Admiral reinstates special dividend as H1 profit beats views

Admiral reinstated its special dividend on Wednesday and reported a jump in first-half profit after motor claims fell as drivers stayed home during the coronavirus lockdown.

In the six months to 30 June, statutory pre-tax profit rose 31% to £286.1m while group net revenue was up 6% to £0.69bn. Pre-tax profit was ahead of consensus forecasts of £233m.

Group turnover, however, fell 4% to £1.69bn, mainly due to the impact of Covid and the company's 'Stay at Home' premium refund.

Customer numbers were 6% higher at 7.17m and the insurer declared an interim dividend of 70.5 pence, up from 63p in the first half of last year. In addition, it said it will pay the 20.7p a share special dividend from the full-year 2019 results that was deferred because of the coronavirus crisis.

Admiral said UK motor claims had fallen "significantly" during the lockdown period as customers stayed at home and were driving less.

Chief executive officer David Stevens said: "We adapted quickly to the new circumstances, pirouetting from one working model to another and compressing years of learning and development into a matter of weeks through a phenomenal collective effort across the company at all levels. Alongside this adaptability, we also stayed true to our long-term commitment to balanced outcomes for all our stakeholders, notably through our £25 a vehicle ‘Stay at Home’ rebate.

"This year’s interims benefit again from our consistently competent underwriting and conservative reserving on past years, feeding into another strong set of results in the core business and beyond. Thank you to all our staff, shareholders and customers who have made this possible."

At 0905 BST, the shares were up 4.4% at 2,637.00p.

Russ Mould, investment director at AJ Bell, said: "Shareholders unsurprisingly were very pleased to see Admiral join the catch up dividend club.

"Paying out to shareholders the special payment deferred at the height of the crisis, as well as revealing a generous increase in the first half payout was both perceived as good news in and of itself as well as signal of management’s confidence in the business.

"This confidence was underpinned by results showing profit well ahead of expectations as the company demonstrated an impressive ability to adapt to the new realities created by coronavirus."