Azzet reports on three stocks with market-moving updates to share today.
AUB Group rallies on robust FY25 result, higher guidance
Shares in AUB Group (ASX: AUB) were up around 11% at the open after the insurance broker announced a strong FY25 result - across all parts of its operation – beat consensus forecasts, while also guiding to a strong FY26 profit.
AUB Group is an insurance broker, providing services to clients across Australia and New Zealand, and also operates an online platform for small business insurance.
The group reported a 17% increase in underlying net profit after tax, reaching $200.2 million for the 2025 financial year, up from $171 million in the previous year.
On the back of $180.1 million in reported profit, up from $137.1 million last year, the company declared a fully franked final dividend of 66 cents per share, which brings the total full-year dividend payout to 91 cents, a 15.2% increase compared to the previous year.
NZ was a big miss versus consensus, but this was offset by a major beat in leading independent international Lloyds broker, Tysers, which the company acquired in 2022 for $880 million.
While pre-tax profit in NZ increased by 2.2% to $23.2 million, the earnings margin of 34.4% was down 210bps from FY24, impacted by future growth initiatives.
Commenting on today’s update, CEO Michael Emmett told the market that FY25 was a pivotal year for AUB Group, marked by solid financial results, international expansion, and operational progress across all divisions.
“Our ability to deliver results in a complex and evolving environment reflects the depth of talent across our organisation and the strength of our operating model,” said Emmett.
He also highlighted the significant contributions from Agencies and BizCover, while also noting that the international business was performing well.
“The Group enters FY26 with a clear focus on disciplined execution, strategic investment, and continued optimisation across the portfolio.”
What also captured the market’s attention this morning was the group’s FY26 underlying profit guidance of between $215 million and $227 million, representing growth of 7.4% - 13.4% over FY25.
Other key numbers announced today include:
- Underlying earnings per share grew to 171.75 cents.
- Agencies earnings margin of 44.2% up 160bps from FY24.
- BizCover earnings margin of 45.8% up 380bps from FY24.
- Accessible cash and undrawn debt facilities of $375 million.
- FY25 revenue of $1.5 billion, up from $651.8 million in FY21.
- UK Retail scale from £110 million GWP in FY24 to £340 million in FY25.
- Gross written premium (GWP) for the year was $11 billion.
- Australian broking division’s profits rose by more 12%, to $135.6 million.
- NZ broking division saw a smaller profit increase of just over 2% or $23 million.
The Group’s agencies, including Tysers, reported a pre-tax profit increase of 30% to $72 million.
There’s sufficient upside in the FY26 guidance for some brokers to flag the likelihood of a consensus upgrade.
Barrenjoey believes the result demonstrates flexibility that the brokers have over insurers, with the ability to dial in costs based on market conditions.
AUB Group has a market cap of $3.9 billion; the share price is up 5% over one year and up 9% year to date.
The stock appears to be in a long-term uptrend because its 200-day moving average is upward-sloping and shows that there has been overall investor demand for the stock.
Consensus is Moderate Buy.
Tyro Payments stumbles on weaker FY25 result
Shares in Tyro Payments (ASX: TYR) were trading 4.65% lower at the open after the payments platform posted a weaker-than-expected underlying FY25 result.
While management tried to frame today’s result as a strong one, in line with guidance provided to the market, some of the numbers spoke for themselves.
Despite reporting a 4.4% increase in gross profit, net profit after tax fell by 30% in the year to June 30 compared to the previous year.
However, outgoing Tyro CEO Jon Davey tried to steer the market’s attention to the 14% gross profit compound annual growth rate, which he said more than outstripped growth in expenses, leading to a 79% earnings compound annual growth rate (CAGR) over the last three years.
Davey also told its investors that the gross profit increase was driven by a 15% increase in the Tyro Health business and a 43% increase in banking users.
Other key FY25 numbers announced today:
- Positive free cash flow generation, at $19.6 million.
- 34 new direct POS integrations.
- 20% increase in transaction value from new merchants.
- Earnings Margin 28.0%, 1.6 points on 26.4% in FY24.
Outlook
The company flagged its entry into pet health, aged care, unattended payments and automotive sub-verticals, with a combined addressable market opportunity of more than $40 billion, while a new banking platform in pilot is rolling out to new Tyro merchants in September.
