In trading Halt today with below response:

Likely driven by below article which ran yesterday int he AFR:

PSC Insurance rides sector growth as Goldman fields inbound interest

This column is not suggesting PSC has received a formal takeover proposal that would require disclosure. Goldman Sachs declined to comment.

Sources pointed to NYSE-listed Arthur J. Gallagher and the UK’s Ardonagh Group – both prolific deal-doers in Australia – as PSC’s would-be dance partners. But Robinson and his Paul Dwyer-chaired board are seeking a price tag of about $2.3 billion, and it was unclear whether the suitors’ interest would progress, the sources said.

The $US55 billion ($83 billion) inorganic growth story of Gallagher is particularly impressive. The insurance broker acquired 37 entities in the first nine months of 2023 that contributed about $475.3 million to annualised revenue. It finished the year by snapping up Cobram, Victoria-based Edgar Insurance Brokers for an undisclosed sum.

Ardonagh Group has also kept a close watch on the local sector’s burgeoning growth, acquiring Queensland-headquartered Envest a year ago. Envest is an insurance investment and distribution group with more than 31 financial services businesses under its belt and a footprint across Australia.

The monthly CPI indicator rose 3.4 per cent in the 12 months to January. The strongest price rises were seen in insurance and financial services, up 8.2 per cent, which fits with what QBE, Suncorp and IAG told their investors in February’s reporting season. The three big insurers have creamed it over the past 18 months, able to pass on premium increases well in excess of claims inflation.

Shares in PSC Insurance last closed at $4.85.

Was expecting a bit better from these results given AUB and SDF but anyway still decent.

Upgraded guidance for NPATA of $83-87M - 1H was $37M NPATA so 2H would be $46M at lower range. Assuming a new run rate of NPATA of $92M.

$92M NPATA against EV of $1.9B (20x) and further growth ahead.

Still looks okay - maybe should have stuck with the bigger players SDF of AUB.

Will continue to hold.

Drop on large volume, i wonder whether there is bad news coming, people hedging ENA shares for the scheme or just a fundie getting out.

Inside Ownership                  Ordinary Shares    % PSC Issued       Net Value at $4.75

Paul Dwyer                             57,174,852                  15.91%            $271.5m

John Dwyer                             34,571,351                  9.62%              $164.2m

Brain Austin                           32,277,966                  8.98%              $153.3m

Tara Falk                                 8,786,200                    2.44%              $41.7m

James Kalbassi                       7,662,587                    2.13%              $36.4m

Antony Robison                      3,599,290                    1.00%              $17.1m

Melvyn Sims                           306,653                       0.09%              $1.45m

Jo Dawson                              10,000                         -                       $47.5K

Total                                       144,388,899                40.17%            $685.85m

PSC Insurance Group Acquisition History

·       August 2023 Acquire Ensurance Ltd (ASX: ENA) - $25.2m ENA operates an Australian based underwriting agency business specialising in professional and financial lines, which will add a high growth operation and new product suite to our Australian Specialty businesses, led by Adam Burgess. https://announcements.asx.com.au/asxpdf/20230808/pdf/05sfgygf003gf2.pdf

·       March 2023 Acquisition of Turner Rawlinson & Company Limited - £4,5m Established in 1980, Turner Rawlinson Insurance Brokers Ltd are an Independent “retail” insurance broker situated in North London. https://announcements.asx.com.au/asxpdf/20230310/pdf/45mjqh2q8ds713.pdf

·       November 2022

Charter-Union Insurance Brokers Ltd (Hong Kong) (“CUIB”) is a Hong Kong based general insurance broking business 

PSC Trade Credit Risk - PSC are taking a 90% equity interest, with an agreement to purchase the remaining equity over 5 years. The total consideration was paid with an initial payment of 80% payable on completion, with the balance adjustable and payable over 2 years. The payments on completion are predominantly cash, with 10% payable in PSI shares. 

