BPM B.p. Marsh & Partners Plc

23 October 2024

B.P. Marsh & Partners Plc 

("B.P. Marsh", "the Company" or "the Group") 

Half Year Results

B.P. Marsh & Partners Plc (AIM: BPM), the specialist investor in early stage financial services businesses, announces its unaudited Group Half Year Results for the six months to 31 July 2024 (the "Period").

Highlights:

·   Total Shareholder return of 12.1% for the Period comprising the growth in Net Asset Value and the aggregate dividends paid in March, May and July 2024

·   Net Asset Value has increased by £23.7m over the Period to £252.9m, a 10.3% increase (31 January 2024: £229.2m; 31 July 2023: £203.5m)

·   Net Asset Value per share 690.8p*, a 9.8% increase (31 January 2024: 629.0p; 31 July 2023: 567.3p)

·   Consolidated profit before tax of £29.0m for the Period (six months to 31 July 2023: £15.6m; year ending 31 January 2024: £43.6m)

·   Group liquidity of £80.2m as at 31 July 2024

·   Two Post Period new investments, both Underwriting Agencies, in CEE Specialty and Volt UW

·   Current liquidity £78.4m

*The fully diluted Net Asset Value per share is 658.5p and includes the remaining 1,038,699 shares held within the Employee Benefit Trust, but also includes £2.9m of loan repayable if the remaining shares, including 236,259 currently unallocated, are sold. The diluted NAV per share also includes the 1,682,500 options over ordinary shares granted to certain Directors and employees of the Group in November 2023 as the performance criteria for NAV growth had been met as at 31 July 2024 (31 January 2024: 626.9p; 31 July 2023: 556.3p).

Commenting on the results, Brian Marsh OBE, Chairman, said:

"We are pleased to report another strong set of results, delivering growth in portfolio value, investment realisations and shareholder returns.

"The completion of the disposal of Paladin during the period showcases the success of B.P. Marsh's investment model, our ability to identify opportunities and to back successful management teams.

"We remain committed to maintaining this momentum, leveraging our expertise to drive further sustainable growth via new investment opportunities and follow-on funding.

"The Board is pleased to welcome Fran as CFO, and given her extensive experience and long-standing tenure, we believe she is well-suited to assume the role. We would also like to thank Jon for his service and wish him well for his future endeavours."

Analyst briefing and investor presentation:

An analyst presentation, hosted by the Company, will be held on Wednesday 23 October 2024 at 10.00 a.m. BST. Analysts wishing to attend should contact bpm@tavistock.co.uk to register.

Management will also provide a live presentation for all existing and potential shareholders via the Investor Meet Company platform at 11.00 a.m. on 23 October 2024.

Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00 a.m. today or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet B.P. Marsh via: https://www.investormeetcompany.com/bp-marsh-partners-plc/register-investor

Note

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Notes to Editors: 

B.P. Marsh's current portfolio contains seventeen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Since formation over 30 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for over ten years.

Statement by the Chairman and Managing Director

We are pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the Period to 31 July 2024.

Half Year Results

During the Period the Group's Net Asset Value ("NAV") has grown by £23.7m from £229.2m (31 January 2024) to £252.9m which together with the aggregate dividends paid in March 2024, May 2024 and July 2024 represents a Total Shareholder Return of 12.1%. This equals an NAV per share of 658.5p on a fully diluted basis following the vesting of the shares in the Group's Joint Share Ownership Plan and inclusion of the options over the Company's shares granted under the Group's Share Option Plan in November 2023 following achievement of the NAV growth criteria; an increase of 5.0% from 31 January 2024.

As previously announced, during the Period, the Group completed a new investment in Devonshire UW Limited, a transactional risk Underwriting Agency. The Group also made a further investment into Pantheon Specialty Group Limited, acquiring a further 7% from Management, bringing its shareholding up to 32%. The Company also participated in a pre-emption process at XPT Group LLC, whereby it acquired US $1.0m worth of shares as part of a wider internal share issue.

Post Period end the Group has made two further new investments. These were also in Underwriting Agencies; one based in the Czech Republic, CEE Specialty s.r.o, and the other is a newly established energy Underwriting Agency, Volt UW Ltd. The Board was impressed with the track record and strategic positioning displayed by the respective management teams and is looking forward to partnering with these strong management teams and assisting them to achieve their growth ambitions.

