Aviva PLC (LON:AV.) saw its first-half operating profit slip as a result of significantly increased weather-related claims, a poor Canadian performance, and the impact of disposals, but the insurer still hiked its dividend by 10%.
For the six months to 30 June 2018, the FTSE 100-listed group said its operating profit dipped by 2% to £1.44bn, down from £1.47bn a year earlier, although excluding disposals its operating profit was up 4%.
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The firm’s operating earnings per share rose by 4% to 26.8p and the company said it remained confident of reaching its goal of greater than 5% growth in 2018 operating earnings per share.
Aviva said it remains financially strong with a capital surplus of £11bn and has started a £600mln share buy-back and paid off €500mln of expensive debt in the first half. The group said it remains on track to achieve its financial targets.
The insurer’s chief executive Mark Wilson said: "During these choppy market conditions, it is reassuring that Aviva's results are consistent, dependable and growing."
The group raised its interim dividend by 10% to 9.25p a share.
Underneath the noise, another half of steady growth
Nicholas Hyett, equity analyst at Hargreaves Lansdown commented: “Tough conditions in the Canadian motor insurance business, the big freeze earlier in the year and exits from Spain and Taiwan mean the headline numbers don’t look great at Aviva.
“But underneath that noise, it’s another half of steady growth from a business which has become pleasantly dependable. Capital generation is steady, new business in life insurance is ticking along nicely and costs have generally been kept under control.”
In early morning trading, Aviva shares were 0.9% lower at 491.1p.