Advertising spend blamed as primary cause of $4m hit to bottom line
Declining profits at Confused have hit the bottom line of the Admiral Group, according to chief operating officer David Stevens.
The aggregator’s profits dropped from £15m in the first half of 2008 to £11m for the same period this year, largely due to increased advertising spend, he said.
Admiral Group’s half-year pre-tax profit increased 5%, from £100.3m last year to £105m. Group turnover was up 17% to £540.1m, compared with £463.4m last year.
“Confused, which is a small but important part of the business, has gone down in profitability for the first half of 2009,” Stevens said.
“A lot of advertising spend was responsible. There were some really heavyweight campaigns going on there. It’s good growth in terms of top line, but the margins are down.”
The group, made up of car insurers Admiral, Diamond, elephant.co.uk and Bell, had increased its customer base by 17%.
Group chief executive Henry Engelhardt commented: “Key to our success was the great result turned in by the UK car insurance business.
“We increased the number of customers by giving a combination of competitive prices and great service.”
Admiral said it would launch a direct car insurance operation, Elephant, in the US, based in Richmond, Virginia.
It would also look at starting two further price comparison operations, in Italy and France.
In March this year, Admiral launched Rastreator, its Spanish price comparison site.