B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2017 Earnings Presentation
36 slides from B.p. Marsh & Partners's earnings presentation, Jun 6, 2017
Slide 1: Year End Results
Year End Results For the year ending 31 January 2017 Camilla Kenyon, Director & Head of Investor Relations Dan Topping, Chief Investment Officer Jonathan Newman, Group Finance Director 6 June 2017 1
Slide 2: Overview
Overview 25+ Years strong Specialist Invested in 44 companies Robust balance sheet PE/VC investor in Financial Services intermediaries and realised 29 since 1990 £12.6 million cash as at 31 January 2017 Industry knowledge Up to £5m investment Long-term view Significant, specialist experience and dee
Slide 3: 2017 Summary - Year End 31 January 2017
2017 Summary - Year End 31 January 2017 • As at 31 January 2017 – 14 investments in portfolio • Equity Portfolio increase of 22.1% since with a NAV of £79.7m (31 January 2016 £70.8m), 31 January 2016 (23.8% between 31 • Dividend of 3.76p per share declared for with an average holding period of five
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 79.68 80 73.85 70.81 70 62.97 Year ended 58.92 60 55.46 Six months ended 50 44.17 £ Millions, (net of deferred tax) 40.61 40 30 22.10 20 * NB: The valuation at 31 10 January 2007 includes £10.1m net proceeds raised on AIM 0 31-Jan-05 31 Jan 2007* 31-Jan-10 31-Jan-1
Slide 5: Dividends
Dividends • The Group’s historic dividend payments are shown below. Total shareholder return in year to 31 January 2017 is 13.9% £1,200,000 £2.50 £1,100,000 £1,000,000 £2.06 Paid £1,000,000 £2.00 Declared £800,000 £800,000 £800,000 £1.50 Intended £1.25 £1.40 £1.47 £600,000 £0.95 £1.35 Share Price £0
Slide 6: Growth Strategy
Growth Strategy B.P. Marsh cash Our goal is to be the early stage capital provider Up to £5.0 m of choice to the financial services sector. We apply our sector expertise to source attractive long-term investment opportunities both in the Invest Take minority equity positions in promising early stage
Slide 7: Specific Activity New Investments in Year
Specific Activity New Investments in Year • Acquisition of 25% of Fiducia in November 2016 • Acquisition of 30% of SSRU in January 2017 • Managing General Agent and Lloyd’s coverholder based in Leeds, specialising • Managing General Agent and Lloyd’s coverholder based in Toronto, Canada. in a number
Slide 8: Specific Activity New Investments
Specific Activity New Investments NEW INVESTMENT IN PERIOD NEW INVESTMENT POST YEAR END • Acquisition of 20% of Asia Reinsurance Brokers (Pte) Limited in April 2016 • Acquisition of 35% of CBC UK Limited in February 2017, via a thinly capitalised holding company, Paladin NewCo Limited • Singapore he
Slide 9: Specific Activity Disposals Post Year End
Specific Activity Disposals Post Year End • Sold holding in Besso to BGC Partners Inc, for cash consideration of £22.01m (net of • Sold holding in Trireme back to fellow shareholder US Risk for a cash consideration of transaction costs and pre-tax), represents an enterprise valuation of £70.5m £2.96
Slide 10: Case Study – Besso Insurance Group Limited (“Besso”)
Case Study – Besso Insurance Group Limited (“Besso”) • Group was instrumental in co-founding Besso in 1995, investing in a specialist team departing from insurance broker now known as JLT Plc • Supported Besso through two decades of investment, including additional Equity and Loan funding • From rev
Slide 11: Investments
Investments Fair market value Movement in Year to Cost of equity Year of initial Movement in Year to Investment Sector Jurisdiction 31 January 2017 Equity 31 January 2017 investment (£’000) investment 31 January 2017 (£’000) (£’000) *Besso Insurance Broking UK 2,828 21,309 37.9% 1995 3,170 17.5% Sum
Slide 12: International Strategy
