Argus posts half-year profits of $26.3m
Argus Group Holdings Limited has reported net income for the six months to September 30 of $26.3 million, compared with $8.1 million in the previous year.
Argus chief executive Alison Hill said: “The financial results for the six months to September 30, 2022 were largely driven by the global inflationary pressures and the resulting increases in interest rates.
“We invite our investors and customers to take a closer look at our group results to recognise the core strength and resilience of our underlying operations during these volatile times.”
Argus said key performance metrics for the group have remained strong.
Operating earnings, a key measure of group profitability, were $7.8 million for the six-month period, compared with $9.8 million for the same period last year.
The group’s combined ratio for the health and general insurance businesses was 76.5 per cent, which Argus said compares well with the three-year average of 76.3 per cent.
Shareholders’ equity at September 30 was $126.8 million, compared with $143 million at March 31.
Argus said substantial rises in market interest rates over the six-month period resulted in unrealised losses in the group’s fixed-income bond portfolios and a $16.2 million decline in consolidated net equity over the period.
Ms Hill said: “The group’s fixed-income bonds are of high quality and typically held to maturity, allowing unrealised losses to unwind over the remaining life of the asset. We therefore view the six-month decline in shareholders’ equity as temporary.”
She added: “When viewed over the longer term, we remain pleased with our shareholders’ equity, which has grown $20.9 million, or approximately 20 per cent, since March 2018. During the same period we have also deployed $2.9 million in share buybacks and returned $18.2 million to shareholders in dividend payments.”
Argus said economic activity returned to more normal levels during the six months to September 30.
As a result, it said, benefit and claims costs across its core businesses increased $2.2 million, or approximately 6 per cent, compared with the prior year.
Net premiums earned within its core insurance businesses increased $4 million or approximately 7 per cent, compared with the prior year.
Combined fee income was $21.3 million, a decrease of $0.4 million, or approximately 2 per cent, over the prior year, largely from market-driven declines in pension administration fee income.
The company’s share price on September 30 was $6.39, compared with $6.10 on March 31.
Book value per share is $5.91 at September 30, compared with $6.69 at March 31.
Ms Hill said: “It is gratifying to see our share price grow over the past 18 months and we are encouraged by the market’s recognition of the value we’re building and will continue to build for our shareholders.”
Based on the group’s financial strength and performance, Argus said, it has declared a dividend of 11 cents per share for shareholders of record as of December 31, payable on January 27.
Ms Hill said: “It is during these volatile times that we see the strength and stability of our core underlying business. Take a closer look and you will see how we continue to successfully navigate financial and operational complexities whilst keeping our customers, our shareholders, our colleagues and our community at the heart of everything that we do.
”As we face into the macroeconomic headwinds of rapidly rising interest rates and broad-based cost inflation, we are confident that our business is resilient, and our talented team are ready to grow further, faster.“