Admiral says Confused.com profits to fall in H2

7th Nov 2014 07:50

Confused.com owner Admiral blamed a competitive market for an expected fall in profits at the price comparison website in the second half versus the first six months of the year.Admiral said: "The UK price comparison market remains highly competitive and we expect Confused.com to deliver a lower result in the second half compared to the first half of 2014."The group also reiterated in a trading update on Friday that future earnings would take a hit from the decline in premiums across the market in recent years, coupled with a return to higher claims inflation.However, it said prices in the competitive UK car insurance market appeared to be stabilising after a period of rapid deflation."Due mainly to positive claims development on our back years, our expectations for our UK Car Insurance business in 2014 remain on track," it said.Admiral said group customers increased 10% to 4.03m between 1 July and 6 November against 3.67m in the third quarter last year.Group turnover fell 3% to £513m and UK car insurance customers increased 5% to 3.18m mainly due to improved retention.UK car insurance turnover dropped 5% to £419m and other customers increased 34% to 854,000.Admiral said its inaugural £200m bond issue completed in July 2014 will result in a net cost of about £4.3m a year after tax, representing interest costs less investment income.Investment in the group's US price comparison operation, Comparenow.com, is expected to be in the region of £15m in 2014 and projected to double in 2015.Chief executive Henry Engelhardt said: "Admiral's industry-leading combined ratios mean we're well placed to grow and continue to deliver strong returns for our shareholders."Shares dropped 21p to 1238p in early trading in London.