Dividend hiked to 5.1p from 2.5p4 Aug 2014 15:21
Dividend hiked to 5.1p from 2.5p
- Profits steady in first half
- EPS rises 4%
Esure, which provides home, travel, pet and car insurance, said profits held steady in the first half, reflecting a "disciplined underwriting performance in difficult market conditions".
The company said that the continuing competitive environment in both the UK motor and home markets is expected to continue over the rest of 2014 and that gross written premiums will fall in the second half.
Nevertheless, the firm hiked its interim dividend to 5.1p, from 2.5p the year before, comprising a 3.6p base payout and a further special dividend of 1.5p.
The Surrey-based firm, which owns the Sheilas' Wheels brand, reported a pre-tax profit of £57.1m for the six months to 30 June, up just 0.4% on the year before. Earnings per share improved by 2.7% to 10.9p.
"The first half of 2014 has seen no let up in the competitive rating environment in both the motor and home markets," said chief executive Stuart Vann.
"The group remained disciplined in its approach to rating and volume which has contributed towards our solid performance," he said.
In-force policies totalled 1.974m by mid-way point of the year, up 2.1% on the end of 2013. This helped to mitigate the impact on the bottom line from a 1.9% year-on-year fall in gross written premiums to £260.4m.
Meanwhile, the combined operating ratio worsened by 1.3 percentage points to 90.9% but was in line with guidance due to "severe weather events" in the first quarter.
Looking ahead, Esure said it will "continue to focus on profit rather than volume" given the anticipated fall in gross written premiums this year, and that the full-year combined operating ratio would be "broadly similar" to the first half.
"There has been no change to the group's view that the UK motor market will not turn until [the first quarter of] 2015 at the earliest."
BC