Written on 20 February, 2024

Underlying net profit after tax rose to $70.2 million from $46.7 million a year earlier, and underlying revenue to $635.7 million from $466 million, the listed broking group says.

“We are proud of this result … it’s the culmination of a number of years of efforts and focus and, frankly, good strategy that has been executed as well,” CEO Michael Emmett said during an earnings call today.

“Across the business we are pleased to see … the turnaround of New Zealand and the fulfillment of our ambitions in agencies. Our good old fundamental core engine, Australian Broking, continues to motor along [and] BizCover remains a quality business operating at tremendous margins with lots and lots of opportunities … more opportunities than we originally envisaged.”

AUB Group’s revised guidance is for underlying net profit after tax of $161-$171 million, compared with a previous $154-$164 million range.

The new guidance represents growth of 24.7-32.5% from 2022-23.

“Most of the growth is expected from organic growth, together with some acquisition growth and a reduction in funding costs arising from the new debt facility put in place during January 2024,” Mr Emmett said, looking to the second half.

“More robust than anticipated performance in the first half and continued profit growth trends estimated for the second half have given us the confidence to upgrade guidance.”

AUB Group’s divisions all recorded increased first-half earnings. Australian Broking’s underlying revenue grew 10% to $274.8 million; BizCover gained 14.7% to $43.1 million; Agencies 45.4% to $84.6 million; and New Zealand 37.3% to $40.8 million.

UK-based Lloyd’s wholesale broker Tysers, which began contributing to earnings from October 1 2022 after AUB acquired it for $880 million, achieved underlying revenue of $192.4 million.

Mr Emmett says the group has not provided the percentage increase in revenue to avoid “inflating” Tysers’ results, since there were only three months of ownership in the corresponding half of the previous financial year.

He says Tysers’ performance is on track and the UK broker’s operations in Singapore and Miami have been repurposed as reinsurance hubs.

“We have identified essential product or industry gaps in wholesale business and have recruited some teams to assist in addressing this.”

On Agencies, he says growth and performance have been “spectacular” since the business launched a new strategy more than three years ago.

“We exceeded $1 billion of premiums from our agencies for the first time in calendar year 2023. Investments in 360 Underwriting and Strata Unit Underwriters have especially enabled growth in general commercial and strata, respectively.”

Insurance News  | 20 February | Read article