Steadfast is pursuing underwriting acquisitions and investigating a move into retail lines.

MD Robert Kelly told today’s half-year results briefing the broker group is on target to meet prospectus forecasts after delivering an 8% profit increase to $14.5 million for the six months to December 31.

Revenue grew 7% to $73.6 million. The figures assume its acquisitions for the August initial public offering (IPO) are included for the full six months.

Mr Kelly says Steadfast’s “acquisition pipeline” remains strong and the group has about $120 million available.

He expects acquisitions this financial year to be “almost exclusively in underwriting”, with several niche players on the radar. There is also interest from brokers who decided not to sell their businesses into the stock market float while they waited to see how the company performed.

“We have pretty strict criteria,” Mr Kelly said, revealing Steadfast has rejected three propositions in the past four months. “We are not afraid to walk away from a deal if it does not suit us.”

He says direct insurers have made good profits in retail lines since prices increased following the 2011 floods and “we are looking at that sector in terms of seeing if there is an opportunity for brokers to play in that area”.

Steadfast brokers wrote gross written premium (GWP) of $2.08 billion in the six months, up 9% on the corresponding period in 2012.

About 3.7% of GWP growth came from price, 3.2% from volume growth and 2.1% from new brokers.

Mr Kelly says the increase “reflects the resilient SME market where our business is focused, and is in line with our market outlook for the financial year”.

CFO Steve Humphrys says the hub strategy, now in place in Sydney, Melbourne, Brisbane and Perth, is delivering significant cost savings in areas such as accounting and IT and is expected to give brokers a 7% profit increase from next financial year.

Mr Kelly says discussions on hubs are under way in other major cities but the group has focused on hubbing brokerages that are most keen.