The firm reported a pre-tax profit rise of 7 per cent to £171.8 million as group turnover rose 6 per cent to £1.17 billion.
The firm’s profit was ahead of market expectations of £167.7 million and it was the eighth consecutive year that Admiral had delivered record profits.
However, the firm warned that its core business, UK car insurance, has become more price competitive, ‘with premium rates falling and competitors seeking to add market share’.
The UK business still saw a profit increase of 9 per cent to £183.3 million, despite the increased pressures, but Admiral’s fledgling international business saw its losses widen from £3.2 million to £8.9 million.
The CEO of Admiral, Andrew Engelhardt, welcomed the results but issued a note of caution, ‘We continue to slow our rate of growth to a more modest level, which we believe is a sensible response to the increased competition in the market.’
Investors seemed unconvinced despite the expectation-beating profits, and shares in Admiral are currently trading down 2.34 per cent at £11.68. The stock has been mainly trading in a tight range between £11 and £12 since the start of March this year.
The fall in share price came despite Admiral raising its interim dividend by 15 per cent to 45.1p per share. Financial data firm Morningstar expects the total dividend for 2012 to be 75.95p, which at the current price would deliver a yield of 6.5 per cent.
Broker Nomura reiterated its ‘buy’ rating on the stock, with a target price of £13, and declared it was ‘encouraged’ by the results.