Admiral Group reports boost in profits

Motor insurance company and owner of price comparison website Confused.com Admiral Group has reported a 5.6 per cent increase in pre-tax profits and six per cent growth in earnings per share for the first half of the year (release).

Pre-tax profits rose to £181.4m from £171.8m in the same period the year before. Basic earnings per share rose to 50.1 p from 47.3p. Turnover fell by seven per cent to £1.09bn.

Yesterday, JP Morgan Cazenove reiterated its underweight rating on Admiral Group and raised their price target to 1,122p from 1,108p. The day before, BNP Paribas reiterated its “underperform” rating on Admiral shares and have a 934p price target. Shares closed down 0.39 per cent at 1,290p yesterday.

Chief executive Henry Engelhardt said he was “really pleased” with the results.

Any time you can increase profits by 6% when competitors are cutting prices you’ve got to be happy.

We didn’t grow the UK insurance business, which was great news because of the competitive environment. We were able to increase profits largely due to excellent claims experience. In addition, Confused.com had a great first half, increasing its profits by over 20%.

Outside the UK all our operations made good progress towards their goal of building profitable, growing and sustainable businesses. Our insurance operations in the US, Spain, Italy and France now account for more than 13% of all our customers. I’m particularly proud of our European price comparison businesses, Rastreator in Spain and Le Lynx in France, both of which were profitable in the period.

All in all it has been a busy, exciting and profitable first half of 2013 and we are poised to meet our expectations for the full year. We continue to give great service and prices to millions of motorists which gives us great confidence in the future.

The interim dividend rose eight per cent to 48.9p.