Steadfast first-half earnings have jumped after stronger pricing boosted the broking and underwriting agency divisions and as the company continues to pursue acquisitions.

Underlying net profit increased 26.4% to $76.3 million while revenue rose 19% to $520.9 million in the six months to December 31.

The company, which raised its full-year guidance, bought Coverforce during the half and completed 18 acquisitions under a program targeted at network brokers seeking to sell equity.

“Our underlying earnings growth for the period was again driven by sustained organic growth in the group’s insurance broking and underwriting agencies and our prudent acquisition strategy,” CEO Robert Kelly said today.

“The Coverforce acquisition in late August and other network broker acquisitions, including those from our trapped capital project, are performing in line with expectations.”

Mr Kelly says the Steadfast acquisition model involves buying successful businesses with strong management teams. The integration of Coverforce has been seamless and strong interest continues from brokers looking to participate in the trapped capital project, he says.

Steadfast network brokers delivered gross written premium (GWP) of $5.2 billion, up 15.6% in the half, with price increases across all lines. Commercial lines accounted for 87% of GWP and retail 13%.

The network totalled 434 brokers, comprising 361 in Australia, 54 in New Zealand and 19 in Singapore at the end of December.

Mr Kelly says $458 million in GWP was transacted through the Steadfast Client Trading Platform, up 31.6%, with the total trending towards an annual $1 billion.

Underwriting agencies GWP rose 16.3% to $852 million, supported by pricing and volume. Underlying earnings before interest, tax and amortisation rose 21.5% to $68.9 million as the division exceeded expectations.

Mr Kelly told an analysts’ briefing that 25 of the 27 agencies “absolutely shot out the lights” in their performance, while Sports Underwriting was affected by covid and smaller strata specialist QUS by capacity issues.

Asked about regulatory reviews that could affect strata, Mr Kelly said Steadfast had commissioned an independent report from consultant John Trowbridge on remuneration and delivery of services in the sector. The report could be completed in the next five or six weeks.

Steadfast has assumed the responsibility to take a closer look, alongside other parties in strata, as more properties are built, while climate change and severe weather events are having an impact, and sometimes erroneous information is circulated, he says.

“Why we are doing this review of the remuneration is to actually be ahead of the game,” he said.

Mr Kelly today also pointed to opportunities from the international unisonSteadfast business and said the Steadfast Risk Group, one of its complementary businesses, is providing additional tools and solutions in the context of a higher pricing environment, and has expanded in captives and mutuals.

Steadfast upgraded guidance for full-year underlying net profit to $163-170 million, compared to the original range of $159-166 million.

Underlying earnings before interest, tax and amortisation is expected to reach $330-340 million, compared with an earlier $320-330 million.

Steadfast statutory net profit in the first half rose from $73.4 million to $104.9 million including a boost from its investment in Johns Lyng Group.