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    AV.   GB0002162385


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Aviva to generate extra $4 billion of cash, planning payback, some M&A

11/30/2017 | 05:54am EDT
FILE PHOTO: People enter and exit the AVIVA headquarters building in Dublin.

LONDON (Reuters) - Aviva (>> Aviva) expects to generate an extra 3 billion pounds ($4 billion) in cash over the next two years and will make acquisitions as well as giving money back to shareholders, it said on Thursday, sending its share price to three-month highs.

LONDON (Reuters) - Aviva (>> Aviva) expects to generate an extra 3 billion pounds ($4 billion) in cash over the next two years and will make acquisitions as well as giving money back to shareholders, it said on Thursday, sending its share price to three-month highs.

Insurers and reinsurers, among them Allianz (>> Allianz) and Swiss Re (>> Swiss Re), have been returning cash to shareholders as strong competition cuts opportunities for expansion.

Aviva has made a number of disposals in the past year, including in France, Spain, Italy and Taiwan, and says its Indian joint venture is under "strategic review".

"The franchises we have left have a pretty decent track record," Chief Executive Mark Wilson told an investor day in Warsaw.

"We are moving into a new phase and we have the capital to be able to do it."

Aviva expects to deploy 2 billion pounds of cash in 2018 by spending 900 million pounds on repaying expensive debt and using the remaining 1.1 billion pounds for "bolt-on" acquisitions and returning cash, it said in a statement ahead of the investor day.

Some analysts had anticipated Aviva would announce a share buyback of 1 billion pounds on Thursday, but Wilson said the firm had an "appetite for M&A".

Aviva has said it is only looking at small purchases following its 5.6 billion-pound ($7.5 billion) takeover of Friends Life in 2015, and is interested in expanding in "insurtech" and artificial intelligence.

Aviva's cash promise helped send its shares to three-month highs. They were up 2.17 percent at 520 pence at 1035 GMT, the second-biggest gainer on the FTSE 100 index <.FTSE>.

Morgan Stanley analyst Jon Hocking reiterated his 'overweight' rating on the stock in a note to clients. "Taken as a package, we think this is a bullish set of goals from Aviva and, if achieved, the current multiple on the shares looks too low," he said, giving the shares a 649p price target.

Aviva said it was raising its expectations for earnings growth to more than 5 percent annually from 2019 onwards, from a previous target of mid-single-digit growth.

It also said it would increase its dividend pay-out ratio to 55-60 percent of earnings per share by 2020, from 50 percent.

The new targets are "achievable", JP Morgan analysts said in a note, reiterating their "overweight" investment rating on the shares.

(Additional reporting by Simon JessopEditing by Jason Neely, Greg Mahlich)

By Carolyn Cohn

Stocks treated in this article : Allianz, Aviva, Swiss Re

ę Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
ALLIANZ SE 0.57% 211.5 Delayed Quote.4.78%
AVIVA PLC 1.39% 393.1 Delayed Quote.19.22%
FTSE 100 0.88% 7078.42 Delayed Quote.8.61%
JASON CO., LTD. 0.37% 537 End-of-day quote.-19.61%
MORGAN STANLEY 0.95% 96.28 Delayed Quote.40.19%
MSCI TAIWAN (STRD) 1.49% 695.372 Real-time Quote.14.63%
MSCI UNITED KINGDOM (STRD) 1.76% 1160.115 Real-time Quote.10.47%
S&P UNITED KINGDOM (PDS) 0.95% 1410.42 Delayed Quote.9.09%
SET 0.01% 1537.78 Real-time Quote.6.09%
SWISS RE LTD 0.86% 84.76 Delayed Quote.0.84%
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07/21AVIVA : Natural disaster H1 insured losses hit 10-year high-Aon
07/21Irish insurance regulator urges reform of renewal rules
07/21AVIVA : Morgan Stanley Lowers Aviva to Equalweight from Overweight
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More news
Sales 2021 46 772 M 65 310 M 65 310 M
Net income 2021 2 260 M 3 155 M 3 155 M
Net cash 2021 8 664 M 12 098 M 12 098 M
P/E ratio 2021 6,96x
Yield 2021 5,58%
Capitalization 15 228 M 21 272 M 21 264 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 3,93 GBX
Average target price 464,14 GBX
Spread / Average Target 11 707%
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
Sector and Competitors
1st jan.Capi. (M$)
AVIVA PLC19.22%21 136
AXA11.85%61 496
METLIFE, INC.22.77%50 459
PRUDENTIAL PLC-0.37%48 472