Aviva Announces Another Buyback

The market has taken Aviva’s AV. full-year 2022 results reported on March 9 well as Aviva furthers its shareholder distributions. In raising cash remittances out of subsidiaries by 11% to GBP 1.8 billion, the business has announced another buyback of GBP 300 million and increased its dividend. The final dividend of GBX 20.7 per share takes the total to GBX 31.0 per share for the year. Total dividend cash cost guidance has been raised to GBP 915 million for 2023, or GBX 39.0 per share. Dividend growth has been rebased to low- to mid-single-digit growth in cash thereafter, implying buybacks will remain a significant part.

The business has reported a good capital position with 212% solvency cover, 196% after the dividend. That’s a bit better than we anticipated. Until we roll our model, we maintain our GBP 4.40 estimate fair value estimate and no moat rating.