How Did AUB Group Achieve 171% Profit Growth in FY25?

Robust Financial Growth Amid Strategic Expansion

AUB Group Limited (ASX, AUB) has unveiled its full-year results for the 12 months ending 30 June 2025, showcasing a significant leap in financial performance. The group reported a 12% increase in revenue, reaching $1.17 billion, while underlying net profit after tax (UNPAT) soared by 171% to $200.2 million. This remarkable growth was driven by a combination of organic expansion and targeted acquisitions, reinforcing AUB’s position as a leading insurance broking and underwriting agency group.

The company’s profit after tax attributable to members rose by 31% to $180 million, reflecting operational excellence and strategic execution. The board declared a fully franked final dividend of 66 cents per share, complementing the interim dividend of 25 cents, resulting in a total dividend of 91 cents per share, a 15.2% increase over the prior year. This dividend payout aligns with a sustainable payout ratio of 53% of UNPAT, balancing shareholder returns with capital flexibility.

Strategic Acquisitions and Operational Highlights

During FY25, AUB Group completed several key acquisitions, notably Pacific Indemnity Underwriting Solutions Pty Ltd and Movo Ins Brokers Holdings Limited, which have bolstered the group’s capabilities in professional lines and expanded its footprint in the UK market. The integration of these acquisitions, alongside organic growth initiatives, contributed materially to revenue and profit increases across all operating divisions.

Australian Broking saw an 8.4% revenue increase and margin expansion, while the Agencies division delivered a 25.1% revenue uplift and a 30% increase in pre-tax profit. BizCover, the group’s digital SME insurance platform, maintained strong momentum with a 15% revenue growth and margin improvement. International operations, anchored by the acquisition of Tysers, reported double-digit EBIT growth, with UK Retail premiums tripling to £340 million.

Capital Strength and Risk Management

AUB Group’s balance sheet remains robust, supported by $375 million in cash and undrawn debt facilities as of 30 June 2025. The group’s leverage ratio stood at 1.97x, reflecting prudent capital management amid ongoing acquisition activity. The company’s risk framework continues to evolve, with a strong emphasis on climate-related risks, cyber security, and regulatory compliance. ESG initiatives remain a strategic priority, with the group maintaining an industry-leading governance rating and advancing diversity and inclusion goals.

Executive Remuneration and Governance

The board welcomed Tonianne Dwyer as a new Non-Executive Director, bringing extensive governance and corporate finance expertise. Executive remuneration remains closely aligned with performance, with 100% vesting of FY23 long-term incentives reflecting outstanding results. The remuneration framework balances fixed and at-risk components, incentivising sustainable growth and shareholder value creation.

Outlook

Looking ahead, AUB Group projects underlying net profit after tax for FY26 to range between $215 million and $227 million, representing growth of 7.4% to 13.4%. The group plans to continue expanding its UK Retail platform and optimize the performance of its Wholesale operations. While premium rate moderation in some markets is noted, management remains confident in navigating pricing dynamics through strategic levers.