Shares of the FSTE 100-listed Admiral PLC (GB:ADM) surged by 10% yesterday after the company delivered stellar results for H1 2024 and increased dividends. Admiral’s pre-tax profits surged 32% year-over-year to £310 million in the first half of 2024. Consequently, the company rewarded its shareholders with an interim dividend of 71p per share, marking a growth of 39% year-over-year.
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Based in the UK, Admiral Group is a financial services company, catering to around 9 million customers globally.
Admiral Shines Amid Customer Growth
During the first half, Admiral saw its customer base expand by 12% to 10.5 million, largely due to its affordable pricing in the UK Motor segment. Admiral’s response to rising inflation in recent years has led to a more competitive approach, which played a key role in driving its customer growth.
By lowering premiums earlier in 2024, the company has set a new record of insuring 5.5 million vehicles in the UK. This has resulted in a 58% rise in first-half turnover for its Motor Insurance division, reaching £2.4 billion.
Overall, the company’s turnover increased by 43% in the first half to £3.21 billion.
Analysts Positive on the UK Insurance Sector
Analyst Chris Beauchamp from the UK-based online trading provider firm, IG Group, commented that the UK insurance sector has returned to favourable conditions, benefiting both the companies and their investors.
Before Admiral’s H1 results, Citi analyst Alexander Evans raised his price target from 3,210p to 3,251p and maintained his Buy rating on the stock. Evan’s revised price target highlights his confidence in Admiral Group’s near-term outlook, particularly due to the improving motor claims environment in the UK.
Recently, Admiral’s rival firm, Aviva PLC (GB:AV), also reported impressive first-half results and maintained a positive outlook for the full year. Aviva reported a 14% year-over-year growth in its operating profit of £875 million, supported by higher sales and favourable market conditions.
Is Admiral a Good Share to Buy?
According to TipRanks, ADM stock has received a Strong Buy rating, backed by four Buy and one Hold recommendations. The Admiral share price target is 3,146.6p, which is around 4% above the current trading levels.
Year-to-date, ADM stock has gained 15.3%.
