Full Year 2024 Steadfast Group Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Julian Braganza - Goldman Sachs - Analyst : Good morning, guys. Just a couple of quick questions from me. Just pointing to slide 16, just on the guidance, just specifically on the organic growth, 9% to 13%, just interested in understanding the drivers of that range, and is it related to the premium rate increases that could eventuate to FY25? Just want to understand what could pull you to the bottom end of that organic growth range into FY25?

Question: Julian Braganza - Goldman Sachs - Analyst : Okay. That's very clear, Rob. And maybe then just touching on the margins for both broking and agency into FY25, I think you're still flagging a bit more investment in agency into next year. I just want to understand. Should we be seeing margin improvement there, even despite that investment? And also, I guess, when does that investment come off next year to the last year, where you sort of beef up sort of resourcing and compliance?

Question: Andrew Buncombe - Macquarie Group - Analyst : Just two for me, please. The first one is on the $300 million expected payment for Trapped Capital in FY25. Can you just remind us whether that's a gross or a net number of the sell-downs?

Question: Andrew Buncombe - Macquarie Group - Analyst : Excellent. And then the other one for me was just on the implied multiples from that Trapped Capital number. The shorter-term numbers look closer to high 8s to low 9s, but the back-ended piece was closer to 10. Is there anything unusual in the short-term pipeline for those multiples as to why that would be so different to the long-term 10 number?

Question: Andrei Stadnik - Morgan Stanley - Analyst : My first question, can you just remind us of the mix of -- within your clients, can you remind us of the mix of small versus medium versus larger corporate businesses?

Question: Andrei Stadnik - Morgan Stanley - Analyst : That's helpful. And my other question, can you just -- I mean, you already explained a bit around the short earn-out -- the potential earn-out being lower. So it sounds like it could be at the $50 million level. But it should perform better in FY24 versus expectations. Can you just explain a little bit more on that? Because it sounds like you're getting the best of both worlds there. Yeah, just be helpful.

Question: Andrei Stadnik - Morgan Stanley - Analyst : And look, if I can ask a third and final question, in terms of how you're thinking about next steps for -- in the US space, what are the next steps from here? What are some of the things kind of within your control that you'd like to do in FY25?

Question: Olivier Coulon - E&P Financial Group - Analyst : Following up a little bit, just on the agency M&A opportunity, I suppose, that may play out with CPS 230, I mean, have you already had some discussions on M&A of some smaller, potentially subscale agencies that might struggle under the new regime? And is there any of that included in the $300 million Trapped Capital? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 29, 2024 / 12:00AM, SDF.AX - Full Year 2024 Steadfast Group Ltd Earnings Call

Question: Olivier Coulon - E&P Financial Group - Analyst : Yes. Okay. No, that's perfect. Thanks for that explanation. Just a final one from me. In terms of potentially entering a declining interest rate environment, not premium rate environment, how are you thinking about M&A, and I suppose the fact that you're going to be purchasing the interest income and paying an EBITA multiple on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 29, 2024 / 12:00AM, SDF.AX - Full Year 2024 Steadfast Group Ltd Earnings Call