B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 2014 Earnings Presentation
30 slides from B.p. Marsh & Partners's earnings presentation, October 2014
Slide 1: Interim Results for the six months to 31 July 2014
B.P. Marsh & Partners Plc Interim Results For the six months to 31 July 2014 Brian Marsh OBE, Chairman Jonathan Newman, Group Finance Director Dan Topping, Investment Director Camilla Kenyon, Director & Head of Investor Relations October 2014 B. P. MarsH & PARTNERS PLC
Slide 2: Overview
Overview Niche Venture Capital provider focused on minority investments in high growth financial services businesses, typically taking an equity stake of between 15% and 45% Considers investment opportunities based in the United Kingdom, Australia, Europe, North America and occasionally elsewhere Es
Slide 3: Financial Highlights
Financial Highlights Net Asset Value per share of 205p As at 31 July 2014 — ten investments in portfolio with a NAV of £59.8m, with an average holding period of eight years Equity Portfolio increase of 5% since 31 January 2014, excluding cash Equity Portfolio increase of 13.7% since 31 July 2013, ex
Slide 4: Investment
Investment Sector Cost of | Fair market equity value investment 31.07.14 (4000) (4000) Equity Year of initial investment Movement in Period to 31.07.14 (4000) Movement in Period ike) 31.07.14 Total 17,299 Besso Insurance Group Insurance 37.9% 16.7% Limited Intermediary Hyperion Insurance Group Insur
Slide 5: Specific Activity within the Portfolio
Specific Activity within the Portfolio During the Period (1) Besso Insurance Group Limited (“Besso”’) 2013 Financial Year Results = Brokerage income has increased to £28.3m (2012: £24.0m), an uplift of over 17%, which is a solid achievement for Besso in what continues to be a challenging market. Thi
Slide 6: Specific Activity within the Portfolio
Specific Activity within the Portfolio During the Period (ii) MB Prestige Holdings PTY Limited (“MB”) Successful end to the 2013 financial year = MB Group achieved revenues of AUD 2.74m and Profit before Tax of AUD 0.78m " The Group can report that it received a dividend of AUD 0.15m, being its prop
Slide 7: Acquisition and Disposal
Acquisition and Disposal Nexus Underwriting Management Limited (“Nexus”’) — Post balance sheet event = On 14 August the Group subscribed for a 5% Preferred Ordinary shareholding in Nexus, an independent specialty Managing General Agency, for a total consideration of £1.55m. The funds will be used to
Slide 8: M&A in the Insurance Intermediary Sector
M&A in the Insurance Intermediary Sector The Insurance M&A market in a recovering global economy Returning positive sentiment within the Market as evidenced from increasing quantum of M&A activity 2014/15 is shaping up to set records in M&A in the Insurance Sector Randall Goss, Chairman of US Risk I
Slide 9: M&A in the Insurance Intermediary Sector
M&A in the Insurance Intermediary Sector Lloyd’s & London Market " M&A activity continues to be driven by a current over-supply of investment capital which is seeking to improve upon historically low returns " The Independent mid-market segment (SME) will be a focus of many companies who find organi
Slide 10: Financial Highlights — Period Ended July 2014
Financial Highlights — Period Ended 31 July 2014 = Equity Portfolio increase of 5.0% for the six month period to 31 July 2014, Equity Portfolio increase of 13.7% for the twelve month period from 31 July 2013, 18.5% excl. Hyperion = NAV of £59.8m (31 July 2013: £56.9m, 31 January 2014: £58.9m ) * = N
Slide 11: Financial Highlights — Period Ended July 2014
Financial Highlights — Period Ended 31 July 2014 » Average compound NAV growth of 11.3% p.a. since 1990 (excl. £10.1m raised on flotation)* » Final Dividend of 2.75p per share declared (40.8m) and paid on 25 July 2014 to Shareholders registered at the close of business on 27 June 2014. » Share price
Slide 12: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 70 60 56.90 58.90 59.80 55.50 50 44.17 40.61 40 & Midlians 22.10 20 10 2.50 477 0 T T T T T : ; : 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31stJan 31stJuly 31stJan 31st July 1990 1995 2005 2007* 2010 2013 2013 2014 2014 = YEAR ENDED Py SIX MONTHS ENDED YEAR END
Slide 13: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 220 200 180 35% discount to [AV as at 3 y 160 NAV as at 31 July 2014 140 120 100 80 60 Price and NAV comparators rebased t® BRfshare price 40 20 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 BPM shar
Slide 14: Cash Position
Cash Position "Cash at 1 February 2014 £14.8m (inc. treasury funds) + £1.0m net proceeds received from sale of the PDGI businesses - £0.7m invested in existing portfolio: 40.2m loans to Walsingham 40.1m net loans to Besso 40.4m Trireme Rights Issue = -£1.9m Tax Paid = -£0.8m Dividend Paid = £12.4m c
