Aviva has announced plans to reward shareholders through the launch of a £300m share buyback scheme in the wake of strong global results for the 2022 calendar year.
In a stock exchange notice, the firm said the programme will commence from 10 March.
Group CEO Amanda Blanc (pictured) said: “We are confident in the future capital generation of our business, and so we are also announcing today an additional return of capital to shareholders, via the launch of a £300m share buyback, in line with our preference to return surplus capital regularly and sustainably.”
Matt Britzman, equity analyst at Hargreaves Lansdown, said the move will be welcomed “with open arms” by investors. “The capital position remains strong and the potential for further buybacks alongside a 7.8% forward yield looks attractive,” he added.
Tough year for Aviva Investors
The group as a whole recorded an underlying operating profit of £2.2bn, up 35% from 2021, mainly driven by earnings growth within the firm’s retirements division.
The insurer also announced a final dividend for the year of 31p per share, a 41% leap from the 22p dished out to shareholders in 2021.
However, the picture was less rosy in the firm’s asset management arm, which recorded a 17% drop in assets under management (AUM) to £223bn, equating to a £45bn hit, largely due to negative market movements across all asset classes.
The firm also posted net outflows of £3.8bn, although this was less than the £4.8bn investors pulled in 2021.
Meanwhile, operating profit was almost cut in half, tumbling to £25m from £41m at the end of 2021.
Revenues fell 6% to £379m for the year, which the firm said reflected the impact of weak investment markets.
Aviva added it will continue to focus on improving efficiency across its asset management wing.
In the results, Aviva said: “While the short-term momentum for flows could be impacted by the continuing market volatility, our longer-term outlook remains positive as we continue to build and deliver growth through our strengths in ESG, real assets, infrastructure, credit and sustainable equities.”
The firm completed the £385m acquisition of Succession Wealth in August, which contributed £3bn to AUM. Looking to the year ahead, Blanc said the wealth arm is aiming for at least 10% growth in net flows.