The AUB Group Ltd (ASX: AUB) share price is rising higher amongst a sea of red on the ASX this morning following the release of its half-year FY20 results.
At the time of writing, AUB shares are trading 2.47% higher at $13.26 per share.
What did AUB report?
AUB, Australasia's largest equity-based insurance broker network, reported a 25.3% increase in adjusted net profit after tax (NPAT) to $21.3 million, up from the $17 million recorded in the prior corresponding period (pcp).
On an adjusted basis, the company reported that earnings per share increased to 28.96 cents per share. This was an increase of 12% over the pcp, however, it did include increased share capital on issue following the equity capital raising that the company undertook back in late 2018.
AUB's reported NPAT came in at $16.6 million, which was a decrease of 16.3% compared to the pcp primarily due to non-cash accounting adjustments as well as acquisition costs.
Divisional results
In its Australian Broking division, AUB recorded a 12.6% increase in pre-tax profit to $24.6 million. The company noted that organic growth of this division was assisted by an increase in commercial lines insurance premiums which averaged 6.2% over the period.
New Zealand Broking saw a 55.2% increase in pre-tax profit to $4.9 million. Here, the company noted that the acquisition of an additional 50% of BrokerWeb Risk Services (BWRS) effective from the beginning of 2019 was a significant contributor to this increase.
AUB's Agencies division increased its pre-tax profit contribution by 8.8% to $5.5 million, while there was 24.8% increase in pre-tax profit from its Health & Rehabilitation division, which came in at $1.8 million.
AUB declared a fully franked interim dividend of 14.5 cents per share (cps), up from 13.5 cps in 1H19. This interim dividend is payable to shareholders on 3 April 2020.
Commenting on the results, AUB CEO and Managing Director, Michael Emmett, said:
"We are pleased by the improved performance across the business. A strong improvement in Health and Rehabilitation has complemented the performance in Broking and Agencies. In addition, the inclusion of BWRS (balance acquired on 1 January 2019) in 1H20 results significantly grew AUB New Zealand profits."
FY20 outlook and guidance upgrade
AUB has upgraded its guidance, commenting that it now expects adjusted NPAT growth of between 16% and 18% for FY20.
The company further noted that 1H20 performance has been positive, with the company making significant progress to realise internal organisational efficiencies and to implement its current strategic initiatives. This positive performance, as well as major recent acquisitions, is what has upgraded AUB's view.
