Steadfast is anticipating higher earnings after record premiums sparked by a hardening rate environment fuelled a 37% rise in net profit to $103.8 million in the year to June 30.

Recent acquisitions also contributed to the strong results.

The broker network is targeting underlying net profit of $100-110 million and underlying earnings before interest, tax and amortisation (EBITA) of $215-225 million in the current financial year.

If achieved, the results would better the 19% rise in underlying net profit to $89.2 million and 17.8% jump in underlying EBITA the business reported for the last financial year. The results fall within the revised guidance set last October by the group.

“We are looking at [2019/20] … the major assumptions are that our strategic partners continue to drive moderate premium price increases,” MD and CEO Robert Kelly said.

“I think we would definitely be able to say that they are definitely going to be in the 5-7.5% range, which is pretty good when you consider what has been going on for the past 18 months.”

The earnings targets also take into account the previously announced bid in June for Insurance Brokers Network Australia (IBNA). Steadfast is expecting a minimum 80% acceptance rate from IBNA members, which would involve up to $70 million of scrip to be issued.

The Steadfast Network achieved a record $6.1 billion in gross written premium (GWP) last financial year, up 16%. The underwriting agencies arm also brought in a record performance, with GWP rising 28% to a record $1.2 billion.

“It was a strong performance in line with our upgraded guidance,” Mr Kelly said in an earnings conference call last week.

“This was driven both by organic growth of 10.9% and acquisition growth at 6.9%, with record premiums for both for [the] Steadfast Network and underwriting agencies.”

Excluding the IBNA bid, Steadfast spent about $136 million in the past financial year on new businesses. It bought the remaining 50% stake in Macquarie Pacific Premium Funding, which has since been renamed iQumulate, acquired Community Broker Network from IAG and took on a majority stake in specialist underwriting agency Heavy Motor Insurance Australia.

The business is still on the prowl for more acquisitions, having raised $100 million from an institutional share placement last week.

The funds would be used partly for investing in new brokerages and underwriting agencies.