The company’s motor performance shifts up a gear.
Admiral drives toward higher profits and larger dividend
- Shares rise 4% in early trading following solid first half
- But the Beast from the East impacted the groups UK household arm and group remains cautious of a ‘no deal’ Brexit
- We continue to recommend Admiral as a ‘hold’ for medium risk investors
Best known for its car insurance and cheesy television adverts, Admiral announced its interim results this morning giving a boost to its employees with many set to receive £1800 of shares.
Shares are up 4% in early morning trading as Admiral posted a 9% rise in half-year profit; up to £210.7m, assisted by a solid performance from the all-important car insurance business where profits were up by 11.3% to £249.5m.
Investors should be pleased with the 7% increase in the dividend to 60 pence and further encouragement should be found in the increasing customer base up 14% to 6.23m as well as the enlarged overall turnover up 14% to £1.66bn.
However the Cardiff-based group, which owns brands including Elephant and Confused.com, did report that the Beast from the East earlier this year had a detrimental impact on the group’s UK household division, pushing it into the red.
The share price has trended rather sideways over the last two years; however we continue to recommend the shares as a ‘hold’, for medium risk investors geared to income due to the strength of the motor business in the UK, improving overseas operations and the strong capital position.
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