Admiral in payout spree as interim profits soar
Admiral Group shareholders are set to cash in as the motor insurer on Wednesday paid an increased interim dividend and special payout after the sale of its Penguin Portals business.
The Board has declared an interim dividend of 115p a share, made up of a normal dividend of 87.9p and special dividend of 27.1p, up 63% year on year. It also declared a further special dividend of 46p as part of the phased return of proceeds from the Penguin Portals comparison businesses.
Group pre-tax profit from continuing operations profits surged by 76% to £482.2m as the company paid out less in motor claims due to fewer people driving during the Covid-19 pandemic. The insurer was able to release reserves set aside for payouts to customers.
Reported pre-tax profit soared to £897.9m from £286.1m a year earlier. Net revenue rose by a third to £791.3m, the company said.
Admiral last month said it expected to report a pre-tax profit from continuing operations of £450m - £500m.
The combined ratio, which represents claims and expenses as a proportion of premiums, for the core motor business was 58.4% compared with 70.7% last year.
The company also added 850,000 new customers in the period, taking its overall customer numbers to 8.02m. Clients in its core UK motor insurance division rose 12 per cent to 4.9m.
AJ Bell financial analyst Danni Hewson said Admiral had managed the impact of the pandemic better than its peers.
“Admiral has won over customers by offering flexibility, boosting its digital capability and paying out customer rebates in a timely fashion, helping to put it ahead of the pack in a highly competitive market," Hewson said.
“These qualities have been rewarded with a double-digit increase in customer numbers at a time when other UK motor insurers are struggling to eke out any growth here at all. The road ahead could be a little bumpier ... as the artificially lower levels of traffic and collisions driven by Covid restrictions starts to unwind."