B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 2018 Earnings Presentation
36 slides from B.p. Marsh & Partners's earnings presentation, Oct 16, 2018
Slide 1: Interim Results for the period ending 31 July 2018
Interim Results For the period ending 31 July 2018 Dan Topping, Chief Investment Officer Jonathan Newman, Group Finance Director Camilla Kenyon, Director & Head of Investor Relations 16 October 2018
Slide 2: Overview
Overview 25+ Years strong Specialist Invested in 50 companies Robust balance sheet PE/VC investor in Financial Services intermediaries and realised 32 since 1990 £15.4m cash as at 31 July 2018 Long-term view Industry knowledge Up to £5m investment Significant, specialist experience and deep sector F
Slide 3: 2018 Summary – Period Ending 31 July 2018
2018 Summary – Period Ending 31 July 2018 • As at 31 July 2018 – 18 investments in • Equity Portfolio increase of 6.7% • Dividend of 4.76p per share declared portfolio with a NAV of £120.1m (31 July since 31 January 2018 for the year ended 31 January 2018, 2017 £88.8m), with an average holding paid
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 130 120.08 120 110 98.87 Full Year 100 88.80 Half Year £ Millions 90 79.68 73.85 80 70.81 62.97 70 58.92 55.46 60 44.17 50 40.61 40 30 *NB: The valuation at 31 January 2007 includes 20 £10.1m net proceeds 10 raised on AIM 0 **NB: The valuation at 31-Jan-07* 31-Jan-
Slide 5: Dividends
Dividends The Group’s historic dividend payments are shown below. Total shareholder return in period to 31 July 2018 is 6.4% £3.50 £1,800,000 4.76p p/s 4.76p p/s £1,600,000 £3.00 £1,400,000 Paid £2.50 £1,200,000 3.76p p/s £2.54 Intended 3.42p p/s £2.00 Share Price £1,000,000 £2.06 2.75p p/s 2.75p p/
Slide 6: Placing and Open Offer completed in July 2018
Placing and Open Offer completed in July 2018 £16.6m net investment into the Company by PSC No change in the Group’s investment model and Increased share capital and reduction in Brian no Board changes Marsh’s holding to c.44.2% Strong cultural fit with both businesses operating Bigger, stronger Gro
Slide 7: Investments
Investments Fair market value Equity Cost of equity investment Movement in Period to Movement in Period to Investment Sector Jurisdiction Year of initial investment 31 July 2018 (£’000) As at 31 July 2018 (£’000) 31 July 2018 (£’000) 31 July 2018 EC3 Brokers Insurance Broking UK 5,000 20.0% 5,000 20
Slide 8: International Strategy
International Strategy Summa Insurance Brokerage S.L. UK Based Investments: CBC UK Ltd EC3 Brokers Ltd Stewart Specialty Risk The Fiducia MGA Company Ltd Underwriting Ltd LEBC Holdings Ltd Mark Edward Partners LLC Nexus Underwriting Management Ltd XPT Group LLC Walsingham Motor Insurance Ltd Approxi
Slide 9: Specific Activity - New Investment
Specific Activity - New Investment ATC specialises in On 10 July 2018 the Group ATC is a Melbourne For the year ended 30 Accident & Health, invested AUD$5.1m in ATC headquartered MGA and June 2018 ATC reported Construction & Insurance Solutions PTY Lloyd’s Coverholder, a Gross Written Engineering, T
Slide 10: Specific Activity within the Portfolio During the Period
Specific Activity within the Portfolio During the Period Throughout the Period to 31 July Since the Group’s investment in During the same period, EBITDA is Nexus was ranked in the Sunday 2018, Nexus continued its M&A Nexus back in 2014, Nexus has expected to increase from £2.6m Times Profit Track 10
Slide 11: Specific Activity within the Portfolio During the Period
Specific Activity within the Portfolio During the Period LEBC announced strong half-year Trading profit grew by 100% LEBC has made changes to the senior management team results for the six-month period to from £1.2m to £2.4m. in October, with Derek Miles (formerly MD of Aspira), 31 March 2018, with
Slide 12: Investment Model
