The reaction to Admiral’s interim figures looks overdone, with the shares falling 131p to £20.47 yesterday. Some blamed an apparent cut in the halfway dividend, as the payment fell from 62.9p to 56p, but last year’s figure contained an 11.9p special payout after the implementation of the Solvency II regime made it clear that the company was carrying surplus capital that could be returned to investors.
Strip this out and you are left with an increase of 10 per cent, while the payment represents 98 per cent of available profits. On the forecast dividends for this year, Admiral shares offer a yield of 5 per cent. Typically, they have been a good income stock and so are popular with retail investors.
The solvency ratio, after