- Group pre-tax profit increases to £62 million
- Year-to-date shares gain 4%
- Declares 2p dividend per share
Shares in Direct Line (DLG) were down marginally to 192p in morning trading as the insurance company reported weaker-than-expected group operating profit for the first half.
The group’s operating profit came in at £63.7 million which was below company-compiled consensus analyst forecasts of £85 million
The insurer has been through the wars over the last year after issuing a profit warning, scrapping its dividend and CEO Penny James stepping down in January 2023.
In February, the insurer rejected a £3.1 billion offer from Belgium-based rival Ageas (AGS:EBR) due to the offer ‘significantly undervaling’ the company.
STRONG PREMIUM GROWTH
However, the company delivered strong premium growth and returned to profitability in the first half to 30 June, reporting a group pre-tax profit of £62 million compared with a £94 million loss on the first half of 2023.
The home, motor and travel insurer saw gross written premiums and associated fees growth of 53.5%, largely because of the Motability partnership which began in September 2023.
Excluding Motability, the company saw growth of 11.4%, supported by rating action across motor, home, commercial direct and rescue.
Direct Line CEO Adam Winslow expects motor’s net insurance to improve during the second half of the year ‘as written margins of above 10% continue to earn through.
‘In non-motor we expect continued growth, in line with our target of 7% to 10% compound annual growth in gross written premium and associated fees between 2023 and 2026,’ he said.
The group's solvency capital ratio, post dividend was a strong 198% and the company declared a dividend of 2p per share.
