Aviva (AV) stock rises on extended share buyback
By Rob Griffin
11:47, 16 December 2021
British insurer Aviva saw its stock rise modestly today after revealing it will extend the share buyback programme that was first announced in August.
In a statement to the London Stock Exchange, the FTSE 100 company said it is increasing the plan from £750m ($995m) to a maximum of £1bn.
The news was enough to push the company’s stock price up 1.5% to 401.71p by late morning in London. This is 23% higher than its 326.6p level at the start of 2021.
Commitment to return £4bn
Chris Beauchamp, chief market analyst at IG, said: “Aviva’s decision to throw more money at its buyback programme has perked up the shares, reminding everyone of the cash flow attractions of these insurers.”
According to Aviva’s statement, the total maximum number of shares to be acquired is now 392 million. The programme will complete no later than the end of March 2022.
Amanda Blanc, Aviva’s group chief executive, said the extension was part of the company’s commitment to returning at least £4bn to ordinary shareholders.
“We will update further on our capital return and dividend plans at our full-year results in March 2022,” she said.
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Key strategic advantage
Aviva’s intention to return at least £4bn in capital, including the initial £750m share buyback, was revealed when the company announced interim results in August.
At the time, Blanc pointed out that the breadth of Aviva, spreading across life and general insurance, was a key strategic advantage.
“We have made good progress on all fronts in the 12 months since we launched our strategy,” she said. “We are delivering on our commitment to make a substantial capital return to our shareholders.”
Read more: Aviva (AV) to meet or exceed cash, cost-saving targets
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