B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2023 Earnings Presentation
48 slides from B.p. Marsh & Partners's earnings presentation, Jun 13, 2023
Slide 1: Annual Results
Annual Results For the year ending 31 January 2023 Dan Topping, Chief Investment Officer Jon Newman, Group Finance Director 13th June 2023
Slide 2: Introduction to B.P. Marsh
Introduction to B.P. Marsh Our Purpose Our Team Our Story Our Investment B.P. Marsh is a specialist private B.P. Marsh was founded in 1990 Strategy We are a complementary team of equity investor in early stage highly experienced leaders in the and has since invested in 54 We take a long term view, w
Slide 3: Year Ending 31 January 2023 Results
Year Ending 31 January 2023 Results Change 31 January 2013 to 31 May 2023 Consolidated profit before Net Asset Value (NAV) tax of of 370 % Change since 31 January 2013 to 31 May 2023 £27.6m £189.5m 320 BPM Share Price AIM All Share 168.5% 6.8% AIM Financials 120.0% +£8.2m, or 42% ahead of year to +£
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 200.00 189.54 179.77 180.00 166.61 160.00 149.91 154.98 142.63 136.90 140.00 126.17 120.00 Full Year £ Millions 98.90 100.00 Half Year 79.68 80.00 70.81 *NB: The valuation at 62.97 31 January 2007 includes 58.92 55.46 £10.1m net proceeds 60.00 raised on AIM 40.61 4
Slide 5: Dividends
Dividends £1,800,000 4.76p p/s 4.76p p/s In aggregate £ 14.0M • The Group is proposing to pay a Final Dividend of £0.5m £11.6m for the year to 31 January £1,600,000 February 2017: 2023 Realisation of £ 12.0M July 2013: Besso Insurance • This dividend will be payable Realisation of £1,400,000 Group H
Slide 6: Disposal Post Year End: Kentro Capital Limited
Disposal Post Year End: Kentro Capital Limited (“Kentro"), formerly Nexus Underwriting Management Ltd Valuation Nexus rebrands to Kentro Capital Limited, the holding company for both Nexus, the In May 2023, the Group agreed to sell its stake The Group originally invested £1.5m in Kentro, largest ind
Slide 7: Recent Disposals – An Overview
Recent Disposals – An Overview TRIREME INSURANCE GROUP LTD WALSINGHAM MOTOR KENTRO CAPITAL LTD INSURANCE LTD BESSO INSURANCE GROUP LTD Date of Investment: 22nd July 2010 MB PRESTIGE HOLDINGS PTY LTD SUMMA INSURANCE Date of Investment: 13th August 2014 Date of Investment: 2nd December 2013 BROKERAGE
Slide 8: Shareholder Returns – Share buy back policy and Dividend
Shareholder Returns – Share buy back policy and Dividend Agreed Sale of Kentro £13m Return to Shareholders, 25% of Proceeds* £51.5m • £1.0m Special Dividend post Kentro completion • £15.1m Equity invested • 3.41x multiple • £2.0m p.a. Dividend proposed from 2024 for 3 • IRR of 25% incl. income years
Slide 9: Business Strategy Update
Business Strategy Update Given the potential opportunities in the B.P. Marsh and its portfolio companies Group’s key markets, it is deemed that such a have performed strongly in the financial reinvestment strategy is in the long-term year to 31 January 2023 benefit to all shareholders In May 2
Slide 10: New Investment Origination
New Investment Origination New Investment Opportunities to 31 Our key investment Personal January 2023, by sector: sourcing channels Connections Direct Fiducia was founded by a long A direct opportunity arose from standing contact of B.P. Marsh. CBC’s Chairman approaching the Financial Tech The inve
Slide 11: New Investment – Verve Risk Services Limited
New Investment – Verve Risk Services Limited (“Verve”) NEW INVESTMENT • In April 2023, the Group invested £0.4m into • B.P. Marsh offered exclusive support to allow Verve Risk Services Limited, a London-based MGA, Scott Simmons and Alan Lambert to undertake an for a 35% shareholding MBO, with Manage
Slide 12: XPT Group LLC
XPT Group LLC (“XPT”) 2023: Cal Inspection Bureau, Inc., Craig & B.P. Marsh originally invested XPT in numbers: GWP Growth (XPT Owned) Leicht LLC £4.8m in June 2017 • 2023 forecast Gross Written B.P. Marsh Value B.P. Marsh provided XPT with further loan funding Premium of over US$700m Acquisition of
