AUB Group Limited Annual Report 2023

DIRECTORS’ REPORT YEAR ENDED 30 JUNE 2023

OPERATING AND FINANCIAL REVIEW Reconciliation of Reported Net Profit After Tax to Underlying Net Profit After Tax The following reconciliation from Reporting NPAT to UNPAT is presented on the basis attributable to equity holders of the parent:

2023 $’000

2022 $’000

Net Profit after tax attributable to equity holders of the parent Add back/(less) (net of non-controlling interests and income tax): - Amortisation of broking registers

65,253

80,836

30,352 (29,796)

11,143

- Adjustments to value of entities (to fair value) on the day they became controlled entities

(41,046)

- Remeasurement of put option liability (net of Interest unwind)

3,620 5,473 39,912

1,104 7,537

- Impairment charge

- Movements in contingent consideration

(337)

- (Profit)/Loss on deconsolidation of controlled entity , sale/dilution of associates and portfolios

(25,315)

(5,894)

- Impairment of the Right of Use Asset and Onerous Lease Expense

251

219

- Acquisition related expenses Underlying Net Profit After Tax

39,355 129,105

20,456 74,018

Operating results for the year In the year ended 30 June 2023 (FY23) Reported Net Profit After Tax attributable to equity holders of the parent (Reported NPAT) was $65.25m (FY22: $80.83m). Reported NPAT was impacted by increased amortisation of broking registers due to acquisition activity, increased contingent consideration related to acquisitions, debt raising and other acquisition related expenses including for the acquisition of Tysers in September 2022. Tysers is a leading London based Llyod’s market broker with access to specialist underwriting expertise and global distribution capabilities. On a Reported NPAT basis, earnings per share was 65.35 cents for the full year (FY22: 105.60). Underlying Net Profit After Tax (Underlying NPAT) is the key measure used by management and the board to assess and review business performance. Underlying NPAT excludes non-controlling interests and the impact of fair value adjustments to the carrying value of associates, profits on sale and deconsolidation of controlled entities, contingent consideration adjustments, amortisation of intangibles, impairment charges and acquisition related costs. Underlying NPAT increased 74.42% to $129.11m in FY23 (FY22: $74.02m) due to strong organic growth across all divisions, complemented by the acquisition of Tysers performing above expectations.

AUB GROUP ANNUAL REPORT 2023

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