B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 2016 Earnings Presentation
33 slides from B.p. Marsh & Partners's earnings presentation, October 2015
Slide 1: B.P. Marsh & Partners Plc Interim Results
B.P. Marsh & Partners Plc Interim Results For the six months to 31 July 2015 Brian Marsh OBE, Chairman Jonathan Newman, Group Finance Director Dan Topping, Investment Director Camilla Kenyon, Director & Head of Investor Relations October 2015 B. P. MarsH & PARTNERS PLC
Slide 2: Overview
Overview Niche Venture Capital provider focused on minority investments in financial services businesses, typically taking an equity stake of between 15% and 45% Considers investment opportunities based in the United Kingdom, Europe and internationally Established in 1990 with funding of £2.5m — 41
Slide 3: Overview Continued
Overview Continued As at 31 July 2015 — fourteen investments in portfolio with a NAV of 465.5m, with an average holding period of six years Equity Portfolio increase of 9.3% since 31 January 2015 Net Asset Value per share of 225p, increase of 9.5% since 31 July 2015, increase of 4.1% since 31 Januar
Slide 4: Investments
Investments Investment Sector Cost of equity investment (£000) Fair market value 31.07.15 (47000) Equity Year of initial investment Movement in Period to 31.07.15 (£000) Movement in Period to 31.07.15 Besso Insurance Broking 2,828 13,896 37.94% 1995 2,997 27.5% LEBC IFA 3,066 8,449 34.91% 2007 1,466
Slide 5: Specific Activity within the Portfolio
Specific Activity within the Portfolio During the Period (1) BESSO Continuing strong financial performance; forecast position as 31.12.2015 revenue of 437m and EBITDA of 44.8m (the year ending 31.12.2014 achieved revenue of £31.3m and EBITDA of £3.7m) Continued international expansion Strengthening
Slide 6: Specific Activity within the Portfolio
Specific Activity within the Portfolio During the Period (ii) LEBC Strong continued performance, benefitting from legislative reforms in the pensions sector. Significantly ahead of 2014 results 43% increase in profits and 9% increase in turnover in financial year to 30.09.14 New office opened in Mai
Slide 7: Specific Activity within the Portfolio: New Investment
Specific Activity within the Portfolio During the Period New Investment Property and Liability Underwriting Managers (PTY) Ltd (“PLUM”) = Acquisition of 20% of PLUM in June 2015 = Managing General Agent based in Johannesburg, specialising in large corporate property risks = Supported by domestic Sou
Slide 8: Investments by Location
Investments by Location Summa Insurance Brokerage S.L. ne ee Total - £3.78m renee \ Approximately 75% of our investee companies’ revenue originates overseas w Bastion Reinsurance Brokerage (PTY) Limited Sterling Insurance (PTY) Limited & Bulwark Investment Holdings (PTY) Limited MB Prestige Holdings
Slide 9: Financial Highlights — Period Ended July 2015
Financial Highlights — Period Ended 31 July 2015 = Equity Portfolio increase of 9.3% for the six month period to 31 July 2015, Equity Portfolio increase of 19.8% for the twelve month period from 31 July 2014, 24.6% excl. Hyperion = NAV of £65.5m (31 July 2014: £59.8m, 31 January 2015: £63.0m ) * = N
Slide 10: Financial Highlights — Period Ended July 2015
Financial Highlights — Period Ended 31 July 2015 » Average compound NAV growth of 11.2% p.a. since 1990 (excl. £10.1m raised on flotation)* * Final Dividend of 2.75p per share declared (40.8m) and paid on 24 July 2015 to Shareholders registered at the close of business on 26 June 2015. " Share price
Slide 11: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 65.50 62.97 58.90 59.84 60 55.50 50 44.17 40.61 40 £ Milli ns 22.10 20 10 0 31st Jan 2005 31stJan 2007* 31stJan 2010 31stJan 2013 31stJan 2014 31stJuly 2014 31stJan 2015 31st July 2015 YEAR ENDED a YEAR ENDED NET OF DEFERRED TAX = SIX MONTHS ENDED * NB: The valuati
Slide 12: Dividends
Dividends = Over the past five years the Group has paid out dividends to its shareholders, demonstrating that the Group is an attractive capital and income investment. The dividend policy is also part of the Group’s strategy to reduce the share price discount to NAV 41,200,000 £1.60 £1.40 ; 41.35 £1
Slide 13: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 220 4 200 4 180 4 160 + 140 4 120 4 100 + 80 5 60 5 Price ai 40 4 == PM share price BPM NAV «=——FSTE AIM All Share ====FTSE AIM Financials 13
Slide 14: Cash Position
Cash Position Cash at 1 Feb 2015 (inc. treasury funds) 47.9m Equity Investments &(2.2)m Net (loans) / repayments 40.5m Tax Repayment &40.2m Dividend Paid &(0.8)m Net treasury gains / other investment income 40.2m Other operating movements 40.2m Cash at 31 July 2015 (inc. treasury funds) 46.0m. 14