https://announcements.asx.com.au/asxpdf/20221104/pdf/45h7b5nrff904y.pdf

·       July 2022 Acquisition of Ensurance UK operations  - $8.2m https://announcements.asx.com.au/asxpdf/20220722/pdf/45c2fpptt0r60g.pdf

·       May 2022 Acqusition of 50% of Tyser UK Retail Business. AUB and PSC have entered into a Term Sheet under which it is intended that PSC will acquire a 50% stake in Tysers UK Retail as part of a 50/50 joint venture with AUB as soon as practicable after completion of the Acquisition. Tysers is a leading specialist international insurance broker based in London https://announcements.asx.com.au/asxpdf/20220509/pdf/458t94bt6yntpy.pdf

Update May 2023 – Tyser acquisition not proceeding. https://announcements.asx.com.au/asxpdf/20230518/pdf/05ptc1qv8s5pzc.pdf

·       April 2022 Acquisition of Alan Wilson Insurance Brokers - $17.5m AWIB has been operating since 1984, and is an insurance broking business based in Traralgon in regional Victoria with 21 staff. https://announcements.asx.com.au/asxpdf/20220427/pdf/458c05hh3sftg8.pdf

·       August 2021 Acquisition of Alliance Insurance Broking Services $24.5m https://announcements.asx.com.au/asxpdf/20210817/pdf/44zcsw17w7np4w.pdf

·       March 2021

Trust Insurance Services - approximately £15.5 million (excluding net assets) (approximately A$28 million equivalent). Formed in 1992, Trust is an independent commercial insurance broker located in Northampton, England. The business services clients in both the United Kingdom and The Republic of Ireland.

Abaco Insurance Brokers - £21.0 million (excluding net assets) (approximately A$38 million) Formed in 2011, Abaco is an independent insurance broker located in Leicester, England with 32 staff. 

https://announcements.asx.com.au/asxpdf/20210303/pdf/44t9fjny0yh9hc.pdf

·       October 2020 Acquisition of Absolute Insurance Brokers Ltd (“AIB) - £8.51m (~ A$15.5m), plus net assets. located in Croydon, (UK – South London), has been operating since 2009 providing risk management and insurance solutions predominantly to business and commercial clients. https://announcements.asx.com.au/asxpdf/20201019/pdf/44nt6rjv5jxtqg.pdf

·       February 2020 Acquisition of Ultimate Safety Solutions Australia - $698K USSA is a Perth based health, safety, environment and quality (HSEQ) consultancy business which has been operating since 2007. https://announcements.asx.com.au/asxpdf/20200210/pdf/44dyv0df5bsf5k.pdf

·       January 2020 Acquisition of Australian Unity (“AU”) - $1.56m general insurance broking operations predominantly in Sydney https://announcements.asx.com.au/asxpdf/20200130/pdf/44dmd6w9gr8phl.pdf

·       November 2019 Acquisition of Carroll Insurance Group (CIG) - ~ £3.4 million (~ A$6.3 million), excluding net assets. CIG is a direct and wholesale broking business, operating in the Lloyd’s and London markets. https://announcements.asx.com.au/asxpdf/20191112/pdf/44bhbtnkglhqhz.pdf

·      July 2019 Acquisition of Paragon Insurance Holdings Ltd - £42.0 million (approximately A$75 m) Paragon provides wholesale brokerage services to clients in the United States and both direct and wholesale brokerage services in the United Kingdom. Paragon generates over 60% of its revenue from the US wholesale market. https://announcements.asx.com.au/asxpdf/20190725/pdf/446w1z2d3g39f1.pdf

·      July 2019 Acquisition of Griffiths Goodall Insurance Brokers - $48m GGIB is a Shepparton based insurance broker established in 1989 which has grown to become one of the largest regional independent insurance brokers in Australia. GGIB is a well-diversified insurance broker with over 30 staff who have particular expertise in commercial, industrial, transport, logistics, pleasurecraft, agri-risk and personal insurance. https://announcements.asx.com.au/asxpdf/20190709/pdf/446h3jhpj4xkg6.pdf

·      June 2018 

Turner Insurance Services Ltd (Turner) - acquired 70% of Turner for a total consideration of approximately £3.96m (A$7.06m). Turner has been operating since 1993 and is a Leicester (UK) based retail insurance broking business servicing the insurance needs of regional and local businesses. 

