NICK JOHNSON NUMIS
UK customer growth slowed in the second half of the year to a 10 per cent annualised increase from 30 per cent in the first half, as Admiral switched from raising rates a little less than the market to a little more. The group put through average rate increases of 15 per cent for the year and we see potential modest downside risk to forecasts from the slowdown in UK customer growth and a longer than expected drag from International losses. Hold.
RICHARD CURR PRIME MARKETS
More than ever in 2011-12, Admiral has been written off as a stock that has had its day. Once again, Admiral has blown profits and revenue expectations out of the water, confounding the analysts with growth numbers and importantly underscoring this performance with a record full-year dividend per share. Prime Markets believes that the results today will in time see the stock recover levels from last summer around 1500-1600p. Buy.
KEVIN RYAN INVESTEC
As 58 per cent of 2011 profit came from the sale of ancillary products, it is clear that strong growth in new vehicles insured is needed to grow earnings. The share price does not reflect the likelihood of either of these events ever occurring, in our view. Admiral remains significantly more profitable than the rest of the UK motor market. We believe that as Admiral grows and its competitors take remedial action to address losses, this leadership position will be eroded. Sell.