NIB Holdings Ltd (ASX:NHF) has released their results for the half-year ending 31st December 2015. Supported by the Group’s ARHI (Australia Residents Health Insurance) business, the health insurer’s results highlighted significant improvements in Underlying Operating Profit.
41% Growth in Statutory Operating Profit
Over the course of the half-year, the group reported Statutory Operating Profit of $59.3million, a 41% improvement to the PCP. Along with 15.2% and 4.7% growth in Group Revenue and Statutory NPAT, equating to $927.1 and $43.1 million respectively.
These results were particularly supported by the growth in the group’s business segments. On an Underlying basis, the Group’s ARHI business accounted for almost 80% of operating profit, to $51.7million.
Furthermore, the NIB’s New Zealand operations improved significantly. With their Underlying operating profit almost exceeding 300% growth for the period, to $7.8million (1H15: $2.7million).
Gross margins grew to 15.1%, from 13.4% in the prior period. With Managing Director Mark Fitzgibbon attributing the growth in part to “Lower claims utilisation at an industry level”.
NIB’s international (inbound) health insurance business recorded an underlying operating profit of $5.4million, a 31% decline to the PCP. With a particular focus on international worker and student customers, the group expects this number to rebound in FY17.
World Nomads Group
On the 31st July 2015, NIB completed the acquisition of World Nomad’s Group, Australia’s third biggest travel insurance provider, for $95million, on an enterprise level basis. The recently acquired business added $4.2million to the Group’s half-yearly results.
Mark Fitzgibbon commented on WMG’s outlook: “We continue to be excited about the growth opportunities in WMG. While we have seen some slowing in the Australian travel insurance market, the business has performed well with good growth in international markets.”
The board have declared an interim fully franked dividend of 5.75cents per share. This is a 4.2% decline to the previous distribution (October 2015: 6cents per share). The Ex-Dividend and Payment date are on the 2nd of March and the 1st of April 2016 respectively.
NIB has confirmed FY16 underlying operating profit to be in the upper end of the guidance range. Between $102-114million (Statutory profit: $90-100million).
NHF Surged Over 7% upon Open
Investors have reacted rather sharply to the results, with NHF, as at 10.25am (AEDT), surging over 7%, to $3.51.
Author: Ben Khouri
Feb 22, 2016
Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.