Admiral hits record profit in tough year

ADMIRAL shares climbed 11 per cent yesterday after the firm overcame last year’s profit warning to announce better-than-expected results.

The car insurance giant increased profits to £299m in 2011, up 13 per cent on the year before, largely thanks to the addition of 600,000 new customers. Turnover increased 38 per cent to £2.19bn.

But although the board was pleased to announce record-breaking year-end figures, it was disappointed by the absence of further growth.

Chief executive Henry Englehardt called on the spirit of Dickens, saying 2011 “was the best of times, it was the worst of times”.

“Profits are up 13 per cent, and in most situations you’d call this a giant winner. But this is less than most people thought they would be. Far less than I thought they would be, that’s for sure. It has been a disappointing year. Not because it was a bad year, but because so much more was expected.”

Analysts had initially pencilled in a 22 per cent profit rise for 2011 but slashed their forecasts in November when Admiral – which insures one in 10 cars on Britain’s roads – warned it had been hit by a substantial jump in personal injury claims, driven by a small number of big payouts to cover long-term care for injured customers.

The firm will look to increase earnings during 2012 by increasing premiums and developing revenues from other ventures such as its online comparison site, Confused.com.

However it faces the threat of regulatory intervention on ancillary revenue, such as highly profitable referral fees to claims lawyers and car hire firms.

Shares in the firm closed at £11.44.