

I'm not bothered what the theory says. I'm interested in the real world situation.

Guaranteed cash in the bank (as a dividend) is better than wealth destruction, surely, even if it does generate a tax liability.

While we are here, research has shown that companies regularly initiate share buybacks when the shares are overvalued rather than when shares are cheap.
It must be pure coincidence that senior staff bonuses are often linked to increased EPS (rather than share price) and the coincidence deepens because a buyback automatically increases EPS, assuming profits are stable.
Coincidence. Surely, right?

GrahamPlatt
Lemon Quarter
Posts: 2059
Joined: November 4th, 2016, 9:40 am
Has thanked: 1032 times
Been thanked: 822 times

Re: Aviva (AV.)

#415974

Postby GrahamPlatt » May 29th, 2021, 7:00 am

absolutezero wrote:“It must be pure coincidence that senior staff bonuses are often linked to increased EPS (rather than share price) and the coincidence deepens because a buyback automatically increases EPS, assuming profits are stable.”


Yes, unless the EPS figure for such linked bonuses is rebased after a buy-back, this is a perverse incentive.

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Aviva (AV.)

#415976

Postby Dod101 » May 29th, 2021, 7:10 am

They have sold a chunk of the business and thus EPS should fall if they do nothing. I would be very surprised if they do not want to reduce the number of shares in issue and so continuing shareholders could look forward to increased dividends going forward as there will be fewer mouths to feed. They may not get bigger dividends of course because in theory at least there will be smaller profits.

As a non shareholder I will watch from afar with interest.

Dod

Steveam
Lemon Slice
Posts: 974
Joined: March 18th, 2017, 10:22 pm
Has thanked: 1745 times
Been thanked: 534 times

Re: Aviva (AV.)

#415986

Postby Steveam » May 29th, 2021, 8:42 am

Absolutezero said: It must be pure coincidence that senior staff bonuses are often linked to increased EPS (rather than share price) and the coincidence deepens because a buyback automatically increases EPS, assuming profits are stable.

I have received share incentives and sat on remuneration committees. My experience and the advice I’ve received is that any scheme should adjust to take account of both share issues and buy backs. This is really basic stuff and I’d be very, very surprised to find a scheme designed in the last 15 years that was so poorly done.

My belief (but I’ve not been able to check it) is that this is just an accusation thrown about because there was historical abuse.

Best wishes,

Steve

scrumpyjack
Lemon Quarter
Posts: 4809
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2673 times

Re: Aviva (AV.)

#416009

Postby scrumpyjack » May 29th, 2021, 10:10 am

Because of the appalling record, the shares are very lowly valued by the market and the disposals they have made are at much better prices relative to the embedded value than the current Aviva market price relative to the group embedded value. Buying back shares at anywhere near the current SP makes overwhelming good sense because of the tontine effect. The SP would IMO very likely rise in this event.

If they do decide to simply splash out the capital as an income dividend, I would sell my holding before they go XD and curse Aviva management for their continuing blind stupidity. My holding is relatively trivial as everything else has performed vastly better.

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Aviva (AV.)

#416010

Postby Dod101 » May 29th, 2021, 10:15 am

Steveam wrote:Absolutezero said: It must be pure coincidence that senior staff bonuses are often linked to increased EPS (rather than share price) and the coincidence deepens because a buyback automatically increases EPS, assuming profits are stable.

I have received share incentives and sat on remuneration committees. My experience and the advice I’ve received is that any scheme should adjust to take account of both share issues and buy backs. This is really basic stuff and I’d be very, very surprised to find a scheme designed in the last 15 years that was so poorly done.

My belief (but I’ve not been able to check it) is that this is just an accusation thrown about because there was historical abuse.

Best wishes,

Steve


I think that is correct and, of course, the built in cynicism of some posters which gets a bit wearing at times.

Dod

GoSeigen
Lemon Quarter
Posts: 4349
Joined: November 8th, 2016, 11:14 pm
Has thanked: 1590 times
Been thanked: 1579 times

Re: Aviva (AV.)

#416102

Postby GoSeigen » May 29th, 2021, 5:18 pm

absolutezero wrote:
GoSeigen wrote:
absolutezero wrote:But return of capital could well mean a useless share buyback where you don't see any return of the capital at all.
(Yes yes. I know the theory behind share buybacks - don't bother "correcting" me because I also see how they work in practice rather than theory)


It's not theory, it's fact, which really should not be misrepresented... It's a return of capital in company law, in accounting, and in practice -- just as an issue of shares is a raising of capital (a transfer to capital to the company).

GS

How much of this capital return (assuming it is in the form of a share buyback) do you expect to see then?
How much of it will turn up in your portfolio or bank account?


There's a fallacy of composition here, or hasty generalisation if you like. Just because one shareholder receives no payment does not mean that there has been no capital return. Similarly the fact that a shareholder receives a payment does not mean that all shareholders will receive it.

The capital return is made to the shareholders as a class. One individual might participate while another doesn't. Where someone accepts a larger return of capital than the proportion being purchased by the company then necessarily some other holder is accepting less. Whether an individual shareholder wishes to participate is entirely up to her; similarly the extent of her participation. If a shareholder wishes to benefit from the capital return but does not then that is the shareholder's own fault. But it doesn't change the fact that a capital return has occurred.


As for me, my exposure to Aviva is probably too small individually to make it worthwhile participating immediately. But perhaps after some time I will trim. Depends whether I consider the price the buybacks are being made at is high enough.

GS


Return to “Company Share news (LSE Main Market)”

Who is online

Users browsing this forum: kenko92 and 9 guests