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Aviva reports a 5% rise in operating profits
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Investors receive a 5% increase in Aviva's interim dividend
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The Share Centre currently lists Aviva as a ‘buy' for income and growth seeking investors
As Britain's second largest insurer, Aviva, reports interim results ahead of market expectations, Nick Raynor, investment adviser at The Share Centre, explains what this means for investors.
"This morning Aviva reaffirmed its place on our buy list by announcing a 5% rise in operating profits to £1.34bn for the first half of the year and an increase of 5% in its interim dividend to 10p. Despite the continuing economic difficulties in the EuroZone, operating profits in the region rose 21% and helped to boost the overall figures.
"The insurer has focused on becoming a leaner company by concentrating on its core markets where profits are greater. The sale of its RAC auto recovery and insurance business helped in these figures.
"There are whispers in the market that private equity companies are interested in acquiring and breaking Aviva up. In the short term, this could be a real benefit to investors as the share price bounces on these rumours. However, over the longer term investors should be cautious.
"We still believe there is potential from Aviva, for both investors seeking income and growth. Bid speculation could make it very attractive indeed."
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