Steadfast Group H1 Earnings Call Highlights
by Sarita Garza · The Markets DailySteadfast Group (ASX:SDF) used its FY26 half-year results call to highlight profit growth, an active acquisition program, and a renewed focus on cost discipline as insurance pricing moderates from recent highs. Management also reiterated full-year guidance and emphasized ongoing investments in technology and AI to streamline workflows and support broker productivity.
First-half earnings: higher NPAT and double-digit EBITDA growth
Chief Executive Officer Robert Kelly pointed to statutory NPAT of AUD 127 million for the half, while management’s preferred measures showed underlying NPATA up 6.3% to AUD 161.5 million, underlying NPAT up 7.3% to AUD 137.5 million, and underlying EBITDA up 12.6% to AUD 293.6 million. Diluted EPS on underlying NPAT was cited at AUD 0.124, up 7.2%.
Chief Financial Officer Hannah provided additional detail on the drivers of EBITDA growth, describing a mix of 2% organic growth and 5.7% acquisition growth (excluding the Rothbury step-up). She said some transactions involved increasing stakes in existing businesses, which does not directly lift EBITDA but instead benefits NPAT via reduced non-controlling interests.
Hannah also said earnings seasonality for FY26 is expected to be broadly consistent with last year, with the first half now expected to represent about 43% of full-year NPAT due to expense savings anticipated to be realized in the second half.
Dividend increased; DRP to operate with no discount
Steadfast declared an interim dividend of AUD 0.082, up 5.1%. Kelly said the dividend reinvestment plan (DRP) will apply with no discount. He also provided key dates: an ex-dividend date of 2 March, a record date of 3–4 March, and a payment date of 25 March.
Cost-out initiatives and second-half bridge
Management repeatedly framed the first half as a period in which cost actions were initiated, with a greater earnings benefit expected in the second half. Kelly said head office costs were reduced by AUD 7 million, and subsidiaries contributed about AUD 4 million of savings, with a compounding effect expected in the second half.
In the Q&A, executives described several factors expected to support the second half:
- Fee actions: Tim Mathieson said Steadfast has committed to increasing broker fees by 2.5% in the second half to support organic growth targets.
- Subsidiary employment costs: Kelly and Mathieson said subsidiary principals were guided to use natural attrition where possible, with benefits expected to “wash through” in the second half.
- Underwriting agencies seasonality: Mark Senkevics emphasized that underwriting agencies’ revenue and profit commissions are historically weighted to the second half, because many profit commissions are calculated after calendar year-end for binders.
When asked whether cost-out efforts were a one-off or “business as usual,” Hannah said the restructure itself was a one-off, but continuous margin improvement is BAU for the group.
Operating performance: broker network growth, underwriting agency actions, and international expansion
Australasian broker network: Mathieson said the broker network grew despite a softer premium cycle, with network gross written premium up 4.4% to AUD 6.4 billion. He cited 23 step-ups, 9 step-downs, and 17 new acquisitions, with 16 intended to be “bolted into” existing equity brokers. He also said Steadfast has 414 brokers and over 3,000 authorized representatives, adding that 86% of group GWP is in commercial lines, which he characterized as more resilient to direct online competition.
Underwriting agencies: Senkevics said the first quarter was challenging, particularly in strata and specialty, but emphasized steps to diversify and improve efficiency. He reported revenue up 2.7% to AUD 240.9 million and EBITDA “more or less flat” at AUD 112.7 million, again stressing second-half skew in the segment’s earnings. Senkevics highlighted the Castle Insurance brand launched via Sure, saying it has exceeded expectations since its October 2025 go-live, with growth “to the tune of about 50%–52%” in the first half and continuing into early second half. He also referenced new products at CHU and said a consolidation initiative across commercial agencies is expected to create an uplift of over AUD 5 million in annualized EBITDA after implementation, with benefits starting in the last months of the year and into FY27.
International: Samantha (International) said ISU Steadfast and HW Specialty exceeded first-half budgeted EBITDA, and highlighted record first-half member additions at ISU. She also discussed a “Trapped Capital” investment path for the network, with the first investment scheduled to complete on March 1 and an intent signed for a second. On Novum (acquired August 2025), she cited $114 million of GWP in calendar 2025, described as 60% organic growth over the prior year, and said ISU members had made 300+ policy submissions into Novum within four months. She also said Novum has entered Canada with a surety offering early in the year.
Guidance reaffirmed; pricing assumptions and acquisition discipline
Kelly reaffirmed FY26 guidance of NPATA AUD 365 million–AUD 375 million, NPAT AUD 315 million–AUD 325 million, EBITA AUD 650 million–AUD 665 million, and undiluted EPS NPAT growth of 6%–10%. He described recent segment disclosure changes and restatements for FY24 and FY25 as presentational, intended to give investors clearer visibility on cash-generating units, and not reflective of underlying performance changes.
On insurance pricing, Kelly said Steadfast is assuming 2%–3% premium increases, noting January 2026 was up 2.7%. He described monthly trends from mid-2025 through January as consistent with a potential bottoming in the cycle and a return toward “inflationary increases.”
Steadfast also addressed acquisition pricing and strategy. Kelly said Steadfast can still complete acquisitions in Australia around 10x EBITDA, while blended multiples across jurisdictions were higher due to offshore deals. In response to questions, management reiterated that it will not pursue acquisitions that are not EPS accretive. Kelly also said the company evaluates share buybacks but believes it can deploy capital more effectively through selective M&A and long-term margin initiatives.
On regulation, Kelly said the ACCC approved 20 transactions (step-ups and acquisitions) over the past 12 months, with timelines shortening from roughly six weeks to two to three weeks.
Hannah said the balance sheet remains conservative, with total borrowings of about AUD 1.2 billion and gearing of 33.4%, below the board-approved maximum of 40%. She said this provided capacity to borrow an additional AUD 382.2 million while staying within the limit.
About Steadfast Group (ASX:SDF)
Steadfast Group Limited provides general insurance brokerage services Australasia, Asia, and Europe. It also offers insurance underwriting services and related services. The company provides various business insurance products, such as aviation, business pack and interruption, contract works, corporate travel, cyber, events, farm, marine, management and product liability, professional indemnity, public liability, trade credit, and workers' compensation insurance. In addition, it offers personal insurance products, including home and contents, landlord, life, motor, and strata insurance.