REPORTING SEASON: Suncorp Group (SUN)
Brought to you by CommSec
Figure 1: Suncorp Group 12 month chart
QLD based financial services company, Suncorp (SUN) reported a worse than expected 4.5% slip in half year profit to $548m.
The result was supported by an 18% rise in insurance premiums received and a continued focus on costs.
Profit was held back by higher natural hazard claims, which were $49m above SUN’s $270m first half allowance.
In a previous company announcement SUN said it received around 400 NSW bushfire claims in Oct, costing between $60m-$70m.
Of SUN’s three principal units (General Insurance (GI), Banking and Life Insurance), GI contributed close to 80% of earnings; while the unit’s earnings slipped by 16%. A $105m NPAT was recorded in its Banking division ($101m rise from 2012).
This year is one of transition for the bank as it exits its Non-Core bank and is likely to be hit by ongoing costs in the short term.
Suncorp Life posted NPAT of $22m and continues to be hurt by poor lapse rates (people either reducing or cancelling policies to save money).
SUN’s fully franked interim dividend rose by 40% to $0.35/share and will be paid out to eligible investors on 1st April.
Looking ahead, SUN is targeting 7-9% group annual growth through to 2015. It is maintaining its 60-80% dividend payout ratio.
SUN fell following the result and has underperformed the broader market since Jan.