Year End Results For the year ended 31 January 2016 Cami milla Kenyon , Director & Head of Investor Relations Dan Toppi ping , Chief Investment Officer Jonathan Newma man , Group Finance Director 7 June 2016
Overview 25+ Years strong Specialist Robust balance sheet invested in 42 companies £5.3 million cash as at 31 January 2016 PE/VC investor in Financial Services intermediaries and realised 29 since 1990 £7.3 million realisation cash expected in July 2016 Industry knowledge Up to £3.5m per investment Long-term view Significant, specialist experience and deep sector For minority equity positions (20-40%) Partnership approach to investment and mutually agreed knowledge acquired across several decades exit route, maximising value 2
2016 Summary - Year End 31 January 2016 • As at 31 January 2016 – fourteen investments in • Equity Portfolio increase of 23.8% portfolio with a NAV of £70.8m (31 January 2015 since 31 January 2015 ( 15.5% • Dividend of 3.42p per share declared for £63m ), with an average holding period of six years between 31 January 2014 to 31 January the year ended 31 January 2016, to be 2015) paid in July 2016 • The Board intends to at least maintain a • Total Shareholder Return of 13.7% for year to 31 • £5.3m cash and treasury funds at 31 dividend of 3.42p per share for the current January 2016 ( 8.2% for the year to 31 January 2015) January 2016 financial year 160 150 es 140 e and comparators indices % Change 31 January 2010 to 31 January 2016 130 120 B.P. Marsh & +59.46% Partners PLC 110 FTSE AIM All Share +3.92% 100 Price FTSE AIM Financials +26.23% 90 80 70 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 BPM share price FSTE AIM All Share, rebased FTSE AIM Financials, rebased Shar are Price Perfor ormanc nce 31 Jan anua uary y 2010 to o 31 Jan anua uary y 2016 3
Performance: Net Asset Value (NAV) Year ended : Net of deferred tax 70.81 65.50 Year ended 70 62.97 Six months ended 58.90 59.84 55.50 60 50 44.17 40.61 40 £ Millions 30 22.10 20 * NB: The valuation at 31 January 2007 includes 10 £10.1m net proceeds raised on AIM 0 31st Jan 2005 31st Jan 2007* 31st Jan 2010 31st Jan 2013 31st Jan 2014 31st July 2014 31st Jan 2015 31st July 2015 31st Jan 2016 4
Dividends • Over the past five years the Group has paid dividends as shown below. Total shareholder return from 31 January 2015 to 31 January 2016 is 13.7%. The dividend also forms part of the Group’s strategy to reduce the share price discount to NAV £1,200,000 £1.60 £1.49 £1.40 Paid £1.35 £1,000,000 £1,000,000 £1.40 £1.25 £1,000,000 Declared £1.20 £800,000 £800,000 £0.95 £800,000 £0.93 £1.00 Intended £600,000 £0.80 Share Price £365,000 £0.60 £400,000 £290,000 £290,000 £0.40 £200,000 £0.20 £0 £0.00 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Year ended Aggregate dividend £3.54m • Given the Group does not impose exit mechanisms on investee companies, there is no guarantee that the Group will continue to pay annual dividends • • Notwithstanding this, it is the Board’s intention to continue to pay dividends when circumstances allow 5
Growth Strategy BP Marsh h cash Our goal is to be the early stage capital provider Up to £3.5 5 m initi tiall ally of choice to the financial services sector. We apply our sector expertise to source attractive long-term investment opportunities both in the Inves est Take minority equity positions in promising early stage financial services companies with talented management teams UK and internationally. We have a strong track record of helping our partner businesses develop before seeking an exit at a time that Devel elop op Provide management with strategic support and additional capital required to stimulate long-term, sustainable growth delivers maximum value for shareholders. Exit Work with management to develop a mutually beneficial exit route to maximise shareholder value Return Re urn on Inve vestme tment nt 6
