General insurer Admiral (ADM) cut back its full-year dividend by 40 per cent after performance at its motor division underwhelmed through 2022. The fall-away in auto claims due to the pandemic reversed through the year and the resultant financial drain was exacerbated by inflationary effects.
Pre-tax profit fell by 39 per cent to £469mn, reflecting a marked fall in UK insurance profit. The group’s combined ratio – the sum of incurred losses and expenses divided by earned premium – increased to 101.7 per cent from 85.2 per cent last time around. This was accompanied by a deteriorating loss ratio. The underwriting performance obviously wasn’t great, but negative external factors played their part. MR
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A sticky half for Hotel Chocolat
Sales at luxury chocolatier Hotel Chocolat (HOTC) fell 9 per cent to £130mn in the half-year to 25 December, with pre-tax profits contracting by 59 per cent to £8.3mn. Management said that weaker online sales in the key UK and Ireland market was “due to a customer preference for a return to stores, together with a deliberately lower marketing spend”.
International sales collapsed by 69 per cent after the company made the strategic call to step back from global markets. The shares were down by over 2 per cent in early trading. CA
Hill & Smith’s grows profits ahead of revenue
Overall, Hill & Smith (HILS) delivered 14 per cent revenue and operating profit growth from continuing operations for 2022, along with a 90-basis point increase in the underlying margin to 13.3 per cent. The disproportionate profit growth relative to revenue points to operational gearing, along with the group’s ability to tailor prices to offset input cost inflation.
It closed out the year with net debt equivalent to 0.7 times cash profits. Cash conversion improved markedly over the second half and the group generated free cashflow of £30.4mn, giving management further “optionality” on the M&A front. MR
