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Aviva returns 4.75 billion stg in capital, ups dividends, Cevian seeks more


© Reuters. FILE PHOTO: Pedestrians walk past an Aviva logo outside the company’s head office in the city of London March 5, 2009. REUTERS/Stephen Hird

By Carolyn Cohn

LONDON (Reuters) -British insurer Aviva (LON:AV) raised the amount it said it would return to shareholders to 4.75 billion pounds ($6.31 billion) on Wednesday as it faces pressure from activist investor Cevian Capital, which responded with a call for a higher dividend.

Aviva had previously said it would give back at least four billion pounds following a string of disposals. Cevian, which revealed its stake in Aviva last year, had sought five billion pounds in a cash return by the end of 2022.

Aviva has raised 7.5 billion pounds from selling eight businesses across the globe since the appointment of Amanda Blanc as chief executive in July 2020.

“We’re focusing the portfolio and rebuilding financial strength – we’ve moved at pace,” Blanc told a media call.

Aviva also said it would pay a total 2021 dividend of 22.05 pence per share and boost it by 40% this year to around 31.5 pence, with a further increase of around 33 pence in 2023.

Cevian, which owns 6% of Aviva, said the insurer could do more.

“Aviva has the capacity for a 50p per share total cash return to shareholders for 2024, substantially higher than the 33p ordinary dividend indicated for 2023,” said Niko Pakalen, partner at Cevian.

Aviva also needs to show it can “convert its market-leading businesses, scale and unique composite model to market-leading profitability and growth,” Pakalen said.

The insurer also said on Wednesday it was buying adviser Succession Wealth for 385 million pounds.

It upgraded its cost savings target to 750 million pounds for the 2018-24 period. Cevian had been pushing Aviva to cut costs more aggressively.

Operating profit from continuing operations fell 10% to 1.63 billion pounds, hurt by weaker performance in its UK life business. Aviva’s shares were up 0.7% at 1257 GMT, in line with the FTSE 100.

($1 = 0.7530 pounds)

Aviva returns 4.75 billion stg in capital, ups dividends, Cevian seeks more

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