Steadfast Group’s net profit rose 21% last year to $228 million, boosted by acquisitions and existing businesses as rate increases continued to contribute to stronger revenues. 

Underlying revenue grew 18.9% to $1.68 billion and earnings before interest, tax and amortisation (EBITA) increased 22.7% to $528.5 billion, falling within the guidance range. 

Gross written premium at the Australasian broker networks rose 12.1% to $13 billion, with price increases by insurers across all non-statutory lines and volume increases of about 3%. 

CEO Robert Kelly says the pricing environment remains strong, particularly in property, where insurers are dealing with inflationary pressures. 

“[Of] the main nine insurers we deal with, not one, not one has said to us that they are going to reduce prices; they have actually said the complete reverse, that they have to keep driving rate,” he told an earnings briefing this morning. 

The group’s underwriting agencies generated GWP of $2.3 billion, up 13.4% on the previous year, with underlying EBITA growth of 18.9%. 

GWP transacted on the Steadfast Client Trading Platform rose 20% to $1.4 billion 

Steadfast completed 48 “earnings-accretive investments” last financial year for a total of $457.8 million, including ISU Group in the US and underwriting agency Sure Insurance.  

ISU, which has 228 members across 40 US states, exceeded the profit that was expected at the time of purchase. The business has been renamed ISU Steadfast. 

“It is a long-term strategy for Steadfast, but we are pleased with how things are going both strategically, financially and operationally in the first 10 months of ownership,” international CEO Samantha Hollman said. 

Steadfast is targeting $300 million of acquisitions this year and continues see opportunities from its trapped capital program in Australia. 

Mr Kelly says the group takes a disciplined approach to acquisitions and reviewed and rejected close to $1 billion of potential deals over the past year. 

At the briefing, Mr Kelly was asked whether the introduction from next July of prudential standard CPS 230 could lead to acquisition opportunities in underwriting agencies, which will be affected by the changes, along with insurers. 

He said pressure is likely to come onto smaller agencies, with impacts more obvious closer to when the standard is due to start, but affected businesses may not be agencies Steadfast would want to acquire.

“There’s some opportunities that may come forward. You have to be very circumspect when you get an opportunity like that to understand what you are picking up.” 

Steadfast has forecast group underlying net profit of $290-$300 million this year and EBITA of $590-$600 million.

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