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    AV.   GB0002162385

AVIVA PLC

(AV.)
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Aviva CEO says turnaround to continue as profits rise

03/06/2014 | 04:37am EDT
A man walks past an AVIVA logo outside the company's head office in the city of London

LONDON (Reuters) - British insurer Aviva unveiled a forecast-beating 6 percent rise in operating profit on Thursday, one year into a turnaround drive that has seen 2,000 lay-offs and sales of underperforming businesses.

Operating expenses were down 7 percent and cost saving targets for the year were ahead of plan, Aviva said in an earnings statement on Thursday, although it noted a 60 million pound hit from flood losses in Britain during the first two months of 2014.

Investors cheered the performance and Aviva's shares jumped more than 8 percent, making it the top gainer on the blue-chip FTSE 100 index.

Chief Executive Mark Wilson acknowledged progress since he joined at the start of 2013 with a remit to revive Aviva's fortunes after a shareholder rebellion that led to the departure of his predecessor.

He said top performing staff could expect bonuses to be reinstated a year after they were cut and senior employees saw pay frozen in a move to appease shareholders after half of them had voted against remuneration proposals.

"We'll pay for performance... We will be paying bonuses for this year and I think the shareholders will be quite OK with that scenario," Wilson said.

He cautioned, however, that he still saw room for improvement, particularly at divisions such as fund management arm Aviva Investors which saw 5 billion pounds of net outflows during 2013.

The division has a new boss, Euan Munro, who joined from rival Standard Life at the start of the year and has a remit to boost its contribution to group operating profit.

"Have we made progress? Yes, some. Is it a little faster than anticipated? Probably. Have we unlocked the full potential at Aviva? Not yet," said Wilson.

His year at the helm has seen tumultuous change, with a management shake-out and disposals of non-core assets in the United States, Spain, Malaysia, the Netherlands and Italy.

More disposals will come in the year ahead, Wilson added.

"We've still got some more disposals to do. We're making some reasonable progress. None of these are big profit reducers.

The amount of cash remitted to the group by subsidiaries - a key strategic focus for Wilson since he took over - rose 40 percent during the year to 1.27 billion pounds.

Analysts at Bernstein Research noted investors would now need to be impressed by proposed "next steps" in the turnaround.

"Aviva's longer-term structural rehabilitation will be challenging. However, we are willing to be convinced otherwise," said Bernstein in a note to clients. The brokerage has a "market perform" rating on Aviva shares.

(Editing by Tom Pfeiffer)

By Chris Vellacott

Stocks treated in this article : Aviva plc, Standard Life Plc

© Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
AVIVA PLC -0.54% 385.2 Delayed Quote.18.45%
FTSE 100 0.85% 7027.58 Delayed Quote.8.78%
MSCI UNITED KINGDOM (STRD) 0.84% 1132.599 Real-time Quote.8.94%
RISE, INC. -3.70% 26 End-of-day quote.8.33%
S&P UNITED KINGDOM (PDS) 0.88% 1399.75 Delayed Quote.9.30%
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More news
Financials
Sales 2021 46 772 M 64 293 M 64 293 M
Net income 2021 2 260 M 3 106 M 3 106 M
Net cash 2021 8 664 M 11 910 M 11 910 M
P/E ratio 2021 6,82x
Yield 2021 5,70%
Capitalization 15 130 M 20 814 M 20 798 M
EV / Sales 2021 0,14x
EV / Sales 2022 0,14x
Nbr of Employees 28 596
Free-Float 97,1%
Chart AVIVA PLC
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Aviva plc Technical Analysis Chart | AV. | GB0002162385 | MarketScreener
Technical analysis trends AVIVA PLC
Short TermMid-TermLong Term
TrendsBearishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 385,20 GBX
Average target price 466,10 GBX
Spread / Average Target 21,0%
EPS Revisions
Managers and Directors
Amanda Blanc Chief Executive Officer & Executive Director
Jason Michael Windsor Chief Financial Officer & Director
Mark George Culmer Non-Executive Chairman
Nitinbhai Babubhai Maganbhai Amin Chief Operating Officer
Michael Mire Independent Non-Executive Director
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