View more on these topics

Aviva boosts growth targets eyeing ‘bolt-on’ acquisitions

Aviva has boosted expectations of how fast it expects to grow its earnings and cash reserves, hinting at further acquisitions as it pays off debt.

At an event for investors today, Aviva says it expects to be able to pay out greater dividends to shareholders as the business has become “streamlined” and “focused on markets where it has high quality franchises and is gaining market share.”

Aviva is targeting higher than mid-single digit growth annually. However, it also expects to deploy £3bn of excess cash over the next two years to pay off debt and fund “bolt-on acquisitions.”

Aviva has been active in the sale and acquisition space in recent years. It bought a majority stake in robo-investment service Wealthify in October, and then acquired Irish provider Friends First a month later.

In September, it completed the sale of half of its shareholding in its Spanish life and pensions joint venture. Aviva announced the sale of offshore business Friends Provident International in July.

Analysts at Morgan Stanley reacted positively to the upgraded targets, going overweight on Aviva shares on the news.

The analyst note reads: “While the size of M&A is obviously unknown, this could be accretive to earnings given low financing costs. 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.”

Recommended

Woodford-Neil-700x450.jpg

Woodford dropped by another fund house

Architas has fully disinvested from the Woodford Equity Income fund within its six-strong £920m multi-asset fund range as it raises concerns over the manager’s current style, Money Marketing has learned. The firm has reduced the overall asset allocation to UK equities in the range as it decides to focus on fewer more “flexible” fund managers […]

BMO GAM takes on passives with launch of low-cost active multi-asset range

BMO Global Asset Management has launched a range of actively managed, low-cost, multi-asset funds to offer investors an alternative to traditionally cheap passive funds. The BMO Universal Multi-Asset Portfolios are aimed at investors with smaller sums such as pension transfer clients. The three funds in the BMO Universal MAP range invest globally across equities and […]

protect

Preparing for the journey ahead

Simon Halifax – Senior Marketing Consultant  Life’s unpredictable as no one really knows what the future will hold. The reality is that there’s likely to be a few surprises or bumps in the road along the way on our journey of life These ‘bumps’ aren’t usually positive, so we try not to think about them and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment