Record rainfall in June this year took its toll on insurer esure (ESUR), and underlying pre-tax profits slipped from £46.5m in last year's first half to £45.6m this term. This was offset by a rise in gross written premiums, with in-force policy numbers up 3.7 per cent to 2.08m. That said, the combined operating ratio of claims to premium income rose from 95.8 per cent to 99.2 per cent. Headline profits were lower in comparison due to last year's £63.8m revaluation gain on its Gocompare holding.
Trading profit from motor insurance grew by over a third to £4.5m, although this would have been higher but for a lower level of prior year reserve releases. On the home insurance side, bad weather turned the previous first-half profit of £7.1m into a loss of £2.3m, sending the combined operating ratio here up from 82.7 per cent to 105.5 per cent. On the investment side, the net return rose from £3.3m to £6.1m.
The now fully owned Gocompare.com contributed operating profits of £14.5m, up £1.2m. By 2019, its cash profits are expected to at least double, and the strategic review of the price comparison website is ongoing.
Analysts at Deutsche Bank forecast EPS of 17.7p for the year to December (from 17.4p in 2015).
| ESURE (ESUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 269.5p | MARKET VALUE: | £1.12bn | |
| TOUCH: | 263.8-269.5p | 12-MONTH HIGH: | 300p | LOW: 219p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 83p* | COMBINED RATIO: | 99.2% | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 276 | 105 | 18.2 | 4.2 |
| 2016 | 320 | 38 | 24.6 | 3 |
| % change | +16 | -64 | +35 | -29 |
Ex-div: 8 Sep Payment: 21 Oct *Includes intangible assets of £177m, or 42p a share | ||||
