Broker group posts profit but warns of soft conditions

Austbrokers has posted a half-yearly net profit of almost $13 million, amid what CEO and Managing Director Mark Searles has called soft conditions.

Although the profit was down from nearly $25 million for the same period in the previous year, Searles says he is pleased with the result, given the state of the market.

“The market has been relatively flat in premium growth for commercial lines and that has been corroborate by both our brokers and insurers,” he says, adding that the SME market remains very competitive.

“The past six months have been a period of consolidation and integration of our FY13 acquisitions in addition to seeking out new opportunities.

“The most recent being the Procare Group where we acquired a 50% stake on 19 February, which is indicative of our desire to seize the right strategic opportunities and our comfort in investing in areas complementary to our existing businesses.’’

Austbrokers also spent $14 million on six acquisitions in the last half of 2013, the profits of which are expected to figure more largely in the next six months of financial results.

Austagencies, the group’s underwriting arm, was a strong performer, with profits increasing more than 20%, in large part to growth via acquisitions.

“The outlook remains positive for the next six months and we expect to build upon the growth achieved to date in the second half of the financial year,” Searles says.

“The Austbrokers owner-driver equity model underpins our success from an organic growth perspective, in addition to being a significant contributing factor during acquisitions. Austbrokers will continue to focus on all growth opportunities throughout the remainder of the year.”

To read more on Searles’ plans for 2014, see our interview here.