Aviva Pre-tax Profit Soars, Declares Dividend; Stock Up

(RTTNews) - Aviva Plc's (AV.L, AV) shares climbed around 10 percent in London trading after the British life and health insurer reported a surge in fiscal 2013 pre-tax profit. The result mainly reflects the absence of 2.9 billion pounds loss related to the write-down of Aviva USA unit in the prior year. Premiums declined from last year. The company also announced higher final dividend.

Chief Executive Officer Mark Wilson said, "The turnaround at Aviva is intensifying. We have focused the business on 'cash flow plus growth' and the benefits are starting to be reflected in our performance. Cash flows to the Group are up 40 percent, operating expenses are down 7 percent, operating profit is up 6 percent and Value of New Business is up 13 percent."

For the year, pre-tax profit, on IFRS basis, from continuing operations attributable to shareholders' profits was 1.28 billion pounds, compared to 175 million pounds last year. The prior year results have been restated, the company said.

The latest annual results included profit from discontinued operations of 1.27 billion pounds, while last year's results included a loss of 2.85 billion pounds, related to the US life and related internal asset management businesses, which was disposed on October 2, 2013.

Including discontinued operations, profit attributable to shareholders of Aviva was 2.01 billion pounds, compared to a loss of 3.10 billion pounds last year.

Earnings per share from continuing operations was 21.8 pence, compared to a loss of 11.2 pence in the previous year.

IFRS operating profit on a continuing basis, excluding US Life and Delta Lloyd, increased 6 percent to 2.05 billion pounds from last year's 1.93 billion pounds. Operating profit from Life business increased 4 percent, and from fund management climbed 82 percent, while profit from General insurance and health declined 11 percent in the year.

On an MCEV basis, pre-tax profit improved to 3.32 billion pounds from last year's 3.19 billion pounds. Earnings from continuing operations attributable to ordinary shareholders was 51.8 pence, compared to 32.6 pence in the prior year.

In the year, gross written premiums from continuing operations, on IFRS basis, decreased to 22.04 billion pounds from 22.74 billion pounds a year ago. Net earned premiums fell to 20.62 billion pounds from prior year's 21.16 billion pounds.

The company noted that IFRS net asset value per share dropped to 270 pence from 278 pence a year ago, while MCEV net asset value per share improved to 445 pence from 422 pence a year ago.

Further, Aviva said its Directors on Wednesday declared a final dividend of 9.4 pence per share, higher than last year's 9 pence. This brings the total dividend for the year to 15 pence, compared to 19 pence a year ago.

Wilson added, "Following our exit from a number of low margin, underperforming or non-strategic businesses, Aviva is simpler, more focused and better managed... Although we have made progress in 2013, I want to guard against complacency."

In London, Aviva shares are currently trading at 511 pence, up 44.90 pence or 9.63 percent.