Slide 15: Investment Opportunities
Investment Opportunities 27 new investment enquiries received in the period to 31 July 2014 26% of the 27 investments continued to detailed investigations Strong current pipeline, including opportunities in the insurance intermediary space and general financial services Out of 27 new enquiries recei
Slide 16: Summary
Summary Equity Portfolio increase of 13.7% since 31 July 2013, 18.5% excl. Hyperion Final Dividend of 2.75p per share declared and paid £7.9m of cash and treasury funds currently available for investment post Nexus Share price discount to Net Asset Value of 38.3% (at close 17 October 2014) Continue
Slide 17: Appendices
Appendices Management Team Board Members Current Portfolio Minority Investor Protections Adding Value Exit Strategy Financials Major Shareholders Contacts 17
Slide 18: Management Team
Management Team Executive Chairman Brian Marsh OBE Group Finance Director Jonathan Newman ACMA CGMA MCSI Investment Director Dan Topping ACIS MCSI 55 years’ experience in insurance broking and underwriting. 1979-1990 was chairman and major shareholder of the Nelson Hurst & Marsh Group, the internati
Slide 19: Management Team
Director, Head of IR. Camilla Kenyon Investment Director Natasha Dunbar Management Team Camilla Kenyon was appointed as Head of Investor Relations at BP Marsh in February 2009, having four years’ prior experience with the Company. Camilla has a number of non-executive appointments over two investee
Slide 20: Board Members
Board Members Non-Executive Director Stephen Clarke Non-Executive Director Philip Mortlock Non-Executive Director Campbell Scoones A Chartered Accountant, Stephen gained many years’ experience with Charterhouse Development Capital in the structuring of venture capital projects in all fields includin
Slide 21: Current Portfolio
Current Portfolio Besso Insurance Group Limited- 37.9% The Broucour Group Limited — 49% Hyperion Insurance Group Limited — 2.5% LEBC Holdings Limited- 34.9% MB Prestige Holdings Limited — 40% February 1995 the Group assisted a specialist team departing from Jardine Lloyd Thompson Group in establishi
Slide 22: Current Portfolio Continued
Current Portfolio Continued Randall & Quilter Investment Holdings Limited - 1.3% Nexus Underwriting Management Limited —5% Sterling Insurance PTY Limited — 19.7% Summa Insurance Brokerage, S.L. - Trireme Insurance sroup Limited — 29.3% Walsingham Motor Insurance Limited — 30% The Group invested in R
Slide 23: Minority Investor Protections
Minority Investor Protections "The Group believes that day-to-day operational control of the business is the domain of the executive management team. However, the Group’s position is well protected and portfolio investments are actively monitored. "The Group outlines from investment the number of ma
Slide 24: Adding Value
Adding Value " We believe in building strong relationships with the businesses we partner and using our expertise and experience in assisting them to achieve their growth targets and maximise shareholder value. We do so as follows: « Representation at Board level « Provision of follow-on funding « G
Slide 25: Exit Strategy
Exit Strategy Exit considered on entry Patient development to achieve full earning potential Recognise and act on opportunistic situations 25
Slide 26: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (IFRS) at 31 July 2014 Unaudited 6 Audited Unaudited 6 months to Year to months to 31 July 2014 31 Jan 2014 31 July 2013 £000 £000 £000 Tangible assets 21 18 13 Investments at fair value — Equity Portfolio 32,351 31,710 27,344 Treasury Funds 8,558 9,289 =
Slide 27: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehen Income (IFRS) at 31 July 2014 Unaudited 6 Audited Unaudited 6 months to Year to months to 31 July 2014 31 Jan 2014 31 July 2013 £000 sulle £000 Gains on Investments (Realised and Unrealised) 1,528 3,853 1,389 Impairment of investments and loans - - - Operating Inc
Slide 28: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 July 2014 Unaudited 6 Audited Unaudited 6 months to Year to months to 31 July 2014 31 Jan 2014 31 July 2013 £000 Sue £000 Net cash from operating activities (46) 705 655 ‘Taxation (1900) (1,400) - Purchase of Property, plant and equipment (6) (17) (8
Slide 29: Key Shareholders
Key Shareholders = Directors « Brian Marsh OBE - 57.9% » Natasha Dunbar - 4.9% = Major Shareholders (>3%) « James Sharp & Co » Henderson Global Investors « IS Partners AG » The Stephen Crowther Trust 29
Slide 30: Contacts
Contacts B.P. Marsh & Partners Plc 24 Floor 36 Broadway London SW1H 0BH Telephone: 020 7233 3112 Website: www.bpmarsh.co.uk Nominated Adviser & Broker Panmure Gordon & Co Telephone: 020 7886 2500 Financial PR Redleaf Polhill Telephone: 020 7382 4730 30
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