Aviva Plc, one of three U.K. managers to suspend trading in real estate investment funds this week, plans to increase its dividend payout ratio even as Britain’s decision to leave the European Union causes uncertainty in the industry.
The company aims for a payout ratio of 50 percent in 2017 from 42 percent last year and that will allow for a balance between cash flow and growth, according to a presentation on its website. Aviva said that uncertainty surrounding the vote may challenge the growth of its operating earnings per share through 2017 and it’s too early to quantify Brexit’s impact.
Aviva Investors, M&G Investments and Standard Life Investments have frozen almost 9.1 billion pounds ($12 billion) of assets after the Brexit vote sparked a spate of redemptions. Aviva Investors froze its 1.8 billion-pound Property Trust on Tuesday. Aviva is due to host a capital markets day Wednesday to outline its strategy.
The payout ratio is not a ceiling on capital return, according to the presentation. The firm is targeting mid-single digit growth in the medium term, the document shows.