Admiral’s shares soared to the top of the FTSE 100 yesterday, showing a 10% increase on the back of impressive half-year financial results.
The company’s revenues surged by 43% in the first six months of its fiscal year, largely due to a strong performance in the UK motor insurance sector. During the period, total revenue reached £3.2 billion, with pre-tax profits climbing by 32% to £310 million.
These outcomes resulted from boasting a record number of 5.5 million vehicles insured in the UK, along with a substantial increase of nearly half a million customers across other insurance products. By the end of June, Admiral had nearly 11 million customers, marking 12% growth primarily through its motor insurance division in the UK, supported by competitively priced offerings.
Admiral’s UK household division also performed well, reporting a pre-tax profit of £11 million, up from £9 million the previous year. This increase was attributed to favourable outcomes from prior year activities and better performance ratios this year.
Group CEO Milena Mondini de Focatiis commented on the results, noting the company’s strong performance in profit, revenue, and customer growth. She emphasized the benefits of early pricing strategies against inflation, which helped boost competitiveness and customer growth in the first half of the year.
The company’s overall turnover and profit increases were driven by solid results in the UK motor sector. Admiral maintained a strong financial foundation with a 198% solvency ratio after announcing a higher interim dividend of 71p per share, according to a CityAM report.
Market analyst Adam Vettese from eToro weighed in on the results, noting that Admiral’s strategic pricing adjustments had given it a competitive edge. Despite higher costs due to inflation, these strategies allowed the company to reduce prices and still achieve a 43% increase in turnover.
Vettese also mentioned Admiral’s acquisition of More Than, which will help diversify its offering in the household and pet insurance sectors. As inflation stabilizes, he anticipates potential reductions in premiums, which could further influence the company’s strategies.
Despite these gains, Admiral’s shares are still nearly 30% below their post-COVID peak, but the strong recent performance may help close that gap.
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