Investment Model Specialist Investor Up To £5m Initial in early stage and SME financial Relationship Driven Investment services businesses, operating in Investors in People 20-40% minority equity stakes niche segment where funding difficult to obtain Scope for follow on funding Long-Term View Value
Slide 13: Investment Model: New Opportunities
Investment Model New Opportunities What we look for Entrepreneurs who have identified a niche area to apply their expertise Ambitious capable management teams with strong, demonstrable business plans Companies with solid value propositions and potential to benefit from value added Insurance Intermed
Slide 14: Investment Process
Investment Process •Strong network of industry contacts • In-house comprehensive fact- • Final negotiation • Business plans tested brings new opportunities finding and due diligence process - three-year historic and • Completion • Post-investment plan compiled •Each opportunity is scrutinised by for
Slide 15: Investment Opportunities
Investment Opportunities • 32 new investment enquiries in period to 31 July 2018 (38 in period to 31 July Current Pipeline 2017) • Overseas MGAs • 1 completed • UK broking businesses • 4 referrals on to portfolio companies as potential bolt-ons • Wealth management sector active • Referrals for UK an
Slide 16: Financial Highlights – Period End 31 July 2018
Financial Highlights –Period End 31 July 2018 Average compound NAV growth of 11.9% p.a. since 1990* • Excl. £10.1m raised on flotation and £16.6m raised in the July 2018 Share Placing and Open Offer Final dividend of 4.76p per share declared paid on 31 July 2018 • To Shareholders registered at the c
Slide 17: Financial Highlights – Period End 31 July 2018
Financial Highlights –Period End 31 July 2018 NAV of £120.1m • 31 July 2017: £88.8m, 31 January 2018: £98.9m NAV per share of 333p • 31 July 2017: 304p, 31 January 2018: 339p, adjusted NAV post July 2018 Placing: 321p Consolidated Profit after Tax: £6.3m • Six months ended 31 July 2017: £10.2m, Year
Slide 18: Cash Position
Cash Position Cash at 1 February 2018 (including treasury funds) £5.4m Equity investments £(3.6)m Loans granted £(1.4)m Loans repaid £1.7m Tax payments £(1.2)m Dividend paid £(1.7)m Net treasury gains and other investment income £0.1m Net proceeds from issue of shares £16.6m Other operating movement
Slide 19: Loan Portfolio
Loan Portfolio Investment 31 July 2018 (£’000) 31 January 2018 (£’000) Bastion* 403 342 Broucour 130 155 Bulwark* 665 665 Fiducia 2,195 1,619 LEBC - 1,500 MB Group 600 603 Nexus 4,000 4,000 Paladin (CBC) 4,096 3,996 PLUM* 1,451 1,115 Stewart Specialty Risk 263 201 Summa 2,171 2,283 Walsingham 1,500
Slide 20: Summary
Summary • Equity portfolio increase of 6.7% since 31 January 2018 • Final dividend of 4.76p per share declared paid on 31 July 2018 and intend to maintain at least that level for the year ending 31 January 2019 • £16.6m net proceeds raised from Share Placing and Open Offer • £15.4m of cash and treas
Slide 21: Appendices
Appendices 1. Management Team 2. Board Members 3. Growth Strategy 4. Adding Value 5. Portfolio 6. Minority Investor Protections 7. Financials 8. Key Shareholders 9. Joint Share Ownership Plan 10.Contacts 21
Slide 22: Management Team
Management Team Brian Marsh Alice Foulk BA (Hons) Daniel Topping Executive Chairman Managing Director Chief Investment Officer Brian Marsh has over 55 years’ experience in Alice Foulk joined B.P Marsh in September Dan Topping is a Member of the Chartered insurance broking and underwriting. Brian 201
Slide 23: Management Team
Management Team Camilla Kenyon Jonathan Newman Director, Head of IR Group Finance Director Camilla was appointed to the main Board in A Chartered Management Accountant with 2011, following her appointment as Head of over 20 years’ experience in the financial Investor Relations in 2009. She has dual
Slide 24: Board Members
Board Members Campbell Scoones Nicholas Walker MSc, (Comb Hons) Pankaj Lakhani FCCA Non-Executive Director Non-Executive Director Non-Executive Director Campbell Scoones has over 45 years' Nick has over 30 years’ experience in the A Certified Accountant, Pankaj Lakhani has experience in the Lloyd's
