NIB share price falls 6.8% following 2019 full-year results

Here are some of the most vital things we learnt from nib's 2019 full-year results.

Bearish investors bid nib’s share price down as much as 6.82% today – after the company released FY19 results that seemed good – but evidently were not up to investor expectations.

Given that NIB Holdings Ltd has already seen its share price surge 48% since January, it’s not fully surprising that we are now witnessing a slight pull-back.

FY19 financials at a glance

As we reported previously, and continuing the trend of conservative forecasting, nib's management spoke modestly of the 2019 results and focused on the impact of challenging market conditions.

Here, NIB Holdings Ltd’s Managing Director, Mark Fitzgibbon pointed out that:

'There's a broad weakness in consumer discretionary spending, fierce competition for that spending and private health insurance has some issues around cost and affordability.'

Even with this weakness, nib saw policyholder growth of 2.1% in the 2019 fiscal year. Such a figure, according to the company at least, positively contrasts with what was generally dour outlook for hospital coverage in the 2019 fiscal year.

On the top-line, underlying revenue came in at A$2.4 billion – an increase of 8.3% from the year prior.

Profits (NPAT) rose by an even higher percentage – reaching A$149.3 million in FY19 – up 11.8% on the corresponding period.

nib’s dividend grows

Beyond these front-line financials, nib declared a final, fully-franked dividend of 13.0 cents. All up, this takes nib's full year dividend to 23.0 cents.

A dividend reinvestment plan is currently available for nib shareholders.

Alternative growth in focus

Other business areas that are likely to interest potential and current investors include nib’s coverage of people from international backgrounds. In FY19 this business segment saw impressive growth of 20%.

Here, NIB Holdings Ltd pointed out that:

'We now cover almost 190,000 students and workers from over 180 countries and have a physical presence in China and India.'

nib share price: 2020 outlook

Regarding the current and future market conditions that could impact nib, the company pointed out that:

'Relatively low levels of claims inflation in recent years have results in arhi insurance margins (7.3% in FY19) being well ahead of nib's long run target range.’

In saying that, nib maintains that it does not expect such high margins to persist indefinitely; rather, noting that it anticipates them to come in closer to 6% moving forward.

Finally, regarding bottom-line estimates, nib's Managing Director, Mark Fitzgibbon has said that the company:

'Anticipates for FY20 a UOP of at least $200 million (statutory operating profit of at least $180 million).'

Citibank’s take on the results

Speaking to the outlook nib provided today, Citibank analysts have suggested that nib’s share price – at these current levels at least – is expensive.

Ultimately, the financial services firm maintains that it looks as if nib would have had to beat expectations for its share price to rise today.

Year-to-date, NIB Holdings Ltd’s share price has still risen 39% – even after factoring in today’s share price sell-off.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.