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Admiral's £355m dividend and Provident's wind-down plan: Results to know today

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CARDIFF, UNITED KINGDOM - SEPTEMBER 24: Admiral insurance company sign seen on  on September 24, 2015 in Cardiff, United Kingdom. (Photo by Matthew Horwood/Getty Images)
An Admiral insurance company sign seen on September 24, 2015 in Cardiff, United Kingdom. Photo: Matthew Horwood/Getty Images

Mid-year earnings season continues in Europe, with wealth manager Quilter and FTSE 100 insurer Admiral among the businesses putting results out on Thursday.

Here's what you need to know:

Admiral's admirable dividend

COVID-19 was a blessing in disguise for insurer Admiral's (ADM.L) first half results, as a slump in claims boosted its profits.

Pre-tax profit rose 76% to £482m in the six months to the end of June. The company saw a double-digit increases in customer numbers at a time when other UK motor insurers are struggling to eke out any growth.

The car and home insurance provider raised its interim dividend by 60% to 115p per share, totalling approximately £335m ($462.7m). 

“Admiral comes out of its latest set of results looking like the Rolls Royce of motor insurers," said AJ Bell financial analyst Danni Hewson. "Compared with its peers, the growth in profit and customer numbers the company is chalking up is highly impressive.

"The road ahead could be a little bumpier for Admiral as the artificially lower levels of traffic and collisions driven by Covid restrictions starts to unwind, however the company has clearly demonstrated its ability to steer the right course.”

The stock rose 1.5% in early trade.

Admiral stock headed higher as COVID boosted its results. Chart: Yahoo Finance UK
Admiral stock headed higher as COVID boosted its results. Chart: Yahoo Finance UK

Deliveroo order growth cools

The unwinding of the pandemic could spell trouble for the bumper at growth food delivery company Deliveroo (ROO.L).  

The takeaway app said in its half-year results on Wednesday that its gross transaction value (GTV) — the total value of orders made on its platform — grew by 131% in the first quarter of 2021. But growth slowed to 81% in the second quarter, as restrictions on day-to-day life began to ease.

Deliveroo's share price was down 3.8% by mid-morning in London. 

Full report: Deliveroo's order growth begins to slow as UK economy reopens

Quilter stock drops

Wealth manager Quilter's (QLT.L) stock dropped in early trade in London, as investors digested concerns about inflation and China-US tensions disclosed in its interim results.

Quilter, formally known as Old Mutual Wealth, reported pre-tax profits up by 20% to £85m in the first half. Net inflows rose by 127% to £2.5bn.

However, the company is on track to meet operating margin targets of 25% in 2023 and 30% by 2025.

However, the company was cautious about the outlook for the months ahead.

"More recently, we have experienced bouts of volatility reflecting uncertainty over the heightened US-China tensions, coupled with concerns over the direction of inflation and interest rates. This leaves us cautious on expectations of further substantial near-term market appreciation," the company said.

Quilter also upped the amount set aside to cover the Lighthouse DB transfer review by £7m, taking the total to £35m. A skilled person review currently taking place uncovered further instances of unsuitable advice. The review is set to close in 2022.

Shares in the business fell 4.6%.

Quilter stock five-day look. Chart: Yahoo Finance UK
Quilter stock five-day look. Chart: Yahoo Finance UK

Provident's costs mount for consumer credit division wind down

Shares in Provident Financial (PFG.L) headed higher, even as the lender said costs related to the wind down of its consumer credit division had ramped up.

The decision to exit consumer credit followed a significant decline in income from its doorstep loans as a result of COVID-19. The business was also hit with a 200% increase in complaints and compensation claims, resulting in a £25m hit.

In May, Provident said it would place the business into a managed run-off, a plan that was signed off by the High Court at the beginning of August. It marks the wind-down of the UK's largest doorstep lender. The business plans to launch a Scheme of Arrangement for the division.

Despite the cost of winding down this segment, the business managed to narrow losses. The company made a pre-tax loss of £44.2m in the first half, compared to £28.1m the previous year.

When the cost of the consumer credit wind down is excluded, the company made an underlying pre-tax profit of £63.5m.

Shares were up 2.5% in early trade in London. 

COVID tailwinds for Shawbrook Bank

Commercial bank Shawbrook Group said it had seen record levels of profitability in its first half, with underlying profit before tax hitting £94.4m. By contrast, profits were just £5.9m in the first half of 2020.

The company offers specialist lending to meet company needs outside of government-backed loan initiatives. Shawbrook has seen loan origination hit record levels as the UK economy begins to rebound.

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