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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Direct Line Insurance Group plc    DLG   GB00BY9D0Y18

DIRECT LINE INSURANCE GROUP PLC

(DLG)
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Direct Line shares hit record high as first-half beats analysts' estimates

08/04/2015 | 04:51am EST
A photo illustration shows insurance renewal notices from Direct Line in London

(Reuters) - Direct Line Insurance Group Plc (>> Direct Line Insurance Group PLC), Britain's largest motor insurer, posted a robust 50 percent jump in first-half profit from continuing operations, beating analysts' expectations.

(Reuters) - Direct Line Insurance Group Plc (>> Direct Line Insurance Group PLC), Britain's largest motor insurer, posted a robust 50 percent jump in first-half profit from continuing operations, beating analysts' expectations.

Shares in the FTSE-100 company surged to an all-time high on Tuesday, ranking among the top gainers on the index <.FTSE>.

Direct Line, most known for its brands Churchill, Green Flag, NIG and Privilege, said it had benefited from an absence of claims due to major weather events and higher-than-expected reserve releases.

The specialist car insurer reported an increase of 5.9 percent in overall motor prices for the second quarter of 2015 from a year earlier, higher than a 2.9 percent rise reported by the ABI Quarterly Average Private Comprehensive Motor Insurance Premium tracker.

The sharp rise in motor premiums comes after three years of premium declines in the UK's motor insurance industry, which has been battered by fierce competition.

Data from price comparison website Confused.com and consultants Towers Watson also showed that after three years of falling prices, car insurance premiums rose in the second quarter by an average 3.6 percent over the last 12 months.

Direct Line, which competes with Admiral Group (>> Admiral Group plc), RSA Insurance (>> RSA Insurance Group plc) and Aviva (>> Aviva plc), however, maintained a cautious view on the motor insurance market.

"By pricing 6 pct, we believe we have managed to match claims inflation but its too early to say that the motor market is pricing claims inflation or it is a turnaround," Chief Financial Officer John Reizenstein told reporters on a conference call.

Pretax profit from continuing operations rose to 315 million pounds for the half-year ended June 30, from 211.7 million pounds a year earlier, while gross written premium from ongoing operations rose 0.4 percent to 1.55 billion pounds.

Direct Line said it would pay an interim dividend of 4.6 pence, from 4.4 pence last year.

The company paid a special dividend of 27.5 pence per share this June as it returned the net proceeds from the sale of its international division, which it sold to focus on general insurance in the UK.

RBC Capital Markets analysts said they expected Direct Line's strong balance sheet to yield more special dividends.

The company's shares were up 2 percent at 373 pence at 0844 GMT (0944 BST).

(Reporting by Aashika Jain in Bengaluru; Editing by Anupama Dwivedi)

By Aashika Jain


© Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
ADMIRAL GROUP PLC 0.91% 2873 Delayed Quote.23.30%
AVIVA PLC 0.25% 324.8 Delayed Quote.-22.59%
DIRECT LINE INSURANCE GROUP PLC 0.00% 297.5 Delayed Quote.-4.93%
MSCI UNITED KINGDOM (STRD, UHD) 0.17% 994.663 Real-time Quote.-16.45%
RISE, INC. 4.17% 25 End-of-day quote.-16.67%
RSA INSURANCE GROUP PLC 0.09% 675 Delayed Quote.19.24%
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More news
Financials
Sales 2020 2 977 M 3 974 M 3 974 M
Net income 2020 343 M 458 M 458 M
Net Debt 2020 - - -
P/E ratio 2020 12,2x
Yield 2020 11,3%
Capitalization 4 021 M 5 359 M 5 366 M
Capi. / Sales 2020 1,35x
Capi. / Sales 2021 1,32x
Nbr of Employees 10 762
Free-Float 98,9%
Chart DIRECT LINE INSURANCE GROUP PLC
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Direct Line Insurance Group plc Technical Analysis Chart | DLG | GB00BY9D0Y18 | MarketScreener
Technical analysis trends DIRECT LINE INSURANCE GROUP PLC
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 17
Average target price 354,44 GBX
Last Close Price 297,10 GBX
Spread / Highest target 29,6%
Spread / Average Target 19,3%
Spread / Lowest Target 0,98%
EPS Revisions
Managers
NameTitle
Penelope Jane James Chief Executive Officer & Executive Director
Danuta Gray Chairman
Steven Maddock Chief Operating Officer
Timothy Walter Harris Chief Financial Officer & Executive Director
Jane Carolyn Hanson Independent Non-Executive Director
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