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Aviva ‘strong’; Alliance Trust divi growth; Galliford Try update

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4.30pm: London unsettled by bonds

Traders were unsettled amid continuing concern over bond markets and will hope US Federal Reserve chairman Jerome Powell provides some comfort when he speaks at the virtual Wall Street Journal Jobs Summit tonight.

The FTSE 100 index closed down 24.59 points, or 0.4%, at 6,650.88.

Noon: Whisky tariffs lifted

US trade authorities have agreed to a four-month suspension of tariffs imposed on UK goods including single malt whiskies and cashmere.

Full story

9am: Deliveroo picks London for IPO

Deliveroo

Delivery firm Deliveroo has confirmed it will list its shares on the London Stock Exchange.

Full story here

8.30am: FTSE 100 falls

The FTSE 100 was trading in line with overnight forecasts (see below), down 46.6 points at 6,628.87 following falls in the US and Asia.

7am: Aviva trading strong

Aviva

Insurer Aviva said trading in many key markets has been strong, with record years for both the Savings & Retirement business and in bulk purchase annuities.

Group annual operating profit came in at £3.161 billion (2019: £3.184bn). Operating profit from core markets came in 3% lower at £2.49 billion (2019: £2.56bn).

The board is recommending a final dividend of 14 pence per share

CEO Amanda Blanc said: “Our performance in 2020 demonstrates the resilience of our core businesses and our growth potential.”

She said the company is making good progress in reducing expenses though more needs to be done to reach top quartile efficiency.

The company has announced an £800m debt tender offer as it looks to accelerate its debt reduction plans and lower debt by a total of £1.7bn in the first half of 2021. 

Aviva confirmed it had completed the sale of its remaining Italian Life and General Insurance businesses for €873m. It is also putting its French division up for sale. 

Alliance Trust raises dividend

The Dundee-based trust has raised its dividend for the 54th consecutive year to 14.38p, an increase of 3% on last year in spite of a fall in dividends received from its portfolio of companies.

The board expects that it will continue to extend its record of year-on-year increases in dividends. “Even in the extremely unlikely event that the Company receives no dividends at all from its portfolio over the next two years, it could continue to pay an increasing dividend from its revenue reserves alone,” it said in its annual results statement.

To further enhance the company’s ability to pay an increasing dividend in the future, shareholders at the Annual General Meeting will be asked for approval to convert its merger reserve of £645.3m into a further distributable reserve.

In 2020 the company’s share price increased to a near record high and Total Shareholder Return (TSR) amounted to 9.4%. Net Asset Value (NAV) Total Return was 8.5% while the company’s benchmark index returned 12.7%.

Galliford Try

The civil engineer said all projects continue to be fully operational and delivering near normal productivity. The company has made no use of Government Covid-19 support in FY21.

Profit before tax for the half year to 31 December came in at £4.1m (H1 2020: £5.6m pre-exceptional loss) with a divisional operating margin of 1.6%, in line with expectations and strategy for sustainable earnings growth.

It has announced a resumption of the dividend under a new and enhanced dividend policy, with an interim dividend of 1.2p per share declared.

Markets

London was expected to fall following lower trading in equity markets elsewhere with US technology stocks particularly rocked by weak sentiment, despite positive vaccine commentary.

The FTSE 100 was forecast to shed 46 points after closing higher last night, up around 61 points, or 0.93%, at 6,675. The more UK-focused FTSE 250 rose 258 points, or 1.33% to 21,436.

On Wall Street the Dow Jones closed 121 points or 0.39% lower whilst the S&P 500 shed 1.31% finish the day and the Nasdaq lost 2.7%.

Asia’s markets were also down. Japan’s Nikkei dropped 2.13% and Hong Kong’s Hang Seng slipped 2.4% whilst the Shanghai Composite marked a 2.4% decline.



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