B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — H1 2021 Earnings Presentation
49 slides from B.p. Marsh & Partners's earnings presentation, Jul 31, 2021
Slide 1: Interim Results
Interim Results For the six-month period ending 31 July 2021 Dan Topping, Chief Investment Officer Jonathan Newman, Group Finance Director
Slide 2: Overview of B.P. Marsh
Overview of B.P. Marsh Investment Strategy We take a long term view, with What we do Who we are Longevity an average holding period of 7 years* Making an initial investment of up to B.P. Marsh is a specialist private equity investor We are a complementary team of highly B.P. Marsh has been investing
Slide 3: Summary – Period Ending 31 July 2021
Summary – Period Ending 31 July 2021 % Change 31 January 2010 to 31 July 2021 B.P. Marsh & 249% 370 Partners PLC • As at 31 July 2021 – 18 investments in the portfolio FTSE AIM All Share 87% with a NAV of £155.0m (31 FTSE AIM Financials 142% January 2021 £149.9m) 320 • Total Shareholder return of 4.
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 160.00 154.98 142.63 149.91 136.90 140.00 130.00 126.17 120.00 98.90 100.00 Full Year £ Millions 79.68 80.00 Half Year 70.81 62.97 58.92 55.46 *NB: The valuation at 60.00 31 January 2007 includes £10.1m net 40.61 proceeds raised on AIM 40.00 **NB: The valuation at
Slide 5: Dividends
Dividends The Group’s historic distribution payments are shown below. Aggregate dividend per share of 30.1p paid since flotation, being 21.5% of the flotation price • Aggregate dividend of £1,800,000 February 2017: £12 £0.9m, paid in July 2021, Realisation of 4.76p 4.76p representing 100% of the Jul
Slide 6: Portfolio Overview – Equity Growth Examined
Portfolio Overview – Equity Growth Examined Over the six-month period to 31 July 2021, the Equity Portfolio grew by 4.1%, with NAV increasing by 3.4% This performance emanated from growth across 70% of the underlying Portfolio From 31 July 2019 to 31 July 2021, B.P. Marsh’s Equity Portfolio has grow
Slide 7: Market Commentary and Outlook
Market Commentary and Outlook During the period, B.P. Marsh and its B.P. Marsh does not have any exposure to portfolio companies have continued balance sheet risk via its investment to show resilience to the challenges portfolio and is therefore unaffected posed by Covid-19 directly by insurance los
Slide 8: International Portfolio – as at 31 July 2021
International Portfolio – as at 31 July 2021 Summa Insurance CBC UK Ltd Brokerage S.L. EC3 Brokers Ltd The Fiducia MGA Company Ltd Stewart Specialty Risk LEBC Holdings Ltd Underwriting Ltd Lilley Plummer Risks Ltd Nexus Underwriting Management Ltd Mark Edward Partners LLC Walsingham Motor Insurance
Slide 9: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce in aggregate c. £1.4bn (c. $1.9bn) of Gross The Group’s broking Written Premium (GWP) in 2021, up from c. £1.1bn (c. $1.5bn) in investments are budgeting to 2020, of which: place c. £659m
Slide 10: Historic Growth of GWP, Revenue and EBITDA across the Insurance Portfolio
Historic Growth of GWP, Revenue and EBITDA across the Insurance Portfolio £1,600,000,000 £160,000,000 In 2018 the Group’s portfolio Between 2018 and 2021, the Group’s produced / placed in aggregate portfolio GWP increased by c. 35%, 35% Growth GWP of c. £0.9bn, revenue of c. with revenue increasing
Slide 11: Overview – Managing General Agencies (MGAs)
Overview – Managing General Agencies (MGAs) B.P. Marsh’s MGAs are budgeting to Date of Equity % at 31 Valuation at 31 Cost of produce GWP of over £749m in 2021, in MGAs Investment Jurisdiction July 2021 July 2021 Investment % of NAV the aggregate Nexus Aug-14 UK 17.42% £43,981,000 £11,126,554 28.4%
Slide 12: Overview – Broking Investments
