B.p. Marsh & Partners Plc · LSE:BPM
B.p. Marsh & Partners — FY2021 Earnings Presentation
51 slides from B.p. Marsh & Partners's earnings presentation, April 2021
Slide 1: Annual Results
Annual Results For the year ending 31 January 2021 Dan Topping, Chief Investment Officer Jonathan Newman, Group Finance Director
Slide 2: Overview
Overview 30+ Specialist Years strong 18 current investments PE/VC investor in Financial Services intermediaries Invested in 53 companies since 1990 Geographically diverse within our specialist sector Up to £5m initial investment Long-term view Industry knowledge For minority equity positions (20-40%
Slide 3: Summary – Year Ending 31 January 2021
Summary – Year Ending 31 January 2021 % Change 31 January 2010 to 320 31 January 2021 • As at 31 January 2021 – 18 B.P. Marsh & 193% investments in portfolio with a Partners PLC NAV of £149.9m (31 January FTSE AIM All Share 74% 2020 £136.9m) 270 FTSE AIM Financials 89% • Total Shareholder return of
Slide 4: Performance: Net Asset Value (NAV)
Performance: Net Asset Value (NAV) 160.00 149.91 142.63 136.90 140.00 130.00 126.17 120.00 98.90 100.00 Full Year £ Millions 79.68 Half Year 80.00 70.81 62.97 58.92 *NB: The valuation at 55.46 60.00 31 January 2007 includes £10.1m net 44.17 40.61 proceeds raised on AIM 40.00 **NB: The valuation at 2
Slide 5: Dividends
Dividends The Group’s historic dividend payments are shown below. Aggregate dividend per share of 30.1p paid since flotation. • Aggregate dividend of £0.9m, February 2017: to be paid in July 2021, £1,800,000 £12 July 2013: Realisation of 4.76p 4.76p representing 100% of the Besso Insurance p/s p/s r
Slide 6: Market Commentary
Market Commentary B.P. Marsh’s insurance intermediary B.P. Marsh does not have any exposure to investments have continued to see balance sheet risk via its investment pricing increases across sectors in portfolio and is therefore unaffected which they operate directly by insurance losses. However, g
Slide 7: Covid-19 Impact & Outlook
Covid-19 Impact & Outlook Since the outbreak of Covid-19, B.P. Marsh has continued to work with and support each of its investee companies Given our mantra of investing in a diverse portfolio across the insurance sector, we believed the portfolio to be well-positioned and collectively resilient The
Slide 8: International Portfolio
International Portfolio 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 Ltd Sage Program Unde
Slide 9: Insurance Intermediary Overview
Insurance Intermediary Overview B.P. Marsh’s insurance intermediary portfolio companies are budgeting to produce in aggregate £1.4bn (c. $1.9bn) of Gross The Group’s Broking Written Premium (GWP) in 2021, an increase from £1.1bn investments are budgeting to (c. $1.5bn) in 2020, of which: place over
Slide 10: Overview – Broking Investments
Overview – Broking Investments Since inception, much of B.P. Marsh’s growth has been underpinned by a Valuation at successful track record of investing in Date of Equity % at 31 31 January Cost of Brokers, both in the Lloyd’s and London Brokers Investment Jurisdiction January 2021 2021 Investment %
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 £765m in 2021, in MGAs Investment Jurisdiction January 2021 January 2021 Investment % of NAV the aggregate Nexus Aug-14 UK 17.51% £40,906,000 £11,126,554
Slide 12: Analysis – Start-Up Investments: Employment Growth
Analysis – Start-Up Investments Employment Growth 250 Since the origins of B.P. Marsh in 1990, we have These investments can produce considerable 225 carved out a niche focus backing shareholder returns 200 entrepreneurial individuals from start-up phase B.P. Marsh's patient investment strategy is k
Slide 13: Bridging the Gap
Bridging the Gap The Group is a specialist in providing early-stage finance, investing in businesses with an Enterprise Value of between zero and c. £25m Our flexible approach to investment translates into the Group Private Equity operating in a niche segment where funding is difficult to obtain > £
Slide 14: Analysis – Start-Up Investments
Analysis – Start-Up Investments The Group has made seven start-up investments in both MGAs and brokers. 39% of the portfolio comprises start-up investments made since December 2013. £000s Gross Written Premium / BP Marsh Investment 31 January 2021 EBITDA Premium Placed Investee Company Date of Inves
Slide 15: Analysis – Start-Up Investments