Slide 25: Growth Strategy
Growth Strategy B.P. Marsh cash Our goal is to be the early stage capital Up to £5.0m provider of choice to the financial services sector. We apply our sector expertise to source attractive long-term Invest Take minority equity positions in promising early stage financial services companies with tal
Slide 26: Adding Value
Adding Value Value creation driven by partnering with ambitious entrepreneurs seeking a partnership to provide growth capital and access to a team with a deep knowledge base in mergers, acquisitions, business sales, business growth and transformation, as well as the financial and legal aspects inher
Slide 27: Portfolio as at 31 July 2018
Portfolio as at 31 July 2018 • Group invested in April 2016 Asia Reinsurance Brokers (PTE) • ARB is a Singapore-headquartered independent specialist reinsurance and insurance risk solutions provider Limited – 25.0% • ARB was established in 2008, following a management buy-out of the business from AJ
Slide 28: Portfolio as at 31 July 2018 Continued
Portfolio as at 31 July 2018 Continued • Group invested in December 2017 • EC3 is an independent specialist Lloyd’s broker and reinsurance broker founded by its current CEO, Danny Driscoll, who led a management buy out to acquire EC3’s then EC3 Brokers Limited– 20.0% book of business from AJ Gallagh
Slide 29: Portfolio as at 31 July 2018 Continued
Portfolio as at 31 July 2018 Continued • In June 2015 the Group completed an investment in Property And Liability Underwriting Managers (PTY) Limited (“PLUM”), a Managing General Agent based in Property & Liability Johannesburg, South Africa Underwriting Managers (PTY) • PLUM specialises in large co
Slide 30: 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 the time of investment the
Slide 31: Consolidated Statement of Financial Position (IFRS) at 31 July 2018
Consolidated Statement of Financial Position (IFRS) at 31 July 2018 Unaudited 6 months to Unaudited 6 months to Audited Year to 31 July 2018 £’000 31 July 2017 £’000 31 January 2018 £’000 Tangible and intangible assets 158 177 167 Investments at fair value – Equity 88,291 62,982 79,122 Portfolio Deb
Slide 32: Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2018
Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2018 Unaudited 6 months to Unaudited 6 months to Audited Year to 31 July 2018 £’000 31 July 2017 £’000 31 January 2018 £’000 Gains on investments (realised and 5,540 12,419 18,837 unrealised) Impairment of investments and loans - (650)
Slide 33: Consolidated Statement of Cash Flows (IFRS) at 31 July 2018
Consolidated Statement of Cash Flows (IFRS) at 31 July 2018 Unaudited 6 months to Unaudited 6 months to Audited Year to 31 July 2018 £’000 31 July 2017 £’000 31 January 2018 £’000 Net cash from operating activities (425) (213) 234 Taxation (1,168) (93) (3,076) Purchase of property, plant and equipme
Slide 34: Key Shareholders at 31 July 2018
Key Shareholders at 31 July 2018 DIRECTORS • Brian Marsh OBE - 44.2%* MAJOR SHAREHOLDERS (>3%) • Alice Foulk • PSC UK Pty Limited – 19.6% • Hargreaves Lansdown Asset Management – 4.4% • Daniel Topping • RBC Wealth Management – 3.9% (Trustee of the • Jonathon Newman Company’s Joint Share Ownership Pl
Slide 35: Joint Share Ownership Plan (JSOP)
Joint Share Ownership Plan (JSOP) • Previous 5% JSOP came to an end in November 2017 and saw year-on-year improvements in shareholder return and increase in share price 138p to 245p over the three-year period • A new 3.9% three-year JSOP instituted to incentivise and retain the management team • 1,4
Slide 36: Contacts
CONTACTS 4 Matthew Parker Street London SW1H 9NP Telephone: 020 7233 3112 www.bpmarsh.co.uk Nominated Adviser & Broker Financial PR Panmure Gordon Redleaf Communications Telephone: 020 7886 2500 Telephone: 020 3757 6880 36
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