CAR insurance group Admiral shrugged off fears over the UK economy to post further double-digit profit and turnover gains in the first half of the year, but saw its share price slide due to fears over its business model.
Admiral, which owns the price comparison site confused.com, said its pre-tax profit jumped 27 per cent, ahead of market expectations, to £160.6m, while turnover leapt 53 per cent to £1.1bn.
But its shares fell more then 12 per cent as investors focused on Admiral’s potential loss of revenue from a likely move to ban referral fees paid by legal firms to insurers for customer data.
Chief financial officer Kevin Chidwick played down concerns that its potential had peaked.
“We are very pleased with the growth and the fact that we have taken our market share up to 11 per cent and we are still improving
our underwriting margin,” he told City A.M.
Admiral also moved to dispel fears over the contribution of referral fees to its burgeoning ancillary sales.
Sales of insurance-related services jumped 38 per cent to £107.1m in the compared with the first half of 2011, but Admiral said its income from referral fees was just £9.4m, or about six per cent of pre-tax profit.