During the Period, the Company distributed the first year of its intended three year aggregate £12m dividend distribution programme with a total of 10.72p per share (£4.0m in total) distributed in the Period. The Company has distributed 49.17p per share to its shareholders since its flotation, equivalent to 8.7% of the share price at the date of writing (567.5p).

The Board continues to aspire to pay at least a further £4m in the year to 31 January 2026 and in the year to 31 January 2027.

The Company initiated a new Share Buy-back programme in June 2024, permitting purchases up to a 15% discount to Net Asset Value, with a £1m budget allocation. During the Period 13 Share buy-back trades were conducted, purchasing an aggregate 63,132 shares for a quantum of £326,379, at an average of 517p per share. Post Period end, the maximum purchase price was increased, and the discount to Net Asset Value threshold was lowered to 10%, and a further 93,570 Shares have been bought-back, with £164,733 of the original £1m budget remaining. The Board considers that the buy-back programme has been successful, allowing the Company to purchase small yet consistent parcels of Shares where available in a NAV accretive way within the restrictions set by the Market Abuse (Amendment) (EU Exit) Regulations 2019.

As we progress through the remainder of 2024, the Group is well-positioned in terms of cash reserves and new business opportunities, enabling us to capitalise on prospects both within and beyond our current portfolio in line with the methodology that has delivered strong historic results. We aim to meet the capital needs of our portfolio to support further growth while ensuring we remain ready to invest in any promising new business opportunities that meet our criteria. The Group will carefully evaluate each investment approach to ensure that capital is invested and protected appropriately. We are encouraged by the breadth of the current pipeline of new business opportunities.

The Board welcomed Francesca Chappell as Chief Finance Officer in September 2024, following the departure of Jonathan Newman. Ms. Chappell has been with the Company since 2013, with a wealth of experience in all areas of the business, and has been able to seamlessly transition into this role. The Company has always prioritised investment and further training within its staff base at all levels and the inherent succession planning that this can accommodate we feel will benefit all stakeholders. 

The Group remains fully cognisant of the ongoing challenges posed by the broader economic climate. While there are positive indicators, such as inflation stabilising and interest rates potentially nearing their peak, these challenges are not yet fully resolved. The Group continues to monitor these developments closely, recognising that the economic landscape remains uncertain. The Group has consistently monitored the effects of the rising cost of living on its employees and has taken action where deemed necessary. Due to the Group's debt-free status and its dual investment strategy, which includes both equity and loan funding benchmarked against the base rate, we have successfully mitigated the negative impact of rising interest rates.

The Group is pleased with its performance as of July 31 2024, which reaffirms the strength of its track record.

Chief Investment Officer Update

In the six month period to 31 July 2024 the underlying portfolio performed well, continuing on from the Group's strongest set of full year results to 31 January 2024.

Over the Period, the valuation of the Group's equity portfolio has increased by 24% adjusting for additions and disposals, with NAV increasing by 10.3%.

Over the past 12 months, the equity portfolio has increased by 61.8% adjusting for additions and disposals, with NAV increasing by 24.3%.

The Group's current cash balance is £78.4m and will allow the Group to continue to do what it does best:-

·    Identify enterprises with robust management teams and significant growth potential;

·    Provide funding, support, and development resources to these companies, enabling them to capitalise on growth opportunities; and

·    Generate returns on investments made for our shareholders through a combination of ongoing equity growth within the portfolio and regular shareholder distributions.

In line with previous disposals, the Group is committed to reinvesting its cash balances into both its existing portfolio and new ventures, while also ensuring an appropriate return to shareholders through our announced dividends and Share Buy-back policies.

The Group continues to focus on identifying new business opportunities and has an active pipeline of prospects currently under consideration. This has been shown by the three investments completed by the Group both within the Period and post.

During the Period, the Group completed one new investment, being Devonshire UW Limited, a London-based Underwriting Agency, specialising in transactional risks encompassing Warranty & Indemnity, Specific Tax, and Legal Contingency Insurance.

Post Period end, the Group completed two new investments, as follows:-

·    CEE Specialty s.r.o - an underwriting agency based in Prague, Czech Republic with a branch office in Bucharest, Romania, which specialises in Marine Hull, Bonds and Liability insurance, targeting business in Central and Eastern Europe. 

·    Volt UW Holdco Limited - a London-based Underwriting Agency, which specialises in energy insurance with a clear focus on insuring property risks associated with power generation and midstream energy, in both the non-renewable and renewable sector.

