Brought to you by:
Liberty Specialty Markets
Liberty Specialty Markets

Steadfast earnings ‘remain strong’ despite virus

Facebook Twitter LinkedIn Google

Steadfast Group said today in a trading update its business is performing well despite the significant impact of the coronavirus outbreak on the Australian economy.

Earnings before interest, tax and amortisation (EBITA) in April, which represents the first full month of COVID-19 restrictions, is in line with its pre-virus expectations.

“EBITA for the 10 months to April remains strong at 21.8% ahead of the same period last year,” the update said. “Premium rates continue to rise, with some small volume reductions in our equity brokers, offset by expense savings.”

Its Steadfast Underwriting Agencies arm continues to outperform with strong organic growth, it says.

The April business update is a first for Steadfast, which had never provided a monthly report until the virus crisis erupted in March. The broker has since announced it will keep investors informed of its trading performance after withdrawing its earnings guidance for this financial year.

Steadfast adds there has been no adverse impact on its working capital position. The business also has an unutilised corporate debt facility of $180 million available to draw on if needed.

The deferred premium offer from some insurers has seen a very low take-up from clients, Steadfast said.

Before the pandemic broke out, Steadfast forecasted an underlying net profit after tax of $100-110 million and EBITA of $215-225 million for this financial year.

The business made $53.2 million in underlying net profit after tax and EBITA of $108.9 million in the December half.