Slide 15: Investment Opportunities
Investment Opportunities Seek entrepreneurial and experienced management teams with a focused growth plan for their business Market positioning enables first-mover advantage in a sellers market Flexible investment approach key driver Add value by provision of contacts, experience in business develop
Slide 16: Investment Opportunities: new enquiries received
Investment Opportunities 30 new investment enquiries received in the period to 31 July 2015 33% of the 30 investments continued to detailed investigations Strong current pipeline Out of 30 new enquiries received: o 23% insurance sector (of which 57% Underwriting Agencies, 14% Brokers, 29% other insu
Slide 17: Summary
Summary Equity Portfolio increase of 19.8% since 31 July 2014, 24.6% excl. Hyperion Final Dividend of 2.75p per share declared and paid £3.2m of cash and treasury funds currently available for investment Further cash of £7.3m expected in July 2016 from the realisation of the Group’s remaining stake
Slide 18: Appendices
Appendices Management Team Board Members Current Portfolio Minority Investor Protections Adding Value Exit Strategy Financials Major Shareholders Contacts 18
Slide 19: Management Team
Management Team Executive Chairman Brian Marsh OBE Group Finance Director Jonathan Newman ACMA CGMA MCSI Investment Director Dan Topping ACIS MCSI 50 years’ experience in insurance broking and underwriting. 1979-1990 was chairman and major shareholder of the Nelson Hurst & Marsh Group, the internati
Slide 20: Management Team
Director, Head of IR. Camilla Kenyon Director Alice Foulk Management Team Camilla Kenyon was appointed as Head of Investor Relations at B.P. Marsh in February 2009, having four years’ prior experience with the Company. She was appointed a Director in 2011. Camilla has two non- executive appointments
Slide 21: Board Members
Board Members Non-Executive Deputy Chairman Campbell Scoones Non-Executive Director Philip Mortlock Non-Executive Director Stephen Clarke Campbell Scoones has over 45 years' experience in the Lloyd's and overseas insurance broking and underwriting markets. Having started his career in 1966 Campbell
Slide 22: Board Members Continued
Board Members Continued Non-Executive Director Pankaj Lakhani FCCA A Certified Accountant, Pankaj Lakhani has over 40 years’ of accounting experience within the Insurance Market and joined the Company as Non Executive Director on 21 May 2015. 22.
Slide 23: Portfolio
Portfolio Bastion Reinsurance Brokerage PTY Limited — 35% Besso Insurance Group Limited 37.9% The Broucour Group Limited — 49% Bulwark Investment Holdings (PTY) Limited — 35% Hyperion Insurance Group Limited — 1.6% The Group invested in December 2014 Bastion specialises in the provision of reinsuran
Slide 24: Portfolio Continued
Portfolio Continued LEBC Holdings Limited - 34.9% MB Prestige Holdings Limited — 40% Nexus Underwriting Management Limited — 9.8% Property & Liability Underwriting Managers (P'TY) Limited — 20% Randall & Quilter Investment Holdings Limited - 1.3% April 2007 invested in LEBC is a national Independent
Slide 25: Current Portfolio Continued
Current Portfolio Continued Sterling Insurance PTY Limited — 19.7% Summa Insurance Brokerage, S.L. — 77.3% Trireme Insuranc Group Limited — 30.57% Walsingham Motor Insurance Limited — 40.5% Invested in June 2013, through the investment vehicle Neutral Bay Investments Limited Sterling is a Sydney-bas
Slide 26: 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 mat
Slide 27: 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 28: Exit Strategy
Exit Strategy Exit considered on entry Patient development to achieve full earning potential Recognise and act on opportunistic situations 28
Slide 29: 44,585 3,545 19,719 2,421 (314) (60) 69,911 (4,384) 65,527
15 44,585 3,545 19,719 2,421 (314) (60) 69,911 (4,384) 65,527
Slide 30: 3,778 - 1,360 5,138 (1,166) (1) 4,140 (782) 3,358 11.5p
3,778 - 1,360 5,138 (1,166) 169 (1) 4,140 (782) 3,358 11.5p
Slide 31: (1) (2,160) - 2,939 (802) - (12) 1,531 2,421
186 201 (1) (2,160) - 2,939 535 4 (802) - 902 (12) 1,531 2,421
Slide 32: Key Shareholders
Key Shareholders = Directors « Brian Marsh OBE - 57.9% » B.P. Marsh Management Limited — 4.86% « Daniel Topping « Campbell Scoones | Less than 0.1% each «Pankaj Lakhani = Major Shareholders (>3%) » James Sharp & Co « IS Partners AG / Helium Special Situations Fund SE
Slide 33: 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 Communications Telephone: 020 7382 4730 33
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