Admiral shares fly to the top of the FTSE 100 as firm hikes dividend amid profit surge
Admiral shares surged to the top of the FTSE 100 this morning, rising more than 10 per cent in early deals after the group reported a bumper set of half-year numbers.
The group reported a 43 per cent jump in turnover in the first half of its financial year thanks to a strong performance at its UK motor insurance division.
Overall turnover came in at £3.2bn for the six months to 30 June. Profit before tax also jumped. The figure rose 32 per cent to £310m.
The group revealed the results were driven by a “record 5.5m vehicles on cover in the UK and nearly half a million more customers across other product lines in the UK”.
As of 30 June, the group had nearly 11m customers, a 12 per cent increase driven by its UK motor arm. The group attributed the growth to its “very competitive” prices.
Admiral’s UK household division reported a pre-tax profit of £11m (2023: £9m), which it stated was “driven by favourable prior year development and an improved current year combined ratio”.
Milena Mondini de Focatiis, group CEO said Admiral: “Delivered a strong set of results in the first half, growing profits, revenues and customer numbers, demonstrating our resilience and agility in changing market dynamics.”
“Given our earlier pricing response to inflation in previous years, we have been able to be more competitive in the first half and this helped grow our customer base 12 per cent to 10.5m. This was driven by a record 5.5m vehicles on cover in the UK and nearly half a million more customers across other product lines in the UK.”
“Our group turnover increased 43 per cent to £3.2bn and Group profit has increased by 32 per cent to £310m, led by strong UK Motor performance. We maintained a strong capital position with a solvency ratio of 198 per cent after a higher interim dividend per share of 71p.”
“We continue to evolve our core technical competences leveraging new data and technology. Our focus now is on unlocking the benefit for our customers of scaled agile for faster delivery and enhancing our capabilities in AI application,” she added.
Adam Vettese, market analyst at investment platform eToro, said: “If something goes wrong, we might ask – will the insurance pay out? Admiral certainly has this morning, announcing a special dividend after posting a very robust set of results.
“Inflation has sent costs of everything higher, insurance premiums included, which is great for firms like Admiral, but the firm has astutely used that buffer in the first half of this year to cut prices and get a competitive edge on its peers. It’s hard to argue against this strategy having paid off with turnover up 43 per cent,” Vettese added.
“This performance was predominately driven my motor policies and with the acquisition of More Than, Admiral can bolster its household and pet divisions with diversity. As inflation eases, we could see premiums cool off further which no doubt the firm will have one eye on. Shares are still almost 30 per cent away from their post-Covid peak and investors will be hoping more strong performance can propel the price back up towards those levels.”