Year End Results For the year ending 31 January 2018 Camilla Kenyon , Director & Head of Investor Relations Dan Topping , Chief Investment Officer Jonathan Newman , Group Finance Director 12 June 2018
Overview 25+ Years strong Specialist Robust balance sheet Invested in 48 companies PE/VC investor in Financial Services intermediaries £5.4m cash as at 31 January 2018 and realised 32 since 1990 Industry knowledge Long-term view Up to £5m investment Significant, specialist experience and deep sector Partnership approach to investment and mutually For minority equity positions (20-40%) knowledge acquired across several decades agreed exit route, maximising value 2
2018 Summary - Year End 31 January 2018 • As at 31 January 2018 – 16 investments in • Equity Portfolio increase of 31.3% portfolio with a NAV of £98.9m (31 January year to 31 January 2018 ( 22.1% • Dividend of 4.76p per share declared 2017 £79.7m ), with an average holding year to 31 January 2017) for the year ended 31 January 2018, period of 3.36 years to be paid in July 2018 • Total Shareholder Return of 25.5% for year to • £5.4m cash and treasury funds at 31 January 2018 ( 13.9% for the year to 31 31 January 2018 January 2017) 270 250 230 % Change 31 January 2010 to 31 January 2018 210 B.P. Marsh & Partners +175% 190 PLC 170 FTSE AIM All Share +60% 150 FTSE AIM Financials +99% 130 110 90 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 Jul-16 Jan-17 Jul-17 Jan-18 BPM share price BPM NAV, rebased FSTE AIM All Share, rebased FTSE AIM Financials, rebased Share Price Performance 31 January 2010 to 31 January 2018 3
Performance: Net Asset Value (NAV) 98.87 100 88.80 90 Full Year 79.68 80 Half Year 73.85 70.81 £ Millions 70 62.97 58.92 60 55.46 50 44.17 40.61 40 30 22.10 20 * NB: The valuation at 31 January 2007 10 includes £10.1m net proceeds raised on AIM 0 31-Jan-05 31 Jan 2007* 31-Jan-10 31-Jan-13 31-Jan-14 31-Jan-15 31-Jan-16 31-Jul-16 31-Jan-17 31-Jul-17 31-Jan-18 4
Dividends The Group’s historic dividend payments are shown below. Total shareholder return in year to 31 January 2018 is 25.5% • £1,600,000 £3.00 £1,400,000* £2.54 £1,400,000 Paid £2.50 £1,100,000 £1,200,000 Declared £2.06 £1,000,000 £2.00 £1.47 Share Price £1,000,000 £800,000 £800,000 £1.35 £1.40 £800,000 £1.50 £600,000 £1.25 £0.93 £1.00 £0.95 £365,000 £400,000 £290,000 £290,000 £0.50 £200,000 £0 £0.00 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Year ended Aggregate dividend £1.4m, based on current shareholding (*up to additional £0.4m dependent on Placing completion and Open Offer take-up) • It is the Board’s intention to maintain this level for the year ending 31 January 2019 and thereafter to continue to pay dividends when circumstances allow • The Board aims to strike a balance between rewarding shareholders with a sustainable yield and investing cash to deliver long-term capital growth • 5
Conditional Placing and Open Offer – Post Year end Event £18.49m total investment by PSC • 6.17m new shares in the Placing for £15.55m • purchase of 1.17m B.P . Marsh Management Limited shares for £3m • Up to £1.5m Open Offer element (up to 595,238 shares) • Increased share capital and reduction in Brian Marsh’s holding to c. 44.2% • PSC’s holding on completion to be c. 19.6% depending on full take up of the Open Offer • The Group will receive up to £17.05m in cash to deploy in new investments and existing portfolio • No change in the Group’s investment model • No Board changes • Bigger, stronger Group, ready for the next phase of its development • 6
PSC & B.P. Marsh – Investment Rationale Complementary listed businesses operating in the insurance intermediary sector • Excellent strategic fit • Investors in businesses from early stage to mature • Investors in insurance intermediary businesses, without taking underwriting risk • Successful investment track records • PSC had followed B.P . Marsh for a significant time before making an approach – a long-term approach also favoured by the Group • Possibilities for joint working in the UK and internationally • Strong cultural fit with both businesses operating under a similar philosophy • Increased capabilities for both parties • 7
