B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2022 Earnings Presentation
48 slides from B.p. Marsh & Partners's earnings presentation, Jun 13, 2022
Slide 1: Full Year Results
Full Year Results For the year ending 31 January 2022 Dan Topping, Chief Investment Officer Jon Newman, Group Finance Director Monday 13th June 2022
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 B.P. Marsh was founded in 1990 Strategy We are a complementary team of equity investor in early stage highly experienced leaders in the and has since invested in 54 We take a long term view, w
Slide 3: Summary: Year Ending 31 January 2022
Summary: Year Ending 31 January 2022 • As at 31 January 2022 – 15 Change 31 January 2010 to 31 January 2022 investments in the portfolio with a 370 % Change since 31 January NAV of £166.6m (31 January 2010 to 31 January 2022 2021 £149.9m) BPM Share Price 285.6% • Total Shareholder return of 11.7% fo
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 180.00 166.61 160.00 149.91 154.98 142.63 136.90 140.00 126.17 120.00 98.90 100.00 Full Year £ Millions Half Year 79.68 80.00 70.81 62.97 *NB: The valuation at 58.92 31 January 2007 includes 55.46 60.00 £10.1m net proceeds raised on AIM 40.61 40.00 **NB: The valuat
Slide 5: Dividends
Dividends £1,800,000 In aggregate £ 12.0M • Dividend of £1m declared, to £10.6m be paid in July 2022 4.76p p/s 4.76p p/s £1,600,000 February 2017: • Aim to maintain £1m dividend July 2013: for the next two years. In Realisation of Besso Realisation of Howden £ 10.0M aggregate this represents c. Insu
Slide 6: Business Outlook and Market Commentary
Business Outlook and Market Commentary B.P. Marsh and its portfolio companies B.P. Marsh continues to focus on investing in have performed well for the financial year niche SME businesses in the financial services to 31 January 2022 space, managed by capable management teams During the financi
Slide 7: 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 • A suitably developed regulatory
Slide 8: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce c. The Group’s broking investments £1.46bn of aggregate Gross Written are budgeting to place c. £703m Premium (GWP) in 2022 of GWP, producing c. £59m of brokerage in 2022, accessing speci
Slide 9: Overview: Managing General Agencies (MGAs) Investments
Overview: Managing General Agencies (“MGAs”) Investments B.P. Marsh’s MGAs are budgeting to underwrite aggregate GWP of more than Date of Equity % at 31 Valuation at 31 Cost of % of NAV at 31 £761m in 2022 MGAs Investment Jurisdiction January 2022 January 2022 Investment January 2022 This will p
Slide 10: Overview: Broking Investments
Overview: Broking Investments Since inception, much of B.P. Marsh’s growth has been underpinned by a Date of Equity % at 31 Valuation at 31 Cost of % of NAV at 31 successful track record of investing in Brokers Investment Jurisdiction January 2022 January 2022 Investment January 2022 brokers, both
Slide 11: Overview: IFA Investments - LEBC Holdings Limited
Overview: IFA Investments - LEBC Holdings Limited (“LEBC”) Date of Equity % at 31 Valuation at 31 Cost of % of NAV at 31 IFA Investment Jurisdiction January 2022 January 2022 Investment January 2022 LEBC Holdings Limited April-07 UK 59.34% £25,000,000 £12,373,657 15.0% B.P. Marsh has been invested
Slide 12: New Business Approach
Ry) B.P.MARSI - WW ae & PARTNERS-PLC New Business Approach
Slide 13: Investment Origination
Investment Origination New Investment Opportunities to 31 Our key investment Personal January 2022, by sector: sourcing channels Connections Direct Fiducia was founded by a long A direct opportunity arose from standing contact of B.P. Marsh. CBC’s Chairman approaching the The investment originated f
Slide 14: 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 15: 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 16: Disposal: MB Prestige Holdings PTY Limited
Disposal: MB Prestige Holdings PTY Limited (“MB”) DISPOSAL • In August 2021, MB, a high value motor • ATC paid AU$17m (c. £9m) for 100% MGA was acquired by ATC Insurance of MB, of which AU$6.8m (c. £3.6m) was Solutions PTY Limited (“ATC”), the consideration due to B.P. Marsh. This Melbourne-headquar
Slide 17: Disposal: Walsingham Motor Insurance Limited
