Admiral Group full-year profits fall for first time since IPO in 2004

5th Mar 2015 09:08

Insurance company Admiral posted the first decline in profits since going public 11 years ago due to investments in the US during a year of consolidation.As a result, turnover was down 3% to £1.97bn and profit before tax excluding minority interest fell 4% £357m.The group said its business in the UK and Italy, its two main markets, saw "unattractive" book growth due to an environment of falling prices.Chief executive Henry Engelhardt said that this was the first time since the company went public that it did not post a record profit, but it "still made a lot of money".Shore Capital analysts said: "The real shocker in these results for us was the increase in the loss ratio for UK motor ex reserve releases and commutation."The company puts this down to falling premiums...we worry that both claims frequency and claims inflation are rising with any expected improvement in prices during 2015 simply reflecting a lag in a worsening claims environment."The broker recommended investors to 'sell' the shares at 1459p as earnings are "likely" to continue to fall in the next few years.Numis brokers were more positive, giving an 'add' recommendation as they said to be "positive on Admiral shares on the basis of substantial medium term growth potential, driven by potential UK market share gains".Shares in Admiral fell 1.85% to 1432p on Thursday at 09:53.