Eyes Down For Aviva plc’s Results

A preview of Aviva plc (LON:AV)’s upcoming half-year results.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

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.

Let me finish up by saying that if you already own Aviva shares, and are interested in blue-chip opportunities from other sectors, I recommend you help yourself to the very latest free Motley Fool report.

You see, the Fool’s top analysts have identified a select group of FTSE 100 companies they believe will generate superior long-term earnings and income growth. Such is their conviction about the quality of these businesses that they’ve called the report “5 Shares To Retire On“.

You can download this free report right now — simply click here.

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

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

piggy bank, searching with binoculars
Investing Articles

Up 82% in 12 months, this dividend stock still has a 5.5% yield!

This dividend stock has given investors growth and a strong yield in recent years. Dr James Fox explores whether there’s…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Over the last 3 years, this British investment fund has delivered nearly double the return of the FTSE 100

Thanks to his specific investment approach, this British fund manager has beaten the FTSE by a wide margin over the…

Read more »

Emma Raducanu for Vodafone billboard animation at Piccadilly Circus, London
Investing Articles

Analysts reckon the Vodafone share price is still undervalued!

Our writer’s been looking at the latest Vodafone share price forecasts and assesses how the group’s performed against the targets…

Read more »

Investing Articles

Considering a Stocks & Shares ISA in 2025? Make sure to avoid these pitfalls

Mark Hartley outlines a few basic tips for investors to ensure opening a first-time Stock and Shares ISA goes as…

Read more »

Thoughtful man using his phone while riding on a train and looking through the window
Investing Articles

What will take the Lloyds share price beyond 80p?

The Lloyds share price has leapt by 40% in the last six months. It's also soared by 135% in five…

Read more »

Fireworks display in the shape of willow at Newcastle, Co. Down , Northern Ireland at Halloween.
Investing Articles

Want to become an ISA millionaire? Here’s one way to target stock market riches with £500 a month

Making a million pounds or more in an ISA doesn't have to be a pipe dream. Here's how a mix…

Read more »

Light bulb with growing tree.
Investing Articles

Could the ITM Power share price be set to soar like Rolls-Royce?

The Rolls-Royce share price has risen 10-fold since 2022. Could this under-the-radar UK growth stock deliver similar returns in the…

Read more »

Close-up of British bank notes
Investing Articles

Turn £20k into a £1k second income this summer? Here’s how!

With £20k, our writer thinks a portfolio of blue-chip shares could help an investor earn a four-figure second income each…

Read more »