Admiral Group’s pre-tax profit comes in 31% lower in fiscal H1

on Aug 12, 2020
  • Admiral Group’s pre-tax profit comes in 31% lower in fiscal H1.
  • The insurance firm declares 70.5 pence a share of H1 dividend.
  • Its net revenue from insurance premium climbed to £350.8 million.

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Admiral Group (LON: ADM) reported its first half (H1) pre-tax profit on Wednesday that came in 31% higher as compared to the same period last year. On the back of its hawkish performance, the company announced to have decided in favour of paying a special dividend from last year that it had previously deferred to cushion the economic impact of the ongoing Coronavirus pandemic.

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Shares of the company that are currently 15% up on a year to date basis, opened more than 2% up on Wednesday. The stock continued its gain as it jumped another 3% in the next hour to hit an intraday high of £26.94 per share. At the time of writing, Admiral has a market capitalisation of £7.82 billion and a price to earnings ratio of 17.96.

Admiral declares 70.5 pence a share of H1 dividend

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Admiral’s board reinstated 20.7 pence a share of special dividend that was originally declared when the company reported its annual 2019 financial results. For the fiscal H1, the financial service firm announced 70.5 pence per share of dividend on Wednesday. It also includes 15.50 pence a share of special dividend. Its peer, Quilter plc, reported a 25% decline in H1 pre-tax profit on Tuesday.

The owner of registered £286.1 million of pre-tax profit in the six months that concluded on 30th June. In the comparable period of 2019, its pre-tax profit was capped at a much lower £218.2 million. Analysts, on the other hand, had anticipated the company to print £254.4 million in pre-tax profit in H1.

In terms of turnover, the Cardiff-based firm saw a decline from £1.76 billion last year to £1.69 billion in the first half of fiscal 2020. The company attributed the decline to the Coronavirus pandemic that fuelled stay at home refunds in recent months. The company announced in late April that a total of £110 million will be refunded to motor customers as COVID-19 restricted them to their homes and reduced driving.

Admiral’s solvency ratio stood at 186% in the fiscal H1

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The car insurance company also highlighted on Wednesday that its net revenue from insurance premium climbed to £350.8 million in the fiscal first half versus the year-ago figure of £349.2 million. A solvency ratio of 186% in H1 was lower than 190% last year. CEO David Stevens of Admiral commented on the report on Wednesday and said:

“This year’s interims benefit again from our consistently competent underwriting and conservative reserving on past years, feeding into another strong set of results in the core business and beyond.”

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