Direct Line share price rises as insurer boosts dividend
Shares in Direct Line Group (LON:DLG) have been in demand in today’s trading after the blue-chip insurer posted an increase in full-year pre-tax profit and said that it would pay a second special dividend.
As of 09:26 GMT, Direct Line’s share price had gained 1.79 percent to stand at 336.40p. The shares have jumped more than 30 percent over the past year.
Direct Line today reported a profit before tax of £456.8 million for 2014, compared with £407.3 million a year earlier, while full-year after-tax profit rose to £372.6 million from £312.8 million. The company, which went public in 2012, said today that it had either met or exceeded all of its initial public offering (IPO) targets.
“At the time of our IPO in 2012 we announced four targets for 2014, and I am delighted to report that we have met or exceeded all of them,” Direct Line’s chief executive Paul Geddes commented in the statement. “After paying the regular and special dividends for 2014, we will also have returned a total of £836 million to shareholders since we began life as a public company.”
The motor insurer, which joined the blue-chip FTSE 100 index last year, announced a 4.8 percent increase in its final dividend per share to 8.8p and unveiled a second special interim dividend of 4.0p.
Direct Line, however, warned that the UK motor and home markets remained ‘highly competitive’, and noted that the start of the year had “seen some additional, potentially seasonal, market pressure” in the motor market.
The Financial Times notes that as of February 28, the consensus forecast amongst 23 polled investment analysts covering Direct Line has it that the company will outperform the market. The 14 analysts offering 12-month price targets for the blue-chip group have a median target of 303.00p, with a high estimate of 403.00p and a low of 240.00p.
As of 10:00 GMT, Tuesday, 03 March, Direct Line Insurance Group PLC share price is 334.95p.