International Strategy Summa Insurance Brokerage S.L. UK Based Investments: LEBC Holdings Ltd The Fiducia MGA Company Ltd Nexus Underwriting Management Ltd Walsingham Motor Insurance Ltd Stewart Specialty Risk Underwriting Ltd B.P. Marsh’s international strategy is focused on those areas where we se
Slide 13: Specific Activity within the Portfolio During the Year (I)
Specific Activity within the Portfolio During the Year (I) • Continues to grow strongly, boosted by investment in technology to build a hybrid • Acquisition of a further 6.87% stake in Nexus completed in December 2016 advice and technology model and success in targeting the at retirement market • Th
Slide 14: Specific Activity within the Portfolio During the Year (II)
Specific Activity within the Portfolio During the Year (II) • Performing in line with expectations, reporting revenue of €6.1m and recurring EBITDA of €1.4m • Walsingham are making good progress in line with the Group’s expectations and are on course to achieve their 2017 budget • Group have been in
Slide 15: Investment Model
Investment Model • Increase in top end first round funding to £5m (from £3m) Change in Investment Criteria • Financial services intermediaries, minority positions (20-40%) • Specialists in early-stage finance to ambitious, proven individuals and teams Increase in top end first round funding to £5m f
Slide 16: Investment Process
Investment Process •Strong network of industry contacts brings us new opportunities •Each investment opportunity is scrutinised by the New Business Department •Suitable opportunities are then referred to be considered by the New Business Committee Initial •Next stage is for the opportunity to be cha
Slide 17: Investment Opportunities
Investment Opportunities • 84 new investment enquiries in year to 31 January 2017 (18% up on previous year) International Focus • 3 completed (2 MGAs, 1 broker) • Of 84 enquiries, 20% overseas • 10% referred on to investee companies • 5 North American continent (1 completed in Canada) • 5 Australasi
Slide 18: Investments Financial Highlights – Year Ended 31 January 2017
Investments Financial Highlights –Year Ended 31 January 2017 Equity Portfolio value increase of 22.1% for the year ending 31 January 2017 • NAV of £79.7m (31 July 2016: £73.8m, 31 January 2016: £70.8m) * • NAV per share of 273p (31 July 2016: 253p, 31 January 2016: 243p) * • Consolidated profit afte
Slide 19: Investments Financial Highlights – Year Ended 31 January 2017
Investments Financial Highlights –Year Ended 31 January 2017 Average compound NAV growth of 11.4% p.a. since 1990 (excl. £10.1m raised on flotation)* Final Dividend of 3.76p per share declared (£1.1m) and will be paid on 28 July 2017 to Shareholders registered at the close of business on 30 June 201
Slide 20: Cash Position
Cash Position Cash at 1 Feb 2016 (including Treasury Funds) £5.3m Equity Investments £(8.3)m Proceeds from disposal of Investments £10.3m Loans granted £(1.2)m Loans repaid £7.3m Tax Payments £(0.1)m Dividend Paid £(1.0)m Net treasury gains and other investment income £0.4m Other operating movements
Slide 21: Loan Portfolio
Loan Portfolio Investment 31 January 2017 (£’000) 31 January 2016 (£’000) Bastion 342 342 Besso 1,808 2,342 Broucour 255 356 Bulwark 615 398 Fiducia 350 - Hyperion - 6,037 LEBC 1,005 1,005 MB Group 759 707 Stewart Specialty Risk 152 - Summa 2,346 2,084 Trireme 2,155 2,155 Walsingham 1,200 1,200 Tota
Slide 22: Summary
Summary • Equity Portfolio increase of 22.1% since 31 January 2016 • Final Dividend of 3.76p per share declared and paid on 28 July 2017 and intend to maintain that level • £12.6m of cash and treasury funds at year end. £29.2m currently available for investment following Besso and Trireme realisatio
Slide 23: Appendices
Appendices 1. Management Team 2. Board Members 3. Adding Value 4. Portfolio 5. Minority Investor Protections 6. Financials 7. Major Shareholders 8. Contacts 23
