AUB says its MGA Whittles and BizCover acquisitions will drive increased profits this financial year and will bring advantages to the group that will unlock future earnings potential.

MGA Whittles, which AUB is acquiring for $140 million, has a 9% compound annual growth rate in revenue and operates at a significantly higher profit margin than the rest of Austbrokers, CEO Mike Emmett said last week.

Other portfolios will be added to MGA, either from within the group or as bolt-on purchases are made, to further increase its scale.

AUB has also bought 40% of online commercial insurance platform BizCover for $132 million. The business is focused on micro-SME clients, offering a complementary segment to AUB as well as opportunities to provide further services as those clients grow.

“There is significant latent potential in AUB’s network of businesses and the acquisition of MGA Whittles and BizCover will enable us to unlock this potential,” Mr Emmett said.

AUB has raised its full-year adjusted net profit guidance to growth of 16-18%, from the previous 8-10% outlook, with acquisitions accounting for the majority of the increase, while improvements in existing operations also contributed.

First-half adjusted net profit rose 25.3% to $21.3 million as its largest division, Australian broking, benefitted from a 6.2% rise in commercial premiums.

Including non-cash accounting adjustments and acquisition costs, net profit fell 16.3% to $16.6 million while revenues rose 12% to $162.9 million.

Australian broking reported a 12.6% rise in profit to $24.6 million, with commission and fee income rising, while interest income fell due to Reserve Bank of Australia rate cuts

The New Zealand division’s profit rose 55.2%, bolstered by last year’s BrokerWeb Risk Services purchase, but AUB says premium rate growth flattened toward the end of the first six months.

Agencies and health and rehab earnings also rose during the half compared to a year earlier.