Direct Line plans special dividend as profits rise

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Insurance group Direct Line today said shareholders were in line for a special dividend of 10p a share after its first-half profits grew almost 8 per cent.

The insurer, previously owned by Royal Bank of Scotland, posted a pre-tax profit of £225.1 million for the six months to 30 June, up from £208.8m for the same period last year.

Direct Line also said it was in talks with a number of possible bidders for its Italian and German operations, having kicked off a strategic review of its international division during the first half, “but at this stage there is no certainty that a disposal will occur”.

Chief executive Paul Geddes said: “We delivered good results in the first half of 2014, despite major weather events and competitive markets, by maintaining our disciplined underwriting approach and from the continued delivery of our strategic initiatives.

This continued performance and our strong capital position have enabled us to declare a special interim dividend of 10p per share as well as increase the regular interim dividend by 5 per cent.”

The interim dividend of 4.4p, together with the special payout, will be paid on 12 September.