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Aviva to generate extra $four billion, give more back to shareholders

LONDON (Reuters) – Aviva (AV.L) discussed on Thursday it expects to generate an extra three billion kilos ($four.04 billion) in money over the following two years and can give more of it back to shareholders, sending stocks within the British insurer upper.

FILE PHOTO: People input and move out the AVIVA headquarters building in Dublin October 19, 2011. REUTERS/Cathal McNaughton/File Photo

It expects to deploy 2 billion kilos in 2018 by way of spending 900 million kilos on repaying pricey debt, making “bolt-on” acquisitions and returning money to shareholders, it discussed in a observation forward of an investor day in Warsaw.

“After a few years of restructuring, our businesses are now high quality and we expect good, sustainable growth from each of them,” Chief Executive Mark Wilson discussed.

Insurers and reinsurers, amongst them Swiss Re (SRENH.S), had been returning money to shareholders as robust competition cuts imaginable alternatives for expansion.

The money promise helped ship the stocks up 2.five % to 521.five pence by way of 0851 GMT, making it the third-top gainer at the blue-chip FTSE 100 .FTSE.

Morgan Stanley analyst Jon Hocking reiterated his ‘overweight’ weighting at the inventory in a follow to customers: “Taken as a package, we think this is a bullish set of goals from Aviva and, if achieved, the current multiple on the shares looks too low.” He flagged a 649p worth goal.

Aviva has discussed it’s only looking for small acquisitions following its five.6 billion pound ($7.54 billion) succeed in of Friends Life in 2015.

Aviva discussed it used to be as soon as once elevating its expectancies for source of revenue expansion to more than five % once a year from 2019 onwards, from a prior goal of mid-single digit expansion.

It additionally discussed it’s going to building up its dividend pay-out ratio to 55-60 % of source of revenue in keeping with share by way of 2020, from 50 %.

The new targets are “achievable”, JP Morgan analysts discussed in a follow, reiterating their “overweight” score.

($1 = zero.7424 kilos)

($1 = zero.8428 euros)

Additional reporting by way of Simon Jessop; modifying by way of Jason Neely

Our Standards:The Thomson Reuters Trust Principles.

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