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Steadfast off to 'tremendous' start as FY22 gets underway

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Steadfast CEO Robert Kelly says the business has made a “tremendous” start to the current financial year, with estimates showing pre-tax earnings in the first quarter are ahead from the year-earlier corresponding period.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the September quarter is about 13.6% up from 12 months ago, he told shareholders at last Friday’s annual general meeting.

“This is a tremendous start to FY22,” Mr Kelly said. “Since we reported our FY21 results insurers have continued to increase premium rates, and our volumes have increased slightly.”

He says Steadfast Underwriting Agencies continue to outperform with strong organic growth.

Based on the first quarter trading results, Mr Kelly says Steadfast is confident of achieving its previously stated EBITDA guidance of $320-330 million for the year to June 30. It has also reaffirmed its underlying net profit after-tax forecast of $159-166 million.

“For the balance of FY22 we expect further moderate price increases by strategic partners across the market to continue as insurers seek to regain profitability,” Mr Kelly said.

“Our network brokers provide Steadfast with an internal pipeline of acquisition opportunities.

“In August 2021 Steadfast has completed our acquisition of Coverforce, funded via scrip issued to the vendors and an equity capital raising.

“The results from this significant acquisition to date are in line with our expectations.”

Steadfast acquired Coverforce for $411.5 million following a competitive process overseen by an investment bank.