We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedFinancial Planning

Aviva posts 10 percent profit fall on higher costs


The insurer is restructuring its business to improve financial performance

Article comments

Aviva posted a 10 percent fall in profits in its first six months due to higher restructuring costs aimed at boosting financial performance, the insurer said on Thursday.

The UK’s second largest insurer made a half-year operating profit of £935 million, down from £1.03 billion a year earlier, as a result of the sale of RAC, “adverse foreign exchange movements, the adverse impact of recent UK weather” as well as higher costs in reorganising the business, the company said.

Analysts had expected a profit of £1 billion, according to a company poll.

The company posted a pre-tax net loss £681 million, and had to write down £876 million in goodwill and intangibles in the US business.

Aviva plans to sell or close more than a quarter of its businesses in a shake-up aimed at regaining the support of investors who in May forced out chief executive Andrew Moss in protest over the group's poor stock market performance.

The insurer, now led by executive chairman John McFarlane, also had to absorb £40 million in flood-related claims during the first half after the country was hit by torrential summer rain.

“We are focusing on those business segments where we can deliver attractive returns.

“Although trading conditions in a number of our major markets will continue to be challenging throughout 2012 we have a clear strategy which we are delivering against. We are confident we will succeed,” chief financial officer Patrick Regan said in a statement on Thursday.

The company is paying an unchanged interim dividend of 10 pence per share.

Aviva shares closed at 318 pence on Wednesday, valuing the company at about £9 billion.

The stock has risen 6 percent since the start of the year, lagging a 16 percent increase in the Stoxx 600 European insurance share index.

photo credit: Reuters

Share:

Recommended Articles

Comments

Aviva posts 10 percent profit fall on higher costs
Financial Planning

Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unansweredmore ..


Ryanair reports 157% profits leap and raises forecast

Total revenues rose 11% to €1.49 billion, the airline reported on Monday.more ..

Apple will 'set the world on fire' with iPhone 6 sales

Analysts anticipate an 'unbelievably massive' second half of '14 for a new, larger-screen iPhone, in part because Apple's committed a record $21B for components, tooling and manufacturingmore ..

Apple posts 5% rise in revenues to $37.4bn

CFO Luca Maestri said Apple had beaten the PC industry average in 32 of the last 33 quartersmore ..

Budget: What business wants

CFOs are keen for the chancellor to avoid any uncertaintymore ..

Stay ahead of the curve

CFOs used to low interest rates ignore working capital optimisation at their perilmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unanswered more ..

In Depth
Interim CFO or consultant? The pros and cons

Interim CFO or consultant? The pros and cons

Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformation more ..

Advertisement

* *