The Group remains dedicated to uncovering new business opportunities and has an active pipeline of prospects currently in evaluation. With this robust pipeline, the Group anticipates making additional investments by the end of its financial year on 31 January 2025.

B.P. Marsh is highly regarded within the financial services (sub)sector in which it specialises, particularly concerning Insurance Brokers and Underwriting Agencies.

The Group continues to commit to investing in niche SME sectors, backed by skilled and knowledgeable management teams, which promotes long-term growth and generates significant value.

Given the strength of the Group's cash position and its market reputation, we believe the business is well-equipped to seize opportunities within our current portfolio, as well as explore new prospects in the financial services sector, particularly in the insurance market.

The Group is actively tracking emerging trends in the insurance sector, with a focus on premium rates and mergers and acquisitions (M&A).

The latest trends in rate changes show that across the global insurance market, rates were flat in the second quarter of 2024. This is the first time since the third quarter of 2017 that global insurance has not increased. This also represents a decrease from the peak rate of 22% observed in the fourth quarter of 2020. 

Rate increases were less consistent across all lines and regions in which our portfolio operates. Rates are still increasing across specific product lines and in regions across the world.

Global Casualty rates increased by 3% in the second quarter of 2024, which was the same increase as in the first quarter of 2024. Global Property rates were flat in in the second quarter of 2024, down from a 3% increase in the first quarter of 2024.

Global Financial and Professional lines, alongside Cyber, were the main driver of overall rate increasing slowing down, falling by 5% and 6% in the second quarter of 2024 respectively. 

Rate increases continue to slow as overall market capacity has increased, via new market entrants and existing carriers increasing their exposure.

Overall, the Group does not anticipate a return to the pricing levels seen during the last soft market in the short term. Given the portfolio predominantly operates in specialist risk areas, rates tend to be less volatile and therefore we remain confident that our portfolio is suitably prepared to weather a softening market.

Regarding the insurance M&A market, the ongoing consolidation trends in the Insurance Market show no indication of abating in 2024. This activity remains a catalyst for substantial prospects for the Group, both in terms of new investments and activity within our core portfolio.

Portfolio Update

New Investments

During the Period to 31 July 2024, the Group completed one new acquisition:-

Devonshire UW Limited ("Devonshire")

- N/A pence NAV per share change in the Period

In March 2024, the Group completed the investment in Devonshire, the London-based underwriting agency specialising in transactional risks, including Warranty & Indemnity, Specific Tax, and Legal Contingency Insurance.

The business has been founded by four experienced industry practitioners, Natasha Attray, James Dodd, James Fletcher and Charles Turnham, who have a collective 30 years of transactional liability underwriting experience.

Devonshire is backed by Lloyd's capacity with support from a strong panel of A-rated insurance capacity providers. The business will provide risk solutions for large M&A transactions for brokers, corporates, private equity firms, professional advisers and other specialist investors.

Date of initial investment: March 2024

31 July 2024 valuation: £300,000

Cost of Equity: £300,000

Equity stake: 30.00%

Post Period end, the Group completed on two further acquisitions:-

CEE Specialty s.r.o ("CEE Specialty")

- N/A pence NAV per share change in the Period

In September 2024, B.P. Marsh acquired a 44% shareholding in CEE Specialty, an underwriting agency based in Prague, Czech Republic with a branch office in Bucharest, Romania.

CEE Specialty was founded in 2019 and specialises in Marine Hull, Bonds and Liability Insurance, targeting businesses in Central and Eastern Europe.

The business is led by James Grindley (CEO) and Tomáš Maršálek (CFO), with CEE Specialty being previously majority owned by CEE Specialty Holdings S.A., a subsidiary of Royalton Capital Investors II L.P., an alternative investment fund manager.

James Grindley has 28 years of experience in various executive management positions within the re/insurance industry, including Lloyd's and the Central and Eastern European markets.

Tomáš Maršálek has 19 years of experience in fund management and venture capital. This has included various senior executive management positions at SMEs (including start-ups), mainly as Chief Financial Officer.

With a team of 15 insurance professionals, CEE Specialty provided B.P. Marsh with an excellent opportunity to invest in a business with a well-established and highly experienced leadership team and strong growth potential over the coming years.

The Company provided €3.3m of funding to complete this transaction, which was utilised in full upon completion as part of a management buy-out, with management now owning 56% of CEE Specialty. 

