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#ASX Announcements
stale
Added one year ago

Earnings upgrade, should have followed my own advice and bought, up over 35%. Looked cheap, thematic right, oh well.

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#Bull Case
stale
Added one year ago

The following is a part extract from this mornings ASX release which was a little more positive than anticipated.

I've added at current share price as imo I see this as a value buy with growth upside.

Upgraded and Updated Earnings Guidance for FY23 AUB Group Limited (AUB) today announced that, as a result of strong Q1 FY23 trading and completion of the Tysers acquisition on 30 September 2022, it is updating guidance for FY23.

FY23 underlying net profit after tax (UNPAT) guidance for AUB, including Tysers and Group debt costs, is expected to be in the range of AUD107.5mn to AUD115.0mn, representing growth of 45.2% to 55.4% over FY22.

AUB’s FY23 UNPAT (excl Tysers and cost of debt) is expected to be in the range of AUD90.0mn to AUD92.0mn, representing 21.6% to 24.3% growth over FY22.

Previous FY23 UNPAT guidance announced to the market on 24 August 2022 was in the range of AUD86.0mn to AUD91.0mn.

Additionally, following completion of the Tysers acquisition on 30 September 2022, AUB announced that Tysers is expected to contribute UNPAT in the range of AUD45.0mn to AUD52.5mn for the nine months to 30 June 2023. 

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#Business Model/Strategy
stale
Last edited 2 years ago

A little bigger than what is preferred by the Strawman community but this seems to be an attractive place highlighted by a few fund managers - AUB and SDF.

The reason it is attractive is as brokers they take a clip of the premium, so higher premiums are good. We are in a premium hardening cycle for most types of insurance and the increased prevalence of natural disasters seems to be a tailwind. They take no underwriting risk as brokers. The factor that perhaps may weigh on premium increases in the future, is higher bond rates so insurers may start to lower premium increases as they are finally being compensated with a return on their float.

AUB looks quite attractive with management guiding for underlying NPAT of $86M to $91M in FY23 excluding the Tyser acquisition. If we look at Tysers acquisition multiple of 12x EV/EBITDA and a $880M purchase price we make a few adjustments can expect Tysers to contribute about $45M in NPAT if it was for a full year.

Taking the lower of guidance of $86M plus $45M equals $131M in NPAT. Noting that Tysers acquisition isn’t complete so won’t contribute for the full year (likely only get 6 months in FY23).  EV of $1.8B with potential derferred consideration for Tyers of $187M. Lets be conservative and call it $2B EV so looking at about NPAT/EV multiple 15.2x for a relatively defensive business if you annualise Tysers earnings.

Looking to keep the same dividend payout ratio of 50-70% of NPAT. Using the lower payout ratio of 50 %of NPAT looking at 3.3% fully franked (conservative) with plenty of growth - both organic and inoranic - ahead. Those who just want income and some growth it may be worth a look.

I’d note Morningstar has a fair value of $28 and broker consensus if $27.20 so 35% upside or so from current prices.

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#H1FY21 Results 23/2/21
stale
Added 3 years ago

1H21 Performance Overview

A record 1H21 result that positions AUB Group for another strong year

Summary

  •  Underlying NPAT1 $30.7mn (1HFY20: $21.3mn) up 44.2%.
  •  Underlying earnings per share 41.47 cents up 43.2%.
  •  Mixture of underlying organic and acquisition driven growth primarily in Australian Broking.
  •  Reported Net Profit After Tax $24mn (1HFY20: $16.6mn), up 44.5%.
  •  Fully franked interim dividend of 16.0 cents per share (1HFY20: 14.5 cps), an increase of 10.3%. Dividend Reinvestment Plan (DRP) remains activated.
  •  Excellent results in Australian Broking are a result of recent initiatives that will continue to drive sustainable improvement in revenue and underlying cost drivers.
  •  Accelerating growth in BizCover together with strong progress against FY21 Execution Priorities. 
  • Sale of Altius agreed, completing exit from Health & Rehabilitation Services.
  •  Continued focus to deliver on growth ambitions – Upgraded FY21 Underlying NPAT guidance of $63.0mn - $65.0mn, representing 17.9% - 21.7% growth on FY20.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02344610-2A1282144?access_token=83ff96335c2d45a094df02a206a39ff4

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