PSI Insurance Group has announced an $80m capital raising to fund acquisitions at $4.50 a share (-5.3% to the previous closing price) and Macquarie says this should leave the company with $108m in its acquisition coffers.
Management expects the funds will be deployed in a similar fashion to its 2020 raising, which was largely dominated by UK purchases.
Macquarie notes the scarcity of UK brokerages has amped prices and cuts EPS forecasts -0.7% for FY22; -4.1% for FY23; and -3% thereafter.
Neutral rating retained. Target price falls to $4.65 from $4.80.
Sector: Insurance.
Target price is $4.65.Current Price is $4.62. Difference: $0.03 – (brackets indicate current price is over target). If PSI meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
