AUB Group has delivered record underlying earnings for FY26, posting underlying net profit after tax of AU$224.6 million - up 12.2% on FY25's AU$200.2 million - on revenue of AU$1,596.6 million and a group EBIT margin of 36.1%, 140 basis points higher than a year ago. The board declared a fully franked final dividend of 71.0 Australian cents per share, taking the full-year payout to 98.0 cents, an increase of 7.7%.
The result opens a week that will define how brokers read the market's health, with Australia's two largest broker networks reporting within 24 hours of each other. Steadfast Group, which has entered a scheme implementation deed with a consortium comprising Amwins, Dragoneer and KKR in a deal implying an enterprise value of about $7.7 billion, releases its FY26 numbers on Wednesday.
"AUB Group begins FY27 with greater scale, a stronger portfolio and clear opportunities to lift returns for shareholders," said AUB Group's Sydney based CEO Michael Emmett (pictured). "In FY26, we delivered record earnings and higher margins, despite moderating insurance markets, while continuing to invest for long-term growth."
He said the performance reflected the breadth of the Group and was led by strong progress internationally.
The gap between underlying and statutory earnings was wide. Reported net profit after tax attributable to equity holders fell to AU$96.0 million from AU$180.1 million, weighed down by AU$62.7 million in impairment charges - up from AU$21.1 million in FY25 - along with AU$48.8 million of amortisation on customer and servicing contracts and AU$23.6 million in acquisition-related expenses.
For brokers watching the domestic distribution market, underlying net profit in AUB's Australian Broking division before tax rose 10.0% to AU$149.1 million, with EBIT margin edging up 30 basis points to 38.1%. AUB attributed the growth to organic drivers and bolt-on acquisitions, noting that average commission and fee income per client increased 6.5%, alongside client and policy count growth – partially offset by a reduction in interest income as cash rates moderate.
That last point is worth flagging. Premium funding interest income fell 11.6%, a reminder that the interest tailwind which flattered broker earnings through the tightening cycle is now reversing.
New Zealand was the clear soft spot. Underlying pre-tax profit rose just 2.7% in local currency to NZD 26.1 million but fell 3.9% in Australian dollar terms to $22.3 million on adverse currency movements. EBIT margin dropped 130 basis points to 33.1%, and average commission and fee income per client declined 2.9%. AUB pointed to a challenging corporate market, foreign exchange headwinds and what the group described in its performance overview as "an unsuccessful market share initiative".
The remediation plan is specific: reset NZbrokers by restructuring the network and strengthening operating alignment with Australian Broking, reset the cost base with improved expense accountability, and concentrate investment behind higher-return businesses. AUB operates NZbrokers with 37 members, including 28 non-equity members, alongside equity investments in six broking partners and two underwriting agencies.
Elsewhere, Agencies lifted underlying pre-tax profit 8.4% to AU$78.0 million, though margin slipped 50 basis points to 43.7% on continued weakness in strata. Stripping strata out of both periods, the Agencies margin actually rose 80 basis points to 46.5%. BizCover was the standout on growth, with pre-tax profit up 19.9% to $22.9 million and margin expanding 200 basis points to 47.8%.
The investor presentation set out medium-term EBIT margin targets by division - 40% for Australian Broking, 42% for New Zealand, 47% for Agencies, 50% for BizCover and 32% for International - against FY26 delivery of 38.1%, 33.1%, 43.7%, 47.8% and 27.6% respectively. New Zealand carries the widest gap.
AUB also put unusually granular numbers around its artificial intelligence programme, reporting 92% Microsoft 365 Copilot utilisation, 43 active AI agents, more than 40 solutions in the pipeline and 710 hours released in the previous 30 days. The group said the focus has shifted from experimentation to embedding AI into broking, underwriting and claims workflows.
Guidance for FY27 is underlying NPAT of $245.0 million to $265.0 million, representing growth of 9.1% to 18.0%, with a AU$255 million midpoint. The forecast assumes a 41/59 first-half/second-half earnings split, GBP:AUD of 1.8975, and central bank cash rates by 30 June 2027 of 4.60% in Australia and 3.00% in New Zealand. Funding costs are expected to rise $8.0 million.
The group finished the year with a leverage ratio of 2.30 times and AU$330.5 million in accessible cash and undrawn facilities.
Separately, AUB announced a board change. Andrew Kendrick will retire from the AUB Group board at the conclusion of the annual general meeting on 12 November 2026, after almost four years of service. He will continue to chair the board of Tysers, AUB's UK subsidiary.
"Andrew has been an outstanding contributor during his tenure on the Board," said AUB chair Peter Harmer. "On behalf of my fellow directors, I want to thank Andrew sincerely for his service and wish him all the very best in his continuing role with the AUB Group."
