NIB Holdings Limited (ASX: NHF) shares are starting the week strongly following the release of its FY 2025 results this morning.
In afternoon trade, the private health insurer's shares are up 4% to $8.01.
At one stage, the ASX 200 stock was up as much as 7% to a 52-week high of $8.26.
ASX 200 stock jumps on results day
For the 12 months ended 30 June, NIB reported a 7.8% increase in group revenue to $3.6 billion.
This reflects a 7.3% increase in Australian residents health insurance (ARHI) revenue, a 14.4% jump in international inbound health insurance revenue, and an 8.1% lift in NZ revenue.
And while NIB's group underlying operating profit (UOP) was down 7.1% in FY 2025 to $239.2 million, this was in line with its guidance.
A key driver of this decline was its ARHI UOP, which was down 4.6% year on year to $217.8 million as margins were guided toward NIB's target range of 6% to 7% with a reported net margin at 7.3%.
Claims inflation in AHRI was 4.5% (4.9% including NSW bed rate changes). Management notes that it continues to be well managed while enhancing the member and provider value proposition. Whereas net policyholder growth in FY 2025 was 3.2%
Despite the UOP decline, the NIB board elected to maintain its full year fully franked dividend at 29 cents per share.
Management commentary
The ASX 200 stock's managing director and CEO, Ed Close, was pleased with the company's performance. He said:
Overall, our core business performed strongly. During the year, we stated that our focus would be our engine-room of growth, which is our private health insurance business in Australia and New Zealand, and delivering value to customers. We have taken further action in New Zealand, where conditions have been difficult. nib's adjacent business lines continue to build momentum, contributing $45.3 million in underlying operating profit while delivering value back to our core PHI businesses.
Outlook
No earnings guidance has been provided for FY 2026. However, management has laid out a few targets for the year ahead.
It will target above-system ARHI net policyholder growth of ~3%, and a stable full year underlying net margin in the 6% to 7% range.
Management also notes that its international students and workers business is expected to continue contributing strongly to group UOP, while New Zealand is on track for full-year profitability, supported by a well-progressed claims recovery plan.
Elsewhere, in non-private health insurance, NIB Health Services is targeting full-year profitability in FY 2026, with NIB Thrive targeting ongoing growth and further operating efficiencies.
Mr Close commented:
We are ambitious about increasing sector participation, providing value for customers, delivering further productivity gains and driving consistent performance across our business.
