Results round-up: Aviva, Morrisons, Old Mutual, Domino's Pizza

Insurer Aviva said it was making a £380m charge to account for the change in the Ogden rate – the discount on personal injury claim payouts – as it revealed full year operating profits up 12% to £3bn and said it would return cash to shareholders.

“Fund management delivered a breakout year with strong positive net flows and operating profit up 30%. General insurance is growing, with operating profit up 17%1, and in UK Digital we have doubled online registrations to five million. We are becoming a digital disruptor for the benefit of our customers,” the company said.

"We are now actively planning a capital return to our shareholders and debt reduction in 2017 and will invest further to grow our businesses," said chief executive Mark Wilson, although there were no details on how Aviva would do this.

Aviva said there was a 20% jump in cash remittances across the group to £1.8bn driven by a 15% increase in general insurance net written premiums to £8.2bn.

Operating profits at its life insurance unit were up 8% to £2.6bn pounds, while in fund management profits increased 30% to £138m as group assets under management wer lifted to £450bn.

The total dividend was increased 12% to 23.3p.

"Looking forward, we will remain focused on achieving our financial objectives: mid single digit annual growth in operating EPS; £7bn of cumulative business unit remittances in 2016-18 inclusive; and an increase in the dividend payout ratio to 50% by the end of 2017," Wilson said.

Morrisons

Helped by a strong fourth quarter, Morrisons grew annual like-for-like sales and underlying profits before tax for the first time in five years and declared a 3.85p final dividend to celebrate.

LFL sales jumped 2.5% in the three months to 29 January, lifting the year's total to 1.7% and turnover up 1.2% to £16.3bn.

Having achieved more than £1bn cost savings, and identifying even more for the current year, underlying PBT rose 12% to £337m, at the upper end of the £330m-£340m range guided by management and beating the £326m consensus forecast from the start of the year.

Underlying earnings per share were 40% higher at 10.86p.

"Our turnaround has just started, and we have more plans and important work ahead," said chief executive David Potts of his 'Fix, Rebuild and Grow' strategy, which has also seen link-ups with Amazon, Timpson, and Rontec.

"If we keep improving the customer shopping trip, I am confident that Morrisons will continue to grow."

Looking forward he conceded that there were uncertainties ahead, "especially around the impact on imported food prices if sterling stays at lower levels", rising depreciation and pension costs, and further invest in staff pay - though this is all incorporated into the plan.

Having achieved £18m of incremental profit from improvements to wholesale, services, interest and online, Potts said he remained confident of the £50m-£100m medium-term target.

"We have identified further cost saving opportunities beyond the £1bn already achieved, in: ordering, distribution between manufacturing and retail, in-store administration, and procurement of goods not for resale," he added, with the medium-term targets of £1bn improvement in working capital and at least £1.1bn of disposal proceeds remaining unchanged.

Old Mutual

UK and South African insurance group Old Mutual said its pre-tax adjusted operating profits came in broadly flat at £1.6bn.

Full year adjusted Net Asset Value (NAV) rose to 228.6p a share compared with 178.9p in 2015per share, due to favourable currency movements and an increase in the market value of its Nedbank operation, Old Mutual said.

IFRS Pre-tax profits were the same at £1.2bn including impairments of £160m in respect of Ecobank Transnational Incorporated, Old Mutual Southern and East Africa and Old Mutual Wealth Italy.

Adjusted operating profit earnings per share were 19.4p compared with 19.3p. Basic earnings were 11.9p a share compared with 12.7p in 2015.

A final dividend of 3.39p a share was declared, making a total dividend of 6.06p.

Funds under management rose 30% to £394.9bn excluding the bond investor arm Rogge which is being sold to rival outfit Allianz as Old Mutual splits itself into four parts.

“This is a resilient performance, and a much improved second half, given the overall flat markets and the external challenges the businesses had to face in our main markets,” Old Mutual said.

“In the UK, investors remained cautious following the result of the Brexit vote although we experienced more normalised flows in the fourth quarter and also changes in regulation with regard to pension exit fees.”

South African operations remained under pressure due to weak economic which was offset by cost management, higher asset based fee income as well as assumption and basis changes.

Domino's Pizza

Domino's Pizza served up a tasty looking set of final results for last year but the shares were sliced down to size due to the lukewarm start made to 2017.

After growing like-for-like sales 7.5% in the 52 weeks to 25 December, the company reported LFL sales growth of just 1.5% in the UK for the first nine weeks of the new financial year.

Analysts said the slowdown from 4.8% LFL in Q4 reflects the strong comparative period last year, slower take-up of its 'Winter Survival deal', stiffer competition from Pizza Hut and some market softness amid the consumer spending dip.

Having opened 11 outlets already, during the whole of 2017 Domino's expects to open around 80 new stores in the UK, and has begun investing in extra supply chain centres to meet its long-term store target of 1,600 UK stores and 76 stores in the Republic of Ireland.

For 2016, the group generated revenue of £361m, up 14% on the previous year, as the UK and ROI business sold 94m pizzas in the year, averaging over 257,000 per day.

Profit before tax rose 17% to £86.2m and underlying basic earnings per share 15.6% to 13.8p

With the recommending of a final dividend of 4.5p, the total dividend swelled 16% year on year to 8p, which was all in line with consensus forecasts.

After a record year for system sales, which also included a major investment to transform activities in Germany as well as a new partnership in the Nordics, chief executive David Wild said Switzerland was now seeing encouraging signs with the business profitable at EBITDA level.