Broking group Austbrokers has shrugged of a gloomy market to post a 17.5% increase in its after-tax profit to $21.4 million for the year to June 30.

The group’s revenue increased 8.2% to $114 million, with the insurance broking network the main contributor. Its Austagencies underwriting business provided “minor input” to the profit.

Austbrokers CEO Lach McKeough says the broking profit growth was due to income growth across the broker network, largely from individual businesses’ growth initiatives, including bolt-on acquisitions.

But direct broking acquisitions by Austbrokers did not contribute to the results “due to their timing and the acquisition costs which are now expensed”.

On the underwriting agencies side, profit growth was mainly driven by the acquisitions of CEMAC and Celestial.

Net profit growth in the second half of the financial year was up 13% on the previous year, compared to a 26% rise in the first half.

“The lower growth rate in the second half was due to the loss of a major account and the fact that the increase in cash deposit interest rates was much less, compared to the first half which resulted in lower interest income growth,” Mr McKeough said.

He says Austbrokers will drive future growth by working with brokers to develop their businesses through marketing initiatives and by continuing the development of the Austagencies business.

It will also look at further bolt-on acquisitions in both broking and underwriting, and expects to post net profit growth of between 5% and 10% for the present financial year.

“The level of the growth will depend on the extent of premium rate increases, the impact of the economy on small and medium enterprises, the level of acquisitions that can be achieved and other variables such as profit shares,” Mr McKeough said.