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PSC backs forecasts for earnings leap

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PSC Insurance Group has backed consensus forecasts for a leap in earnings this financial year, driven by its two largest acquisitions and growth from existing operations.

The company expects a $10.5 million incremental boost to earnings before interest, tax, depreciation and amortisation (EBITDA) from the purchases of Shepparton-based broker Griffiths Goodall and UK-based Paragon International.

MD Tony Robinson told the group’s AGM in Melbourne last week that other PSC businesses are also performing well and the company is supportive of a market consensus forecast for underlying EBITDA of $58.7 million.

The company reported underlying EBITDA of $43.3 million last financial year, up 17% from the previous 12 months. Operational EBITDA was $41.7 million.

PSC wrapped up its purchase of Lloyd’s broker Paragon, the larger of the two acquisitions, at the start of last month and announced the Griffiths Goodall buy in early July.

“Both businesses have grown to where they are today from entirely organic means, and in both cases the senior management teams are staying in the business and will be joining us…as shareholders in the group,” Deputy Chairman Paul Dwyer told the meeting.

Paragon is considered a landmark transaction by PSC due to the access it provides to the US market. The business is expected to contribute annualised EBITDA of $7.5 million.

Mr Robinson says the recent acquisitions will also drive earnings per share growth in the 2021 financial year.

Last week PSC also said it had established a new UK debt facility with Baring Asset Management to support its growth in the region over the long term.

The facility has initial limits of £35 million ($65 million) and an incremental limit of £50 million ($93 million) which will be available to support suitable acquisitions without the need for further documentation.