B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 FY2024 Earnings Presentation
49 slides from B.p. Marsh & Partners's earnings presentation, Oct 17, 2023
Slide 1: Interim Results
Interim Results For the 6 month period ending 31 July 2023 Dan Topping, Chief Investment Officer Jon Newman, Group Finance Director 17 October 2023
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 We are a complementary team of B.P. Marsh was founded in 1990 Strategy equity investor in early stage highly experienced leaders in the and has since invested in 56 We take a long term view, w
Slide 3: Period Ending 31 July 2023 Results
Period Ending 31 July 2023 Results Consolidated profit Net Asset Value Change 31 January 2013 to 31 July 2023 before tax of (NAV) of 470 £15.6m £203.5m 420 % Change 31 January 2010 to 31 July 2023 BPM share price 352% BPM NAV/share, rebased 300% Six months ended 31 July 2022: £17.0m +£14.0m, or 7.3%
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 250 £203.45m 200 £189.54m £179.77m £166.61m £154.98m £149.91m 150 £142.63m £136.90m £ Millions £126.17m £98.90m Full Year 100 Half Year £79.68m £70.81m *NB: The valuation at £62.97m 31 January 2007 includes £58.92m £55.46m £10.1m net proceeds 50 raised on AIM £40.6
Slide 5: Dividends
Dividends £2.50 M £20.0M In aggregate: £18.6m The Group paid a Final Dividend of £0.5m for the £18.0M year to 31 January 2023 July 2013: February 2017: October 2023: £16.6M __ Realisation of Howden Realisation of Besso Realisation of Kentro £2.00 M Broking Group Insurance Group Capital Limited £16.0
Slide 6: Disposal: Kentro Capital Limited
Disposal: Kentro Capital Limited ("Kentro") On 9 October 2023, the Group completed the sale of its stake in Kentro to Brown & Brown Inc Sale of Kentro: £51.5m The Group originally invested £1.5m in Kentro, known then as Nexus Underwriting Management Limited, for a 5% shareholding in August 2014 • £1
Slide 7: Disposal: Kentro Capital Limited
Disposal: Kentro Capital Limited ("Kentro") Nexus rebrands to Kentro Capital Limited, the holding company for both Nexus, the largest independent specialty managing general agent in the London market, and Xenia Broking, the 2023: 18.70% leading credit insurance and surety distribution specialist sha
Slide 8: Shareholder Returns – Share Buy-Back Policy and Dividend
Shareholder Returns – Share Buy-Back Policy and Dividend Sale of Kentro It’s the Board’s ongoing aim to strike a balance between long term capital growth and providing meaningful returns to Shareholders. £51.5m This continues to be a topic under discussion by the Board and more information will be p
Slide 9: New Investment Origination
New Investment Origination New Investment Opportunities to 31 July Our key investment Personal 2023, by sector: sourcing channels Connections Direct Fiducia was founded by a long A direct opportunity arose from standing contact of B.P. Marsh. the CEO of Pantheon Speciality, InsurTech The investment
Slide 10: New Investment – Pantheon Specialty Limited
New Investment – Pantheon Specialty Limited ("Pantheon") NEW INVESTMENT • In June 2023, the Group invested into Pantheon, a • Since investment, Pantheon has had a number of holding company established in partnership with significant new business wins and significant key Robert Dowman, receiving a 25
Slide 11: New Investment – Verve Risk Services Limited
New Investment – Verve Risk Services Limited ("Verve") NEW INVESTMENT • In April 2023, the Group invested £0.4m into • B.P. Marsh offered exclusive support to allow Verve Risk Services Limited, a London-based MGA, Scott Simmons and Alan Lambert to undertake an for a 35% shareholding MBO, with Manage
Slide 12: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce c. £1.75bn of aggregate Gross Written Premium The Group’s broking investments (GWP) in 2023 (compared to £1.32bn in 2022) are budgeting to place c. £868m of GWP, producing c. £76m of brok
Slide 13: Overview: Managing General Agencies Investments
Overview: Managing General Agencies ("MGAs") Investments Current Internal rate Multiple on B.P. Marsh’s MGAs are budgeting to Date of Equity % at 31 Cost of Valuation at % of NAV at of return to Invested underwrite aggregate GWP of circa £880m MGAs Investment Jurisdiction July 2023 Investment 31 J
Slide 14: Overview: Broking Investments
