Full-year numbers were pretty much in line with expectations for motor and home insurer esure (ESUR), but what did surprise was the upbeat outlook for 2016.
With motor premiums looking to harden up at last, esure now expects gross written premium growth of 10-15 per cent in 2016, and 4-6 per cent growth in policy numbers. And having acquired full ownership of comparison website Gocompare.com last March, esure reckons it can boost profitability there by 20-30 per cent. In 2015, the site contributed £20.2m to group trading profits.
Gross written premiums rose in 2015, and in-force policies topped the 2m mark. The fall in underlying pre-tax profit from £107.2m to £82.9m was largely the result of lower prior year reserve releases of £46.4m in 2015, compared with £79.6m in 2014. As a result, the combined operating ratio, of claims to income, deteriorated from 91.9 per cent to 97.8 per cent, which also reflected the £4m cost of bad weather in December.
Analysts at JPMorgan Cazenove are forecasting trading profit for 2016 of £110.4m and underlying EPS of 19.3p, compared with £92.3m and 16.4p in 2015.
| ESURE (ESUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 262.3p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 261.9-263.3p | 12-MONTH HIGH: | 273p | LOW: 198p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 82p** | COMBINED RATIO: | 97.8% | |
| Year to 31 Dec | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2011ǂ | 500 | 55 | na | nil |
| 2012ǂ | 515 | 116 | 67.9 | nil |
| 2013 | 526 | 118 | 45.5 | 9.5* |
| 2014 | 518 | 103 | 42.9 | 9.9* |
| 2015 | 550 | 134 | 36.3 | 10.3* |
| % change | +6 | +30 | -15 | +4 |
Ex-div: 7 Apr Payment: 20 May ǂPrior to flotation *Excludes special dividends of 6.5p in 2013, 7.3p in 2014 and 6.6p in 2015 **Includes intangible assets of £182m, or 44p a share | ||||
