Admiral ups profits 25pc

PROFITS at motor and home insurer Admiral jumped almost a quarter in 2010 but investors shied away yesterday over fears its growth may not be sustainable.

UK growth drove Admiral’s pre-tax profit up to £266m from £216m in 2009 in a seventh straight year of growth, while turnover rose 47 per cent to £1.58bn from £1.08bn in 2009.

Admiral, which manages brands such as Diamond, also raised its dividend 18 per cent to 68.1p.

Chief operating officer David Stevens said the 32 per cent growth in vehicles insured in the UK was due to the shift to buying insurance online.

“We have negotiated the transformation of the market to a price comparison market better than our competitors,” he said. He dismissed concerns that further growth may be tricky. “With a ten per cent market share we don’t see any particular wall coming towards us,” he said.

Analysts questioned Admiral’s overseas strategy after its European brands performed poorly again. “The reason for being involved outside the UK is unclear to us and a strategic error,” said Investec analyst Kevin Ryan.

Profits at its comparison site fell by half, to £12.1m from £25m, as competition intensified.