(Sharecast News) - Admiral Group reported a small rise in half-yearly earnings as it hiked prices in response to claims inflation, but also slashed its interim dividend by 15%.
Pre-tax profit rose 4% to £234m in the six months to June 30. The company declared an interim dividend of 51p a share, down from 60p a year earlier when it approved a special payout following the sale of its Penguin Portals.
"Inflation persists, but we have navigated the cycle well, maintaining pricing discipline and a focus on medium-term profitability. We recognise that these are challenging times for many people and we are committed to being there for them when they need us the most, delivering good service and competitively priced products while also actively managing our costs," the company said on Wednesday.
"Our UK motor business delivered a profit of £298m in the first half of 2023. As we increased prices well ahead of the market last year, our active vehicle base reduced over the period, but we are on a strong footing to leverage improving market conditions."
Matt Britzman, equity analyst at Hargreaves Lansdown, said Admiral was managing a challenging backdrop well "with some pretty serious price hikes now starting to feed through to improved performance".
"The bad news for consumers is that car insurance is now another inflated cost to try and manage as part of the ever-increasing pressures on income. Some customers have had enough, and Admiral saw a 7% dip in customer numbers over the quarter. But for Admiral, that's a loss w"orth taking as maintaining profitable insurance contracts is key, even if it means losing a few customers along the way.
Reporting by Frank Prenesti for Sharecast.com
Admiral (ADM)