Ad­mi­ral is ‘hop­ing for a pot of gold’ for Con­ brand

The Sunday Telegraph - Money & Business - - Business - By Lucy Bur­ton Tele­graph The Sun­day

IN­VESTORS are ques­tion­ing the fu­ture of Ad­mi­ral’s price com­par­i­son web­site Con­ amid con­cerns the mo­tor in­surer is sim­ply hop­ing for “a pot of gold at the end of the rain­bow”.

Alas­tair Gunn, a fund man­ager at Jupiter As­set Man­age­ment, told

that he wants Ad­mi­ral to fol­low in ri­val Esure’s foot­steps by spin­ning off its price com­par­i­son arm and cre­at­ing a “pure-play” firm.

“There was a time where Ad­mi­ral had the only OK price com­par­i­son web­site and they had an op­por­tu­nity then to float part of it,” he said. “It’s hard for them to say we’re adding value [now] as it makes ma­te­ri­ally less profit to­day than it did 10 years ago.

“They are pur­su­ing an in­ter­na­tional ex­pan­sion strat­egy hav­ing not proven the in­vest­ment case for that part of the business.”

Ar­gu­ing that the FTSE 100 firm has “ob­vi­ously come to the con­clu­sion that there’s a pot of gold at the end of the rain­bow” in the price com­par­i­son mar­ket, he urged Ad­mi­ral to fo­cus on its suc­cess­ful mo­tor insurance arm.

How­ever, Ad­mi­ral in­vestors were split on the fu­ture of Con­, which is cur­rently run­ning a se­ries of high-pro­file TV ad­ver­tise­ments fea­tur­ing James Cor­den. Royal Lon­don’s head of eq­ui­ties Peter Rut­ter said: “If it was a sale for a very at­trac­tive val­u­a­tion that’s one thing, but a spin-off I don’t see as valu­able to be hon­est.”

The de­bate co­in­cides with re­ports that Ama­zon is look­ing to launch its own price com­par­i­son site, send­ing shares in the UK’S main listed play­ers Go­com­pare and Money­su­per­mar­ket plung­ing last week.

Mr Rut­ter said that although a move by Ama­zon “could be bad for Con­fused. com”, a site from the tech­nol­ogy gi­ant would likely give its owner Ad­mi­ral a boost if it be­came a mem­ber, as it could lead to a surge in sales.

James Cor­den stars in the Con­ ad­ver­tise­ments on tele­vi­sion

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