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PSC revenue rises on organic growth, acquisitions

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PSC Insurance Group today reported underlying revenue increased 18% to $119 million in the last financial year, driven by robust organic growth and contributions from new acquisitions.

Underlying net profit increased 15% to $27.8 million, but on a statutory basis it declined 9% to $25.4 million due to one-off charges and a $17.3 million fair value gain enjoyed in 2017/18.

Earnings before interest, tax, depreciation and amortisation (EBITDA) on an underlying basis improved 17% to $43.3 million.

Organic growth added another $3 million to operational underlying EBITA and acquisition-led growth brought in $3.8 million.

“It has been another active and successful year for the group,” MD Tony Robinson said.

“We remain focused on organic growth outcomes, supplemented by acquisition-based growth where we feel we can add value and grow the business.”

The distribution business, which accounts for more than half of earnings, increased its underlying revenue to $70 million from $58.2 million on strong results from broking, solid client growth and hardening rates.

The UK business, the second-largest income generator, also performed well as underlying revenue rose to $30.5 million from $24.6 million a year earlier.

PSC has worked to grow its UK presence with a number of investments. It took on a 70% stake in Leicester-based Turner Insurance Services in June last year. The group also launched construction-focused wholesale agency Chase Underwriting International and made other smaller purchases.

Last month, the business bought London-based Lloyd’s broker Paragon International for a base consideration of £42 million ($75.3 million).

PSC is focusing on growing its local presence as well. In July it announced a $48 million deal to take over regional broker Griffiths Goodall.

The new additions will support the future growth of the business.

“We have previously announced the acquisitions of Griffiths Goodall and Paragon. Both businesses have very capable management teams who have grown their businesses entirely from organic means. They are welcome additions to the group,” PSC says.

“Dependent on the timing of completion for Paragon, we expect earnings growth from these acquisitions of over 20% for the financial year 2020. The existing businesses are also expected to continue to perform well and grow organically at a level consistent with prior years.”