Easy Broking Online Ltd (EBO) - EBO is a UK based underwriting agency, specialising in SME property risks. Its products are sold through UK brokers and delivered by an online platform and has current revenue of approximately £0.6m (A$1.1m). PSI currently own approximately 23% of EBO via its UK subsidiary Alsford Page & Gems Ltd. 

https://announcements.asx.com.au/asxpdf/20180625/pdf/43w0mx0xsccgt6.pdf

·      June 2018 Investment in B P Marsh & Partners PLC PSI is delighted to advise that it is acquiring a shareholding of between 19.6% and 19.9% in B P Marsh & Partners plc (BPM). PSI’s investment will total approximately £18.5 million (approximately A$33m subject to exchange rates on completion). BPM is a specialist private equity and venture capital investor in principally insurance intermediary businesses, and financial services businesses. It has investments in the UK, USA, Europe, Australia and Asia. Listed on the AIM market of the London stock exchange. https://announcements.asx.com.au/asxpdf/20180612/pdf/43vqcg04jw78gd.pdf

·      December 2017

Insurance Solutions Corporation Pty Ltd (Insurance Solutions) - $4.2m Insurance Solutions is a Melbourne based insurance broking business and has been operating since 1993. 

Capital Insurance Brokers Pty Ltd (CIB) - $4.65m CIB is a Canberra based general and life insurance broking business and has been operating since 1979. 

https://announcements.asx.com.au/asxpdf/20171218/pdf/43q7xqzns6ynr9.pdf

·       August 2017

Insurance Marketing Group of Australia Pty Ltd (IMGA) – $5.7m IMGA is a Brisbane based, national insurance broking business, specialising in services to the healthcare industry. IMGA has been operating since 1999 and has a very good reputation with its customers and the market place. IMGA has a history of developing new products for the evolving needs of the healthcare industry and healthcare professionals.

Medisure Indemnity Australia Pty Ltd (MIA) - $2.9m MIA, a related business of IMGA, is a Brisbane based, national underwriting agency, specialising in insurance products to the healthcare industry. MIA has strong relationships with a number of major Australian insurance companies. 

 https://announcements.asx.com.au/asxpdf/20170817/pdf/43lgxzcn43cv3y.pdf

·       July 2017 

National Franchise Insurance Brokers (NFIB) - $1.2m NFIB is a Perth based insurance broking business, specialising in services to franchise groups and their franchisees. The services are delivered via a unique online platform, which provides efficiencies for the clients and the business. Given PSI’s national footprint and scale, NFIB will be able to expand its client reach and sales capability and will strengthen PSI’s capability and services to franchise and affinity groups throughout Australia. 

Riley & Associates (R&A) - $1.2m R&A are a Gold Coast based insurance broking business. R&A will integrate within our existing team and business in the Gold Coast. This acquisition as a ‘bolt on’ will make a further contribution to an already well performing business unit within the Group. 

Clover.com.au Pty Ltd (Clover) - investment of $1.1 million for a 16% ownership interest in Clover. Clover is an early stage personal financial advisory and planning business, utilising technology to attract clients and to deliver its services. Clover is in the early ‘post revenue’ phase of its evolution and this funding round will be used to expand and fund its marketing. The technology platform is complimentary with existing general insurance online platforms within the Group, being PSC Direct, Online Insurance Brokers (travel insurance) and now the NFIB platform. The investment will enhance the Group’s ability to evolve its online capability and use of technology to reach our existing and future client base. 

https://announcements.asx.com.au/asxpdf/20170719/pdf/43kqwkxqjc67bz.pdf

·       May 2017

Online Insurance Brokers Pty Ltd (OLIB) - $4.0m are a direct to market, online travel insurance agency business which has been operating for over 12 years. OLIB is a profitable business and the addition of OLIB to the Group will enhance our ability to efficiently deliver value added services to our clients. 

