Insurance broker steadfast with profits

One of the biggest companies to float on the stock exchange this year, Steadfast Group, has posted profits slightly ahead of its targets and reaffirmed its guidance.

After listing on the ASX earlier this month, the commercial insurance broker on Friday reported adjusted profits of $28.1 million, compared with $27.2 million forecast in its prospectus.

The numbers assume that various acquisitions of small brokers, which were only completed this month, have contributed to the bottom line for the full year.

On a statutory basis it posted a $13.4 million loss, after incurring $23.8 million in costs relating to its initial public offering. This is a slightly better result than the $15.7 million statutory loss forecast in its prospectus. Gross written premium placed by its network of 280 brokers around the country rose about 10 per cent to $4 billion.

While recent ASX debutante iSelect has suffered a sharp fall in its share price since floating in June, and this week failed to hit revenue targets, Steadfast has performed solidly for investors so far.

After a strong debut in which its stock jumped nearly 25 per cent to $1.42 on its first day, it has remained near this level and was trading at $1.40 after the result on Friday.

Chief executive Robert Kelly reaffirmed guidance of earnings before tax interest, tax depreciation and amortisation of $60.6 million for this financial year. The growth outlook assumes the broker will achieve revenue growth of 5 per cent and not make any further acquisitions this year.

"The IPO listing follows 17 years of building Steadfast Group in Australia's largest broker cluster group and enables us to be an acquirer of insurance brokers, underwriting agencies and a series of ancillary businesses," Mr Kelly said.