Maiden dividend for Brightside

Brightside's business model involves providing underwriters with a reliable source of quality business, mainly vehicle insurance, so it carries no underwriting risk itself, and takes great care in applying its own screening to eliminate fraudulent applications. So, while overall policy sales declined 5 per cent to 227,610, a focus on more profitable contracts meant net profit margins rose from 18 per cent to 19 per cent.

Overall, vehicle-related policy sales increased by 3 per cent to 194,808, helped by an 11 per cent rise in eCar policy sales (to 78,221 policies), which more than offset a 6 per cent decline in van insurance policies, a segment of the market that is suffering from greater competition, particularly online. And, while the hardening in motor market premiums has virtually stopped, Brightside believes that rates will remain stable for a while, as insurers work to increase reserves in the face of new Solvency 11 regulatory requirements.

After the half-year end, Brightside launched white label insurance products for Asda and Debenhams and secured 2,300 sales in July and August.

Analysts at Edison Investment Research expects full-year pre-tax profits of £21.4m and EPS of 3.24p (from £16.7m and 2.54p in 2011).