Aviva to generate further $four billion, give extra again to shareholders

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

FILE PHOTO: Individuals enter and exit the AVIVA headquarters constructing in Dublin October 19, 2011. REUTERS/Cathal McNaughton/File Picture

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

“After a number of years of restructuring, our companies are actually prime quality and we anticipate good, sustainable progress from every of them,” Chief Government Mark Wilson stated.

Insurers and reinsurers, amongst them Swiss Re (SRENH.S), have been returning money to shareholders as robust competitors cuts alternatives for growth.

The money promise helped ship the shares up 2.5 % to 521.5 pence by 0851 GMT, making it the third-top gainer on the blue-chip FTSE 100 .FTSE.

Morgan Stanley analyst Jon Hocking reiterated his ‘obese’ weighting on the inventory in a be aware to purchasers: “Taken as a bundle, we expect this can be a bullish set of objectives from Aviva and, if achieved, the present a number of on the shares seems to be too low.” He flagged a 649p value goal.

Aviva has stated it is just searching for small acquisitions following its 5.6 billion pound ($7.54 billion) buy of Buddies Life in 2015.

Aviva stated it was elevating its expectations for earnings progress to greater than 5 % yearly from 2019 onwards, from a earlier goal of mid-single digit progress.

It additionally stated it could enhance its dividend pay-out ratio to 55-60 % of earnings per share by 2020, from 50 %.

The brand new targets are “achievable”, JP Morgan analysts stated in a be aware, reiterating their “obese” score.

($1 = zero.7424 kilos)

($1 = zero.8428 euros)

Further reporting by Simon Jessop; enhancing by Jason Neely

Our Requirements:The Thomson Reuters Trust Principles.

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