Gallagher’s profits jump in Q1Posted On: Apr. 25, 2019 6:19 PM CST
Net earnings at Arthur J. Gallagher & Co. rose 23.0% from the year-ago first quarter to $351.7 million as revenues also grew, 8.32%, to $1.99 billion, the company’s earnings statement said Thursday after markets.
In addition to the broker’s organic revenue growth, investment income and net gains in divestitures rose sharply to $75.4 million from $16.3 million a year ago, according to financial data.
Organic growth in the company’s core brokerage and risk management segments was 5.5%, J. Patrick Gallagher Jr., chairman, president and CEO, said on the broker’s earnings call Thursday.
Organic growth was “solid” across all divisions globally, he said, with U.S. retail brokerage organic growth “around 6%.”
Domestic retail property/casualty pricing was positive across all major lines of business except workers compensation, he said.
In the U.K., organic growth was “around 5%” and retail property/casualty pricing was up 3% on average, Mr. Gallagher said, while Australian and New Zealand delivered organic growth of “about 8%.”
“As we look forward, 2019 organic brokerage base commission and fee organic feels like it will be about 5%,” Mr. Gallagher said.
Turning to mergers and acquisitions, Mr. Gallagher said the broker had completed 11 brokerage mergers and acquisitions, which should add about $70 million in annualized revenue.
So far in the second quarter, the broker has completed three brokerage mergers and acquisitions.
Gallagher’s mergers and acquisitions pipeline, Mr. Gallagher said, is “very full” with about $350 million in revenue represented by some 60 term sheets agreed or being prepared, although he cautioned the broker “won’t complete all these mergers.”