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PSC on target as half-year earnings increase by more than 50%

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PSC Insurance Group says pre-tax earnings grew in excess of 50% in the six months to December 31 as forecast, driven by strong organic growth and solid contributions from recently acquired businesses, especially in the UK.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to $28.7 million, up 52% from a year earlier while underlying revenue increased 25% to $93.8 million.

Statutory net profit after-tax surged to $13.6 million from $8.8 million.

“These are very strong results in the context of the business, personal and economic challenges presented by the COVID-19 pandemic and the current state of the insurance markets globally,” the listed business said today in an investor update.

“The Group has received no assistance from the Job Keeper scheme of the Australian government.”

PSC expects the strong underlying performance to continue, keeping the business on track to achieve underlying EBITDA at the top end of its $65-70 million forecast.

The business remains confident of progressing a number of acquisition targets it has identified, having raised $70 million from existing and new shareholders to fund potential expansions.

PSC says in the December half organic growth contributed $6 million to the business, up 32% from a year earlier.

In the UK, completing the £8.51 million ($15.1 million) acquisition of Absolute Insurance Brokers and taking the remaining 30% stake in Turner Insurance Services (PSC acquired a 70% stake in 2018) produced a significant advance in the group’s stated strategy of growing a direct commercial broking business in the country.

Acquisition growth was $3.8 million during the period and this was largely driven by the UK operating segment.

The UK/International business is now the second biggest source of underlying EBITDA, earning some $11.7 million in the December half.

PSC’s distribution business - which it defines as insurance broking that includes PSC Network Insurance Partners, life broking and PSC Workers Compensation Consulting – provides the lion’s share of EBITDA, at $16.3 million.

The agency business reported underlying EBITDA of $2.2 million. The agency business includes Chase Underwriting, Breeze Underwriting, Online Travel Solutions and Medical Indemnity Australia.