15th Aug 2018 09:39
LONDON (Alliance News) - Admiral PLC on Wednesday reported an increased interim profit driven by a good performance its UK Motor division, prompting a 7% dividend hike.
The FTSE 100-listed insurer posted a 9.1% increase in pretax profit to GBP211.0 million from GBP193.4 million the year before.
Revenue increased 14% to GBP1.66 billion from GBP1.45 billion. Return on equity fell to 54% from 55% in the same period last year.
Admiral saw an 11% profit increase in its UK Motor division, to GBP249.5 million from GBP224.2 million, in the period, mainly as a result of "growth in ancillary revenue and instalment income".
The UK division posted higher profit than overall pretax profit due to "other" items totalling a negative GBP38.2 million. This included a share scheme charge of GBP21.6 million, up from GBP16.9 million a year before, and the company's new Loans business posting a GBP6.4 million loss, up from GBP1.6 million previously.
Admiral's net insurance premium revenue increased 7.4% to GBP323.7 million from GBP301.3 million.
Admiral increased its total customers 13% to 6.2 million from 5.5 million, with UK Insurance customers increasing 19% to 5.1 million from 4.3 million.
The number of cars insured in the UK was over 4 million and the number of vans insured increased to over 200,000, up from the 4.0 million total vehicles insured at the end of the previous period.
The car and home insurer's solvency ratio was 196% in the first half, down from 214% the year before, with a loss ratio of 65.2%, down from 68.0%. The group combined ratio was 87.4%, improved from 90.0% a year before, with the lower the figure the more profitable Admiral's underwriting.
The company is proposing an interim dividend of 60.0 pence per share, a 7.1% increase year-on-year from 56.0p paid the previous year.
The dividend represents a 40.8p normal dividend, plus a special dividend of 19.2p.
Chief Executive Officer David Stevens said: "Zut alors. Nos operations europeennes sont rentables! Or probably more accurately, given that over half of our European customers are Italian - le nostre compagnie Europee sono in profitto. Moreover, the European insurers delivered overall profitability whilst growing the business by almost a fifth in a year.
"But that's not the only important milestone in the first half, which was characterised by substantial growth across almost all our businesses.
"Most importantly, the core UK car insurance business continues to grow both in terms of profit and customer numbers. Early in 2018 we passed the four million mark for cars on cover - the car that hit the milestone was a Peugeot 108; our first 25 years ago was an Isuzu Piazza."
Shares in Admiral were up 4.4% Wednesday at 2,085.00 pence each.
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