PSC Insurance Group announced today full-year underlying earnings exceeded $57 million as previously flagged, with acquisitions and organic growth combining to cushion the economy-wide impact of COVID-19.

For this current financial year, the Melbourne-based broker is projecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $65-70 million and underlying net profit after-tax of $40-43 million.

Continued hardening market conditions, along with solid organic growth and contributions from key acquisitions in the UK and Australia will support the business in the current financial year and beyond.

“We expect the current economic conditions to prolong the hardening pricing cycle into [this financial year], partially offsetting the volume contraction,” PSC said. “The [current financial] year will be a year where we return our focus to achieving strong organic profit growth.

“That, coupled with the benefit of full-year contributions from some of the acquisitions we made during [the last financial year], makes us confident that we will see significant profit and [earnings per share] growth in the [current] period.”

In the last financial year, underlying EBITDA grew 32.7% to $57.4 million and underlying net profit after-tax increased 34.5% to $37.4 million while operating revenue went up 48.6% to $176.7 million.

However statutory net profit after tax fell 26.4% to $18.7 million, impacted by non-recurring items of $17.6 million. These included fair value adjustments of $8 million and $8.3 million in transaction-related costs.

PSC says the business has achieved a “terrific result” in what has been “one of the most difficult years for placing risks”.

“No report this year would be complete without mentioning the impact of COVID-19 on the business and social environment,” PSC says. “Yet we have achieved a terrific result.”

The acquisitions of London-based Paragon International and Victorian brokerage Griffiths Goodall have paid off for the business. The two outfits contributed about $17.4 million in earnings, with Paragon providing the largest share at $12 million.