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Admiral picks Spain for EU unit, posts YOY rise in FY'17 profit

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Admiral picks Spain for EU unit, posts YOY rise in FY'17 profit

Admiral Group Plc announced plans to establish a unit in Spain as a result of the U.K.'s exit from the EU and reported a year-over-year increase in full-year 2017 results.

The U.K.-based motor insurance company said it already applied for licenses to operate an insurance company and an insurance intermediary business in Spain to support its European operations. Spain's regulator is expected to approve the applications in 2018, the group said, adding that it aims to have everything "up and running" ahead of any hard Brexit deadline that might eventually become clear.

"Spain made sense for us for a number of reasons, not least the fact that we already have people and infrastructure in Madrid and Seville and of course an existing relationship with the regulator," CFO Geraint Jones said.

Admiral also intends to set up new locally regulated entities in Spain and France through which its Rastreator and LeLynx price comparison businesses will trade.

The group does not expect the plans to have a material impact on its regulatory capital position.

For full year 2017, Admiral reported consolidated after-tax profit attributable to equity holders of the parent of £334.2 million, up from £222.2 million a year earlier. EPS for the year was 117.0 pence, compared to 78.5 pence in 2016.

The group's share of pretax profit increased on a yearly basis to £405.4 million from £284.3 million. The statutory pretax profit stood at £403.5 million, up from £278.4 million a year ago.

Net revenue increased year over year to £1.13 billion from £1.02 billion, with net insurance premium revenue rising on a yearly basis to £619.1 million from £548.8 million.

Group turnover amounted to £2.96 billion, up from the year-ago £2.58 billion.

Net insurance claims fell on an annual basis to £347.1 million from £394.6 million, while net operating expenses and share scheme charges increased to £366.9 million from £332.4 million.

The group combined ratio — a measure of profitability — improved to 87.9% in 2017 from 94.4% in 2016.

The British insurer's board of directors proposed a final dividend of 58.0 pence per share for 2017, up from 51.5 pence per share in 2016. The amount, which represents a normal dividend of 39.5 pence per share and a special dividend of 18.5 pence per share, will be paid June 1.

Total dividends for 2017 will be 114.0 pence per share, compared to 114.4 pence per share paid in 2016, which included an additional return of surplus capital of 11.9 pence per share. Excluding the additional return, the total dividend for 2017 is 11% higher than 2016, according to the group.

As of Dec. 31, 2017, Admiral's post-dividend solvency ratio was 205%, compared to 212% at the end of 2016.