The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Admiral Group is trading at £14.57, and the stock is up 2.8% since the company reported a 7% rise in full-year profit for 2013 in March, with results exceeding analysts’ estimates.
The company’s US business Elephant Auto increased its vehicle base by 34% which helped offset the 9% drop in premiums from the UK operation. The chief financial officer, Kevin Chidwick expects the UK market to remain subdued for ‘at least six months if not another year’.
In July, Admiral Group warned that its premiums were being squeezed, and announced an unexpected bond issuance in which £200 million was raised to beef up its cash balance and comply with new EU regulations.
Equity analysts are a touch on the bearish side; out of the 21 ratings, four are buys, nine are holds and eight are sells.
The stock has dropped 7.2% since July’s statement, and traders viewed it as a thinly-veiled profit warning. A similar announcement on Wednesday could drive the stock to £14.06, and the shares may encounter resistance at £15.16.