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    AV.   GB0002162385


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Aviva shares soar as new CEO cuts focus on Asia and Europe

08/06/2020 | 06:10am EDT
FILE PHOTO: A logo sits on the window of the Aviva head office in the city of London

Aviva shares soared to five-month highs on Thursday after the British life, motor and home insurer's new chief executive Amanda Blanc said it would reduce its focus on Asia and Europe in a strategy shift welcomed by analysts.

Blanc took over last month to become the insurance company's third chief executive in less than two years. Analysts have said the insurer is operating in too many countries and sectors, and its shares have lagged rivals.

Aviva will instead focus on Britain, Ireland and Canada, the company said.

Aviva shares rose as much as 7.5% before trimming gains to trade at 296 pence at 0902 GMT, up 4.2% and the top performer in the FTSE 100.

"We are going to shake up the organisation," Blanc told a call about Aviva's first-half results released on Thursday. She said there may be better owners in the long term for some of Aviva's Asian and European businesses.

Aviva's European operations include France, Italy and Poland. It said last year it was selling its stake in its Hong Kong business. Its other Asian operations include Singapore and a joint venture in China.

"Amanda Blanc is not taking her foot off the gas," said Joe Healey, investment research analyst at broker The Share Centre. "It's pleasing to see a prudent process in place to keep the balance sheet healthy."

Aviva posted a 12% drop in first-half operating profit to 1.2 billion pounds ($1.6 billion), though this was above expectations of 1.1 billion pounds, according to a company-supplied consensus forecast.

Aviva's performance was helped by strong results in UK annuities. The value of new business in its UK life business rose 60% to 323 million pounds, but Europe life and Asia life fell by 21% and 6% respectively, to 188 million and 90 million.

Former CEO Maurice Tulloch carried out a strategic review of the Asian businesses last year but sources said he was unable to secure a high enough price to sell Aviva's Singapore division.

Aviva also said at the time it was looking at strategic options for Vietnam and Indonesia. It has since pulled out of Indonesia.

JP Morgan analysts said management under Blanc was moving fast on strategy though it reiterated its "neutral" rating on the stock. KBW said the strategic changes were positive, reiterating its "market perform" rating.

The company set aside 165 million pounds in its general insurance business for claims related to the COVID-19 pandemic, in line with a previous estimate.

Aviva, which like several other insurers suspended its final dividend for 2019 earlier this year, said it would pay a 2019 second interim dividend of six pence and would review the final dividend, and its dividend policy later, in the year.

($1 = 0.7590 pounds)

By Carolyn Cohn

ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AVIVA PLC 0.91% 388.601 Delayed Quote.18.45%
FTSE 100 -0.03% 7024.19 Delayed Quote.8.78%
MSCI UNITED KINGDOM (STRD) 0.84% 1132.599 Real-time Quote.9.85%
S&P UNITED KINGDOM (PDS) -0.01% 1399.38 Delayed Quote.9.30%
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Sales 2021 46 772 M 64 530 M 64 530 M
Net income 2021 2 260 M 3 118 M 3 118 M
Net cash 2021 8 664 M 11 954 M 11 954 M
P/E ratio 2021 6,82x
Yield 2021 5,70%
Capitalization 15 130 M 20 814 M 20 875 M
EV / Sales 2021 0,14x
EV / Sales 2022 0,14x
Nbr of Employees 28 596
Free-Float 97,1%
Duration : Period :
Aviva plc Technical Analysis Chart | AV. | GB0002162385 | MarketScreener
Technical analysis trends AVIVA PLC
Short TermMid-TermLong Term
Income Statement Evolution
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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