Overview – Broking Investments Since inception, much of B.P. Marsh’s growth has been underpinned by a successful track record of investing in Date of Equity % at 31 Valuation at Cost of brokers, both in the Lloyd’s and London Brokers Investment Jurisdiction July 2021 31 July 2021 Investment % of NAV
Slide 13: LEBC Holdings Limited (LEBC) – Independent Financial Advisor
LEBC Holdings Limited (LEBC)– Independent Financial Advisor Date of Equity % at Valuation at Cost of Investment Jurisdiction 31 July 2021 31 July 2021 Investment % of NAV LEBC Holdings Limited April-07 UK 59.34 £25,000,000 £12,373,657 16.1% B.P. Marsh has been invested in LEBC, an Independent Privat
Slide 14: MB Prestige Holdings PTY Limited (MB)
MB Prestige Holdings PTY Limited (MB) REALISATION In August 2021, MB was acquired by ATC Insurance The consideration was paid in newly issued shares in Solutions PTY Limited (“ATC”), the Melbourne ATC, which increases B.P. Marsh’s shareholding by headquartered MGA and Lloyd’s Coverholder, in 5.5% to
Slide 15: MB Prestige Holdings PTY Limited (MB) – continued
MB Prestige Holdings PTY Limited (MB) – continued CASE STUDY / REALISATION Sold shareholding in MB for AU$6.8m (c. £3.6m), paid in ATC shares increasing shareholding Transaction represents: to 25.5% • 29% IRR since 2013 MB made final $16,000,000 repayment on B.P. • C. 9x equity multiple Marsh AU$1.4
Slide 16: Nexus Underwriting Management Limited (Nexus)
Nexus Underwriting Management Limited (Nexus) CASE STUDY / CURRENT INVESTMENT (+ = Acquisition) B.P. Marsh’s valuation has increased from £1.6m in 2008 Nexus Founded • Top 10 global MGA + 2014 (for a 5% On investment: • #1 independent trade credit broker in shareholding) to £44.0m at 5% August 2014:
Slide 17: XPT Group LLC (XPT)
XPT Group LLC (XPT) CURRENT INVESTMENT B.P. Marsh was a founding investor in XPT in June Since this investment, XPT has made nine 2017, providing $6m for an initial shareholding of 35% acquisitions In September 2021 XPT secured an additional This includes one made recently, being S&H $30.25m banking
Slide 18: Stewart Specialty Risk Underwriting Ltd (SSRU)
Stewart Specialty Risk Underwriting Ltd (SSRU) CURRENT INVESTMENT SSRU was a start-up Managing General Agent (MGA) This has allowed SSRU to achieve the initial goals set investment, specialising in the energy and out in its business plan, to become a 'one stop shop' construction space in Canada, whi
Slide 19: Lilley Plummer Risks Limited (LPR)
Lilley Plummer Risks Limited (LPR) CURRENT INVESTMENT B.P. Marsh invested in the newly-formed Lloyd's LPR is well positioned to continue its positive growth broker, LPR, in October 2019, taking a 30% since formation, setting an ambitious budget for shareholding for a cash consideration of £1m 2021,
Slide 20: The Fiducia MGA Company Limited (Fiducia)
The Fiducia MGA Company Limited (Fiducia) CURRENT INVESTMENT B.P. Marsh invested in the start-up UK Marine Cargo After launching five years ago, Fiducia is currently MGA Fiducia in November 2016, taking a 25% budgeting to produce GWP of approaching £24m in shareholding for a cash consideration of £7
Slide 21: Investment Opportunities
Investment Opportunities 31 new investment enquiries in the period to 31 July 2021 Financial Tech, 16% 27% of these new investment enquiries emanated internationally, compared to 73% domestic enquiries Insurance Tech, 16% Current Pipeline Both the MGA and Broking sectors remain active, regardless of
Slide 22: 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-add Insurance Interme
Slide 23: Financial Highlights – Period Ended 31 July 2021
Financial Highlights – Period Ended 31 July 2021 NAV of £155.0m 31 January 2021: £149.9m, 31 July 2020: £142.6m NAV per share of 430.4p, 424.6p* diluted 31 January 2021: 416.4p, 31 July 2020: 396.2p Consolidated Profit before Tax: £6.2m Year ended 31 January 2021: £13.7m, six months ended 31 July 20
Slide 24: Financial Highlights – Period Ended 31 July 2021
