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PSC eyes opportunities as it posts strong first-half growth

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PSC Insurance Group is looking to expand into Asia after the business performed strongly in the December half, buoyed in part by acquisitions it has made over the past few months.

The listed brokerage announced today that statutory net profit after tax improved 13% to $8.8 million in the six months to December 31, and on an underlying basis it grew 18.5% to $11.2 million.

Recent additions to the business, such as the £42 million ($81.6 million) acquisition of London-based Paragon International, contributed about $20.1 million in incremental revenue during the period.

Underlying revenue increased 37% to $74.8 million, including $13.9 million from Paragon, and $4.7 million from Griffiths Goodall, the Victorian brokerage acquired last July for $48 million.

“The result is a product of the group’s disciplined approach to building a great insurance broking and services business and reflects growth from existing business and the inclusion of recent acquisitions,” PSC says.

“The acquisition pipeline includes opportunities in Australia and the UK and the possibility of taking a holding in a small business in Hong Kong to test the opportunities in that region.”

The PSC financial statements show the business already has a stake in Hong Kong insurance brokerage Charter Gilman through a $1.01 million investment made last July.

The Australia business led with $600 million in gross written premium (GWP) in the December half, followed by the UK at $500 million and the US on $400 million.

Underlying revenue from the UK business increased to $29.3 million from $13.7 million a year earlier. The UK business now accounts for 39% of underlying revenue.

The distribution business, which makes up half of PSC’s underwriting revenues, logged $37.2 million, up from $31.7 million. The agency business made about $7.6 million, down from $8 million.

PSC says it is confident of a strong second half and expects the business to gain “full benefit” from the acquisitions it made recently.