Overview: Broking Investments Current Since inception, much of B.P. Marsh’s Internal rate Multiple on Equity % at Cost of Valuation at % of NAV at of return to Invested growth has been underpinned by a Brokers Date of Investment Jurisdiction 31 July 2023 Investment 31 July 2023 31 July 2023 31 Jul
Slide 15: XPT Group LLC
XPT Group LLC ("XPT") 2023: Cal Inspection Bureau, Inc., Craig & B.P. Marsh originally invested XPT in numbers: GWP Growth (XPT Owned) Leicht LLC £4.8m in June 2017 • 2023 forecast Gross Written B.P. Marsh Value B.P. Marsh provided XPT with further loan funding Premium of over US$700m Acquisition of
Slide 16: Investment Summary – CBC UK Limited
Investment Summary – CBC UK Limited ("CBC") CURRENT INVESTMENT • CBC, in which B.P. Marsh first invested in 2017, • From the time of our original investment, through to continues to perform strongly and is trading 31 July 2023, our valuation in CBC has risen significantly ahead of budget in 2023 sig
Slide 17: Investment Summary – ATC Insurance Solutions
Investment Summary – ATC Insurance Solutions PTY Limited ("ATC") CURRENT INVESTMENT • The Group first invested in ATC in July 2018, • ATC is now one of the largest Lloyd’s underwriting taking a 20% equity stake for AU$ 5.1m (£2.9m) agencies in Australia • Since this date, the Group has provided furt
Slide 18: Investment Summary – Lilley Plummer Risks
Investment Summary - Lilley Plummer Risks Limited ("LPR") CURRENT INVESTMENT • B.P. Marsh invested in the newly-formed Lloyd's • When the Group originally invested in LPR, the broker, LPR, in October 2019, taking a 30% business achieved £1.8m of revenue. In LPR’s year shareholding for cash considera
Slide 19: Stewart Specialty Risk Underwriting Ltd
Stewart Specialty Risk Underwriting Ltd ("SSRU") CURRENT INVESTMENT • SSRU Managing General Agent (MGA), providing a • Growth has been achieved via organic growth across variety of Property and Casualty products to a wide its existing commercial casualty and property book array of clients in the Con
Slide 20: Market Overview and Insurance Price Changes
Market Overview and Insurance Price Changes B.P. Marsh continues to monitor trends in the rate of pricing for GLOBAL FINANCIAL insurance business placed in the areas where the portfolio operates GLOBAL PROPERTY GLOBAL CASUALTY & PROFESSIONAL Global commercial insurance rates increased by 3% in Q2 20
Slide 21: Overview: IFA Investments - LEBC Holdings Limited
Overview: IFA Investments - LEBC Holdings Limited ("LEBC") Internal rate Current of return to Multiple on Equity % at Cost of Valuation at % of NAV at 31 July Invested IFA Date of Investment Jurisdiction 31 July 2023 Investment 31 July 2023 31 July 2023 2023 Capital LEBC Holdings April-07 UK 59.34%
Slide 22: 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 SAGE Program • A suitably develope
Slide 23: Financial Highlights – Period Ended (unaudited)
Financial Highlights – Period Ended 31 July 2023 (unaudited) Net Asset Value (NAV) of NAV per share of 567.3p +7.8% over six months 7.9% Total £203.5m (556.3p* diluted) Shareholder Return +£14.0m over six months Including total dividend of £1.0m paid Feb 2023/July 2023 31 July 2022: 499.0p (490.8p d
Slide 24: Financial Highlights – continued
Financial Highlights – Period Ended 31 July 2023 (unaudited) - continued Average compound NAV growth of Loan Portfolio Net Loans Granted 8.9% p.a. £17.8m £6.6m since flotation and 11.8% p.a. 31 July 2022: £9.2m Loans granted • £4.9m XPT since 1990* 31 January 2023: £11.5m • £2.0m CBC Excl. £10.1m ra
Slide 25: Post Period End - Financial Highlights
Post Period End - Financial Highlights Current Loan Portfolio £4.3m cash £22.4m and treasury balances at 31 July 2023 Current liquidity of £51.0m Following receipt of funds from Kentro Follow-on Funding: Group is debt free Loans Granted £4.6m Loans granted Discount to NAV (diluted) 33.8% • £3.0m Pan
Slide 26: Summary
Summary B.P. Marsh’s expertise and experience The global insurance puts us in a prime position to support market continues to Our position as capital provider Through an extensive SME financial intermediaries to reach the be a promising of choice for the sector in which we network of brokers, next l
Slide 27: Appendices
