Steadfast Group Limited (ASX:SDF) reported higher underlying Earnings in FY26 while entering a binding scheme implementation deed that could result in the company leaving the ASX. The proposed transaction values Steadfast shares at A$6.00 each before adjusting for permitted dividends, while the FY26 result showed continued growth across its broker network, Underwriting agencies and international operations.

Underlying Earnings Increase

Underlying Revenue increased 15.3% to A$2.105 billion for the year ended 30 June 2026.

Underlying EBITA rose 13.8% to A$669.8 million.

Underlying NPAT increased 8.2% to A$319.5 million, while underlying diluted EPS reached 28.8 cents, up 7.7%.

The result reflected a combination of organic growth, acquisitions and higher Equity ownership in existing businesses.

Statutory Profit Declines

Statutory NPAT was A$269.1 million compared with A$334.9 million in FY25.

The prior-year result included a significant non-trading gain associated with Steadfast increasing its ownership of Rothbury Group.

FY26 also included non-trading items and portfolio-related adjustments.

The difference between statutory and Underlying Profit therefore reflects Acquisition accounting and other items outside the group’s preferred measure of recurring operating earnings.

Organic and Acquisition Growth Both Contribute

Steadfast attributed FY26 underlying EBITA growth to several sources.

Organic growth contributed 5.0 percentage points.

Acquisitions of new businesses added 4.4 percentage points, while increased equity holdings contributed another 4.4 percentage points.

The mix illustrates the group’s long-running strategy of combining internal growth with acquisitions and increased ownership of businesses already within its network.

Broker Network GWP Reaches A$13.2 Billion

Steadfast’s Australasian Network generated gross Written Premium of A$13.2 billion, up 6.2%.

Underlying EBITA from the network increased 13.2%.

Acquisitions contributed 10.5 percentage points of that EBITA growth.

The Business continued implementing its broker-hubbing strategy, intended to reduce duplicated costs and improve operating efficiency across participating brokerages.

Underwriting Agencies Write A$2.5 Billion

Steadfast Underwriting Agencies generated A$2.5 billion of gross written premium in FY26, up 2.3%.

Underlying EBITA from the division was A$260.8 million.

The business continued consolidating operations to improve efficiency while maintaining underwriting discipline and managing client retention.

The division remains a material component of the group and is central to the structure proposed under the Takeover transaction.

International Earnings Expand

Steadfast International generated underlying EBITA of A$29.8 million.

This represented an increase of A$23.9 million from FY25.

Growth reflected higher profit-sharing and network membership income, increased activity at HWS Specialty and contributions from acquisitions and minority investments.

International operations remain smaller than the Australasian businesses but provide another avenue for expansion.

Takeover Scheme Values Shares at A$6.00 Before Dividends

Steadfast entered into a binding scheme implementation deed on 21 August 2026.

Under the proposal, all issued Steadfast shares would be acquired for A$6.00 per share in cash, less permitted dividends paid after the relevant transaction date.

The Board unanimously recommends shareholders vote in favour of the scheme in the absence of a superior proposal and subject to the independent expert concluding that it is in shareholders’ best interests.

Final Dividend Reduces Remaining Scheme Cash

Steadfast paid a fully franked FY26 final dividend of 12.75 cents per share on 25 September 2026.

Total FY26 dividends reached 20.95 cents per share, up 7.4%.

Because permitted dividends reduce the A$6.00 scheme price, the final dividend lowers the remaining cash scheme consideration to approximately A$5.8725 per share.

Shareholders entitled to the dividend would therefore receive the dividend separately from the eventual scheme payment if the transaction completes.

Transaction Remains Conditional

The scheme remains subject to shareholder, court and regulatory approvals.

Regulatory approvals are required across several jurisdictions in which Steadfast operates.

Implementation was targeted for December 2026, subject to the required conditions being satisfied or waived.

Until those steps are completed, Steadfast remains an independently listed company and continues operating under its existing business plan.

FY27 Guidance Assumes Continued Earnings Growth

Steadfast provided FY27 underlying EBITA guidance of A$700 million to A$715 million.

Underlying NPAT is expected to range from A$333 million to A$343 million.

Underlying diluted EPS growth is guided at 4%–8%.

The outlook assumes Australian insurance premium pricing increases by approximately 2%–3%.

These remain management forecasts and depend on market conditions and transaction timing.

Leadership Transition Remains on Hold

Steadfast had previously announced plans for founder and Managing Director Robert Kelly to retire from the executive role.

The CEO succession process was subsequently paused after the takeover proposal emerged.

Kelly remains responsible for overseeing the business and proposed transaction while the scheme progresses.

The future Leadership structure will depend partly on whether the transaction completes.

Key Risks and Areas to Watch

The most immediate uncertainty is scheme completion.

Shareholder approval, court approval, regulatory clearances and the independent expert’s assessment remain important conditions.

If the scheme does not proceed, Steadfast would again be assessed primarily on organic premium growth, acquisition execution and insurance pricing.

While the transaction remains pending, FY27 trading against EBITA and NPAT guidance will also remain relevant.