Analysis – Start-Up Investments LPR XPT Investment: £7.3m Over the past Investment: £1.0m Date: June-17 Date: Oct-19 decade the Subscribed to a 35% Subscribed to a 35% Group’s start-up shareholding in specialty Broker shareholding in an lines distribution investments independent Lloyd's marine broke
Slide 16: Analysis – Start-Up Investments - Growth
Analysis – Start-Up Investments - Growth This graph shows the group's ability to assist in the growth of our start-up £500,000,000 £45,000,000 investments, showing the growth of Gross Written Premium, Revenue and £450,000,000 £40,000,000 EBITDA: £400,000,000 £35,000,000 Gross Written Premium £350,00
Slide 17: Highlights – IFA Investment – LEBC Holdings Limited
Highlights – IFA Investment– LEBC Holdings Limited (LEBC) Equity % at Valuation at Date of 31 January 31 January Cost of Investment Jurisdiction 2021 2021 Investment % of NAV LEBC Holdings Limited April-07 UK 53.9% £25,000,000 £12,374,000 16.7% B.P. Marsh has been invested in LEBC, the Independent P
Slide 18: Highlights – Start-Up Investments - SSRU
Highlights – Start-Up Investments - Stewart Specialty Risk Underwriting (SSRU) SSRU was a start-up MGA investment, specialising in In B.P. Marsh’s financial year, its shareholding in SSRU the Energy and Construction space in Canada, which has increased in value by 124% to £5.6m launched in January 2
Slide 19: Highlights – Start-Up Investments - Lilley Plummer Risks
Highlights – Start-Up Investments - Lilley Plummer Risks Limited (LPR) B.P. Marsh invested in the newly-formed Lloyd's broker In September 2020, LPR established a broker in Cyprus LPR in October 2019, taking a 30% shareholding for a called LPR Insurance Brokers, which received Lloyd’s cash considera
Slide 20: Highlights – Start-Up Investments - Fiducia
Highlights – Start-Up Investments - The Fiducia MGA Company Limited (Fiducia) 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 co
Slide 21: Highlights - The Wider Portfolio – XPT Group
Highlights - The Wider Portfolio – XPT Group LLC (XPT) Throughout the Group’s financial year, XPT has Moving into 2021 and beyond, we view XPT as well- continued its expansion strategy positioned in the market to continue its expansion plans, both via organic growth and further This has included the
Slide 22: Highlights - The Wider Portfolio – CBC UK Limited
Highlights - The Wider Portfolio – CBC UK Limited (CBC) Established in 1985, CBC is a longstanding Retail and In B.P. Marsh’s financial year, its shareholding in CBC Wholesale Lloyd’s Insurance Broker has increased in value by 10% to £8.6m B.P. Marsh supported the MBO of CBC in 2017, providing To da
Slide 23: Highlights - The Wider Portfolio – Nexus Underwriting Management
Highlights - The Wider Portfolio – Nexus Underwriting Management Limited (Nexus) Throughout the Group’s financial year, Nexus has Since B.P. Marsh’s investment in Nexus in 2014, GWP performed well and is budgeting significant growth has grown from £50m to estimated GWP of £427m in 2021 and EBITDA ha
Slide 24: Investment Opportunities
Investment Opportunities Non-Financial Services 50 new investment enquiries in year to 2% 31 January 2021 Financial Tech 40% of these new investment enquiries 18% emanated internationally, compared to 60% domestic enquiries Current Pipeline Insurance Tech Both the MGA and Broking sectors remain acti
Slide 25: 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 26: Financial Highlights – Year Ended 31 January 2021
Financial Highlights – Year Ended 31 January 2021 NAV of £149.9m 31 January 2020: £136.9m NAV per share of 416.4p* 31 January 2020: 380.1p Consolidated Profit after Tax: £13.7m Year ended 31 January 2020: £12.5m Underlying Profit before Tax: £0.9m Year ended 31 January 2020: £0.8m *On 12 June the Gr
Slide 27: Financial Highlights – Year Ended 31 January 2021
Financial Highlights – Year Ended 31 January 2021 Average compound NAV growth of 8.2% p.a. since flotation and 11.7% 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) to be paid on 30 July 2021
Slide 28: Cash Position
Cash Position Cash at 1 February 2020 £0.8m Equity investments £(2.4)m Loans granted £(1.1)m Loans repaid £2.9m Advances of borrowings £1.0m Tax repayments £0.2m Dividend paid £(0.8)m Other operating movements £0.1m Cash at 31 January 2021 £0.7m Current cash balance £1.8m Current Total Available Cas
Slide 29: Loan Portfolio
Loan Portfolio Investment 31 January 2021 (£’000) 31 January 2020 (£’000) Broucour 37 - Fiducia 2,545 2,470 LEBC 1,500 1,000 MB Group - 282 Nexus 4,000 6,000 Paladin (CBC) 5,096 4,596 Stewart Specialty Risk 171 258 Summa 2,056 2,012 Walsingham 286 715 XPT 1,452 1,512 Total 17,143 18,845 © 2021 B.P.