Slide 24: Management Team
Management Team Brian Marsh OBE Alice Foulk BA (Hons) Dan Topping ACIS MCSI Executive Chairman Managing Director Chief Investment Officer Brian Marsh has over 55 years’ experience in insurance Alice Foulk joined B.P. Marsh in September 2011 having Dan Topping is a Member of the Chartered Institute o
Slide 25: Management Team
Management Team Camilla Kenyon Jonathan Newman ACMA CGMA MCSI Director, Head of IR Group Finance Director Camilla was appointed to the main Board in 2011, following A Chartered Management Accountant with over 20 years’ her appointment as Head of Investor Relations in 2009. She experience in the fina
Slide 26: Board Members
Board Members Campbell Scoones Stephen Clarke FCA Pankaj Lakhani FCCA Non-Executive Director Non-Executive Director Non-Executive Director Campbell Scoones has over 45 years' experience in the A Chartered Accountant, Stephen gained many years’ A Certified Accountant, Pankaj Lakhani has over 40 years
Slide 27: 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 28: Portfolio as at 31 January 2017
Portfolio as at 31 January 2017 • Group invested in April 2016 Asia Reinsurance Brokers (PTE) Limited • ARB is a Singapore headquartered independent specialist reinsurance and insurance risk solutions provider – 20% • ARB was established in 2008, following a management buy-out of the business from A
Slide 29: Portfolio as at 31 January 2017 Continued
Portfolio as at 31 January 2017 Continued • April 2007 invested in LEBC LEBC Holdings Limited – • LEBC is a national Independent Financial Advisory company providing services to individuals, corporates and partnerships principally in employee benefits, investment and life product areas and has 15 of
Slide 30: Portfolio as at 31 January 2017 Continued
Portfolio as at 31 January 2017 Continued Sterling Insurance (PTY) Limited – • Invested in June 2013, through the investment vehicle Neutral Bay Investments Limited 19.7% • Sterling is a Sydney-based specialist underwriting agency offering a range of insurance solutions within the Liability sector s
Slide 31: 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 m
Slide 32: Consolidated Statement of Financial Position (IFRS) at 31 January 2017
Consolidated Statement of Financial Position (IFRS) at 31 January 2017 Audited Year to Unaudited 6 months to Audited Year to 31 January 2017 £’000 31 July 2016 £’000 31 January 2016 £’000 Tangible assets 15 12 15 Investments at fair value – Equity Portfolio 63,567 53,109 54,051 Treasury Funds 5,230
Slide 33: Consolidated Statement of Comprehensive Income (IFRS) at 31 January 2017
Consolidated Statement of Comprehensive Income (IFRS) at 31 January 2017 Audited Year to Unaudited 6 months to Audited Year to 31 January 2017 £’000 31 July 2016 £’000 31 January 2016 £’000 Gains on investments (realised and unrealised) 11,491 4,251 10,275 Impairment of investments and loans - - - O
Slide 34: Consolidated Statement of Cash Flows (IFRS) at 31 January 2017
Consolidated Statement of Cash Flows (IFRS)at 31 January 2017 Audited Year to Unaudited 6 months to Audited Year to 31 January 2017 £’000 31 July 2016 £’000 31 January 2016 £’000 Net cash from operating activities (69) (241) 405 Taxation (102) (37) 145 Purchase of property, plant and equipment (8) (
Slide 35: Key Shareholders at 31 January 2017
Key Shareholders at 31 January 2017 DIRECTORS • Brian Marsh OBE - 57.3% • B.P. Marsh Management Limited – 4.86%* • Daniel Topping • Campbell Scoones Less than 0.5% each • Pankaj Lakhani * The Executive Directors hold the following beneficial joint interests in Ordinary Shares, held together with B.P
Slide 36: Contacts
Contacts B.P. Marsh & Partners PLC 4 Matthew Parker Street London SW1H 9NP 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 36