Material capital return, below some estimates
Aviva to return £4.75bn to shareholders, above our £4.5bn estimate and slightly above consensus flagged by company at £4.7bn, but below some analysts at £5bn.
Similarly, the new commitment to 31.5p DPS in FY22 is a big step-up (40%), and above our 27.5p estimate, albeit below Bloomberg consensus mean of 32.5p.
Mid-single digit growth outlook unchanged, implying 33p in FY23 (we and consensus had forecast 5% medium-term dividend growth).
3-year cash remittance target rolled forward and increased to £5.4bn from £5.0bn.
Cost reduction target increased by £100m to £400m, with £200m of costs to be taken to achieve new target.
Of results themselves, op profit was a 2% miss to consensus, in-line excluding management actions, while DPS was 2% miss at 22.05p vs 22.5p.
IFA acquisition announced
Separately, Aviva announced £385m acquisition of Succession Wealth, an IFA network, which may raise questions over further inorganic investment plans.
Dividend yield stands out, albeit in the pack with peers
On first view, while some analysts had perhaps got ahead of themselves, the recent pullback in shares puts the prospective, growing yield at 7.7%, attractive in absolute terms, albeit in the pack with UK life peers.
Meeting at 8:30am.
We place our forecasts and target price under review.
