October 27, 2006 by Canadian Underwriter
Hub International Limited (NYSE: HBG) (TSX: HBG) has announced strong improvement in both revenue and key expense ratios for the three months and nine months ended Sept. 30, 2006.
Revenue increased 29%, to US$126.5 million in 2006 Q3, compared to the 2005 third-quarter revenue of US$98.3 million.
Hub’s 29% increase in revenue for the quarter included strong gains in both the United States and Canada, the company reported.
U.S. revenue grew 35% — to US$90.7 million in 2006 Q3 from US$67.2 million in 2005 Q3 — including the impact of both acquisitions and 1% organic growth.
In Canada, revenue rose 16% — to US $35.9 million from US$31 million with organic growth of 11% (4% without the impact of foreign exchange).
Organic growth is a non-GAAP measure that describes internal growth from operations owned at least one year.
Martin P. Hughes, Hub’s chairman and CEO, said organic growth was limited because rates continued to be weaker on average in 2006 Q3 than in the prior-year period.
“While the company’s catastrophe-exposed business has experienced strong rate increases, the preponderance of the company’s revenue was derived from markets where rates continued to decline,” the company announced in a press release.
“Our sales culture and productivity continue to be strong and we achieved results within our target ranges for new business and retention during the quarter,” Hughes said. “We are focused on consistent, effective execution of our growth strategies in all rate environments, as this is the key to long-term returns for our shareholders.”
Hughes also saw more opportunities for Hub to expand business through acquisitions. “We see ample opportunity to grow our business, both through acquisitions of well-managed brokerages and through organic growth of our existing businesses,” Hughes said. “Although we aren’t benefiting from increasing rates, we are still achieving progress in our core focus areas of sales and margins.”