Disposal: Walsingham Motor Insurance Limited (“Walsingham”) DISPOSAL £ 5.0M • In December 2021, the Group sold its • The total consideration received stake in Walsingham, the London based represents an IRR of 22% (inclusive of all MGA, which specialised in UK Courier income and fees) and a money mul
Slide 18: Disposal Post Year End: Summa Insurance Brokerage
Disposal Post Year End: Summa Insurance Brokerage, S.L. ("Summa") DISPOSAL £ 9M • In January 2022, the Group agreed to sell • The Group assisted Summa’s £ 8M its 77.25% shareholding in Summa to Management team in the formation of Acrisure España S.L., part of Acrisure Summa, back in 2005 LLC, the gl
Slide 19: Kentro Capital Limited (Kentro)
Kentro Capital Limited (“Kentro”), formerly Nexus Underwriting Management Limited CURRENT INVESTMENT Kentro GWP growth 2008 Kentro (formerly named Nexus) Founded B.P. Marsh’s valuation has On investment: Kentro in numbers:- August 2014: Investment by B.P. Marsh (+ = Acquisition) increased from £1.5m
Slide 20: XPT Group LLC (XPT)
XPT Group LLC (“XPT”) CURRENT INVESTMENT B.P. Marsh originally invested XPT Group growth and valuation history £4.8m in June 2017 A further investment of £2.5m was made in January 2019, with a loan of £1.5m provided in April 2019 2018 + 2017: Western Security Surplus Insurance Brokers, Inc £4.8m £33
Slide 21: Investment Summary – The Fiducia MGA Company Limited
Investment Summary – The Fiducia MGA Company Limited (“Fiducia”) CURRENT INVESTMENT • B.P. Marsh first invested in Fiducia, the UK Marine • Since formation, Fiducia has had in place strong Cargo MGA, in November 2016 underwriting controls which focus on the underlying profitability of their book of
Slide 22: Investment Summary – CBC UK Limited
Investment Summary – CBC UK Limited (“CBC”) CURRENT INVESTMENT • CBC, in which B.P. Marsh first invested in 2017, • This includes:- continues to perform well ‒ A Global Risk team, led by Mark Winston, • In CBC’s last financial year, an EBITDA of £2.2m was who have been together for over 30 years ach
Slide 23: Investment Summary – Ag Guard PTY Limited
Investment Summary – Ag Guard PTY Limited (“Ag Guard”) CURRENT INVESTMENT • Since our investment in 2019, Ag Guard continues to • In comparison, Ag Guard produced GWP of c. AU$ 7m perform well, producing significant year on year in its last financial year to 30 June 2021 growth • The Group’s valuati
Slide 24: Investment Summary – EC3 Brokers Limited
Investment Summary – EC3 Brokers Limited (“EC3”) CURRENT INVESTMENT • The Group first invested in EC3, the Lloyd’s • B.P. Marsh has continued to support EC3 during this independent specialist insurance and reinsurance difficult period, and has assisted EC3 in the following broker, in 2017 ways:- • T
Slide 25: Investment Summary – Stewart Specialty Risks Underwriting Ltd
Investment Summary – Stewart Specialty Risks Underwriting Ltd (“SSRU”) “When establishing SSRU, I wished to build a 'one stop shop' for clients operating in a number of niche sectors across Canada. The continued expansion of SSRU's product offering, alongside its "anywhere/any time" working structur
Slide 26: Financial Highlights – Year Ended 31 January 2022
Financial Highlights – Year Ended 31 January 2022 Net Asset Value (NAV) of NAV per share of 462.7p +11.1% over year 11.7% Total £166.6m (455.6p* diluted) Shareholder Return +£11.6m over six months Including dividend of £0.9m paid July 2021 +£16.7m over year 31 July 2021: 430.4p (424.6p diluted) 31 J
Slide 27: Financial Highlights - continued
Financial Highlights – Year Ended 31 January 2022 - continued Average compound NAV growth of Loan Portfolio Net Loans Repaid £8.6m cash 8.4% p.a. £10.4m £7.8m at 31 January 2022 since flotation and 31 July 2021: £16.7m Key repayments Current cash balance of £17.5m** 11.6% p.a. 31 January 2021: £17.1
Slide 28: Summary
Summary B.P. Marsh’s expertise and Through an experience puts us in a prime Our position as capital provider of choice for the sector in which extensive position to support SME financial network of intermediaries to reach the next we operate offers us unparalleled access to new opportunities brokers
Slide 29: Appendices
Appendices 1 Equity Investment Valuations & Loan Portfolio 30 2 Portfolio 33 3 Financials 37 4 Investment Model & Bridging the Gap 40 5 B.P. Marsh & Partners Plc Board Members 42 6 B.P. Marsh & Company Limited Board Members 43 7 Minority Investor Protections 44 8 Key Shareholders 45 9 Joint Share Ow
