Admiral is ‘hoping for a pot of gold’ for Confused.com brand
INVESTORS are questioning the future of Admiral’s price comparison website Confused.com 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 Confused.com, 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 Confused.com advertisements on television