26 Aug 2016
PSC Insurance (PSI:ASX) is a little-know consolidator of insurance brokers that landed on the ASX boards in December 2015. In no uncertain terms, its inaugural full year earnings report was a cracker. Revenue increased 34% on FY15 with this number over 20% ahead of prospectus forecasts. The underlying Net Profit (pre amortisation) at $14.3m was 15% ahead of prospectus. Remember, PSI has only been listed for 9 months.
Not surprisingly the stock price has been tearing away, having now doubled since IPO.
Following in the successful footsteps of the likes of AUB Group and Steadfast, PSI is carving out a name for itself as a serious consolidator in the space having averaged almost acquisition almost every month since listing.
Contributing more than $8m in revenue to date, the acquisitions have included:
- Reliance Franchise Partners
- Australian Reliance Perth and Sydney
- John Holman & Sons
- Hiscock Insurance Brokers
- T A Management
With a market cap now approaching $500m and a modestly geared balance sheet, there is every expectation acquisitional growth will continue.
Of course there is a long and undistinguished list of companies that have attempted to consolidate professional services industries and failed. However management in PSC own over 60% of the issued capital making the key players in this company as invested as any in its ongoing success.
The Cyan C3G Fund remains a long-term shareholder in PSI with a price target in excess of $2.50.