PSC Insurance Group has reported an 11% rise in underlying profit, in what is likely to be its final result as a listed Australian company before becoming part of UK-based Ardonagh.

Underlying net profit after tax and before amortisation grew to $87 million from $78.5 million, and underlying revenue increased 15.5% to $343.6 million last financial year.

PSC shareholders will vote on September 26 on Ardonagh’s $2.3 billion takeover offer, paving the way for the deal to complete in October. The proposal is recommended by the board and has been assessed as “fair” and “reasonable” in an independent expert report. 

“We’re very excited about what the merger means for our clients and our staff – it’s a really positive step forward,” MD Tony Robinson told a results briefing today.

PSC says the Ardonagh transaction will help it reach its goal of becoming a globally significant broking and intermediary business.

“This merger is a real step to us achieving that in conjunction with a group that is very like-minded – very similar skill set and capability, and drive and ambition,” Mr Robinson said.  

PSC says there is a continued strong outlook this financial year for each of its businesses.

Distribution, which includes Australian and New Zealand broking, reported a 15.2% increase in revenue last financial year, with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rising 12.4% to $63.4 million.

PSC says there was a good performance across Australian broking and increases in workers’ compensation consulting, while it was a year of consolidation for the network business as it “digested the move away from our buying group” and invested in the New Zealand platform.

Market conditions were described as mixed by policy class, with commercial softening and reduced premiums in some areas.

Agency revenue rose 11.9%, while earnings eased 6% to $12.2 million as the division started three new businesses – Chase Plant and Equipment, Chase Credit, and Chase Accident and Health.

UK and international revenue increased 17.5% and EBITDA increased 21.1% to $56 million.

CFO Joshua Reid says Paragon, a Lloyd’s broker PSC acquired in 2019, had a second half that was well up on the previous corresponding period while still facing rating environment challenges in areas such as cyber and directors’ and officers’ cover.  

During the year, PSC made a small investment in its first Vietnamese business, through an association with that country’s largest insurer.

“We expect this may become an opportunity to progressively and patiently grow a business in the region,” the company said.

Underlying EBITDA across the group grew 14.5% to $127.1 million as organic growth contributed $9.1 million and acquisitions $7 million.

Overall, PSC completed 14 acquisitions and deployed about $50 million in capital, with a focus on smaller, accretive opportunities. The pace slowed in the second half as the Ardonagh deal emerged.

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