Italian opera buffo Gio Compario is making a return to the TV adverts of GoCompare, called back into action by its parent esure (ESUR). In March the motor insurance group bought the remaining half of the comparison website it did not already own, delivering an accounting boost of £64m to pre-tax profit. But there is not much to sing about elsewhere: higher claims, tough competition and less money released from reserves sent underlying profit down by more than a fifth to £47m.
The combined operating ratio (COR) of claims to income grew by a 4.9 percentage points to 95.8 per cent compared with 2014. Management points to a revival of whiplash claims, despite government attempts to subdue the market, as well as an increase in mileage driven - and thus accidents - due to low petrol prices. The company is pushing through premium increases to mitigate the rising claims, but there is no magic wand: Mr Vann expects a 96 per cent to 97 per cent COR for the full year.
Home insurance was relatively flat, although good weather after last year's floods saw profitability improve. As for GoCompare, the company managed to reduce expenses by 5 per cent, although media spend will increase in the second half as Signor Compario returns to our screens.
Analysts at broker Peel Hunt expect full-year adjusted profit before tax of £142m and EPS of 19.1p, compared to £106m and 19.8p in 2014.
| ESURE (ESUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £1bn | |
| TOUCH: | 237-240p | 12-MONTH HIGH: | 274p | LOW: 187p |
| DIVIDEND YIELD: | 6.6%* | PE RATIO: | 15 | |
| NET ASSET VALUE: | 80p** | COMBINED RATIO: | 95.8% | |
| Half-year to 30 Jun | Gross premiums (£m) | Pre-tax profit (£m) | Investment income (£m) | Dividend per share* (p) |
|---|---|---|---|---|
| 2014 | 265 | 57 | 7.6 | 5.1 |
| 2015 | 260 | 105 | 3.9 | 4.2 |
| % change | -2 | +85 | -49 | -18 |
Ex-div: 3 Sep Payment: 16 Oct *Includes special dividends **Includes intangible assets of £191m, or 46p a share | ||||
