Direct Line reveals storm damage; Aggreko edges up
Insurance company Direct Line has said the damage caused by storms Ciara and Dennis in February is set to lead to claims of about £35m, which is more than half of its expected annual weather cost of £64m.
The firm added that the coronavirus outbreak has the potential to hit is travel business. So far it has seen claims of £1m related to the virus.
Its comments came as Direct Line reported a 12.2% drop in full-year profits to £509.7m.
Chief executive Penny James said the company had navigated “a difficult motor market” during the year, but said the car insurance market showed signs of imporeement in the second half of 2019.
Direct Line also announced the launch of a share buyback of up to £150m.
Underlying group revenue for the year to the end of December was down 1% and in line with the prior year excluding the 2018 Winter Olympics and early design and project management revenue for Tokyo 2020 Olympics.
Operating profit came in 10% higher at £241 million and profit before tax up 9% at £199 million. The final dividend is up 3% to 18.3 pence.
Chris Weston, chief executive, said: “Our 2019 results demonstrate the significant progress we have made to improve the group’s financial performance. We delivered underlying profit growth of 13%, driven by a strong performance in Rental Solutions, and a significant working capital improvement.
We are proposing a 3% increase in the final dividend, reflecting the Board’s confidence in the sustainability of our performance.
We are well-positioned to meet our customers’ evolving needs in the changing energy market.
Going forward we believe that a continued focus on the four strategic priorities first set out in 2015 will underpin the achievement of our mid-teens ROCE target in 2020 and beyond.”