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Aviva Profit Falls, Cuts Dividend; Standard Life Net Up, Announces Spl. Payout


Insurer Aviva Plc (AV, AV.L) Thursday reported a sharp fall in pre-tax profit for full-year 2012, mainly due to writedowns resulted from agreed sale of its US business. The company also cut its final dividend. The shares are down about 13 percent in the morning trade.

Meanwhile, Standard Life Plc (SL.L) reported a significant increase in profit for the year as revenues more than doubled, with a growth in net earned premiums as well as investment returns. Its UK business was benefited by reduced costs and a 38 percent rise in gross inflows. In addition to the final dividend, the board has proposed to pay a special dividend.

Looking ahead, Standard Life said its UK business remains well positioned to benefit from regulatory, market and demographic changes.

David Nish, chief executive of the company stated, "Standard Life has undergone considerable change over the past three years. As a result we now have significant opportunities for further strong and sustainable growth."

Announcing its preliminary results, the company said its profit before tax attributable to equity holders' profits rose to 778 million pounds from 378 million pounds in the prior year.

Aviva's profit before tax attributable to shareholders' profits from continuing operations plunged to 25 million pounds from 551 million pounds last year. Loss after tax was 3.05 billion pounds in 2012, compared to a 60 million pounds profit last year. The results included previously announced 3.3 billion pounds writedown on US disposal.

Aviva posted loss per share of 113.1 pence, compared to profit of 5.7 pence per share last year. Loss per share from continuing operations was 15.2 pence, as against earnings of 10.9 pence last year. Including integration and restructuring costs, Aviva's annual operating profit before tax attributable to shareholders' profits dropped to 1.66 billion pounds, from 2.24 billion pounds in the previous year.

Operating profit before tax of Standard Life surged 65 percent to 900 million pounds, driven by a significant improvement in UK performance, and the continuing growth of Standard Life Investments, as well as previously announced management actions in Canada and UK.

On a per basis, Standard Life's earnings were 29.5 pence, up from 12.9 pence per share in the previous year.

Annual total revenues of Standard Life more than doubled to 19.19 billion pounds from 9.09 billion pounds reported last year. Net earned premium climbed to 4.22 billion pounds from 3.25 billion pounds a year earlier. Investment returns were 13.98 billion pounds, significantly higher than 4.91 billion pounds in the preceding year.

Standard Life board has proposed a final dividend for the year of 9.80 pence per ordinary share, up 6.5 percent from last year, and a special dividend of 12.80 pence. The dividends will be paid on May 21, 2013 to shareholders of record on April 5.

Aviva's board declared a final dividend of 9 pence per share, down from 16 pence last year, reducing its total dividend by 27 percent for the year to 19 pence from 26 pence a year ago. The company has restated its prior-year results. The Group also said it won't pay bonuses to its executive directors or award pay rises for 2013.

Aviva shares are currently trading at 313.88 pence, down 45.92 pence or 12.76 percent, on a volume of 60.45 million shares on the LSE.

Standard Life trades at 372 pence, down 0.59 percent, on 3.12 million shares.

by RTTNews Staff Writer

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