Aviva is resuming dividends paused in the first wave of coronavirus infections, though the payment will be rebased following the recent sale of its Singapore and Italy businesses.
Amanda Blanc, chief executive officer, said Aviva’s simplification programme was making good progress and set a target for total 2020 dividends at 21p, down from 30p in 2018. Its resumption of payouts, which follows the Prudential Regulation Authority pressuring insurers to hoard capital earlier in the year, suggests regulatory pressure has lifted.
The company said it was exploring options for businesses including its French and Polish operations.
Aviva pledged to pay a 7p per share interim dividend in January and recommended a final 14p payout, subject to final board approval in March. The total dividend is then expected to grow by low to mid-single digits, Aviva said.
Jefferies analyst Philip Kett said the divi was “surprisingly high, as it implies an 80 per cent underlying cash remittance payout from the core of the group.” But Aviva’s core solvency remains strong and under the new capital policy liquidity has grown from £2.5bn in the first half to £2.8bn, giving management plenty of funds to redeploy, he said.
Briefly
AstraZeneca is facing growing criticism over the way it and Oxford university have handled the early readout from trials of their coronavirus vaccine. The results were hailed a success for showing an average efficacy of 70 per cent — a figure reached by pooling the results from cohorts on two different dosing regimens. On Tuesday, Moncef Slaoui, the head of Operation Warp Speed, the US government’s funding programme for vaccine development, disclosed one cohort was limited to people aged 55 or below, a demographic with lower risk of developing severe Covid-19. Oxford and AstraZeneca did not disclose the age breakdown on Monday, when results were released.
Pub group Mitchells & Butlers reported a £123m pre-tax loss for its fiscal year ended September versus last year’s £177m profit as sales plunged 34.1 per cent to £1.48bn. The company said that in spite of lockdown measures its like-for-like sales decline of 3.5 per cent “remained consistently ahead of the market” and net debt held steady at £1.56bn.
Sector peer Fuller, Smith & Turner posted half-year revenue down 73 per cent to £46m, resulting in an adjusted loss before tax of £22m. The company said it had returned to profitability during the final two months of the period when pubs were allowed to reopen.
Full-year results from Britvic showed adjusted earnings down 21.9 per cent to £165.8m as revenue weakened 8.6 per cent to £1.41bn. The Pepsi bottler said it had taken “decisive and rapid action to reduce costs” which helped to mitigate some of the effects of lockdowns. Profit after tax rose 16.9 per cent to £94.6m, which reflected one-off adjustments including charges related to the closure of its Norwich site.
Boohoo, the online fast-fashion retailer that has faced a backlash over working practices, said it has appointed Sir Brian Leveson “to provide independent oversight of the group’s Agenda for Change programme”. Sir Brian, a retired English judge, is best known for chairing the public inquiry into British press ethics that followed the News of the World phone hacking scandal.
Polymetal, the FTSE 100 listed Russian gold miner, said it plans to pay £2.1m for a 22.5 per cent strategic stake in Cyprus-based mining group Chesterfield Resources.
Also on Thursday are updates from Severn Trent, Mulberry, Bodycote, Amigo and CVS Group.
Beyond the Square Mile
Cloud software company Salesforce is in talks to buy Slack, the work messaging app, in what would be one of the biggest software transactions to date. Slack shares closed nearly 40 per cent higher on Wednesday after news of the talks were reported. An announcement could be made early next week, one person close to the talks said. A deal would set up a showdown with Microsoft that could shape the way software is used by many of the world’s office workers, writes our west coast editor Richard Waters.
ByteDance has earned more time to restructure ownership of its video sharing app TikTok in the US after the Trump administration granted another extension on a deadline for the business to be sold. The Committee on Foreign Investment in the US granted a one-week extension on the deadline, which was set to expire on Friday, the company’s lawyers and the US Treasury said on Wednesday.
A US court has ordered Google to hand over the personal emails of the son of a Russian oligarch as part of a bitter £453m divorce case. Judge Virginia DeMarchi in California told the US tech group to surrender Temur Akhmedov’s emails for use as evidence in a lawsuit brought by his mother, Tatiana Akhmedova, the wife of an ally of Vladimir Putin. The order comes days before the Akhmedovs are due to face each other in the High Court in London over the blockbuster settlement.
Essential comment before you go
The editorial board
Rishi Sunak’s spending review was an implicit indictment of the government’s handling of the pandemic and failed to prepare the public — and his party — for the long-term need for unpopular tax rises to repair the public finances.
Lombard
Buying GoCo is a distraction, not a solution for magazine publisher Future. Melrose, meanwhile, shows signs of a return to form.
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