Strong quarter sees Steadfast boost earnings forecast
Steadfast raised its earnings guidance range today after its broker network and underwriting agencies made a strong start to the financial year. “We are seeing better than expected first-quarter organic growth supported by mid-single-digit price rises by insurers,” MD and CEO Robert Kelly told the annual general meeting in Sydney this morning. The group has also completed several acquisitions that will make a contribution this year and Mr Kelly says there is still a strong acquisition pipeline. Steadfast expects underlying earnings before interest, tax and amortisation (EBITA) of $190-200 million and underlying net profit of $85-90 million for the year ending June 30. At the annual results in August it forecast EBITA of $185-195 million and net profit of $82.5-87.5 million. Since the end of last financial year Steadfast has acquired several insurance broking business and one specialist motor agency, investing a total of $90 million, Mr Kelly says. The company has long-term debt facilities of $385 million, with more than $100 million available to fund future growth. insuranceNEWS.com.au reported in a Breaking News bulletin last week that Steadfast had acquired IAG’s Community Broker Network – Australia’s largest authorised representative group – and had also taken a 50% interest in Sydney-based strata specialist BAC Insurance. Mr Kelly says extending the group’s international reach is a key strategy and it now has 53 network brokers in New Zealand and Asia, and a 40% stake in global group unisonSteadfast. The company is also looking for increased returns from its technology investments, with its Steadfast Client Trading Platform (SCTP) live across six insurance lines and with $230 million of gross written premium (GWP) transacted through the platform last financial year. Mr Kelly says Steadfast has budgeted for a “small positive” EBITA contribution this year, growing to a targeted $23 million a year in five years, based on $2.3 billion of GWP transacted through the SCTP platform by that time. “We will continue to invest in technology in the coming years as it is a key strategy for evolving our service offering to Steadfast Network brokers and their clients, and it positions us as a global leader in insurtech,” he said.