Financial Highlights – Period Ended 31 July 2021 Average compound NAV growth of 8.1% p.a. since flotation and 11.5% 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 2.44p per share (£0.9m) paid on 30 July 2021 To shar
Slide 25: Cash Position
Cash Position Cash Total Liquidity, inc. Loan Cash at 1 February 2021 £0.7m £2.7m Equity investments £(0.2)m Equity proceeds £0.3m Portfolio loans granted £(0.1)m Portfolio loans repaid £0.5m Dividend paid £(0.9)m Other operating movements £0.8m Cash at 31 July 2021 £1.1m £3.1m Current cash balance
Slide 26: Loan Portfolio
Loan Portfolio Investment 31 July 2021 (£’000) 31 January 2021 (£'000) 31 July 2020 (£’000) Broucour 21 37 - Fiducia 2,545 2,545 2,545 LEBC 1,500 1,500 1,500 Nexus 4,000 4,000 4,000 Paladin (CBC) 5,096 5,096 4,896 Sage 108 - - Stewart Specialty Risk - 171 256 Summa 1,664 2,056 2,042 Walsingham 286 2
Slide 27: Summary
Summary B.P. Marsh has been a leading specialist investor in global financial intermediary companies for over 30 years We are diversified in terms of company concentration, geography and currency, mitigating risk The Group has a proven track record of creating excellent value for shareholders throug
Slide 28: Appendices
Appendices 1. Equity Investments 8. Investment Process 2. Portfolio 9. Adding Value 3. Financials 10. Minority Investor Protections 4. Management Team 11. Key Shareholders 5. Board Members 12. Joint Share Ownership Plan 6. Growth Strategy 13. Contacts 7. Investment Model © 2021 B.P. MARSH & PARTNERS
Slide 29: Equity Investments – Underwriting Agencies
Equity Investments – Underwriting Agencies Movement in Movement in Equity Cost of equity Period to 31 Period to 31 Fair market value As at 31 July investment Year of initial July 2021 July 2021 Investment Sector Jurisdiction 31 July 2021 (£’000) 2021 (£’000) investment (£’000) (%) Nexus MGA UK 43,98
Slide 30: Equity Investments - Brokers and Other
Equity Investments - Brokers and Other Movement in Fair market value Equity Cost of equity Movement in Period to 31 July 31 July 2021 As at 31 July investment Year of initial Period to 31 July 2021 Investment Sector Jurisdiction (£’000) 2021 (£’000) investment 2021 (£’000) (%) Summa Insurance Brokin
Slide 31: Portfolio as at 31 July 2021
Portfolio as at 31 July 2021 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 2021 Continued
Portfolio as at 31 July 2021 Continued Criterion Underwriting Pte Limited • Investment date: July 2018 29.4% • B.P. Marsh helped establish Criterion alongside Partners in AsiaRe Holdings (PTE) Limited and Asia Reinsurance Brokers (PTE) Limited • Criterion is a start-up Singapore-based Managing Gener
Slide 33: Portfolio as at 31 July 2021 Continued
Portfolio as at 31 July 2021 Continued Lilley Plummer Risks Limited • Investment date: October 2019 30.0% • LPR is a specialist marine Lloyd's broker, based in London MB Prestige Holdings PTY Limited • Investment date: December 2013 40.0% • MB is an MGA, headquartered in Sydney, Australia, recognise
Slide 34: Portfolio as at 31 July 2021 Continued
Portfolio as at 31 July 2021 Continued Sage Program Underwriters, Inc • Investment date: June 2020 30.0% • Based in Bend, Oregon and founded in 2020 by CEO Chuck Holdren, Sage provides Workers Compensation insurance to niche industries, including inland delivery and field sport sectors Stewart Speci
Slide 35: Portfolio as at 31 July 2021 Continued
Portfolio as at 31 July 2021 Continued Summa Insurance Brokerage, S.L. • Investment date: January 2005 77.3% • We provided finance to a Spanish management team in order to acquire and consolidate regional insurance brokers in Spain • Summa has acquired brokers all over Spain. It now has over 20 offi
Slide 36: Consolidated Statement of Financial Position (IFRS) at 31 July 2021
