Admiral Group PLC (LON:ADM) has reinstated its special dividend on top of an increased interim payout as it said there was now a “reduced level of uncertainty in the economic environment compared to earlier in the year”.
The motor insurer's pre-tax profits for the first half of the year jumped by 30% to £286.7mln thanks to a strong level of prior-year reserve releases in the UK and international businesses and profits growth from its Confused.com arm.
Numbers this time last year were also hit by a £33mln impact of a change to the Ogden discount rate.
In motor insurance this time, there was a positive reduced levels of driving during lockdown led to significantly fewer claims and lower premiums after Admiral gave customers a £25-per-vehicle ‘stay at home’ rebate for customers to reflect reduced claims frequency due to the coronavirus pandemic.
Although customer numbers rose 6% to 7.17mln, the refund contributed to group revenues falling 4% to £1.69bn in the half-year. Excluding the premium rebate, turnover would have increased by 2%.
The board declared a total half-year dividend of 91.2p per share, worth a total of approximately £263mln and made up of a 70.5p interim dividend and the 20.7p special dividend that had been previously deferred in April under Bank of England advice.
The FTSE 100-listed group noted that all employees were paid their full salaries, with only a small number of staff in France furloughed, and apart from that no support has been sought or received from government schemes.
Admiral also said more than 10,000 staff will each receive free shares worth up to £1,800 under the employee share scheme based on these results.
The group said it has cautiously resumed travel insurance sales and its Admiral Loans businesses in the second half.
Milena Mondini de Focatiis, group CEO designate, was confirmed as an executive director ahead of taking the full role next March.
Shares in the company rose 5% to 2,653p by noon on Wednesdy.
The headline PBT was a 23% beat to the City consensus forecast, analysts at UBS noted, though the interim dividend was only slightly ahead of expectations, while the special dividend catch-up “is positive and we suspect not expected by all”.
The expense ratio came in short but the UBS analysts said they it seemed like a one-off due to premium rebates and work from home expenses.
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