Austbrokers and Steadfast outline the year ahead

After a flurry of acquisitions earlier this year, the two cluster groups have given brokers an idea of what to expect this financial year.

Fresh off its successful float, Steadfast has signaled its focus this year will be on consolidating the more than 60 businesses in which it bought equity stakes into the Steadfast family, while Austbrokers has flagged plans to continue its growth through acquisitions.

Steadfast CEO Robert Kelly says the company has a reputation for taking good care of the brokers it has stakes in.

“We won’t move forward until we are completely happy that we’ve bedded down what we’ve bitten off already,” he says. “However in saying that I think in the latter part of this year we’d probably be better informed about what we may or may not do.”

Kelly also indicated the Steadfast sights are not just on brokers but on underwriting agencies and any ancillary businesses that could help the cluster group reduce costs for its members.

The company is also moving forward with experiments in merging brokers to reduce costs.

As part of its “hubbing strategy”, four brokers in Sydney are being merged into one, along with three in Melbourne.

“The ability to save some expenses across those broking houses is quite exciting,” Kelly says. “We can help dramatically by bringing a whole series of brokers together and looking at how we can reduce their back office costs.”

For last financial year, Steadfast recorded a $13.4 million loss, which includes almost $24 million in IPO costs. Gross written premium was up 10% compared to last year.

Meanwhile, Austbrokers has recorded a 61% jump in net profit after tax for the last financial year, up to more than $41 million.

Austbrokers CEO Mark Searles says he is pleased to have delivered double-digit growth in the current economic environment.

“Going forward we will continue investing in our strategic growth initiatives,” he says. “Acquisitions will continue to be a core part of our growth strategy alongside organic growth and support for broker growth at a local level.

“Austagencies will continue its growth strategy through product development and strategic acquisitions. We will see continued growth and development through our partnership with Hunter for premium funding.”

Searles says Austbrokers will also continue to invest in improving its infrastructure for members.

“We will continue to invest in our core competencies including IT support, automation of broking processes, further development of iClose, business intelligence reporting and marketing,” he says.

NIBATV spoke with Macquarie Premium Funding CEO Stuart White and Fabian Pasquini, General Manager of Acquisitions and Mergers at Austbrokers, about the keys to successful mergers and acquisitions.