Management believes Tyro is well-positioned to accelerate delivery of its strategic priorities and unlock future growth.
“Our strong balance sheet and disciplined cost management provide the capacity to accelerate the delivery of our strategic initiatives, including inorganic growth, while continuing to deliver strong outcomes for our merchants and shareholders,” said Davey.
“While early in the year, we’re encouraged by the positive trends we are seeing in our payment volumes and adoption of our banking offering into Q1 FY26, which supports our FY26 outlook.”
Tyro expects continued gross profit growth and improved operating efficiency and guided to FY26 gross profit of between $230 million to $240 million and earnings margin between 28.5% to 30.0%.
The stock’s shares were placed in a trading halt in mid-August after receiving a speeding ticket from the ASX for not explaining a 10% share price rally.
The next morning, management confirmed that it had received unsolicited and non-binding takeover interest from separate parties over the past few months, which the board believed undervalued the 22-year-old company.
Two years ago, private equity firm Potentia Capital walked away from its $1.60 a share bid for Tyro after a lengthy due diligence process.
Back in July, analysts at Morgans retained their buy rating on Tyro with a trimmed price target of $1.55.
Tyro Payments has a market cap of $634 million; while the share price is up 45% year to date (to $1.16), it remains over 300% down on the $3.88 it was trading at early October 2021.
The stock’s shares appear to be in a strong bullish trend confirmed by multiple indicators.
Consensus is Strong Buy.
IVE Group tanks after posting FY25 result
Shares in IVE Group (ASX: IGL) were down around 10% in early afternoon trading despite the diversified marketing company releasing what, at face value, looked like a reasonably good FY25 result.
The market may have baulked at the company’s revenue of $954.8 million, down 1.6% from $969.9 million in the previous year.
However, earnings of $136.7 million were up 7.0% from $127.8 million in the previous period due largely to a strong uplift in operating margins, which management attributed to strict cost control coupled with the full emergence of Ovato and JacPak cost synergies.
The stock has historically paid relatively attractive dividends and investors may have been disappointed that the group’s annual dividend remained steady at 18.0 cents per share, which, based on today’s share price ($2.78), is over a 6% yield – ranking in the top 25% of Australian dividend payers.
Other key FY25 numbers announced today:
- Material gross profit margin, 49.3% up from 46.7%.
- Net profit of $52.1 million, up 21.1% from $43.0 million.
- Operating cash conversion to earnings normalised to 101.9% from 114.0%.
- EPS (NPAT) 33.7¢ps, up 20.3%.
- Net debt $114.4 million, down from $131.0 million at 30 June 2024.
- EPS (NPATA) 36.1¢ps, up 19.4%.
Outlook
The group guided to FY26 underlying profit guidance of between $50 million -$54 million, but what may have also ruffled investors' feathers were some lingering abnormals lurking within next year’s projected numbers.
FY26 guidance – what to expect
Includes a $2.5 million adverse after-tax non-cash AASB 16 timing difference due to the assumption of significant new long-term property leases (Dandenong and Kemps Creek) that will reverse over the life of the leases (nil pre-AASB 16 impact in FY26).
Excludes expected Lasoo operating loss of $4 million post-tax (significant improvement expected in FY27).
Excludes abnormal costs of around $10 million post-tax, primarily associated with the Dandenong and Kemps Creek relocations, including duplication of rent until expiry of old leases.
Capital expenditure is expected to be around $42 million (net of disposal proceeds) in FY26, reflecting the remaining $11.5 million packaging capacity build-out (including planned FY25 spend of $7 million moved to FY26) plus $18 million relating to the Dandenong and Kemps Creek fit-outs.
Despite its high level of debt, the company trades at a significant discount to its estimated fair value, and this may suggest potential upside.
However, much of this discount may relate to the poor job management appears to do in communicating exactly what the company’s core earnings consist of and explaining it clearly to would-be investors.
To the uninitiated, the company’s core earnings are spread across creative services, data-driven communications, product and distribution, integrated marketing, and technology solutions.
IVE Group has a market cap of $428 million; the share price is up 29% in one year and down 7% in the last week.
The stock’s shares are in a strong bullish trend, confirmed by multiple indicators.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
