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Eyes Down For Aviva plc’s Results

Aviva (LSE: AV) (NYSE: AV.US) is set to announce its half-year results on Thursday next week (8 August).

At the time of writing, this troubled insurance giant’s shares are trading at 371p — up 1% over the last six months compared with a 5% rise for the FTSE 100.

How will Aviva’s business have performed in the first half compared with last year’s first half? And will the company be on track to meet forecasts for this year’s key full-year numbers? Here’s your cut-out-and-check results table!

  H1 2012 FY 2012 H1 2013 Forecast
FY 2013
Forecast
FY growth
Profit before tax (£bn) (0.46) 0.25 ? 1.74 +606%
Earnings per share (EPS) (26.0)p (15.2)p ? 42.5p n/a
Dividend per share 10.0p 19.0p ? 15.9p (16.3%)

Analysts are expecting a big improvement in performance from Aviva this year. The profit and EPS figures within the table above are from continuing operations; last year’s numbers look even worse if we include discontinued operations. There was a loss before tax of £2.5bn and a loss per share of 113.1p after a £3.3bn writedown on the disposal of the group’s US business took its toll.

The consensus among the City experts is for profit before tax from continuing operations to leap to £1.74bn during 2013 from last year’s £0.25bn. Be aware, though, that there are wide variations in the analyst forecasts: the consensus EPS number of 42.5p includes estimates ranging from as low as 29p to as high as 59p.

In the circumstances, it would be foolish for me to attempt to offer any guidance on the half-year profit and EPS numbers that Aviva will unveil within next week’s results. Once we have them, though, we may have a better idea about whether the bullish or bearish analysts look likely to be nearer the mark with their full-year estimates.

Dividend

We’re on much firmer ground with the interim dividend that will be declared. Aviva slashed its final dividend last year by 44%, and the chief executive said: “We would expect the 2013 interim dividend to rebase in line with the percentage reduction in the 2012 final dividend”.

Based on that guidance, shareholders should be looking for an interim dividend of about 5.6p compared with last year’s half-time payout of 10p. However, if the board does deliver 5.6p, analyst full-year forecasts (15.9p) would imply a final dividend of 10.3p — a hefty increase of 14.4% on last year’s final. As such, it strikes me that analysts may have expectations of a little more than 5.6p for the interim dividend and not quite such a large rise for the final.

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> G A Chester does not own shares mentioned in this article.