Slide 13: Investment Summary – CBC UK Limited
Investment Summary – CBC UK Limited (“CBC”) CURRENT INVESTMENT • CBC, in which B.P. Marsh first invested in 2017, • This represents an equity value uplift of 104% over continues to perform strongly the prior year valuation at 31st January 2022 • In CBC’s last financial year, an EBITDA of £3.8m • In
Slide 14: Overview: Managing General Agencies Investments
Overview: Managing General Agencies (“MGAs”) Investments Internal rate Current Valuation at % of NAV at of return to Multiple on B.P. Marsh’s MGAs are budgeting to Date of Equity % at 31 Cost of 31 January 31 January 31 January Invested underwrite aggregate GWP of circa £900m MGAs Investment Juris
Slide 15: Overview: Broking Investments
Overview: Broking Investments Since inception, much of B.P. Marsh’s growth has been underpinned by a Internal rate Current successful track record of investing in Equity % at Valuation at % of NAV at of return to Multiple on brokers, both in the Lloyd’s and London 31 January Cost of 31 January 31
Slide 16: Investment Summary – ATC Insurance Solutions
Investment Summary – ATC Insurance Solutions PTY Limited(“ATC”) CURRENT INVESTMENT • The Group first invested in ATC in July 2018, • ATC is now one of the largest Lloyd’s underwriting taking a 20% equity stake for AU$ 5.1m (£2.9m) agencies in Australia. • Since this date, the Group has provided furt
Slide 17: Investment Summary - Lilley Plummer Risks Limited
Investment Summary - Lilley Plummer Risks Limited (“LPR”) CURRENT INVESTMENT • B.P. Marsh invested in the newly-formed Lloyd's • When the Group originally invested in LPR, the broker, LPR, in October 2019, taking a 30% business achieved £1.8m of revenue. In LPR’s year shareholding for a cash conside
Slide 18: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce c. £1.64bn of aggregate Gross Written Premium The Group’s broking investments (GWP) in 2023 (compared to £1.32bn in are budgeting to place c. £742m 2022**) of GWP, producing c. £75m of br
Slide 19: Our Current International Portfolio
Our Current International Portfolio B.P. Marsh’s international strategy is focused on areas where we see: • Sufficient opportunity for business Canada: US: development in partnership with a Stewart Specialty Risk XPT Group LLC Underwriting Ltd London-based investor SAGE Program • A suitably develope
Slide 20: Market Overview and Insurance Price Changes
Market Overview and Insurance Price Changes B.P. Marsh continues to B.P. Marsh expects rate GLOBAL FINANCIAL monitor trends in the rate of increases to continue to slow GLOBAL PROPERTY GLOBAL CASUALTY pricing for insurance business in the areas which the Group's & PROFESSIONAL placed in the UK portf
Slide 21: Overview: IFA Investments - LEBC Holdings Limited
Overview: IFA Investments - LEBC Holdings Limited (“LEBC”) Internal rate Current Equity % at Valuation at % of NAV at of return to Multiple on 31 January Cost of 31 January 31 January 31 January Invested IFA Date of Investment Jurisdiction 2023 Investment 2023 2023 2023 Capital LEBC Holdings April-0
Slide 22: Price and NAV comparators
Year Ending 31 January 2023 Results Change 31 January 2013 to 31 May 2023 Consolidated profit before Net Asset Value (NAV) tax of of 370 % Change since 31 January 2013 to 31 May 2023 £27.6m £189.5m 320 BPM Share Price AIM All Share 168.5% 6.8% AIM Financials 120.0% +£8.2m, or 42% ahead of year to +£
Slide 23: Financial Highlights – Year ended 31 January 2023
Financial Highlights – Year ended 31 January 2023 Net Asset Value (NAV) of NAV per share of 526.2p +5.5% over six months 14.4% Total £189.5m (516.8p* diluted) Shareholder Return +£9.7m over six months Including dividend of £1.0m paid July 2022 31 January 2022: 462.7p (455.6p diluted) +£22.9m over ye
Slide 24: Financial Highlights - continued
Financial Highlights – Year ended 31 January 2023 - continued £12.1m cash Average compound NAV growth of Loan Portfolio Net Loans Granted 8.7% p.a. £11.5m since flotation and £1.0m and treasury balances at 31 January 2023 31 January 2022: Current liquidity of £5.2m 11.7% p.a. £10.4m Loans granted •
