Steadfast Group Limited (SDF)
BUY

Ready Steady

 22 Feb 2023
Sector: Financials

1H23 RESULT

Need To Know

  • A solid result with a strong EBITA growth (+22.5%)
  • Guidance upgraded in prior week, which implied ~4% upgrade for 2023 market estimates
  • Re-iterate Buy rating

Result Highlights

Revenue was A$663m, 4% ahead of market.  

EBITA of A$188.6m, 3% ahead of the market. 

EBITA Growth of 22% driven by mix of organic growth (+9%) and non-organic growth (13%). 

Net profit after tax (NPAT) A$90.2m, 5% beat on market. 

EPS 9.06cps (up 7.7% vs 1H22).

DPS was 6cps (15% growth on 1H23). 

Guidance Upgrade (Pre-Released 13 Feb 2023)

Investment View

A strong 1H23 result. The result is driven by a strong mix of organic and non-organic EBITA growth. We expect that this growth will continue into 2H FY23 due to the robust rate environment as well as the continued investment in non-organic opportunities. 

Expansion was seen in the Steadfast Client Trading Platform (SCTP) area of the business with transacted Gross written premiums (GWP) growing 22% over the period, demonstrating stronger growth than across broking/agencies. 

Guidance upgrades were pre-released last week so it’s unlikely we will see much of a share price reaction today. The outlook for FY23 remains positive and SDF with rate tailwinds expects to continue further into 2H23. 

We maintain our Buy Rating. 

Figure 1: EBITA organic and inorganic growth breakdown. 

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Stock Overview

Share Price

Company Overview

SDF is an Australian insurance company offering both business and personal insurance products through insurance brokerages and underwriting agencies.

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