Aviva reports £747 million profit and Builds Capital Strength and announces news plans for Delta Lloyd
Management actions deliver encouraging results
- IFRS profit after tax £747 million (HY08: £84 million loss)
- IFRS operating profit £1,049 million (HY08: £1,223 million)
- MCEV operating profit £1,685 million (HY08: £1,509 million)
- Margin increased, with life and pensions sales down 4%
- Combined operating ratio ahead of target at 97% (HY08: 97%)
- IGD solvency surplus increased to £3.2 billion (31 December 2008: £2.0 billion)
Action on dividend reflects strategy, earnings and outlook
- Interim dividend reduced by 31% to 9 pence
- Lower earnings drives dividend adjustment
- Provides additional financial flexibility to create long-term value
Strategic actions create financial flexibility to exploit market opportunities
- Plans for partial IPO of Delta Lloyd on Euronext Amsterdam
- Sale of Aviva Australia will complete in the third quarter
- Overwhelming customer support for reattribution of inherited estate which will generate customer and shareholder value
- 9% reduction (£0.5 billion annualised) in group’s operating cost base
Andrew Moss, group chief executive, commented:
“In a challenging economic environment Aviva has returned to profit: life and pensions margins have improved, the general insurance business has beaten our targets and our regulatory capital position has strengthened significantly. The diversity of our business and innovative products and services have served our shareholders and customers well in difficult economic times.
“Our overriding priority now is to continue to build a position of strength from which Aviva can exploit market opportunities. In this context we have decided to reduce our interim dividend to 9p per share in line with lower investment earnings in 2009.
“We continue to transform Aviva for the future. We are today announcing plans for a partial IPO of Delta Lloyd when market conditions allow. This will enable Aviva to free up capital for use elsewhere and will allow Delta Lloyd to pursue its ambitions in the Benelux region.
“These actions, together with ongoing focus on cost management and the sale of Aviva Australia, will significantly increase our strategic flexibility. In the long term interest of our shareholders we are determined that Aviva should be in the best possible shape to seize opportunities to grow and add value.”
Full report available here
