Admiral Plc, ever conservative, continued to show steady growth with no major business breakthroughs in its interim results. The company, which went public six years ago to increase visibility to its blue chip customer base, has continued to grow business and take on staff. Net profit jumped 16.1% to UKP1.5m on turnover up 32.6% to UKP17.7m, while the interim dividend was up to 2.0p from 1.7p last time. The increased turnover was attributed mostly to increased staff levels. From 620 staff in February, the company has continued to recruit to its current level of 680, with departments growing in varying areas. The growth doesn’t appear to be through getting much new business, though, as Admiral still attributes 80% of the company’s business to existing contracts which were with the company in 1987. This may change if it recognises its dream of expanding into continental Europe – the company only does occasional business there at present, although it is on the acquisition trail in Europe, brandishing UKP5.5m cash. This lack of expansion reflects executive chairman Clay Brendish’s reservations about doing anything rash. We’re not glitzy and we’re not sexy, he said, We’re a true service company. We’re a long term investment. Significant areas of growth for the company still lie in industry and commerce, which in 1991 accounted for 11% of Admiral’s revenue, and now account for 25%. Even the defence business blipped slightly in what Admiral sees as a downward trend for it – after falling to 27% from 37% last year, it rose to just under 30% in the interim. The immature client server-market mananges to account for 18% of Admiral’s business, with Brendish predicting growth in that area. The company’s profit margins are low, though; while turnover jumped 32.6% operating profit rose by a smaller 20.2%. While some of this is doubtless down to increased staff levels, the company admitted that profit margins are lower these days, due to the increasing number of consultancies being set up by redundant workers. The other disappointments are the overseas operations. The Australian subsidiary, while growing at more than the UK average, is still doing less well than expected. Australia will begin to benefit from federal contracts according to Admiral. The Singaporean operation, of which Admiral owns 51%, made losses, accounted for as an UKP8,000 contribution reflecting the share of the loss attributable to the minority shareholders. Overseas operations still account for under 10% of Admiral’s total revenue. It could be that the company needs a stronger continental and overseas presence to be taken seriously outside its strong UK base.
