Gallagher reports 34% profit rise and 5.4% organic growth in H1

US broking group Arthur J Gallagher made a net profit of $134m (£87.6m) in the first half of 2013, up 34% on the $99.8m it made in the same period last year.

Earnings before interest, tax, depreciation, amortisation and change in estimated acquisition earn out costs (EBITDAC) increased 18% to $247.9m (H1 2012: $209.5m).

Organic growth in base commissions and fees at Gallagher’s brokerage segment was 5.4% (H1 2012: 4.2%).

The brokerage segment’s net increased 25% to $93.1m (H1 2012: $74.7m), while EBITDAC rose 28% to $227m (H1 2012: $176.8m).

In the second quarter of 2013 alone, group net profit increased 30% to $93.5m (Q2 2012:  $71.7m), while EBITDAC grew 12% to $149.6m (Q2 2012: $133.1m).

The brokerage segment’s organic growth for the second quarter of 2013 was 5.9% (Q2 1012: 5%).

Rate increases

Gallagher chief executive Patrick Gallagher said: “We had another strong quarter of organic growth and margin expansion across our global operations.”

Gallagher was also upbeat about insurance prices in some countries. He said: “Australia, and our clients are indicating steady, but small, incremental improvements in their business prospects. Around the world, we are successfully executing our strategies and our sales culture is thriving.”

Heath Lambert costs

The costs of integrating UK broker Heath Lambert, which Gallagher bought in 2011, remained almost static in the first half of 2013, shaving $8m from Gallagher’s EBITDAC in the half (H1 2012: $8.1m).

The integration of Heath Lambert is expected to complete this year.