Staff to cash in from £600m Admiral float

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The Independent Online

Admiral, the UK car insurer, is planning to float on the London market this autumn, with an expected value of about £600m.

Admiral, the UK car insurer, is planning to float on the London market this autumn, with an expected value of about £600m.

The move will see about 900 of its 1,500 employees who have shares in the group take home windfalls of about £55,000. Employees in the staff profit share schemes have already done well in recent years, with a record £2.5m paid out last year alone. The company was ranked seventh best in the workplace in a recent Financial Times survey.

The Cardiff-based company is 47 per cent owned by its employees, with the remainder accounted for by financial investors including Barclays Private Equity, XL Capital and Munich Re.

Henry Engelhardt, the chief executive, led a management buyout of the insurer backed by Barclays Private Equity in 1999. At the time, the company was valued at about £80m.

Mr Engelhardt's 14 per cent stake is now expected to be worth more than £80m after the float, which will leave 14 other senior directors with shares valued at about £180m. The management has agreed not to sell their shares for a period after the offering.

Admiral is one of several general insurance companies to announce plans to come to market, including Benfield, the reinsurance broker, which listed last June.

Admiral has appointed Lexicon Partners, the financial services boutique, as an adviser. Barclays Private Equity said that while a flotation remained the most likely option, a trade sale had not been ruled out. It added the group was unlikely to use the flotation to raise additional capital.

Mr Engelhardt said: "Our proposed flotation is a validation of our successful growth. It comes as an exciting next stage in the future development of our company."

Admiral, which also owns the, and Diamond car insurance brands, also announced an increase in profits of almost 30 per cent for the 12 months to 31 December, up £16m to more than £71m. The company's premium income was up 12 per cent for the year, to £372m.

The group said its claims, expense and combined ratios all improved over the year, while the number of customers increased by 15 per cent to more than 800,000.

Admiral specialises in providing motor insurance for those who typically pay higher premiums, such as younger drivers, people living in cities and those who drive sports cars or high performance cars.

Admiral's strongest area of growth, however, was across its internet based business, Elephant, which saw its customer base rise 47 per cent.

Mr Engelhardt said: "2003 was a fantastic year for us. We grew rapidly while simultaneously increasing our profits. I'm particularly pleased that the staff profit share reached record levels."