B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2013 Earnings Presentation
30 slides from B.p. Marsh & Partners's earnings presentation, June 2013
Slide 1: B.P. Marsh & Partners Plc Final Results
B.P. Marsh & Partners Plc Final Results Year to 31 January 2013 Brian Marsh OBE, Chairman Jonathan Newman, Group Finance Director Dan Topping, Investment Director June 2013
Slide 2: Overview
Overview Niche Venture Capital provider focused on minority investments in financial services businesses, typically taking an equity stake of between 15% and 45% Geographic focus on UK, but also considers opportunities in EU and North America Established in 1990 with funding of £2.5m – 31 inve
Slide 3: Financial Highlights – Year Ended 31 January 2013
Financial Highlights – Year Ended 31 January 2013 NAV of £55.5m (31 July 2012: £52.0m, 31 January 2012: £50.1m) NAV per share of 190p (31 July 2012: 178p, 31 January 2012: 171p)* Currently trading at a 32.1% discount to NAV (at 3rd June 2013) Consolidated profit after tax £5.7m (31 July 2012
Slide 4: Other Key Developments – Cash Position
Other Key Developments – Cash Position Cash at 31 January 2013 £1.8m (31 January 2012: £0.7m) Key movements: Acquisitions • £0.8m acquisition of Besso shares from Michael Wade Nov 2012 Net Loans granted • £1.3m net lent to investee companies (incl. £0.6m Broucour, £0.3m Summa, £0.2m Besso) Disposa
Slide 5: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 60 55.50 52.00 50.12 46.48 50 43.88 40.61 40 £ Millions 30 22.10 20 8.69 10 4.77 2.50 0 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st July 31st Jan 90 95 99 05 07* 09 11 12 12 2013 YEAR ENDED YEAR ENDED SIX MONTHS ENDED NET OF DEFERRE
Slide 6: 2007-2013: Resilient Net Asset Value (NAV)
2007-2013: Resilient Net Asset Value (NAV) 6
Slide 7: Investments at January 2013
Investments at 31 January 2013 Consolidated Cash Flow Investment Activity Cost of Fair market Equity % Year of Movement equity value initial in year to investment 31.01.13 investment 31.01.13 (£’000) (£’000) (£’000) Besso Insurance Group Limited Insurance broker 2,618 5,223 36.5% 1995 538 The Brouco
Slide 8: Key Portfolio Valuation Movements in Year – Hyperion
Key Portfolio Valuation Movements in Year – Hyperion Insurance Group Ltd (“Hyperion”) Partial Disposal of Hyperion Investment In March 2013 the Group agreed to sell 80% of its 13.8% holding in Hyperion to equity firm General Atlantic for cash consideration of £29.2m (£5.20/share), subject to reg
Slide 9: Key Portfolio Valuation Movements in Year – Hyperion (cont’d)
Key Portfolio Valuation Movements in Year – Hyperion Insurance Group Ltd (“Hyperion”) (cont’d) As sale agreed in 2012, and substantial due diligence carried out before 31 Jan 2013, the valuation of Hyperion in accounts reflects the offer received Original investment Nov 1994 £0.025m + £0.5m loan
Slide 10: Key Portfolio Valuation Movements in the Year – LEBC Holdings
Key Portfolio Valuation Movements in the Year – LEBC Holdings Limited (“LEBC”) In April 2007 the Group invested in LEBC, an Independent Financial Advisory company with 11 branches around the UK LEBC secured a year-on-year turnaround in profit before tax of £1.12m (FY2012 profit of £0.54m versus
Slide 11: Key Portfolio Valuation Movements in the Year – Besso
Key Portfolio Valuation Movements in the Year – Besso Insurance Group Limited (“Besso”) The Group originally invested in Besso in 1995; since then Besso has grown to a company with turnover, for the year ended 31 December 2012, of £26m (from £24.2m in the year ended 31 December 2011, an increase o
Slide 12: Key Portfolio Valuation Movements in Year – Summa
Key Portfolio Valuation Movements in Year – Summa Insurance Brokerage, S. L. (“Summa”) In 2005 the Group invested in Summa, a Madrid based insurance intermediary consolidator, which has completed 19 acquisitions within the Spanish market since the Group’s initial investment Despite the economic
Slide 13: Other Key Developments – Investment Opportunities
Other Key Developments – Investment Opportunities 62 prospective new investments received in the year to 31 January 2013, compared to 83 in the Year to 31 January 2012 Sourcing of new opportunities: Long-term introducer relations Active networking BVCA membership Referrals from accountan
Slide 14: Other Key Developments – Investment Opportunities Continued
Other Key Developments – Investment Opportunities Continued Some of the opportunities reviewed by the Group during the period: US-Based specialty lines underwriter and wholesale broker Early stage specialist MGA Start up MGA, underwriting Marine insurance in Eastern Europe International In
Slide 15: Minority Investor Protections
