Direct Line’s honeymoon period since listing on the London Stock Exchange last month came to an end today as the realities of quarterly reporting hit home.
The insurer, which also owns Churchill, Green Flag and Privilege, saw operating profits fall 4% to £123.7 million during the three months ending September 30 — ending a run of six successive quarters of growth. The results suffered the impact of lower returns on investments and the group’s shares fell 1% in early trading.
The news was not all bad for investors who have seen the company’s shares rise by almost 15% since they were listed at 175p. Today the stock slipped 2.25p to 196.6p. Direct Line said it was half way to taking out £100 million in costs from the business after cutting 900 jobs during the period.
Paul Geddes, chief executive, said: “These are our first quarterly results as a listed company and we are pleased to report continued progress on our strategy.
“Against the backdrop of a competitive market and subdued investment returns, we continue to focus on disciplined pricing and underwriting, delivering claims improvements and lowering our expenses through cost savings.”
