13th Jul 2005 07:30
Admiral Group PLC13 July 2005 Trading Statement 13 July 2005 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Admiral Group growth continues in first half 2005 Admiral Group plc ("Admiral", or "the Company") today provides an update oncurrent trading. The Company will announce its 2005 first half-year results on 6September 2005. Highlights •Turnover Admiral's turnover grew to £319.4m in H1 2005 compared to £269.3m H1 2004, anincrease of 19%. Compared to H2 2004 turnover is up 15%. •Policy count rose 16% to 1,057,452 The number of policies on risk as at the end of June 2005 was 1,057,452, anincrease of 16% from the 910,545 customers on risk at the end of June 2004 and a5% increase over the 1,007,571 customers on risk at the end of December 2004. •Non-underwriting income increased* The income generated by sales of non-underwriting products and services in H12005 increased by 25% to £36.0m compared to £28.7m in H1 2004. Compared to H22004 non-underwriting income is up by 18% from £30.5m. Market Developments During the first half of 2005 Admiral implemented a series of rate increases forboth new business and renewals. At the end of June 2005 premium rates are circa2.9% above rates at the end of June 2004. This reflects our previously announcedplan for 2005 of decelerating policy growth and widening margins relative toindustry averages, as industry profitability deteriorates. In the first half of the year Admiral found market rates were generallyunchanged. This implies a deteriorating result for the market as a whole, asthere is a claims inflation factor of circa 5%, largely due to an even largerinflation factor for bodily injury claims. If the market does not react to thisdeterioration, general trading conditions may be more difficult in the secondhalf. Admiral believes that market combined ratios will rise further this year, whichwill mean some of its competitors will be operating at a loss. As expected, the market has continued to see a substantial increase in overallmarketing spend, with press and TV spend rising 54% year on year**. Over thesame period Admiral has increased its marketing spend by 15%, on an equivalentbasis. It is a measure of our marketing efficiency that despite these levels ofcompetitor marketing activity, and despite increasing our rates relative to themarket, we have been able to grow our policy base over the period. The internet continues to grow strongly as a source of new business and theCompany's share of car insurance bought over the internet has remainedrelatively unchanged at circa 20%***. Henry Engelhardt, Chief Executive Officer of Admiral, said: "Admiral continuesto perform well and we are pleased with the results for the first half of 2005and encouraged with the progress of all our brands. We plan to maintain ourstrategy during the second half of 2005, of continuing rate increases,maintaining marketing efficiency and providing our customers with great service.As previously stated, we do not anticipate asking Munich Re to go beyond 11%year-on-year policy growth. " Notes * Non-underwriting income does not include Gladiator Commercial andConfused.com. ** Source: AC Nielsen, June 03 - May 04 v June 04 - May 05 *** Source: ebenchmarkers. For further information, please contact: Admiral 029 20434394Louisa ScaddenFinancial Dynamics 020 7269 7200Robert BailhacheDominick Peasleywww.admiralgroup.co.uk About Admiral Admiral is a fast growing financial services intermediary with a track record ofprofitability. Admiral principally sells private motor insurance and ancillaryproducts, such as cover for breakdown, roadside assistance and legal expenses.Admiral markets directly to the public in the UK through its four core brands:Admiral, elephant.co.uk, Diamond, and Bell. The Group also offers customers online quotes through its brand Confused.com,the UK's first insurance aggregator. Unlike other brands, Confused.com does notsell insurance. Visitors to Confused.com's website fill out their details onceonline and Confused.com finds the cheapest quotes available on the internet fromits large panel of insurers. Admiral's motor insurance is underwritten primarily by third party insuranceproviders, with Admiral controlling all pricing and underwriting decisions andadministration. Admiral also retains a proportion (presently 25%, net of quotashare reinsurance) of the private motor underwriting for its own account. Admiral was admitted to the Official List of the London Stock Exchange on 28September 2004 following a Global Offer of Ordinary Shares to institutionalinvestors that was more than seven times subscribed. On 20 December 2004 theCompany became a constituent of the FTSE 250 index.. The Ordinary Shares tradeunder the ticker symbol ADM.L. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Admiral