B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 FY2023 Earnings Presentation
44 slides from B.p. Marsh & Partners's earnings presentation, Oct 19, 2022
Slide 1: Interim Results
Interim Results For the 6 month period ending 31 July 2022 Dan Topping, Chief Investment Officer Jon Newman, Group Finance Director Thursday 19th October 2022
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: 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 4: Price and NAV comparators
Summary: Period Ending 31 July 2022 • As at 31 July 2022 – 15 Change 31 January 2010 to 31 July 2022 investments in the portfolio % Change since 31 January with a NAV of £179.8m (31 370 2010 to 31 July 2022 January 2022 £166.6m) BPM Share Price 233.4% AIM All Share 37.7% • Total Shareholder return o
Slide 5: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 200.00 179.77 180.00 166.61 160.00 154.98 149.91 142.63 136.90 140.00 126.17 120.00 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 £10.1m net proceeds 55.46 60.00 raised on AIM 40.61 **NB: Th
Slide 6: Dividends
Dividends £1,800,000 In aggregate £ 12.0M • Dividend of £1m declared for year ending 31st January 2022 4.76p p/s 4.76p p/s £10.6m and paid in July 2022 £1,600,000 February 2017: July 2013: • Aim to maintain £1m dividend Realisation of Besso Realisation of Howden £ 10.0M for the next two years. In In
Slide 7: Business Outlook and Market Commentary
Business Outlook and Market Commentary B.P. Marsh and its portfolio companies The Group continues to work closely with its have performed strongly in the 6 month investee companies' respective Management period to 31 July 2022 Teams, providing advice and support, to assist in long term growth
Slide 8: Disposals – An Overview
Disposals – An Overview The Group’s Valuation Committee is responsible for determining the valuation of the Group’s equity Cost of Valuation prior Equity proceeds Internal rate of Multiple on investments, and undertakes this Investment Disposal Date Investment to disposal date received return on S
Slide 9: Insurance Price Changes
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 portfolio operate Rates c
Slide 10: 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 • A suitably developed regulatory
Slide 11: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce c. The Group’s broking investments £1.49bn of aggregate Gross Written are budgeting to place c. £758m Premium (GWP) in 2022 (compared to of GWP, producing c. £60m of £1.34bn in 2021*) bro
Slide 12: Overview: Managing General Agencies (MGAs) Investments
Overview: Managing General Agencies (“MGAs”) Investments B.P. Marsh’s MGAs are budgeting to underwrite aggregate GWP of more than Current £736m in 2022 (2021: £703m*) Current Multiple on Date of Equity % at 31 Cost of Valuation at % of NAV at Internal rate Invested This will produce more than £8
Slide 13: Overview: Broking Investments
Overview: Broking Investments Since inception, much of B.P. Marsh’s growth has been underpinned by a Current successful track record of investing in Current Multiple on brokers, both in the Lloyd’s and London Equity % at Cost of Valuation at % of NAV at Internal rate Invested market, as well as in
Slide 14: Overview: IFA Investments - LEBC Holdings Limited
Overview: IFA Investments - LEBC Holdings Limited (“LEBC”) Current Current Equity % Valuation Internal Multiple on IFA Date of at 31 July at 31 July Cost of % of NAV at rate of Invested Investment Jurisdiction 2022 2022 Investment 31 July 2022 return Capital £21,603,0 LEBC Holdings Limited April-07
Slide 15: Kentro Capital Limited (Kentro)
Kentro Capital Limited (“Kentro”), formerly Nexus Underwriting Management Ltd B.P. Marsh’s valuation has Kentro in numbers: GWP Growth increased from £1.5m in 2014 2022: Nexus rebrands to Kentro Capital Limited, the holding company for both (for a 5% shareholding) to • Managed Gross Written B.P. Mar
Slide 16: XPT Group LLC (XPT)
XPT Group LLC (“XPT”) 2022: IBI Insurance Brokers Incorporated B.P. Marsh originally invested XPT in numbers: GWP Growth (XPT Owned) £4.8m in June 2017 B.P. Marsh invested a further £2.8m ($3.5m) in XPT, which increased • 2022 forecast Gross Written B.P. Marsh Value our shareholding to 29.15% Premiu
Slide 17: Investment Summary – ATC Insurance Solutions
Investment Summary – ATC Insurance Solutions PTY Limited(“ATC”) CURRENT INVESTMENT • The Group first invested in ATC in July 2018, taking a • ATC is now one of the largest Lloyd’s underwriting 20% equity stake for AU$ 5.1m (c. £2.9m) agencies in Australia. • Since this date, the Group has provided f
Slide 18: Investment Summary – Ag Guard PTY Limited
Investment Summary – Ag Guard PTY Limited (“Ag Guard”) CURRENT INVESTMENT • Since our investment in 2019, Ag Guard continues to • The latest in its suite of rural products, Ag Guard perform well, producing significant year on year recently launched a lifestyle farm insurance offering, growth Farmsty
Slide 19: Stewart Specialty Risk Underwriting Ltd (SSRU)
Stewart Specialty Risk Underwriting Ltd (SSRU) CURRENT INVESTMENT • SSRU is a start-up Managing General Agent (MGA) • Growth has been achieved via organic growth across investment, providing a variety of Property and its existing commercial casualty and property book Casualty products to a wide arra
