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QUEENSLAND’S summer of sun helped Suncorp Group (SUN) to post an impressive rise in profit for the half year to December.
The Brisbane-based listed insurer increased net profit after tax by 47.6 per cent to $574 million compared to the previous corresponding period ($389m), when Queensland was recovering from one of its worst wet seasons in history.
Improved weather conditions, operational efficiencies, top line growth and favourable investment markets also contributed to the result, says the company.
Profit from SUN’s insurance arm had a huge increase to$564 million, up from $162 million pcp, while the core bank NPAT was down 7.7 per cent to $144 million and Suncorp Life down 61.7 per cent to $51 million.
The company, which has increased its fully-franked dividend to 25 cents per share in response to the strong result.
SUN’s share price dropped 4.16 per cent to $11.185 cents this morning, but the company has enjoyed a strong run since June, when it hit a low of $7.45.
CEO Patrick Snowball says the company’s business model and re-focussed core businesses delivered growth across the group and stable expense ratios at a time of significant business investment.
“While this result does reflect more benign weather conditions and improved investment markets, our business is in good shape,” says Snowball.
“We are better positioned than ever to support our customers while delivering an improved financial performance.”
The group has implemented a three-year strategy corporate strategy, focusing on its core businesses and the “One Company, Many Brands”, model.
”Building Blocks” initiatives will deliver targeted financial benefits of $235 million per annum, while a simplification program outlined in May is expected to provide an additional $200 million in annualised benefits by the 2016 financial year.
“The transformation of the Suncorp Group has been achieved despite protracted global economic volatility and unprecedented natural hazard impacts,” says chairman Ziggy Switkowski.
“I am pleased with progress and confident the business will continue to deliver for its customers and shareholders.”
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