0R15 8884.0068 1.4156% 0R1E 9171.0 0.0% 0M69 None None% 0R2V 255.5 0.3929% 0QYR 1619.0 0.0% 0QYP 434.5 -0.344% 0RUK None None% 0RYA 1600.0 4.5752% 0RIH 195.2 1.3763% 0RIH 195.2 1.3763% 0R1O 225.5 9877.8761% 0R1O None None% 0QFP None None% 0M2Z 255.0 0.2457% 0VSO 33.3 -6.4738% 0R1I None None% 0QZI 596.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 236.3943 1.5483%
Admiral Group PLC (LON: ADM) – Distributed 161 pence of dividend attributable for H1 FY21.
Admiral Group PLC is an FTSE 100 listed United Kingdom-based financial services company engaged in offering motor insurance, household insurance, travel insurance and lending products. The Company has four segments: UK Insurance, International Insurance, Admiral Loans and other.
(Source: Company Presentation)
Recent Trend of Dividend Payments
The Company had paid a normal interim dividend of 87.90 pence per share and a special dividend of 73.1 pence per share on 01 October 2021, with an ex-dividend date of 02 September 2021. Moreover, the special dividend of 46.0 pence per share was attributable to the sale of the Penguin Portals comparison businesses.
(Source: LSE; Analysis done by Kalkine Group)
Growth Prospects
Key Risks
Now, we will analyse the Key Fundamental Statistics & Shareholding Pattern of Admiral Group PLC.
Muenchener Rueckversicherungs Gesellschaft in Muenchen AG is the most significant shareholder as it holds nearly 29.72 million shares as of 30 September 2021.
H1 FY21 Financial & Operational Highlights (for the six months ended 30 June 2021, as of 11 August 2021)
(Source: Company result)
Financial Ratios (H1 FY21)
Share Price Performance Analysis
(Source: Refinitiv; Analysis done by Kalkine Group)
On 04 October 2021, at 08:03 AM GMT+1, ADM’s shares were trading at GBX 3,119.00, down by around 0.38% from the previous day closing price. Stock 52-week High and Low were GBX 3,631.31 and GBX 2,621.00, respectively.
From a technical standpoint, ADM is hovering between the lower Bollinger band and the middle Bollinger band, indicating an upside potential in the stock price. Moreover, the 14-days RSI of ~24.26 supports an upside momentum in the stock price.
Over the last one year, ADM’s stock price has delivered a positive return of ~19.29%, and it has outperformed the FTSE 100 index (benchmark index) with a return of about 18.11% and FTSE All-Share Non-Life Insurance index (benchmark sector) with a return of around 15.98%.
Valuation Methodology: Price/Book Approach (NTM) (Illustrative)
Business Outlook Scenario
The Company had accelerated the growth trajectory in H1 FY21, with a robust profitability growth. Furthermore, the Company had returned the proceeds from the sale of the Penguin Portals comparison businesses to shareholders in the form of special dividends. Meanwhile, ADM will pay 65% of post-tax profits as a normal interim dividend for each of the half-year. ADM will distribute entire earnings to the shareholders in case it is not retained for solvency and buffers. Hence, ADM expects to return 90-95% of earnings to the shareholders for the foreseeable future. The Company had managed to reformulate the strategies, especially at the time of pandemic and took advantage of the changing market dynamics. In a nutshell, the Company seems well equipped with the adequate financial strength to generate long term returns for the shareholders.
Considering the favourable market dynamics, improvement in insurance metrics, robust top-line revenue and bottom-line profitability during H1 FY21, consistent dividend payments, strong return on equity, and support from the valuation as done using the above method, we have given a “BUY” recommendation on Admiral Group PLC at the current price of GBX 3,119.00 (as on 04 October 2021 at 08:03 AM GMT+1), with lower-double digit upside potential based on 8.81x Price/NTM Book Value per share (approx.) on FY21E book value per share (approx.).
*The reference data in this report has been partly sourced from REFINITIV.
*All forecasted figures and Peer information have been taken from REFINITIV.
*Dividend Yield may vary as per the stock price movement.
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.
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