Austbrokers Holdings says it may acquire more brokers from Steadfast following the rival cluster group’s float earlier this year.

“Last [financial] year we purchased or were involved in about five acquisitions with Steadfast members,” GM Acquisitions and Development Fabian Pasquini told insuranceNEWS.com.au at the Austbrokers AGM last week.

“Competition has always been there, but the Steadfast float has, if anything, raised some further opportunities to the surface.”

Austbrokers acquired Steadfast brokers WRI Insurance Brokers and InterRISK last financial year. Overall, it made 19 acquisitions and now has equity stakes in 47 brokers.

Some Steadfast brokers who had not previously considered selling “put all their options on the table” when approached during the group’s initial public offering, Mr Pasquini says.

“Competition is a good thing. It helps everybody to sharpen their focus.”

Mr Pasquini says Austbrokers targets brokerages that deliver a strong return on investment, and it also receives direct approaches.

“We already have a strategy in place as to who we think should be an Austbrokers partner in the next 12 months.”

Austbrokers uses the “owner-driver” business model, in which it acquires major equity in a broker and appoints a partner development manager to the board.

Steadfast has so far generally acquired a smaller amount of equity and does not have board representation, relying instead on share and unit-holder deeds.

“How you can invest millions of dollars and not be at the table is an interesting concept,” Mr Pasquini said.

Austbrokers CEO Mark Searles told the AGM the broker network performed well last financial year, increasing revenue by 7.5% to $272.96 million while its share of broker profits grew 17.6% to $50.38 million.

Austbrokers is to extend its $40 million facility with St George Bank by $10 million, so “approximately $25 million will be available for future acquisitions over the next 12 months”, after future earn-out payments of $8 million.

“The Austbrokers value proposition provides the ideal solution to any broker looking for a true equity partnership, whether they be an IBNA or Steadfast member or a non-aligned broker,” Mr Searles said.

The group will not vary its previous earnings expectations for this financial year from a 5-10% increase in net profit after tax.

Acquisitions made last year will contribute to profit growth, but interest earnings are down amid uncertain economic conditions.

Results for the four months to October 31 were “pleasing”, Mr Searles says.

Austbrokers reported a 61% rise in net profit after tax to $41.2 million last financial year.

Long-serving director and co-founder of Austbrokers Phil Shirriff stood down from the board at the AGM, while director Ray Carless was reappointed for three years. Mr Shirriff, a former ING Asia-Pacific CEO, had been on the board since 1986.