Consolidated Statement of Financial Position (IFRS) at 31 July 2021 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2021 £’000 31 July 2020 £’000 31 January 2021 £’000 Tangible and intangible assets 107 137 123 Right of use asset 919 1,084 1,001 Investments at fair value – Equity
Slide 37: Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2021
Consolidated Statement of Comprehensive Income (IFRS) at 31 July 2021 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2021 £’000 31 July 2020 £’000 31 January 2021 £'000 Gains on investments (realised and unrealised) 5,315 5,922 12,877 Amounts recovered from / (impairment of) - -
Slide 38: Consolidated Statement of Cash Flows (IFRS) at 31 July 2021
Consolidated Statement of Cash Flows (IFRS) at 31 July 2021 Unaudited 6 months to Unaudited 6 months to Audited year to 31 July 2021 £’000 31 July 2020 £’000 31 January 2021 £'000 Net cash from operating activities 874 (345) 408 FX Movement (2) (6) (81) Taxation (6) 238 234 Purchase of property, pla
Slide 39: Growth Strategy
Growth Strategy Our goal is to be the early stage capital provider of choice to the financial services sector. We apply our sector expertise to source attractive B.P. Marsh long-term investment opportunities cash (Up to £5.0m) both in the UK and internationally. We have a strong track record of help
Slide 40: Enterprise Value
Bridging the Gap B.P. Marsh specialises in providing early-stage finance, investing in businesses with an enterprise value of between £0 and c. £25m Our flexible approach to investment translates into us operating in a niche segment where funding is difficult to obtain Private Equity > £250m or Inve
Slide 41: 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 Worked
Slide 42: 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 Joined
Slide 43: Investment Model
Investment Model Specialist Investor Up To £5m Initial Investment in early stage and SME financial services Relationship Driven 20-40% minority equity stakes businesses, operating in niche segment Investors in People where funding difficult to obtain Scope for follow on funding Value Add Long-Term V
Slide 44: Investment Process
Investment Process Strong network of industry In-house comprehensive Final negotiation Business plans tested contacts brings new fact-finding and due diligence opportunities Completion Post-investment plan compiled process - three-year historic by BPM team Each opportunity is scrutinised and forecas
Slide 45: Adding Value
Adding Value Value creation driven by partnering with ambitious entrepreneurs seeking a partnership to provide growth capital and Board level access to a team with a deep knowledge representation and Guidance on Provision of base in mergers, acquisitions, business sales, strategy and follow-on fundi
Slide 46: Minority Investor Protections
Minority Investor Protections B.P. Marsh believes that day-to-day operational - Dividend payments or other distributions control of the business is the domain of the including bonuses executive management team. However, our The Group has an extensive track record of position is well protected and po
Slide 47: Key Shareholders
Key Shareholders Directors Major Shareholders (>3%) Brian Marsh OBE 41.81%* PSC UK Pty Limited 19.72% Alice Foulk Less than 0.5% Mr. Martin Macleish 4.77% Daniel Topping Less than 0.5% Hargreaves Lansdown Asset Mgt 4.15% Jonathan Newman Less than 0.5% JTC Employer Solutions* 3.90% Pankaj Lakhani Les
Slide 48: Joint Share Ownership Plan (JSOP)
Joint Share Ownership Plan (JSOP) A 3.9% three-year JSOP was created These shares were issued into joint 1,206,888 of the 1,461,302 shares in June 2018 to incentivise and retain beneficial ownership of employees are jointly owned by employees and the management team and staff and the newly formed Tr
Slide 49: 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
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