Car insurance firm Admiral has cheered investors with a broadly strong set of full year results, prompting a 20 per cent increase in the total dividend.
The group delivered a 15% rise in pre-tax profit at £343m compared to £299m in 2011. Turnover climbed 1.0% from £2.19bn to £2.22bn.
Earnings per share totalled 95.1p, up from 81.9p the previous year.
Group Chief Executive Officer Henry Engelhardt said 2012 had been the company's most successful year to date.
Alastair Lyons, the Chairman of the group, said: "In my statement last year I commented that I was very confident, given the quality of our management and our staff, that 2012 would demonstrate their capability and commitment to put the 2011 issue of higher than expected claims behind us and restore lost shareholder value. This confidence has, I believe, been fully justified with pre-tax profits 15% higher at £345m; reserve releases from the 2010 and 2011 years; and a share price that was 36% higher at the end of the year than the start.
"This level of profitability delivered a 60% return on capital employed and supported total dividends of 90.6p per share, which represents a distribution of 95% of our earnings. Our normal dividend, growing in line with our growth in profits based on a 45% pay-out ratio, amounted to 42.7p per share, whilst our available surplus, after taking into account our required solvency, provision for our overseas expansion plans, and a margin for contingencies, made possible a further special dividend of 47.9p per share."
Divisionally, UK Car Insurance delivered a profit of £372.8m - up 19% on 2011's result of £313.6m, primarily driven by higher net insurance premium revenue and an improved combined ratio (along with associated profit commission). Turnover for this core business accounted for 87% of the group total (2011: 90%) and 85% of customers (2011: 88%). Growth in the UK was moderated in 2012 in response to conditions in the UK market.
Turnover in the group's international car insurance business rose 33% to £162.9m (2011: £122.1m) and customer numbers climbed 42% to 435,900. The combined loss from the operations was, however, higher, at £24.5m (2011: loss of £9.5m), predominantly as a result of growth in the younger businesses and some strengthening of back year claims reserves in the more mature businesses.
The group's UK price comparison business, Confused.com, delivered a pre-tax profit of £18.2m - around £2.0m higher than 2011's result, on 7.0% higher revenue. Outside the UK, Admiral's international price comparison businesses (Rastreator.com in Spain and LeLynx.fr in France) made a combined loss of only £0.2m (2011: loss of £5.6m) whilst combined revenue increased by nearly 70%.
The share price rose 6.00% to 1,343p by 08:40.