MinorityInvestor Minority InvestorProtections Protections The Group’s position is well protected and portfolio investments are actively monitored. The Group has the following investor safeguards in place: Board meetings are held frequently and at least every three months; Timely management accou
Slide 16: Adding Value
Adding Value We believe in building strong relationships with the businesses we partner and using our expertise and experience in assisting them to achieve their growth targets and maximise shareholder value. We do so as follows: Representation at Board level Provision of follow-on funding G
Slide 17: Exit Strategy
Exit Strategy Exit considered on entry Patient development to achieve full earning potential Recognise and act on opportunistic situations Deal size favours acquisition by large financial services firms 17
Slide 18: Other Key Developments – Outlook
Other Key Developments – Outlook Continue to seek investment opportunities in high growth businesses Continue to seek attractive realisation opportunities for our current portfolio Climate of continuing economic uncertainty necessitates a prudent approach Focus on maximising value in existin
Slide 19: Summary
Summary Summary NAV proving to be resilient even in uncertain economic conditions 90% of portfolio by value in insurance broking or related activities BP Marsh is not subject to the limitations of a closed fund, such as asset redemption pressures £1.8m cash at 31 January 2013 £4.3m loan fa
Slide 20: Appendices
Appendices Management Team Board Members Current Portfolio Financials Major Shareholders Contacts 20
Slide 21: Management Team
Management Team 50 years’ experience in insurance broking and Executive Chairman underwriting. 1979-1990 was chairman of the Nelson Hurst & Marsh Group. More than 30 years’ experience Brian Marsh OBE building, buying and selling financial services businesses particularly in the insurance sector Char
Slide 22: Management Team
Management Team Camilla Kenyon was appointed as Head of Investor Investment Director Relations at BP Marsh in February 2009, having four years’ prior experience with the Company. Camilla holds two non-executive appointments, is Chair of the Camilla Kenyon New Business Committee and is a Member of th
Slide 23: Board Members
Board Members A Chartered Accountant, Stephen gained many years’ Non-Executive Director experience with Charterhouse Development Capital in the structuring of venture capital projects in all fields Stephen Clarke including financial services, and in guiding and monitoring their progress. He joined t
Slide 24: Current Portfolio
Current Portfolio Besso Insurance February 1995 the Group assisted a specialist team departing from Jardine Lloyd Thompson Group in Group Limited- 36.5% establishing Besso Holdings Limited, which specialises in insurance broking for the North American wholesale market Besso Holdings Limited chan
Slide 25: Current Portfolio cont.
Current Portfolio cont. Paterson Squared LLC Founded in September 2008 after its separation from Paterson Martin Limited - 22.5% The team use sophisticated modelling techniques to assess risk, with a view to providing counter-party risk and transaction advice Portfolio Design Group The Group i
Slide 26: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) Consolidated at 31 January 2013 Balance Sheet Audited Unaudited 6 Audited Year to months to Year to 31 Jan 2013 31 July 2012 31 Jan 2012 £’000 £’000 £’000 Tangible assets 7 10 14 Investments at fair value 52,711 47,998 50,624 Debtors / Loans receiv
Slide 27: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement Consolidated of Comprehensive Income StatementIncome (IFRS) Income Statement (IFRS) at 31 January 2013 to 31 July 2007 Audited Unaudited 6 Audited Year to months to Year to 31 January 31 July 2012 31 January 2013 £’000 2012 £’000 £’000 Gains on Investments (Realised and Unreal
Slide 28: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 Consolidated Cash Flow January 2013 Audited Unaudited 6 Audited Year to months to 31 Year to 31 Jan 2013 July 2012 31 Jan 2012 £’000 £’000 £’000 Net cash from / (used by) operating activities 12 146 215 Taxation - - - Purchase of Property, plant and
Slide 29: Key Shareholders
Key Shareholders Directors Brian Marsh OBE - 59.2% Natasha Dunbar - 4.9% Major Shareholders (>3%) The Stephen Crowther Trust Henderson Global Investors IS Partners AG AXA Framlington James Sharp & Co 29
Slide 30: Contacts
Contacts Contacts B. P. Marsh & Partners Plc 2nd Floor 36 Broadway London SW1H 0BH Telephone: 020 7233 3112 Website: www.bpmarsh.co.uk Nominated Adviser & Broker Panmure Gordon & Co Telephone: 020 7886 2500 Financial PR Redleaf Polhill Telephone: 020 7382 4747 30