Slide 30: Summary
Summary A leading specialist investor in global financial intermediary companies for over 30 years Diversified in terms of company concentration, geography and currency, mitigating risk A proven track record of creating excellent value for shareholders: - Identifying future industry leaders through
Slide 31: 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 32: Equity Investments – Underwriting Agencies
Equity Investments – Underwriting Agencies Movement in Movement in Fair market value Equity Cost of equity Year to 31 Year to 31 31 January 2021 As at 31 investment Year of initial January 2021 January 2021 Investment Sector Jurisdiction (£’000) January 2021 (£’000) investment (£’000) (%) Nexus MGA
Slide 33: Equity Investments - Brokers and Other
Equity Investments - Brokers and Other Fair market Movement in Movement in value Equity Cost of equity Year to 31 Year to 31 31 January As at 31 January investment Year of initial January 2021 January 2021 Investment Sector Jurisdiction 2021(£’000) 2021 (£’000) investment (£’000) (%) Paladin (CBC) I
Slide 34: Portfolio as at 31 January 2021
Portfolio as at 31 January 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
Slide 35: Portfolio as at 31 January 2021 Continued
Portfolio as at 31 January 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 Ge
Slide 36: Portfolio as at 31 January 2021 Continued
Portfolio as at 31 January 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 a MGA, headquartered in Sydney, Australia, recogni
Slide 37: Portfolio as at 31 January 2021 Continued
Portfolio as at 31 January 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 Sp
Slide 38: Portfolio as at 31 January 2021 Continued
Portfolio as at 31 January 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 o
Slide 39: Consolidated Statement of Financial Position (IFRS)
Consolidated Statement of Financial Position (IFRS) at 31 January 2021 Audited year to Audited year to 31 January 2021 £’000 31 January 2020 £’000 Tangible and intangible assets 123 151 Right of use asset 1,001 1,286 Investments at fair value – Equity Portfolio 130,951 115,666 Debtors / Loans receiv
Slide 40: Consolidated Statement of Comprehensive Income (IFRS)
Consolidated Statement of Comprehensive Income (IFRS) at 31 January 2021 Audited year to Audited year to 31 January 2021 £’000 31 January 2020 £’000 Gains on investments (realised and unrealised) 12,877 11,570 Amounts recovered from / (impairment of) investments and loans 37 (69) Operating income 4,
Slide 41: Consolidated Statement of Cash Flows (IFRS)
Consolidated Statement of Cash Flows (IFRS) at 31 January 2021 Audited year to Audited year to 31 January 2021 £’000 31 January 2020 £’000 Net cash from operating activities 408 1,189 Taxation 234 261 Purchase of property, plant and equipment (5) (26) Equity investments made (2,408) (2,551) Net proc
Slide 42: Management Team
Management Team Brian Marsh Alice Foulk Daniel Topping Jonathan Newman Executive Chairman Managing Director Chief Investment Officer Group Finance Director Brian Marsh has over 55 years’ experience in Alice Foulk joined B.P Marsh in September 2011 Dan Topping is a Member of the Chartered A Chartered
Slide 43: Non-Executive Board Members
Non-Executive Board Members Pankaj Lakhani FCCA Nicholas Carter Non-Executive Director Non-Executive Director A Certified Accountant, Pankaj Lakhani has over Nicholas Carter has over 50 years’ experience 40 years’ of accounting experience within the in the Lloyd’s Insurance Market. Nick held a Insur
Slide 44: 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 45: 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 46: 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 47: 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 48: 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 49: Key Shareholders at 31 January 2021
Key Shareholders at 31 January 2021 Directors Major Shareholders (>3%) Brian Marsh OBE 41.85%* PSC UK Pty Limited 19.74% Hargreaves Lansdown Asset Alice Foulk Less than 0.5% Management 4.15% Daniel Topping Less than 0.5% Mr. Martin MacLeish 4.09% Jonathan Newman Less than 0.5% JTC Employer Solutions
Slide 50: Joint Share Ownership Plan (JSOP)
Joint Share Ownership Plan (JSOP) Previous JSOP came to an end in Subject to share price hurdle of 313p On 12 June 2021 the Group expects November 2017 and saw year-on-year on vesting date certain performance criteria to be improvements in shareholder return met. Whilst these shares remain in the an
Slide 51: 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