Slide 30: Equity Investments – Underwriting Agencies
Equity Investments – Underwriting Agencies Fair market value Equity Movement in year Movement in Year 31 January 2022 As at 31 January Cost of equity Year of initial to 31 January 2022 to 31 January 2022 Investment Sector Jurisdiction (£’000) 2022 investment (£’000) investment (£’000) (%) Nexus MGA
Slide 31: Equity Investments - Brokers and Other
Equity Investments - Brokers and Other Fair market value Equity Movement in year Movement in Year 31 January 2022 As at 31 January Cost of equity Year of initial to 31 January 2022 to 31 January 2022 Investment Sector Jurisdiction (£’000) 2022 investment (£’000) investment (£’000) (%) Summa Insuranc
Slide 32: Loan Portfolio
Loan Portfolio Investment 31 January 2022 (£'000) 31 July 2021 (£’000) 31 January 2021 (£'000) Broucour 1 21 37 Fiducia 2,449 2,545 2,545 Kentro - 4,000 4,000 LEBC 1,500 1,500 1,500 Lilley Plummer Risks 200 - - Paladin (CBC) 3,096 5,096 5,096 Sage 111 108 - SSRU - - 171 Summa 1,521 1,664 2,056 Walsi
Slide 33: Portfolio as at 31 January 2022
Portfolio as at 31 January 2022 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
Slide 34: Portfolio as at 31 January 2022 Continued
Portfolio as at 31 January 2022 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
Slide 35: Portfolio as at 31 January 2022 Continued
Portfolio as at 31 January 2022 Continued Lilley Plummer Holdings Limited • Investment date: October 2019 30.0% • Lilley Plummer Risks is a specialist marine Lloyd's broker, based in London providing a wide range of services for the maritime industry such as Marine and Hull Insurance, P & I cover an
Slide 36: Portfolio as at 31 January 2022 Continued
Portfolio as at 31 January 2022 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 Const
Slide 37: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) at 31 January 2022 31 January 2022 31 July 2021 31 January 2021 (Audited) (Unaudited) (Audited) Tangible and intangible assets 96 107 123 Right of use asset 836 919 1,001 Investments at fair value – Equity Portfolio 149,349 136,205 130,951 Debtors
Slide 38: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement of Comprehensive Income (IFRS) at 31 January 2022 Audited year to Unaudited 6 months to Audited year to 31 January 2022 £'000 31 July 2021 £’000 31 January 2021 £'000 Gains on investments (realised and unrealised) 19,142 5,315 12,877 Amounts recovered from / (impairment of) in
Slide 39: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 January 2022 Audited year to Unaudited 6 months to Audited year to 31 January 2022 £'000 31 July 2021 £’000 31 January 2021 £'000 Net cash from operating activities 1,507 874 408 FX Movement (35) (2) (81) Taxation (13) (6) 234 Purchase of property, p
Slide 40: 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 41: 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 42: 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 15+ 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 43: 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 15+ years of experience 20+ years of experience Founded B.P. Marsh in 1989 Joined B.P. Marsh in 2007 and appointed Chief Investment Off
Slide 44: 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 45: Key Shareholders as at 27th May 2022
Key Shareholders as at 27th May 2022 Directors Major Shareholders (>3%) Brian Marsh OBE 41.80%* PSC UK Pty Limited 19.71% Alice Foulk Less than 0.5% Mr. Martin MacLeish 4.80% Daniel Topping Less than 0.5% Hargreaves Lansdown Asset Mgt 4.28% Jonathan Newman Less than 0.5% JTC Employer Solutions* 3.85
Slide 46: Joint Share Ownership Plan (JSOP)
Joint Share Ownership Plan (JSOP) A 3.9% three-year JSOP was created in June These shares were issued into joint beneficial 1,206,888 of the 1,461,302 shares are 2018 to incentivise and retain the ownership of employees and the newly jointly owned by employees and the Trust. management team and staf
Slide 47: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN This presentation and its contents may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in par
Slide 48: Contacts
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 © 2022 B.P. MARSH & PARTNERS PLC 48