Insurance broking and underwriting agency AUB Group [ASX:AUB] was falling by 3% in share value today after announcing discrepancies in Underlying Net Profit After Tax (UNPAT) between the first and second halves of FY23.
Last month the insurance company released an upgrade to its earnings guidance for the 2023 financial year at the company’s annual General Meeting. However, since then, the company noted ‘a wide disparity in analysts’ views’ linked to the forecast.
For 2022 so far, AUB Group’s share has dipped 11%, though it’s only just below the wider S&P 200 over the last 12 months.
Source: marketindex.com
AUB Seeks to clarify FY23 UNPAT Guidance ‘Split’
On Monday morning, AUB revealed that its analysts have found inconsistencies in the split between its UNPAT reported for 1H23 and 2H23. This has since cast some confusion over its upgrade to FY23 guidance, as presented at the AGM on 3 November.
Seeking to soften the disparity, the company decided to provide an outline of its expectations for the company’s performance in both the first and second half of 2023 separately.
The following points were based on the preliminary, unaudited financial performance of 1H23 and are subject to the assumptions made in AUB Group’s FY22 results presentation and AGM presentation – as well as expectations of trading for the remainder of the financial year.
These were the company’s main points:
1H23 performance
- ‘AUB Group expects UNPAT in the range of AUD$41.5 million to AUD$44.5 million for 1H23, representing 35.5% to 45.3% growth over 1H22.
- AUB Group 1H23 UNPAT (excl Tysers and cost of debt) is expected to be in the range of AUD$39.0 million to AUD$41.0 millionn, representing 27.4% to 33.9% growth over 1H22.
- Tysers 1H23 UNPAT is expected to be in the range of AUD$11.0 million to AUD$12.0 million for the three months, since acquisition, to 31 December 2022.
- Impact of Corporate Interest expense (interest on group debt including debt for the Tysers Acquisition) is expected to be AUD$8.5 million for the three months to 31 December 2022 (this includes facility arrangement fees and undrawn facility fees).
- AUB Group expects Underlying EPS for 1H23 in the range of 42.9 cps to 46.0 cps representing 4.1% to 11.7% growth over 1H22.’
2H23 performance
- ‘AUB Group expects UNPAT in the range of AUD$66.0 million to AUD$70.5 million for 2H23.
- Growth in AUB Group 2H23 UNPAT (excl Tysers and cost of debt) is expected to be in the range of AU$6.0 million to AUD$8.0 million, representing 13.8% to 18.4% growth over 2H22.
- Tysers 2H23 UNPAT is expected to be in the range of AUD$34.0 million to AUD$40.5 million.
- Impact of Corporate Interest expense (interest on group debt including debt for the Tysers Acquisition) is expected to be AUD$19.0 million for the 6 months to 30 June 2023 (this includes facility arrangement fees and undrawn facility fees). AUB Group expects Underlying EPS for 2H23 in the range of 65.0 cps – 69.4 cps representing 17.9% to 26.0% growth over 2H22.’
Source: AUB
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Regards,
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For The Daily Reckoning
