Takeover Looms as AUB Navigates Board Changes and Market Challenges

Strong Financial Performance Anchors FY25

AUB Group Limited (ASX, AUB) reported a standout financial year ending June 2025, with underlying net profit after tax (NPAT) climbing 17.1% to $200.2 million. This result not only surpassed the company’s guidance but also reflected disciplined execution amid mixed macroeconomic conditions. Earnings per share rose 9.5% to 171.75 cents, underscoring operational leverage and sustainable shareholder returns.

The company declared a fully franked final dividend of 66.0 cents per share, bringing the total dividend for FY25 to 91.0 cents, a 15.2% increase from the prior year. This dividend growth signals AUB’s confidence in its cash flow and capital position, supported by $375 million in cash and available debt facilities.

Strategic Growth and International Expansion

AUB’s growth story is anchored in a multi-pronged strategy combining organic expansion, targeted acquisitions, and international market penetration. The Australian broking division benefited from portfolio simplification and equity partnerships, driving revenue and margin improvements. The BizCover platform continued its upward trajectory through technology innovation and product enhancements.

Internationally, AUB made significant strides in the UK retail broking market through investments in Momentum and Movo, boosting premiums from approximately £110 million to £340 million within a year. The Agencies division also exceeded premium targets, notably with the acquisition of Pacific Indemnity, strengthening its professional lines portfolio. Tysers, the Group’s international wholesale and retail broking platform, is being positioned for scale and efficiency through leadership and structural enhancements.

Board Changes and Corporate Governance

The year saw notable changes at the Board level, with the appointment of Tonianne Dwyer as a Non-Executive Director and Chair of the Audit and Risk Committee. Dwyer brings extensive experience from ASX-listed companies and international markets. Meanwhile, long-serving directors David Clarke, Cath Rogers, and Richard Deutsch retired, marking a generational shift in governance.

Takeover Proposal Adds Market Intrigue

AUB disclosed a confidential, non-binding indicative proposal from EQT to acquire the company at $45 per share via a scheme of arrangement. This proposal has evolved into a consortium bid with CVC joining EQT, extending exclusivity to December 4, 2025. While due diligence and negotiations continue, the Board remains focused on maximising shareholder value and cautions that there is no certainty the transaction will proceed.

Outlook and FY26 Priorities

Looking ahead, AUB maintains a positive outlook for FY26, forecasting underlying NPAT growth between 7.4% and 13.4%, with earnings per share expected to rise to between 184.41 and 194.70 cents. The company plans to prioritise portfolio optimisation in Australia, scale its agencies, expand New Zealand market share, and accelerate international growth, particularly in UK retail and Tysers’ wholesale capabilities. Technology investments, including the rollout of Aurora and Lola platforms, will underpin productivity and client retention.

Despite industry chatter about premium rate moderation, AUB reports continued premium increases in Australia and New Zealand, supporting its optimistic guidance. The company also reaffirmed its commitment to ESG principles, achieving recertification as a ‘Great Place to Work’ and maintaining a premium retention rate of 94%.