On the day that it was announced that the UK economy had officially slipped into recession for the first time in 11 years, the good burghers at Admiral (ADM) revealed that they were reinstating the special dividend due to a “reduced level of uncertainty in the economic environment”. That means shareholders will receive the 20.7p special that was deferred in April in response to advice from the Bank of England.
Despite turmoil in the wider economy, the insurer’s net premiums held firm from the 2019 half-year, while revenue would have been up year-on-year apart from a £25-per-vehicle ‘stay at home’ rebate for customers to reflect the fall in driver miles caused by the pandemic. That translated into fewer claims, reflected in the motor segment’s combined ratio, improving 9.1 percentage points since the end of 2019 to 70.7 per cent. Reported profits benefitted from strong prior-year reserve releases, with the statutory pre-tax figure up by 31 per cent to £286m.
New business has not slowed unduly. The group also boosted customer numbers, with the domestic total up 5 per cent to 5.58m, while internationally numbers were 10 per cent to the good at 1.49m.
The consensus forecast gives adjusted EPS of 133.62p, falling to 127.73p in 2021.
| ADMIRAL (ADM) | ||||
| ORD PRICE: | 2,639p | MARKET VALUE: | £ 7.76bn | |
| TOUCH: | 2,639p-2,640p | 12-MONTH HIGH: | 2,722p | LOW: 1,859p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 354p | COMBINED RATIO: | 83% | |
| Half-year to 30 June | Net Premiums (£m) | Pre-tax profit (£m) | Investment Income (p) | Dividend per share (p) |
| 2019 | 349 | 218 | 18.3 | 63.0 |
| 2020 † | 351 | 286 | 32.0 | 70.5 |
| % change | +0.5 | +31 | +75 | +12 |
| Ex-div: | 03 Sep | |||
| Payment: | 02 Oct | |||
| † Interim pay-out of 70.5p includes special dividend of 15.5p per share. In addition, the deferred FY2019 special dividend of 20.7p will be paid alongside the 2020 interim dividend. | ||||
