Sabre Insurance Group – better margins and a good Interim statement helps shares now 158p, brokers TP 200p

31.07.2025

This morning’s Interim Results to end-June reported by Sabre Insurance (LON:SBRE) displayed a set of strong margins and that the motor insurance underwriting group is on track to see its earnings grow.

Despite a near 25.3% fall in gross written premiums to £100.3m (£125.7m), the group actually increased its pre-tax profits by 26.2% to £25.5m (£20.2m).

The Business

The company provides private car and motorbike insurance through a broad network of insurance brokers with car insurance also being sold directly through its ‘Go Girl’ and ‘Insure 2 Drive’ brands.

It declares that it has a diversified book of business and broad underwriting footprint with a bias towards the higher average premium segment.

The business is looking to maintain its focus on the UK private motor insurance market whilst diversifying into other vehicle underwriting opportunities.

Its aim is to continue to provide brokers and direct customers with quotes across the entire risk spectrum and ensure the group continues to deliver market-leading underwriting performances, together with controlled and attractive growth over the long term.

Management Comment

CEO Geoff Carter stated that:

"I am very pleased with our position at the halfway point of the year.

We have continued to write measured but healthy volumes of business at our target loss ratios through the continued soft part of the market pricing cycle.

We have maintained cautious claims inflation assumptions, and focussing on margins not volumes will help protect us against any external macro shocks.

This also positions us well to resume strong growth as the market cycle turns - which we still anticipate being later this year.

We have continued to make good progress towards our Ambition 2030 targets; in particular, we were pleased with the launch of our direct Motorcycle product which went to market on schedule and has delivered encouraging early results.

I expect us to begin testing of differentiated car insurance rates in H2, in-line with the timeline set out at our December 2024 Capital Markets Event. 

We have ended the first half of the year in a strong capital position and our first share buyback programme is progressing well.

Our interim dividend is double that paid in 2024.

We remain confident of delivering a strong profit in 2025, in-line with 2024, and an attractive dividend.

Sabre is well placed to achieve strong levels of absolute profit growth in the years ahead - delivered both by our margin over volume strategy and Ambition 2030 initiatives and targets. 

This will underpin our commitment to sustainable and attractive total shareholder returns."

The Equity

There are some 228.91m shares in issue.

The larger holders include Aberforth Partners (8.22%), Link Fund Solutions (7.14%), Gresham House Asset Management (7.13%), Quilter Investors (5.15%), Janus Henderson Investors (5.07%), BlackRock Investment Management (5.02%), Ninety One UK (5.00%), AXA Investment Managers (4.92%), Wellington Management (4.79%), and M&G Investment Management (4.75%).

Broker’s View

Analysts Abid Hussain and Barrie Cornes, at Panmure Liberum, rate the group’s shares as a Buy, with a 200p Target Price.

Upon these Interims they have actually nudged their estimates a little higher than previously mentioned.

For the current year to end-December they look for pre-tax profits slightly lower at £46.5m (£48.6m), with earnings fractionally easier at 14.3p (14.5p) per share, whilst maintaining its 13.0p dividend.

For the 2026 year they look for £47.0m profits, 14.4p earnings and a 13.1p dividend per share.

Looking forward to 2027 the analysts estimate £51.4m profits, 15.8p earnings and 14.0p per share dividend.

They note that:

“We increase our earnings estimates to reflect the stronger investment returns evidenced in the results.

This leads to an increase in our PBT by 4% for FY25E (£46.5m) and 1% for FY26E (£47.0m).

We await further evidence of the pricing cycle turning positive in 2H25 before reflecting any potential price increases.”

The brokers state that the Investment Case for Sabre Insurance centres around:

“its ability to have managed previous underwriting cycles successfully, maintaining positive earnings throughout the period of elevated claims inflation.

This has positioned management to now write business at target margins and navigate the next part of the cycle.

However, the share price continues to trade as if margins will remain weak, or earnings will not materialise.

The new focus on optimising earnings and grow through the underwriting cycle will help re-rate the stock as management executes against the plan.”

My View

This morning the market has reacted well to the Interim news and statements, with Sabre’s shares improving 7.02% by 10.40p to 158.60p.

At that level the group is valued at £392.25m.

The shares have risen from the 150.80p level at which I featured the company last week, I am still looking for them to break above the 167p point and then break through my 170p Target Price.

(Profile 10.01.2025 @ 134p set a Target Price of 170p)