Cluster group Austbrokers has reported an encouraging start to the new financial year, and expects stable rates to prevail for the remaining three quarters of 2008/09.

CEO Lach McKeough told last week’s Austbrokers AGM he expects continued business growth.

“Inflationary pressures have meant sums insured have been increasing and this environment has been favourable for the broking industry,” he said.

“The soft premium rate environment of the past few years has moderated, with rates firmer. But increases have not been large; nor are they across all classes of income.”

Austbrokers banked $14.3 million in net profit during fiscal year 2008, a 14% increase on last year. Acquisitions were responsible for just over half the 29% increase in the company’s share of profits.

The cluster group is likely to continue its recent run of acquisitions. Since June Austbrokers has acquired or increased stakes in six portfolios, including 50% of SRG Corporate.

“The broker market will continue to consolidate and opportunities to make acquisitions will arise,” Mr McKeough said. “These may be more the portfolio or bolt-on business for existing members than stand-alone.”

But he admitted declining interest rates, uncertain broker profit commissions and broad economic conditions could all dampen future earnings.

Austbrokers is still confident it will reach its forecast net profit of 5-10% for the present financial year.