Aviva on Wednesday said 2021 was a year of significant strategic progress across the board following the disposal of eight non-core units, making the insurer a ‘much simpler, leaner business’.
For 2021, Aviva posted adjusted operating profit of £2.27 billion, down from £3.16 billion in 2020 as a result of discontinued operations. Pretax profit from from continuing operations was £801 million, down from £1.81 billion.
Turning to returns, Aviva declared a total dividend of 22.05p, up 5% from 21.00p in 2020. In addition, the London-based company said it will return £4.75 billion to shareholders comprising £3.75 billion via B share scheme on top of a £1 billion share buyback.
Separately, Aviva said it would acquire independent financial advice firm Succession Wealth for £385 million. The transaction, it said, enhances its presence in the fast-growing UK wealth market as more people seek advice for their retirement and savings options.
Aviva shares up 2.1% early Wednesday, outperforming the wider FTSE 100 index.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.7% at 7,378.12
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Hang Seng: down 1.9% at 22,334.14
Nikkei 225: closed down 1.7% at 26,393.03
S&P/ASX 200: closed up 0.3% at 7,116.70
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DJIA: closed down 597.65 points, 1.8%, at 33,294.95
S&P 500: closed down 1.6% at 4,306.26
Nasdaq Composite: closed down 1.6% at 13,532.46
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EUR: flat at $1.1105 ($1.1109)
GBP: down at $1.3292 ($1.3334)
USD: up at JP¥115.10 (JP¥114.89)
Gold: up at $1,940.01 per ounce ($1,930.54)
Oil (Brent): up at $111.40 a barrel ($106.10)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday’s key economic events still to come
OPEC and non-OPEC ministerial meeting
1100 CET EU flash estimate euro area inflation
1100 GMT Ireland monthly unemployment
1000 EST US Fed Chair Powell presents Monetary Policy Report to Congress
0815 EST US ADP national employment report
1030 EST US EIA weekly petroleum status report
1400 EST US Beige Book
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Heavy fighting was reported overnight into Wednesday in eastern and southern Ukraine as Russian forces pushed forward into day seven of their invasion of their western neighbour, according to Ukrainian media reports. Reports from the eastern city of Kharkiv, Ukraine’s second-largest, said that Russian forces attacked a military medical centre. The UNIAN news agency reported that they engaged Ukrainian forces, which managed to take six new Russian 5-80BWM tanks. Russian airborne forces landed in Kharkiv and triggered immediate clashes in the streets, following Moscow’s relentless air assault across the ex-Soviet state. In the southern city of Kherson, the Ukrinform news agency reported that Russian tanks fired on the offices of the Ukrainian intelligence agency SBU. Anton Herashchenko, an advisor to the Ukrainian Interior Ministry, spoke of multiple civilian deaths and said the populace of Kherson was defending the city with petrol bombs. According to local reports, it is surrounded by hostile forces. City officials said Russian soldiers have occupied the harbour and the train station and reported multiple dead, both among the civilian population and the Ukrainian armed forces. The Russian army claimed it had taken control of Kherson. ‘The Russian divisions of the armed forces have taken the regional centre of Kherson under full control,’ defence ministry spokesman Igor Konashenkov said in televised remarks.
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UK house prices continued to rise in February but growth looks set to slow in the coming months against a backdrop of higher UK interest rates, mortgage lender Nationwide said. On an annual basis, the Nationwide UK house price index rose 13% in February, accelerating from 11% in January. The print beat the market forecast, cited by FXStreet, of 11%. UK house prices increased 1.7% in February month-on-month, ticking up from 0.8% growth in January. The latest reading was more than double the consensus estimate of 0.6%. The average UK house price stood at £260,230 in February, rising 1.8% from £255,556 in January.
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UK shop price growth surged to a more than 10-year high in February. According to the latest British Retail Consortium-NielsenIQ tracker, yearly UK shop price inflation accelerated to 1.8% in February, from 1.5% in January. February’s figure was the hottest since November 2011, the BRC said. On a monthly basis, UK shop prices increased 0.5% in February, following a 0.1% hike in January. Annual non-food inflation quickened to 1.3% in February, from 0.9% in January, the highest rate since September 2011. Food inflation was unmoved at 2.7% in February, while fresh food inflation alone accelerated to 3.3% from 2.9% in January.
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The US warned citizens against travelling to Hong Kong, citing the risk of children being separated from parents as the Chinese city imposes controversial Covid isolation policies. The State Department upgraded Hong Kong to its highest ‘Do Not Travel’ warning ‘due to COVID-19 related restrictions, including the risk of parents and children being separated’. ‘In some cases, children in Hong Kong who test positive have been separated from their parents and kept in isolation until they meet local hospital discharge requirements,’ the State Department added. The Asian financial hub is in the grip of its worst coronavirus outbreak, registering tens of thousands of new cases each day, overwhelming hospitals and shattering the city’s zero-Covid strategy. China has ordered local officials to stamp out the outbreak even as studies suggest as many as a quarter of the city’s residents may have been infected in the current wave.
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BROKER RATING CHANGES
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SocGen cuts AB Foods to ’hold’ (’buy’) - target 2,100 (2,500) pence
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Peel Hunt raises Travis Perkins to ’buy’ (’add’) - target 1850 pence
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COMPANIES - FTSE 100
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Persimmon said its performance was strong in 2021 as it delivered more homes and strengthened its platform for future growth. For 2021, pretax profit was £966.8 million, up from £783.8 million in 2020 on revenue of £3.61 billion, up from £3.33 billion. The York, England-based housebuilder completed 14,551 new homes in 2021, almost a 1,000 more than 13,575 homes in 2020. The average selling price was £237,078, up from £230,534. Turning to returns, Persimmon is to pay a 125 pence regular annual dividend instalment in April, alongside a 110p payment of surplus capital in July. Looking ahead, Persimmon anticipates a greater proportion of completions in the second half of the year relative to the first, reflecting a ‘return to more typical trading patterns and the growth profile of our outlet network’. It also expects to deliver volume growth of 4% to 7% for 2022 from 2021 levels and that increases in selling prices will mitigate build cost inflation.
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COMPANIES - FTSE 250
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CMC Markets said it intends to launch a £30 million share buyback programme. The online trading firm said this should be considered as part of a normal balanced approach to shareholder returns alongside the current dividend policy, which was unchanged.
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CMC rival IG Group said it has completed the sale of North American Derivatives Exchange and its 39% stake in Small Exchange to Foris DAX Markets, trading as crypto.com. The $216 million disposal was first announced back in December.
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Clarkson promoted Laurence Hollingworth to chair, effective immediately, replacing Bill Thomas, who it previously announced will step down once a successor was found. Hollingworth has been on Clarkson’s board since July 2020 and brings ‘extensive experience’ following a 37-year career in stockbroking and investment banking with Cazenove and JP Morgan.
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COMPANIES - DUBLIN
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Ryanair carried 8.7 million passengers in February, up from 7.0 million in January, though down from its recently monthly peak of 11.3 million in October. Load factor also improved to 86% in February from 79% in January, and this equalled the best load factor for the budget airline since July. However, Ryanair said traffic in December, January and February was badly affected by Omicron-related travel restrictions.
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Wednesday’s shareholder meetings
Ecofin Global Utilities & Infrastructure Trust PLC - AGM
Mila Resources PLC - AGM
Paragon Banking Group PLC - AGM
River & Mercantile UK Micro Cap Investment Co Ltd - AGM
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