Austbrokers profit up 60.7% for 2013

Austbrokers Holdings (ASX: AUB) reported full-year 2013 earnings yesterday, pushing top and bottom lines into double-digit territory. In the last year, the insurance broking services company increased sales 34% to $168 million, although its gross margins contracted slightly due to a larger 37.9% increase in expenses.

The company benefited from a $12 million carrying value increase that pushed its profit before tax up 57% to $58.7 million. After tax and other adjustments, things look even better for investors: net profit attributable to shareholders soared 60.7% over the last year to $41.2 million. The corporation also doled out 14.5% more dividends in 2013 than 2012 – a total of $0.355 per share.

Profit growth came primarily from Austbrokers’ insurance broking network, although underwriting agencies cushioned the bottom line through acquisitions and start-up businesses. Corporate expenses from the likes of IT investment, administrative costs, and variable incentive costs sliced off 5.2% of potential profit growth, while lower taxes added back 2.2%.

2013 was a boom year for Austbrokers, with $40 million in acquisitions and a 62% jump in share prices. Looking ahead, the company expects to cool off slightly with lower interest rates and an increasing focus on building out existing strengths. 2014 Adjusted net profit after tax is expected to clock in around 5% to 10% higher than this year.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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