Aub Group Limited · ASX:AUB
Aub — Austbrokers Holdings — H1 2008 Earnings Presentation
23 slides from Aub's earnings presentation, Feb 28, 2008
Slide 1: Cover letter to ASX: Half Year Results Presentation
28th February 2008 For personal use only The Manager Australian Stock Exchange Company’s Announcement Office Level 6, Exchange Centre 20 Bridge Street Sydney, NSW 2000 Dear Sir or Madam, Re: Austbrokers Holdings Limited Presentation - Half Year Results Further to the company’s release today on its r
Slide 2: First Half Year 2008 Results Presentation
For personal use only AUSTBROKERS HOLDINGS LIMITED First Half Year 2008 Results Presentation Thursday 28th February 2008 1
Slide 3: Agenda
Agenda For personal use only • Overview – Business Overview – First HY 2008 Business Highlights – First HY 2008 Financial Highlights • First HY 2008 Financial Performance • FY 2008 Outlook 2
Slide 4: Business overview
Business overview For personal use only • Austbrokers is one of top four insurance broking networks in Australia – Client base of over 250,000 – Over 1,200 personnel engaged in the business – Over $1 billion in premiums placed 3
Slide 5: Business overview (con't)
Business overview (con’t) For personal use only • Insurance Broking owner-driver model – 39 member broker firms • 24 50% owned • 13 51% - 80% owned • 2 100% owned • Underwriting agency business – Entities are authorised to write business on behalf of licensed insurers – no underwriting risk – Austag
Slide 6: First HY 2008 Highlights
First HY 2008 Highlights For personal use only • Acquisitions Direct • Premium Funding – 50% of Strathearn Insurance Brokers – Perth, – Continuing promotion and development of Joint Brisbane, Sydney Venture with Pacific Premium Funding (GE – 50% of Rivers Insurance Brokers – Cairns, Brisbane, Compan
Slide 7: Profit Growth Half Year to December 2005 - 2007
Profit Growth Half Year to 31 December 2005 - 2007 For personal use only 7000 6000 5000 4000 Profit $M 3000 2000 1000 0 2005 2006 2007 Profit – Net profit after tax before amortisation of intangibles before profits on businesses / portfolios sold (Adjusted NPAT) 6
Slide 8: First HY 2008 financial performance
First HY 2008 financial performance For personal use only Actual Actual $’000 First HY First HY % change 2008 2007 Broker Revenue (net of commission 85,722 66,835 28.3% paid) Brokers & Agencies Profit 12,800 48.0% 8,646 (AHL share) Profit (before tax and amortisation of 9,451 6,389 47.9% intangibles
Slide 9: Agenda
Agenda For personal use only • Overview • First HY 2008 Financial Performance: – Income statement – as per ASX reporting – Reconciliation to Adjusted NPAT – Profit and loss statement – detailed – Balance sheet – Other financials • FY 2008 outlook 8
Slide 10: Income Statement
Income Statement For personal use only FOR THE HALF-YEAR ENDED 31 DECEMBER 2007 Consolidated 6 months ended 6 months ended December December 2007 2006 Notes $'000 $'000 Revenue 4 (i) 31,461 27,263 Other income 4 (ii) 2,826 3,011 Share of profit of associates 4 (iii) 5,630 3,410 Other expenses 4 (iv)
Slide 11: Profit after tax reconciliation
Half Year to 31 December For personal use only Profit after tax Reconciliation of reported result to operating NPAT before profits relating to divestments and amortisation of intangibles. First HY First HY Actual 2008 Actual 2007 $ ‘000 $ ‘000 Reported Profit attributable to members 5,853 4,677 Prof
Slide 12: Half Year to December profit and loss detail
Half Year to 31 December For personal use only HY TO HY TO 31 VARIANCE VARIANCE $'000 31-Dec-07 31-Dec-06 %'000 % CONSOLIDATED BROKERS COMMISSION AND FEES 23,863 21,568 2,295 10.6% LIFE INCOME 2,233 1,742 491 28.2% PROFIT COMMISSIONS 677 451 226 50.1% PREMIUM FUNDING 1,708 1,577 131 8.3% INTEREST 1,
Slide 13: First HY 2008 compared to First HY 2007
First HY 2008 compared to First HY 2007 For personal use only • Adjusted NPAT for First HY 2008 at $6.5 million – Adjusted NPAT excludes $0.3 million profits on sale of businesses (tax credit) and $0.9 million amortisation of intangibles expense – Exceeded prior period adjusted NPAT by $1.8 million
Slide 14: First HY 2008 compared with First HY 2007
First HY 2008 compared with First HY 2007 For personal use only • In 2007 FY the First Half profit represented 35% of the full years profit – expected move to approximately 42% in FY 2008 due to: – First time increase of earnings from FY 2007 acquisitions largely cease in second half – Likely reduct
Slide 15: Insurance Broking Income Analysis
First HY 2008 compared with First HY 2007 For personal use only Insurance Broking Income Analysis • Total insurance broking income up approximately 9% on 2007 (excluding acquisitions) • Premiums placed (excluding acquisitions) up approximately 5% on 2007 (2006 down 2.2%) • Insurance broking commissi
Slide 16: Broker profits as % of broker income
Broker profits as % of broker income For personal use only Brokers Profits (before tax) as a percentage of Broker Income* 2008 First HY 25.2% 2007 First HY 19.2% * Constitutes commission (net of subagents commission), fees and other income Improvement due to recent acquisitions and increases in brok
Slide 17: Balance sheet
Balance sheet For personal use only 31 Dec 2007 30 June 2007 Assets $000 $000 Current Assets Cash at Bank 20,910 25,250 Cash at Bank – Trust 32,342 32,912 Receivables 37,302 55,417 Broker Loans 2,322 4,055 Held for resale 1,022 Total Current Assets 92,876 118,636 Non Current Assets Receivables 324 8
Slide 18: Balance sheet (cont)
Balance sheet (cont) For personal use only 31 December 2007 30 June 2007 Liabilities $’000 $000 Current Liabilities Payables 74,417 89,241 Tax Liabilities 2,554 1,307 Provisions 4,227 3,562 Interest bearing loans and borrowings 344 404 Total Current Liabilities 81,542 94,514 Non current liabilities
Slide 19: Other Financials
Other Financials For personal use only Funding • Interest Bearing Liabilities – $16 million at holding company level – $4 million in subsidiaries • Undrawn bank facility at 31 December – $14 million • Estimated $9 million committed for future payments for completed acquisitions payable 2008 – 2009 •
Slide 20: Agenda
Agenda For personal use only • Business Overview • First HY 2008 Financial Performance • FY 2008 Outlook – Market conditions – Strategy – Outlook 19
Slide 21: Market conditions
Market conditions For personal use only • Premium rates – Market conditions unaltered – Indications from some underwriters of need for premium rate increases – Premium rate movements will vary across classes • As market conditions improve, organic growth from network initiatives should emerge • Curr
Slide 22: Strategy
Strategy For personal use only • Growth – acquisition activity to continue – business development – cross marketing – marketing initiatives implemented to increase cross sell of insurance products • Back office synergies and efficiencies – transfer of brokers to central IT DataCentre, mergers, centr
Slide 23: Outlook
Outlook For personal use only • Market conditions not expected to change in the short term • Insurance broking industry consolidation – continuing acquisition opportunities • Organic growth expected to continue to emerge through broker network initiatives • Acquisitions (after funding costs) to date