Market report

Aviva ‘financially strong’ | ITV down | Harbour holds

Amanda Blanc
Amanda Blanc: building a clear track record

Insurance group Aviva chief executive Amanda Blanc said the company was ‘financialy strong’ as she announced a 9% rise in group operating profit for the year to £1.467bn (2022: £1.350bn).

It proposes a final dividend per share of 22.3 pence (2022: 20.7 pence) giving a total dividend per share of 33.4 pence (2022: 31.0 pence), up 8%.

Amanda Blanc, group chief executive, said: “We have made significant progress in 2023. Sales are up, costs are down, and operating profit is 9% higher.

“Our position as the UK’s leading diversified insurer, with major businesses in Canada and Ireland, is clearly delivering. Today we have raised our total dividend by 8% to 33.4 pence and have now returned more than £9bn in capital and dividends to shareholders over the last three years.

“We have generated strong organic growth, especially in our capital-light businesses, which make up over half our portfolio. General insurance premiums increased by 13% on the back of strong performances in Canada and the UK.

“We are the number one provider of workplace pensions, and this business continues to thrive, with a record £6.9bn of net flows, boosted by winning 477 new schemes during the year.

“Our private health business is experiencing strong demand from businesses and individual customers and sales grew 41% in 2023. The higher interest rate environment boosted the bulk annuity market, where we secured excellent volumes of £5.5bn at strong margins.

“We are building a clear track record of strong and consistent performance. In each of the last three years we have grown sales, operating profit and our dividend. This momentum gives us increased confidence for Aviva’s future, and so today we are announcing a new £300m share buyback programme, upgrading our dividend guidance to mid-single digit cash cost growth, and upgrading our Group financial targets.

“Aviva is financially strong. We are trading consistently well. Our prospects have never been better. We have leading businesses in growing markets, a fantastic brand, and we are investing substantially to make service better for our 19m customers. All the ingredients are in place to ensure Aviva continues to deliver an outstanding performance for our customers and our shareholders. I’m certain we will.”


Nationwide swoops on Virgin Money

Nationwide Building Society boss Debbie Crosbie is leading a £2.9 billion takeover bid for Virgin Money, formerly Clydesdale and Yorkshire bank where she worked for more than two decades.

Virgin Money shares climbed by 55¾p, or 35% to 214.75p.

Full story here


ITV

Unforgotten
ITV screened Unforgotten

ITV reported a 41% fall in annual profits as weak ad revenues offset a record performance from its studios unit.

Pre-tax profit for the year to December 31 came in at £396m from £672m a year earlier.

The company said there had been a “severe decline” of 15% in linear advertising as companies held back amid uncertainty surrounding the global economy. However, digital revenue performed better, increasing by 19% to £490 million.

Chief executive Dame Carolyn McCall’s belief that the outlook is now brightening helped lift investors’ confidence and the shares advanced 7.5p, or 12.2% to 68.5p, a five-month high.

Income over the first three months of 2024 is expected to have been higher than both the same period last year and in 2019, before the pandemic struck.

“We’re definitely seeing more confidence in the advertising market,” said Dame Carolyn. “Our first quarter is up 3% year-on-year and also pleasingly up 3% on 2019, which was the last normalised quarter before Covid.”

She said that this summer’s Euro 2024 men’s football tournament, which begins in Germany in June, would be “very positive” for bolstering ITV’s advertising revenue.

“Last year was a tough advertising market, that’s undeniable,” she said. “We’ve compensated for a lot of that through our studios division and digital growth, but at the same time we expect this year to be better than last year.”


Harbour Energy

North Sea oil and gas producer Harbour Energy held production guidance for 2024 as it reported a sharp fall in annual profits on the back of lower output and weaker prices.

Pre-tax profit for 2023 slumped to $597m from £2.46bn a year earlier when surging energy prices provided a cash bonanza for the sector.

Production fell to 186,000 barrels of oil equivalent per day from 208kboepd. Harbour said it still expected to produce 150-165 kboepd with production to end February of around 172 kboe



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