Shore Capital says sell Admiral after H1 premiums dip

13th Aug 2014 17:14

Broker Shore Capital has repeated its advice to investors to sell shares in Admiral after the car and home insurer revealed premiums fell again in the first half.Admiral's average UK car insurance premium fell 11% to £495, although customer numbers rose more than 4%, fuelling a 1% increase in group profit in the first half on a 5% revenue fall.Shore said it was concerned that the UK combined ratio for the first half of 2014 rose to 85.3%, against 81.5% a year ago, plus a warning of reduced margins from business written in 2013, would leave the UK business unable to keep producing positive news.Shore, which has a 1450p price target on the stock, added that it believed the group's price-to-earnings ratio was too high given pressures on earnings from various sources."With regulatory clouds still surrounding the industry and UK household providing no respite, we reiterate our 'sell' recommendation on Admiral," Shore analyst Eamonn Flanagan said.Shares fell 83p or 5.7% to 1,367p by 15:25 in London.PW