-Operating profit up 35% in 2022
- Dividend up 40.6%
- New £300 million share buyback unveiled
Insurance company Aviva’s (AV.) strong recent performance continued with its 2022 results which revealed robust profit growth, an increase in the dividend as well as a fresh £300 million buyback.
Investors reacted positively on a down day for the wider market, with the shares up 2.6% to 461.7p.
Under CEO Amanda Blanc, who took the helm in July 2020, non-core businesses have been sold off and returns have improved substantially.
This is reflected in an impressive share price performance under her tenure, albeit undone somewhat by the wider market volatility of the last 12 months caused by inflationary pressures and the war in Ukraine.
HOW PROFIT AND THE DIVIDEND ADVANCED SHARPLY
Operating profit was up 35% to £2.21 billion, general insurance gross written premiums advanced 8% to £9.75 billion. And the combined operating ratio, which measures how much the company pays out in claims relative to its premiums was at 94.6%.
The total dividend came to 31p, more than 40% up on 2021 and the company announced a £300 million share buyback. Blanc hinted at more dividend growth to come. She said: ‘We are committed to delivering an attractive and sustainable dividend, and have upgraded our dividend guidance to low-to-mid single digit growth in the cash cost of the dividend.’
AJ Bell investment director Russ Mould commented: ‘A bright spot on the UK market was offered by insurer Aviva, where current CEO Amanda Blanc has done an enviable job.
‘Streamlining operations and selling off underperforming businesses is a well-worn strategy, but one Blanc has executed well and that’s evident in the 2022 numbers which show a big increase in profit and dividends accompanied by a big share buyback.’
Disclaimer: Financial services company AJ Bell owns Shares magazine. The author of the article (Tom Sieber) and the editor of the article (Martin Gamble) owns shares in AJ Bell.
