AUB Group says the business is enjoying good momentum as it again raised its earnings outlook for this financial year following a strong set of first-half results.

The revised guidance projects underlying net profit after-tax of $63-65 million, which if achieved, would mean a rise of 17.9-21.7% from a year earlier. Last November the listed broker network raised its guidance to $60-62 million from $58.5-61 million after the business reported robust trading conditions in the first quarter.

Underlying net profit after tax in the six months to December 31 rose 44.2% to $30.7 million from a year earlier. Reported net profit surged 44.5% to 24 million.

“The reality is this is a cracker of a result,” CEO and MD Mike Emmett told analysts last week in an earnings call. “We’re really pleased with it.”

He says the first-half result “was important” to the group as it proved the strategy to grow the business was working.

These include actions taken in recent months such as the acquisition in December of 360 Underwriting Solutions and investment of a majority stake in August in Experien Insurance Services, a brokerage that specialises in general and life insurance products for the medical profession.

The decision to invest $132 million for a 40% stake in online distribution platform BizCover in February last year is also paying off.

“Our acquisition approach is delivering strong benefits to the group, adding not only profits but also enhancing our capabilities,” Mr Emmett said. “We are pleased with this result and specifically with the performance across our Australian broking businesses together with exceptional revenue and profit growth in BizCover since acquisition.”

In the December half, the Australian Broking unit grew its underlying pre-tax net profit by 60.1% to $39.3 million as revenue surged 24.2% to $233.4 million. The increase was underpinned by strong organic and acquisition-related growth.

Average premium increases of 7.4% in commercial and cost reduction measures supported organic growth while contributions from investments such as the ones made last year in Experien and BizCover gave added support.

Mr Emmett says anticipated rate increases of 5-6% will contribute about $2.9 million to second-half underlying net profit after-tax. The estimated profit contribution from acquisitions of $3.4 million is primarily from 360 Underwriting and Experien.

He says starting in August the business will report the results of BizCover and other related investments as a separate division. The move is an acknowledgement of the “strategic importance” of these new earnings drivers, he says.