PSC – Business Overview The PSC Insurance Group (PSC) operates a diversified insurance intermediary Group with operations and investments in Australia, New Zealand • and the United Kingdom PSC has a proven track record in business acquisition, establishment and turnaround in the insurance services industry. The PSC Group comprises • a portfolio of businesses ranging from start-ups to mature businesses PSC is listed on the Australian Stock Exchange (ASX), with a market capitalisation of approximately AUD $731m • PSC’s principal businesses within the general insurance intermediary and services market comprise: • insurance broking; • underwriting agencies; • an authorised representative network business in Australia and NZ • wholesale insurance broking in the United Kingdom; and • reinsurance broking in the United Kingdom; • PSC also operates complementary businesses including life insurance broking, on-line direct general insurance and third party claims • management. PSC does not take underwriting risk however maintains relationships with many insurers in Australia, NZ and the UK The PSC Insurance Group has a diverse client base. It predominantly services the insurance needs of SMEs. These clients have access to the full • range of business services offered by PSC. The PSC Insurance Group also services other insurance brokers through its United Kingdom broking and underwriting agency operations and services insurance carriers by way of their reinsurance operations 8
Joint Share Ownership Plan (JSOP) Previous 5% JSOP came to an end in November 2017 and saw year-on-year improvements in shareholder return and increase in share • price 138p to 245p over the three-year period A new 5% three-year JSOP to be instituted to incentivise and retain the management team • c.1,400,000 new shares to be issued at market price at close on 12 June 2018 on a partly-paid basis • New shares issued into joint beneficial ownership of employees and the newly formed Trustees of B.P . Marsh Employee’s Share T rust • (the “Trust”) All current B.P . Marsh staff working at the Group on the date the previous JSOP matured to be included, in varying proportions • Nominal value of shares paid by the Trust out of funds loaned by the Group with additional consideration left outstanding until shares • are sold Proceeds of share sales divided between the joint owners so staff receive the amount of market growth, less a carrying cost • 9
Investments Fair market Movement in Equity Cost of equity Movement in value Year of initial Period to 31 Investment Sector Jurisdiction investment Period to 31 As at 31 January investment January 2018 31 January 2018 (£’000) January 2018 2018 (£’000) (£’000) EC3 Brokers UK 5,000 5,000 20.0% 2017 - - Insurance Broking Mark Edward U.S. 4,573 4,219 30.0% 2017 (354) (7.7)% Insurance Broking Partners Summa Spain 6,096 4,018 77.3% 2005 (822) (17.0)% Insurance Broking Paladin (CBC) UK 4 2,372 35.0% 2017 2,369 67,671.4% Insurance Broking ARB Singapore 1,268 779 20.0% 2016 (574) (42.4)% Insurance Broking Bastion South Africa 100 - 35.0% 2014 (100) (100.0)% Insurance Broking XPT U.S. 4,790 4,219 35.0% 2017 (571) (11.9)% Insurance Group Nexus UK 8,575 20,544 17.08% 2014 6,629 47.6% MGA Sterling Australia 1,945 2,198 19.7% 2013 (180) (7.6)% MGA PLUM South Africa 1,220 - 42.5% 2015 (1,846) (100.0)% MGA MB Australia 480 1,840 40.0% 2013 255 16.1% MGA Walsingham UK 600 692 40.5% 2013 492 246.0% MGA Fiducia UK 75 75 25.0% 2016 - - MGA Bulwark South Africa - - 35.0% 2015 - - MGA SSRU Canada - - 30.0% 2017 - - MGA LEBC UK 12,374 33,166 59.34% 2007 12,821 63.0% IFA Total 47,100 79,122 18,119 10 MGA – Managing General Agent; IFA – Independent Financial Adviser
International Strategy UK Based Investments: Summa Insurance Brokerage S.L. CBC UK Ltd EC3 Brokers Ltd Stewart Specialty Risk The Fiducia MGA Company Ltd Underwriting Ltd LEBC Holdings Ltd Nexus Underwriting Management Ltd Mark Edward Partners LLC XPT Group LLC Walsingham Motor Insurance Ltd Approximately 51% of our investee companies’ revenue B.P. Marsh’s international originates overseas strategy is focused on those areas where we see sufficient opportunity for business development in partnership with a London-based investor coupled with a suitably Asia Reinsurance Brokers Pte Ltd developed regulatory and compliance environment Bastion Reinsurance Brokerage (PTY) Ltd Bulwark Investment Holdings (PTY) Ltd MB Prestige Holdings (PTY) Ltd Property & Liability Underwriting Managers (PTY) Ltd Sterling Insurance (PTY) Ltd 11
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