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Motor insurer Admiral Group (ADM) saw its shares tumble yesterday after warning that competitive pressures had continued to weigh on its price comparison website confused.com.
The group said it expected at least to meet forecasts of a 9.9 per cent rise in profit this year, but said margins at confused.com remained under pressure, with turnover from the website over the first nine months of 2008 in line with the same period last year.
Confused.com, which accounted for 20 per cent of group profit in 2007, has been hit by growing competition from new entrants to the price comparison market.
Admiral shares have fallen 19 per cent since the beginning of the year.
Numis Securities analyst Richard Gradidge said the company's outlook for in-line ninemonth turnover at confused.com implied that the unit's revenues had fallen in the third quarter, offsetting an increase reported at the halfyear stage.
"There are a couple of things in the statement that may have disappointed. Confused is starting to see revenue reductions," he said.
Admiral is expected to report a 2008 pre-tax profit of pounds 200.1 million, up 9.9 per cent from pounds 182.1 million the previous year, according to the average of seven analysts' estimates collected by the company.
"We are on track to hit or exceed analysts' consensus profit estimates for 2008. Despite all the turmoil in the financial markets, Admiral had another good quarter," said chief executive Henry Engelhardt in a statement.
Admiral, which sells car insurance through the Admiral, Bell, Diamond and Elephant.co.uk brands, said it had 1.71 million car insurance customers as of September 30, a 17 per cent increase from a year earlier.
That helped push group turnover for the first nine months of the year up 13 per cent to pounds 718 million.
Mr Engelhardt said the company had also benefited from price increases and lower insurance claims. "Prices are moving up while claim trends are leading to improved profitability," he added.
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