BCS Broking Pty Ltd - The purchase price for the initial 25% shareholding is up to $1.2 million, with the price of future tranches being a function of future revenue and profit. BCS are a construction focussed insurance broking business, based in Brisbane, with a national focus. We will initially purchase a 25% shareholding, contracted to increase to 50% over 3 years. The investment will complement and expand on the Group’s existing focus and specialisation in the value chain of construction insurance across Australia. 

RP Hoxton Park Pty Ltd (RPHP) - The purchase price for the 50% is a little over $0.5 million, payable $0.3m upfront and the balance on an adjustable basis after 12 months. RPHP is a franchisee in the Group’s Reliance Partners franchise group business. We are purchasing the remaining 50% of the business and integrating the portfolio into our existing Newcastle broking business. The operator of RPHP has been appointed the ongoing Managing Principal of the Newcastle business. 

https://announcements.asx.com.au/asxpdf/20170504/pdf/43j0q2m23blc7t.pdf

·       April 2016 Acquisition of Hiscock Insurance Brokers - $3.04m Melbourne based insurance broking business. https://announcements.asx.com.au/asxpdf/20160429/pdf/436x1bjd14c0x0.pdf

·       April 2016 Acquisition of John Holman & Sons (holding) LTD - £2.5 million + net assets. UK Based Lloyds Insurance broking business. https://announcements.asx.com.au/asxpdf/20160426/pdf/436r2x3tk3v6c0.pdf

·      Feb 2016 Acquisition of EIB Insurance Brokers PTY LTD https://announcements.asx.com.au/asxpdf/20160226/pdf/435dy35n9wt3m0.pdf

·      Feb 2016 Reliance Franchise Partners and Australian Reliance Broking business - $10.1m Australian Reliance has broker businesses in Perth, Melbourne, Sydney and Brisbane. Reliance Partners has franchisees throughout Australia. The majority of the franchisees are partly owned by Reliance Partners and partly owned by the franchisee management. https://announcements.asx.com.au/asxpdf/20160219/pdf/4355xm4p8dhcpb.pdf

Capital Raise History PSC Insurance Group

As of October 2023 PSC has raised $273m since IPO December 2015

·      March 2022 Raised $80 m at $4.50 per share from selected institutional and sophisticated investors. https://announcements.asx.com.au/asxpdf/20220311/pdf/456xjsntn2jd20.pdf

·      November 2020 Raised $60 m at $3.00 per share from selected institutional and sophisticated investors. https://announcements.asx.com.au/asxpdf/20201125/pdf/44q7f36r2c7g9y.pdf

·      July 2019 Raised $35m at $2.60 per share from institutional share placement https://announcements.asx.com.au/asxpdf/20190725/pdf/446w1z2d3g39f1.pdf

·      October 2017 Raised $55m at $3.00 per share from selected institutional and sophisticated investors https://announcements.asx.com.au/asxpdf/20171031/pdf/43ns98m6pr5n52.pdf

·      December 2015 IPO Raised $43m at $1.00 per share.

PSC INSURANCE GROUP LTD (PSI) – FY21 HALF-YEAR RESULTS ANNOUNCEMENT AND INVESTOR PRESENTATION

Financial Highlights:

UNDERLYING REVENUE UP 25% TO $93.8M.

UNDERLYING EBITDA UP 52% TO $28.7M. UNDERLYING NPATA UP 50% TO $17.1M.

UNDERLYING EPS UP 36% TO 5.9 CENTS.

STATUTORY NPAT UP 55% TO $13.6M. INTERIM DIVIDEND INCREASED BY 14% FULLY FRANKED TO 4.0 CENTS

Presentation

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02343935-3A561790?access_token=83ff96335c2d45a094df02a206a39ff4