Admiral (ADM) bounced back to deliver record profits in 2017, having seen profits dented in the previous year due to changes in the Ogden rate used to calculate compensation payments. Much of the improvement was generated by a strong performance in UK vehicle insurance, where the number insured grew by 8 per cent to 3.96m. Profitability was again helped by significant prior year reserve releases, but the company is taking a prudent approach ahead of a review into the Ogden rate, and reserves reflect the current rate of discount.
Household insurance grew strongly, with the number of properties insured jumping by 41 per cent to 700,000. Buyers are increasingly making use of its multi-cover offering. Last year also saw the launch of its in-house underwritten van insurance product, followed by travel insurance. On the international front, Hurricane Harvey didn’t help, but losses continued to narrow, from £19m in 2016 to £14m in 2017.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2018 of £462.5m and EPS of 129.9p.
| ADMIRAL (ADM) | ||||
| ORD PRICE: | 1,951p | MARKET VALUE: | £5.6bn | |
| TOUCH: | 1,951-1,952.5p | 12-MONTH HIGH: | 2,162p | LOW: 1,705p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 225p* | COMBINED RATIO: | 87.9% | |
| Year to 31 Dec | Net premiums (£m) | Pre-tax profit (£m) | Investment income (£m) | Dividend per share (p) |
| 2013 | 483 | 370 | 14.3 | 46.9 |
| 2014 | 465 | 351 | 15.4 | 46.2 |
| 2015 | 467 | 369 | 32.6 | 57.9 |
| 2016 | 549 | 278 | 53.1 | 102.5 |
| 2017 | 619 | 404 | 41.7 | 114 |
| % change | +13 | +45 | -21 | +11 |
| Ex-div: | 10 May | |||
| Payment: | 1 Jun | |||
| *Includes intangible assets of £159m, or 56p a share | ||||
