Shares in Admiral leapt this morning despite the Cardiff-based insurer reporting a fall in profits for the first half of the year. The Wales-based company's pre-tax profit dropped 18 per cent to £429.2m, while turnover held steady at £3.11bn.
Over 13,000 employees will each receive free share awards worth up to £1,800 under the employee share schemes. Investors were reassured as the group cut its dividend less than expected, sending shares higher. The FTSE 100-listed firm's market capitalisation rose to £11.3bn, making it the 46th largest company on the index.
CEO highlights growth beyond UK motor
In her statement to the stock market, group chief executive Milena Mondini highlighted the success of the company's expansion beyond UK motor insurance with "continued profitable growth in our other UK personal lines and European insurance businesses, and Admiral Money".
She said: "The strong fundamentals of our business remain unchanged. I am confident that our relentless focus on our growing customer base, and being efficient and adaptable mean that we are well-positioned to deliver on our growth ambitions."
Dividend and buyback announced
The Board has declared an interim dividend of 70.5 pence per share, alongside a share buyback of £45m. Mondini told City AM the market had been subdued towards the end of 2024 and into 2025, prompting the insurer to raise prices at the start of the year to keep pace with claims inflation, which she anticipates will bear fruit in the second half of the year.
EV insurance growth
Within its motor division, Admiral reported a 27 per cent increase in its electric vehicle (EV) insurance book, alongside growing demand for its complimentary subscription service aimed at helping customers manage EV ownership costs. Mondini said Admiral has been "very competitive for EVs" from an early stage, as EVs are "a great feature for the planet".
European operations swing to profit
Despite challenges in its UK motor arm, its European operation swung to a profit of £17.2m, recovering from a £0.6m loss the previous year. Mondini said she was "particularly proud" of France, which was running at "very strong margin" and double-digit growth. Customer numbers climbed by 5 per cent, surpassing 12 million for the first time.
Market reaction
Admiral shares climbed 5.6 per cent on Thursday morning to hit £39.28 per share, with the stock having risen by more than a fifth since the beginning of the year.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The headline profit decline only tells half the story. Yes, Admiral is feeling the impact of last year's softer motor pricing, but under the hood, it's navigating the turn in the cycle well."
"There are also encouraging signs that Admiral is becoming more than a UK Motor story. Household, Europe and Admiral Money are all moving in the right direction. Near-term earnings may remain a little uneven, but the route back to growth is becoming clearer, and the building blocks for a stronger 2027 are falling into place."