Slide 25: Post Year End - Financial Highlights
Post Year End - Financial Highlights Agreed Sale of Kentro* Follow-on Funding: £5.2m current cash £51.5m And treasury balances at 12 June 2023 Net Loans £15.1m Equity invested Granted £56.2m expected funds including Kentro receipt, pre-distributions 3.41x multiple £4.6m Exchanged May 2023 Completion
Slide 26: Summary
Summary B.P. Marsh’s expertise and experience The global insurance puts us in a prime position to support market continues to Our position as capital provider Through an extensive SME financial intermediaries to reach the be a of choice for the sector in which we network of brokers, next level promi
Slide 27: Appendices
Appendices 1 Equity Investment Valuations, Loan Portfolio & IRR note 28 2 Portfolio & Investment Model 31 3 Financials 39 4 B.P Marsh & Partners Plc and B.P. Marsh & Company Limited Board Members 42 5 Minority Investor Protections 44 6 Environmental, Social & Governance Policy 45 6 Key Shareholders
Slide 28: Equity Investments – Underwriting Agencies
Equity Investments – Underwriting Agencies Fair market value Equity Movement in Year Movement in Year 31 January 2023 As at 31 January Cost of equity Year of initial to 31 January 2023 to 31 January 2023 Investment Sector Jurisdiction (£’000) 2023 investment (£’000) investment (£’000) (%) Kentro MGA
Slide 29: Equity Investments - Brokers and IFA
Equity Investments - Brokers and IFA Fair market value Equity Movement in Year Movement in Year 31 January 2023 As at 31 January Cost of equity Year of initial to 31 January 2023 to 31 January 2023 Investment Sector Jurisdiction (£’000) 2023 investment (£’000) investment (£’000) (%) Paladin (CBC) In
Slide 30: Loan Portfolio
Loan Portfolio Investment 31 January 2023 (£'000) 31 July 2022 (£'000) 31 January 2022 (£’000) Ag Guard 682 - - Broucour - - 1 Denison and Partners 500 150 - Fiducia 2,225 2,428 2,449 Kentro - - - LEBC 3,000 1,500 1,500 Lilley Plummer Risks 300 300 200 Paladin (CBC) 3,096 3,096 3,096 Sage 120 117 11
Slide 31: Portfolio as at 31 January 2023
Portfolio as at 31 January 2023 Agri Services Company PTY Limited • Investment date: July 2019 41.0% • Ag Guard is an Australian-based MGA which provides insurance to the Agricultural Sector Asia Reinsurance Brokers (Pte) Limited • Investment date: April 2016 25.0% • ARB is a Singapore-headquartered
Slide 32: Portfolio as at 31 January 2023 Continued
Portfolio as at 31 January 2023 Continued Criterion Underwriting (Pte) Limited • Investment date: July 2018 29.4% • Criterion is a start-up Singapore-based Managing General Agency providing specialist insurance products to a variety of clients in the Cyber, Financial Lines and Marine sectors in Far
Slide 33: Portfolio as at 31 January 2023 Continued
Portfolio as at 31 January 2023 Continued LEBC Holdings Limited • Investment date: April 2007 59.3% • LEBC is a national Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas Lilley P
Slide 34: Portfolio as at 31 January 2023 Continued
Portfolio as at 31 January 2023 Continued Stewart Specialty Risk Underwriting Ltd • Investment date: January 2017 30.0% • SSRU is a recently established Specialty Casualty Underwriting Agency, based in Toronto, Canada. It provides specialist insurance products to a wide array of clients in the Const
Slide 35: Bridging the Gap
Bridging the Gap B.P. Marsh specialises in providing early- With the support of B.P. Marsh, these stage finance, investing in businesses with businesses develop over time achieving an enterprise value of between £0 and c. considerable growth in value £25m These investments then attract the int
Slide 36: Investment Model
Investment Model Up To £5m Specialist Investor Relationship Driven Initial Investment B.P. Marsh specialises in early stage We see people as key to each investment and We take on investments which are smaller than and SME financial services businesses we build relationships as well as businesses oth