Slide 20: Investment Summary – EC3 Brokers Limited
Investment Summary – EC3 Brokers Limited (“EC3”) CURRENT INVESTMENT • The Group first invested in EC3, the Lloyd’s • B.P. Marsh has continued to support EC3 during this independent specialist insurance and reinsurance difficult period, and has assisted EC3 in the following broker, in 2017 ways:- • T
Slide 21: Investment Origination
Investment Origination New Investment Opportunities to 31 July Our key investment Personal 2022, 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 investment
Slide 22: Financial Highlights – Period ended (unaudited)
Financial Highlights – Period ended 31 July 2022 (unaudited) Net Asset Value (NAV) of NAV per share of 499.0p +7.9% over six months 8.5% Total £179.8m (490.8p* diluted) Shareholder Return +£13.2m over six months Including dividend of £1.0m paid July 2022 31 July 2021: 430.4p (424.6p diluted) +£24.8m
Slide 23: Financial Highlights – continued
Financial Highlights – Period ended 31 July 2022 (unaudited) - continued Average compound NAV growth of Loan Portfolio Net Loans Repaid £14.1m cash 8.6% p.a. £9.2m £1.3m and treasury balances at 31 July 2022 since flotation and 31 July 2021: £16.7m Key repayments Current liquidity of £12.7m - 18 Oct
Slide 24: Summary
Summary B.P. Marsh’s expertise and Through an experience puts us in a prime Our position as capital provider of choice for the sector in which extensive position to support SME financial network of intermediaries to reach the next we operate offers us unparalleled access to new opportunities brokers
Slide 25: Appendices
Appendices 1 Equity Investment Valuations & Loan Portfolio 26 2 Portfolio & Investment Model 29 3 Financials 36 4 B.P Marsh & Partners Plc and B.P. Marsh & Company Limited Board Members 39 5 Minority Investor Protections 41 6 Key Shareholders 42 7 Joint Share Ownership Plan 43 8 Contacts 44 © 2022 B
Slide 26: Equity Investments – Underwriting Agencies
Equity Investments – Underwriting Agencies Movement in Period Movement in Period Fair market value Equity Cost of equity Year of initial to 31 July 2022 to 31 July 2022 Investment Sector Jurisdiction 31 July 2022 (£’000) As at 31 July 2022 investment (£’000) investment (£’000) (%) Nexus MGA UK 51,52
Slide 27: Equity Investments - Brokers and IFA
Equity Investments - Brokers and IFA Movement in Period Movement in Period Fair market value Equity Cost of equity Year of initial to 31 July 2022 to 31 July 2022 Investment Sector Jurisdiction 31 July 2022 (£’000) As at 31 July 2022 investment (£’000) investment (£’000) (%) Paladin (CBC) Insurance
Slide 28: Loan Portfolio
Loan Portfolio Investment 31 July 2022 (£'000) 31 January 2022 (£'000) 31 July 2021 (£’000) Broucour - 1 21 Denison and Partners 150 - - Fiducia 2,428 2,449 2,545 Kentro - - 4,000 LEBC 1,500 1,500 1,500 Lilley Plummer Risks 300 200 - Paladin (CBC) 3,096 3,096 5,096 Sage 117 111 108 Summa - 1,521 1,6
Slide 29: Portfolio as at 31 July 2022
Portfolio as at 31 July 2022 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 in
Slide 30: Portfolio as at 31 July 2022 Continued
Portfolio as at 31 July 2022 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 Eas
Slide 31: Portfolio as at 31 July 2022 Continued
Portfolio as at 31 July 2022 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 Plum
Slide 32: Portfolio as at 31 July 2022 Continued
Portfolio as at 31 July 2022 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 Construc
Slide 33: 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 34: 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 35: 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 36: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) at 31 July 2022 31 July 2022 31 July 2021 31 January 2022 (Unaudited) (Unaudited) (Audited) Tangible and intangible assets 90 107 96 Right of use asset 754 919 836 Investments at fair value – Equity Portfolio 160,398 136,205 149,349 Debtors / Loans
Slide 37: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2022 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2022 £'000 31 July 2021 £’000 31 January 2022 £'000 Gains on investments (realised and unrealised) 16,367 5,315 19,142 Amounts recovered from / (impairment of) in
Slide 38: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 July 2022 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2022 £'000 31 July 2021 £’000 31 January 2022 £'000 Net cash from operating activities (91) 874 1,507 FX Movement 40 (2) (35) Taxation (17) (6) (13) Purchase of property, p
Slide 39: 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 40: 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 41: 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 42: Key Shareholders as at 30 September 2022
Key Shareholders as at 30 September 2022 Directors Major Shareholders (>3%) Brian Marsh OBE 41.80%* PSC UK Pty Limited 19.71% Alice Foulk Less than 0.5% Mr. Martin MacLeish 4.80% Daniel Topping Less than 0.5% Hargreaves Lansdown Asset Mgt 4.32% Jonathan Newman Less than 0.5% JTC Employer Solutions*
Slide 43: 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 44: 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 © 2022 B.P. MARSH & PARTNERS PLC 44
B.P. Marsh & Partners — H1 FY2023 Earnings Presentation on 6ix