Austbrokers Holdings Limited has delivered revenue of $173m for the 2014 full year, representing a 18.3% increase, boosted by organic and new acquisition growth across the group.
The $34.7m net profit after tax (NPAT) was down 16% on the prior year. The result on an adjusted NPAT basis was a 10.5% increase to $35.5m. The $34.7m NPAT includes adjustments to the carrying value of associates of $3.4m (2013 $12m), after tax loss on sale of portfolios, interests in associates & controlled entities and contingent consideration adjustments of $0.5m (2013 $0.4m profit).
The final dividend was 26.5 cents per share fully franked, payable on 24 October 2014. The FY14 dividend is 38.5 cents per share – a 8.5% increase in dividend per share.
Gross written premium rose to more than $2bn and the share of broker profits was up 4.2%. Acquisitions in FY14 contributed to 1.3% of the increase.
Total commission and fee income in the broker network increased by 12.1%, assisted by acquisitions. Total income increased by 11.1%, and resulted from a combination of both organic growth and new broker growth.
Premium funding income grew by 16%. Profit commissions were up by almost 18.5% as a result of improved claims experience by insurers in 2013 and so far in 2014.
Broker network expenses increased by 13.3% (5.3% excluding direct acquisitions) as a result of the cost impact of bolt-on acquisitions within the network, direct expenses related to income growth as well as some inflationary increase in costs.
Austagencies saw a 40% growth in revenue and profit contribution was up 33%, which added 5.3% to the group’s overall adjusted NPAT growth. The group said this was achieved through organic growth, the development of start-up agencies and a small contribution from acquisitions with an overall focus on underwriting discipline and the defined market segment strategy.
The acquisition of the Procare Group in February 2014 contributed 1.3% to the group’s adjusted NPAT growth in its first year.
Turning to group services, Austbrokers reported that the development of the full policy administration system had progressed and is expected to be operational this quarter.
“This will enable additional efficiencies in operational activities across the group,” the group explained. “In addition, work has been undertaken on developing a group Customer Relationship Management (CRM) system and sales platform to assist our partners with their new business growth activities.”
The group, in discussing its outlook, stated: “In FY2015, Austbrokers Holdings expects continued growth, by driving organic growth, supplemented by executing relevant acquisition and start-up investment opportunities across all three divisions (insurance broking, underwriting agencies and insurance & risk services).”
It added: “It is our objective to contain costs below the rolling seven year average. Notwithstanding economic uncertainty, the group is budgeting to achieve growth in Adjusted NPAT for FY2015 of between 5% and 10% over FY 2014.