Slide 37: Investment Approach
Investment Approach Flexibility Long-Term View Value Add We’re proud to have a uniquely flexible We bring specialist experience and We have a long-term approach to our approach to investment and exit sector-specific expertise and knowledge investment partnerships WE ARE FLEXIBLE WE BRING MORE THAN J
Slide 38: Investment Process
Investment Process 1 2 3 4 Initial Assessment Due Diligence and Completion Post Transaction Support Exit Strategy • Strong network of industry contacts • Consider exit strategy when the business • Work to flexible timelines • Business plan implemented brings new opportunities is ready to move to the
Slide 39: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) at 31 January 2023 31 January 2023 31 July 2022 31 January 2022 (Audited) (Unaudited) (Audited) Tangible and intangible assets 79 90 96 Right of use asset 671 754 836 Investments at fair value – Equity Portfolio 171,461 160,398 149,349 Debtors / Lo
Slide 40: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement of Comprehensive Income (IFRS) at 31 January 2023 Audited year to Unaudited 6 months to Audited year to 31 January 2023 £'000 31 July 2022 £'000 31 January 2022 £'000 Gains on investments (realised and unrealised) 27,430 16,367 19,142 Amounts recovered from / (impairment of) i
Slide 41: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 January 2023 Audited year to Unaudited 6 months to Audited year to 31 January 2023 £'000 31 July 2022 £'000 31 January 2022 £'000 Net cash from operating activities 451 (91) 1,507 FX Movement (36) 40 (35) Taxation (14) (17) (13) Purchase of property,
Slide 42: B.P. Marsh & Partners PLC Board
B.P. Marsh & Partners PLC Board Brian Marsh Dan Topping Pankaj Lakhani Executive Chairman Chief Investment Officer Non-Executive Director 55+ years of experience 15+ years of experience 40+ years of experience Founded B.P. Marsh in 1989 Joined B.P. Marsh in 2007 and appointed Chief Investment Of
Slide 43: B.P. Marsh & Company Limited Board
B.P. Marsh & Company Limited Board Brian Marsh Dan Topping Jon Newman Executive Chairman Chief Investment Officer Group Finance Director 55+ years of experience 15+ years of experience 25+ years of experience Founded B.P. Marsh in 1989 Joined B.P. Marsh in 2007 and appointed Chief Investment Off
Slide 44: Minority Investor Protections
Minority Investor Protections B.P. Marsh believes that day-to-day operational control of The Group has an extensive track record of working within the business is the domain of the executive management companies as partners and places significant emphasis team. However, our position is well prot
Slide 45: Environmental, Social and Governance Policy
Environmental, Social and Governance Policy B.P. Marsh is committed to being a responsible investor with Environmental, Social The results revealed that many of our portfolio companies and major suppliers were and Governance (ESG) focused principles incorporated throughout our investment already
Slide 46: Key Shareholders as at 30 May 2023
Key Shareholders as at 30 May 2023 Directors Major Shareholders (>3%) Brian Marsh OBE 40.39%* PSC UK Pty Limited 19.74% Alice Foulk Less than 0.5% Mr. Martin MacLeish 4.81% Daniel Topping Less than 0.5% Hargreaves Lansdown Asset Mgt 4.13% Jonathan Newman Less than 0.5% JTC Employer Solutions* 3.86%
Slide 47: Joint Share Ownership Plan (JSOP)
Joint Share Ownership Plan (JSOP) A 3.9% three-year JSOP was created in June On 12 June 2021 the performance criteria On a sale in excess of 281p per share the 2018 to incentivise and retain the were met. Whilst these shares remain in the Group is entitled to receive up to £4.1m. management team and
Slide 48: Contacts
4 Matthew Parker Street London SW1H 9NP Telephone: 020 7233 3112 http://www.bpmarsh.co.uk/ Nominated Adviser & Broker Panmure Gordon Telephone: 020 7886 2500 Financial PR Tavistock Telephone: 020 7920 3150 © 2023 B.P. MARSH & PARTNERS PLC 48