Aviva crops divi by 31%

6th Aug 2009 07:05

Insurer Aviva swung to a profit after tax for the first six months of 2009 from a loss last year and announced plans for a partial IPO of its Dutch business, but still cut its dividend by 31%.A loss of £84m last year turned into a £747m profit after tax for the half-year to 30 June. IFRS operating profit fell 14% to £1.05bn from £1.2bn in 2008.The interim payout drops to 9p a share from 13.09p a year ago. Aviva said the dividend policy remains unchanged basing the dividend on IFRS operating earnings after tax within a cover range of 1.5 to 2 times."Highly volatile financial markets in the first quarter and new lows in consumer confidence in the real economy are challenging for all businesses and this continues to suggest that a cautious stance is required," said chief executive Andrew Moss."Our overriding priority now is to continue to build a position of strength from which Aviva can exploit market opportunities."The company said it has also started the ball rolling on its idea for a partial IPO of Delta Lloyd on Euronext Amsterdam."An IPO would bring the flexibility to reallocate capital to other profitable opportunities or to pursue balance sheet restructuring opportunities," according to a statement.The IPO will take place "when market conditions and other factors allow". "While the economic environment continues to be uncertain, and sales volumes will continue to be subdued, there will be opportunities from which strong companies like Aviva will benefit," the group said.Aviva's IGD solvency surplus increased to £3.2bn during the period from £2bn at the end of 2008.The underlying cost base has fallen by 9% over the last 12 months and the group says it is ahead of its plan to deliver £500m of cost savings by 2010.