15th Aug 2024 16:21
(Alliance News) - Admiral Group PLC impressed analysts with a forecast-busting performance in the first six months of 2024, boosted by impressive growth in its UK motor business.
On Thursday, the Cardiff, Wales-based insurer and financial services company said pretax profit jumped 32% to GBP309.8 million in the half year that ended June 30, from GBP233.9 million the previous year.
Insurance revenue rose 38% to GBP2.21 billion from GBP1.61 billion, as insurance service expenses increased 18% to GBP1.70 billion from GBP1.44 billion. Insurance service result therefore was GBP237.0 million, up 55% from GBP152.5 million.
Admiral raised its interim dividend by 39% to 71.0 pence per share, including a 19.7p special dividend, from 51.0p last year.
UK Insurance total premiums written rose 59% to GBP2.51 billion from GBP1.58 billion, though International Insurance fell 3.8% to GBP421.0 million from GBP437.6 million.
Chief Executive Officer Milena Mondini said: "Given our earlier pricing response to inflation in previous years, we have been able to be more competitive in H1 and this helped grow our customer base 12 per cent to 10.5 million. This was driven by a record 5.5 million vehicles on cover in the UK and nearly half a million more customers across other product lines in the UK."
UK Motor Insurance reported a 60% increase in total premiums written to GBP2.25 billion from GBP1.40 billion.
In response, shares in Admiral jumped 7.5% to 3,022.00 pence in London on Thursday.
Bank of America said Admiral has "bested bullish market expectations for growth in UK motor insurance, delivering almost three years' worth of growth in just six months".
BofA explained Admiral's UK motor policy count stands at 5.48 million, up 11% in the year-to-date. This is higher than Visible Alpha consensus of 5.41 million by end-2025 and just shy of end-2026 forecasts of 5.53 million, the broker explained.
"Admiral has effectively delivered almost three years' of growth in just six months. This will lead to meaningful upward revisions to top-line estimates," the broker noted.
Group turnover was 20% ahead of its forecasts, boosted by impressive new business. Group pretax profit was 2% to 4% ahead of expectations, with the dividend also 5% to 8% ahead.
"After already driving [around] 10% to 20% in upgrades to future earnings forecasts year-to-date, we expect today's resoundingly positive update will again rebase expectations higher," BofA stated.
BofA reiterated a 'buy' rating on Admiral and called the insurer one of its top UK picks.
By Jeremy Cutler, Alliance News reporter
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