AUB Group Earnings: Growth Not Exhausted but Expected to Slow

Reliable performer AUB Group’s double-digit pretax profit growth across all divisions is impressive. Higher insurance premiums are an industrywide tailwind, with bolt-on acquisitions and operating leverage boosting earnings growth. At a group level, revenue increased 36%, and EBIT margin expanded 120 basis points to 32.5%, resulting in pretax profit up 54%. Full-year underlying net profit after tax guidance is upgraded to AUD 161 million–AUD 171 million, from up to AUD 164 million previously. Our prior forecast of AUD 168 million viewed guidance as conservative, and after the first-half result, we modestly increased our forecast to AUD 172 million, up 33% on last year. Margins in New Zealand and agencies expanded faster than expected, also prompting a modest uptick in our medium-term forecasts. Acquisitions contributed roughly half the profit growth in the first half, but some are already in the second-half fiscal 2023 numbers, meaning growth rates will not be as big in the latter half of fiscal 2024.