Appendices 1 Equity Investment Valuations, Loan Portfolio & IRR Note 28 2 Portfolio 31 3 Recent Disposals 35 4 Bridging the Gap & Investment Model 36 5 Financials 40 6 B.P Marsh & Partners Plc and B.P. Marsh & Company Limited Board Members 43 7 Minority Investor Protections 45 8 Environmental, Socia
Slide 28: 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 2023 to 31 July 2023 Investment Sector Jurisdiction 31 July 2023 (£’000) As at 31 July 2023 investment (£’000) investment (£’000) (%) Kentro (post-HY MG
Slide 29: 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 2023 to 31 July 2023 Investment Sector Jurisdiction 31 July 2023 (£’000) As at 31 July 2023 investment (£’000) investment (£’000) (%) Paladin (CBC) Insurance
Slide 30: Loan Portfolio
Loan Portfolio Investment 31 July 2023 (£'000) 31 January 2023 (£'000) 31 July 2022 (£’000) Ag Guard 653 682 - Denison and Partners 670 500 150 Fiducia 1,771 2,225 2,428 LEBC 3,000 3,000 1,500 Lilley Plummer Risks - 300 300 Paladin (CBC) 5,096 3,096 3,096 Pantheon 500 - - Sage 118 120 117 Verve 569
Slide 31: Portfolio as at 31 July 2023
Portfolio as at 31 July 2023 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 32: Portfolio as at 31 July 2023 Continued
Portfolio as at 31 July 2023 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 33: Portfolio as at 31 July 2023 Continued
Portfolio as at 31 July 2023 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 34: Portfolio as at 31 July 2023 Continued
Portfolio as at 31 July 2023 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 35: Recent Disposals – An Overview
Recent Disposals – An Overview TRIREME INSURANCE GROUP LTD WALSINGHAM MOTOR KENTRO CAPITAL LTD INSURANCE LTD BESSO INSURANCE GROUP LTD Date of Investment: 22nd July 2010 MB PRESTIGE HOLDINGS PTY LTD SUMMA INSURANCE Date of Investment: 13th August 2014 Date of Investment: 2nd December 2013 BROKERAGE
Slide 36: 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 37: 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 38: 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 39: 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 40: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) at 31 July 2023 31 July 2023 31 July 2022 31 January 2023 (Unaudited) (Unaudited) (Audited) Tangible and intangible assets 72 90 79 Right of use asset 590 754 671 Investments at fair value – Equity Portfolio 185,815 160,398 171,461 Debtors / Loans
Slide 41: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2023 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2023 £'000 31 July 2022 £'000 31 January 2023 £'000 Gains on investments (realised and unrealised) 14,714 16,367 27,430 Amounts recovered from / (impairment of) i
Slide 42: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 July 2023 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2023 £'000 31 July 2022 £'000 31 January 2023 £'000 Net cash from operating activities 213 (91) 451 FX Movement (49) 40 (36) Taxation (33) (17) (14) Purchase of property, p
Slide 43: 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 16+ 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 44: 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 16+ 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 45: 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 46: Environmental, Social and Governance Policy
Environmental, Social and Governance Policy B.P. Marsh is committed to being a responsible investor with Environmental, Social The results revealed that many of our portfolio companies and major suppliers were and Governance (ESG) focused principles incorporated throughout our investment already
Slide 47: Key Shareholders as at 29 September 2023
Key Shareholders as at 29 September 2023 Directors Major Shareholders (>3%) Brian Marsh OBE 40.59%* PSC UK Pty Limited 19.84% Alice Foulk Less than 0.5%** Mr. Martin MacLeish 5.23% Daniel Topping Less than 0.5%** Hargreaves Lansdown Asset Mgt 4.33% Jonathan Newman Less than 0.5%** JTC Employer Solut
Slide 48: Joint Share Ownership Plan (JSOP) and Share Option Plan (SOP)
Joint Share Ownership Plan (JSOP) and Share Option Plan (SOP) 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 t
Slide 49: 4 Matthew Parker Street London SW1H 9NP Telephone: 020 7233 3112
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 © 2023 B.P. MARSH & PARTNERS PLC 49
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