Investments Fair market et value Moveme ment in Year to Cost of equity Year of initial Moveme ment in Year to Inves estment ment Sector Equity 31 January 2016 31 January 2016 investment (£’000) inves estme ment nt 31 January 2016 (£’000) (£’000) Besso Insurance Broking 4,409 19,720 44.97% 1995 7,240 58.0% Summa Insurance Broking 6,096 4,331 77.25% 2005 5 0.1% Trireme Insurance Broking 1,849 2,116 30.44% 2010 83 4.1% Bastion Insurance Broking 100 100 35% 2014 -55 -35.5% Hyperion Insurance Broking & MGA 743 7,310 1.66% 1994 - - Nexus MGA 4,575 5,999 13.48% 2014 1,424 31.1% Sterling MGA 1,945 1,917 19.70% 2013 -348 -15.2% MB MGA 480 1,440 40% 2013 152 11.8% PLUM MGA 306 307 20% 2015 1 0.3% Walsingham MGA 600 200 40.50% 2013 -400 -66.7% Bulwark MGA - - 35% 2015 - - LEBC IFA 3,066 9,497 34.66% 2007 2,514 36.0% R&Q Insurance services 881 773 1.32% 2010 -397 -33.9% Broucour Business Sales 98 341 49% 2008 50 17.2% Total 25,148 54,051 10,269 MGA – Managing General Agent IFA – Independent Financial Adviser 7
Specific Activity within the Portfolio During the Year (I) Further investment in Nexus throughout the year, which saw the Group’s shareholding Continuing strong financial performance; 2016 forecast of £37 37m revenue and over £6m of increase from 5% to 13.7% underlying EBITDA (the year ending 2015 achieved revenue of £35m and EBITDA of The additional consideration, totaling £3,021,000 000, enabled Nexus to acquire EBA £4m ) Insurance Limited and Millstream Underwriting Limited Completed refinancing deal with Clydesdale Bank, and the additional funding will assist EBA Insurance Limited is a Managing General Agency ("MGA") with offices in the UK, Besso in continuing its growth trajectory and building on its recent expansion into new France and Italy offering clients Architects & Engineers Professional Indemnity, Fine Art regions & Specie and Event Cancellation insurance products Strengthening of management team, Rob Dowman and Russ Nichols being appointed Millstream is a London Market based MGA that specialises in underwriting and dual-CEO, reflecting their increasing contribution to the development and strategy of the managing of Travel, Personal Accident and Sickness insurance programs Group. Also Howard Green and Roddy Caxton-Spencer were appointed as Chairman and Growth of Nexus Underwriting Asia including new three-year deal with XL Catlin to write deputy Chairman of Besso Limited respectively financial lines businesses in Asia. Strengthening of the Board, hiring of a new CEO, Tim Coles, and appointment of a new independent NED, Jeremy Adams 8
Specific Activity within the Portfolio During the Year (II) Continued improving performance over 2015, reporting net revenues of € 5.3m and Strong continued performance, resulting from introduction of pension freedoms, auto- EBITDA of € 1.2m enrolment and defined benefit consultancy work 66% increase in operating profits to £1.8m and 22% increase in turnover to £15 15m in Successful refinance of banking arrangements which Spanish Banking Institutions, which resulted in Summa reducing its indebtedness to the Group by € 0.5m financial year to 30.09.15 New office opened in Maidstone in June 2015, bringing total branches to 15 Summa well positioned to take advantage of Spain’s stabilising economy and growing Looking to develop a “bionic” advice proposition combining technology and human insurance sector involvement LEBC expects momentum to continue during 2016 9
Specific Activity New Investment Post Year-end NEW INVESTMENT • Acquisition of 20% of Asia Reinsurance Brokers (Pte) Limited in April 2016 • Singapore headquartered independent specialist reinsurance and insurance risk solutions provider • Specialises in the provision of long-term reinsurance and insurance solutions to a wide range of insurance and reinsurance companies throughout Asia • Initial consideration of SGD $2,398,424 Dan Topping, appointed as Non-Executive Director, comments: • Shareholding may increase to 25 25% for an additional cash consideration of up to “ We viewed this investment as an excellent opportunity to take SGD SGD $500 500,000 00 , dependent on ARB’s performance in its financial year ending 31st a shareholding in a profitable independent reinsurance broker, December 2017 with an enviable client list of regional and international insurers. We anticipate supporting the first rate management • Established in 2008, following a management buy-out of the business from AJ team in their endeavours to further develop and grow their Gallagher, led by the CEO, Richard Austen company. ” • Considered an exciting opportunity to invest in a well-established and profitable business with an experienced and respected management team and strong growth potential 10
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