Austbrokers increased profit by 20% to $25.64 million for the year to June 30 on contributions from acquisitions in the underwriting agencies business and growth in the broking network.

The company says despite an uncertain economic outlook, it expects underlying profit growth of 5-10% this financial year as its agency and broker operations expand.

Revenue from ordinary activities rose 9.7% to $125.43 million, while expenses were up 7% to $88.25 million.

Austbrokers says conditions were tough for small-to-medium enterprises and some clients were lost through insolvencies.

“While premium rates increased during the year, the increases were largely confined to property classes, with liability rates either flat or slightly down, resulting in only moderate increases overall,” it said in a statement.

The company says it will continue to grow via acquisitions and by working with its broker partners to develop their businesses. But it warns competition for acquisitions “appears to be increasing, with other parties entering the market”.

The result included profits from the sale of shares in associates and controlled entities, plus a tax credit.

Austbrokers says if such one-off items were excluded, its underlying after-tax profit would be $27.4 million, up 15%.

The company says the acquisitions of CEMAC last year and the Film Insurance Underwriting Agency in January boosted the result.

The acquisitions of Country Wide Insurance Brokers in April and Dittman & Associates in January contributed $500,000 after acquisition costs.

Growth in the broker network, including from bolt-on acquisitions, contributed 8.5% to overall profit growth.

Premium funding income grew by 16% but profit commissions fell 49% due to the higher losses experienced by insurers last year.

CFO Steve Rouvray told insuranceNEWS.com.au the decision to increase the full-year dividend by 21.6% to 31 cents, with a final dividend of 21.5 cents fully franked, was made to bring the figure into line with the increase in profit.