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Insurance arm boosts Johns Lyng’s profit

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Johns Lyng Group today reported a 25% rise in net profit for the year to June 30 to $13.4 million, aided by a strong showing from its insurance building and restoration services (IBRS) arm.

The building services provider’s insurance business recorded a 17.2% rise in revenue to $261 million to take the overall sales income to $335.1 million, up 16.8% from the 2017/18 financial year.

IBRS is one of three divisions that make up the business. It has been enjoying significant growth in the past 18 months, fuelled by a pipeline of post-catastrophe recovery works and contract wins and extensions with major insurance clients.

Business-as-usual activities – the backbone of the IBRS unit – increased 39.9% to $214.8 million and non-recurring recovery works from natural disasters, including the NSW hailstorm and Queensland floods, brought in revenue of $46.2 million.

“We’ve been clear in our message that non-forecast [catastrophe] events are an added bonus to our overall performance, and I think this year’s results underline that point,” CEO Scott Didier said.

“At the same time, we have demonstrated that we have an unrivalled capacity to respond when catastrophic events hit, which is a great reflection of the truly national footprint we have worked hard to build.

“We expect work from both the Sydney hailstorm and Townsville flood to continue into [the current financial year], as is reflected in significant expected job volumes.”

Looking ahead, several key acquisitions and expansions made in recent months will provide additional support to the growth of the IBRS business, Johns Lyng says.

This month the business bought a controlling stake in Sydney-based strata and facilities management business Bright & Duggan. It also acquired US restoration group Steamatic in April and bought a 56.6% equity stake in Dressed for Sale, a pre-sale residential property staging and styling business in February.

(The acquisition of Texas-based Steamatic will not affect the Australian company of the same name. Owner and CEO Oliver Threlfall has previously said Steamatic in Australia uses the brand under licence, and that Johns Lyng’s ownership of the US company will have no direct effect on his operations.)

In February Johns Lyng also launched a dedicated division to focus on building and restoration repairs for strata insurers.

“Of equal significance is the progress we made in executing our growth strategy during the year,” Mr Didier said.

“We were pleased to announce a series of new contract wins and extensions with major insurance clients… and we have announced three strategic acquisitions that will add value to the broader group.”

The company’s insurance clients include Chubb, CHU, IAG, Hollard, QBE, Zurich, Suncorp, Vero, Youi and RACWA Insurance.