Admiral Group (ADM) H1 2024 earnings summary

Executive summary

• Group profit before tax rose 32% to £310m, driven by strong UK Motor performance, improved margins, and disciplined portfolio management, with group turnover up 43% to £3.21bn and customer numbers up 12% to 10.5m.

• UK Motor led growth with a 58% rise in turnover and 15% customer growth, while international business returned to profit despite challenges in Italy.

• Diversification beyond Motor continued, with UK Household, Admiral Money, and Travel contributing £18m profit and 17% customer growth.

• Interim dividend increased 40% to 71p per share, with a payout ratio of 92% of H1 profit after tax; solvency ratio remains robust at 198%.

• Completed More Than acquisition, strengthening UK Household and Pet insurance offerings and integrating 300 staff.

Financial highlights

• Group profit before tax up 32% to £310m; EPS increased 35% to 77.5p; group turnover up 43% to £3.21bn.

• Return on equity improved to 45%; group combined ratio improved to 80% (down 9pts year-on-year).

• UK Insurance profit before tax rose 20% to £363m; UK Motor profit up 20% to £359m; UK Household profit up 31% to £11m.

• International Insurance returned to profit (£1.7m vs. £7.6m loss), with US Motor delivering $3.8m profit and European Motor profit impacted by adverse claims in Italy.

• Admiral Money profit before tax increased to £7m (+152%), with loan balances stable at £1.03bn and provision coverage at 8.5%.

Outlook and guidance

• Expect slower growth in H2 as market competition increases and prices/inflation trends soften, but margins remain strong.

• UK Motor margins expected to decrease in H2 due to seasonality and inflation, but overall profitability remains a focus.

• Focus remains on disciplined growth, prudent reserving, and leveraging scaled agile and AI capabilities.

• International: focus on margin and efficiency, especially in Italy and Spain; US business under review for long-term strategy.

• Preparing for regulatory changes, including CSRD and IFRS S1/S2, and developing a Net Zero Transition Plan.