Date of initial investment: September 2024

31 July 2024 valuation: N/A

Cost of Equity: €2,819,852 (£2,354,134)

Equity stake: 44.00%

Volt UW Holdco Limited ("Volt")

- N/A pence NAV per share change in the Period

In October 2024, the Group announced that it had subscribed for a 25.5% Cumulative Preferred Ordinary shareholding in Volt, a London-based Underwriting Agency. B.P. Marsh provided funding of up to £2.5m via both equity and a loan facility, which will be partially drawn down upon completion.

Volt specialises in energy insurance, focusing specifically on insuring property risks related to power generation and midstream energy across both non-renewable and renewable sectors. The agency was established by three seasoned industry professionals: Chris Allison, Andrew Tokley, and Kevin Cleary.

With the backing of B.P. Marsh, management aims to develop a best-in-class, client-centric energy underwriting agency with a strong emphasis on Environmental, Social, and Governance (ESG) principles. The company will be headquartered in London and will underwrite a global portfolio of energy-related business, with a particular emphasis on the United States.

Volt operates as a Lloyd's Coverholder and has secured A-rated capacity from both Lloyd's and non-Lloyd's carriers, with long-term profitability and sustainability for insurers and reinsurers being integral to Volt's business strategy.

The Co-founders, Chris Allison, Andrew Tokley and Kevin Cleary each have over 25 years' experience working in senior leadership positions at various underwriting-led businesses; including large (re)insurance companies, Lloyd's syndicates and underwriting agencies, each having a proven track record of success.

The Group looks forward to continuing its support for Volt and its management team in the years ahead, assisting the business in achieving its long-term aspirations and objectives.

Date of initial investment: October 2024

31 July 2024 valuation: N/A

Cost of Equity: £25.50

Equity stake: 25.50%

Follow-on Investments and Funding

XPT Group LLC ("XPT")

+ 15.5 pence NAV per share uplift in Period

The Group's investment in XPT, the specialty lines insurance distribution company, continues to perform well, with the business on track to produce Gross Written Premium of close to US $900m in its financial year to 31 December 2024 (31 December 2023: US $675m).

XPT's exceptional growth has been driven by various factors, both via its acquisition strategy, individual and team hires and underlying organic growth. This has included strong performance from XPT's property and casualty divisions and successful new producer hires in the Platinum Construction business.

XPT continues to look at new acquisitions and further announcements on this should be made before the year end. 

XPT has made 16 business acquisitions since the Group first invested in 2017. XPT now has offices in 20 locations across 13 States, acting for insureds across all of the USA.

XPT's performance since its inception has been impressive and its continued acquisition strategy, alongside strong organic growth means that XPT is well positioned to continue this growth into 2025.   

In the Period, the Group provided XPT with a further US $1m of funding (c. £0.8m) as part of pre-emption offering.

Date of investment: June 2017

31 July 2024 valuation: £48,788,000

Cost of Equity: £13,842,158

Equity stake: 27.49%

Pantheon Specialty Limited ("Pantheon")

+ 27.3 pence NAV per share uplift in the Period

The Group first invested in Pantheon in June 2023, when it subscribed for a 25% stake in a new holding company established in partnership with Robert Dowman.

Robert has over 30 years' experience in the market and is seen by the industry as a leading London Market Casualty broker, specialising in the larger more complex liability placements across the world, whether that be on a facultative or programme basis.

Within the Period, the Group acquired from Pantheon's founders a further 7% shareholding in Pantheon for an upfront consideration paid of £7.3m, increasing the Group's equity stake to 32%.

Since Pantheon was established, just over one year ago, Mr Dowman has hired a number of key individuals, and has built a market leading independent specialist broker with the Pantheon team recognised as leading London Market Casualty brokers, specialising in complex liability placements worldwide.

Since investment, Pantheon has performed strongly, and in its current financial year to 31 December 2024, Pantheon is forecast to produce an adjusted EBITDA in excess of £16m. This growth has been demonstrated in Pantheon's notable increase in valuation to £32.6m as at 31 July 2024. 

Pantheon is well positioned to continue this impressive growth into 2025 and beyond.

Date of initial investment: June 2023

31 July 2024 valuation: £32,694,000

Cost of Equity: £7,300,025 

Equity stake: 32.00%

NAV breakdown by portfolio company

The composition of B.P. Marsh's underlying investment portfolio can be found here:

The Group's current active investments are in the Insurance Intermediary sector.

These insurance investments are budgeting to produce in the aggregate £1.34bn of insurance premium during 2024, and a breakdown between brokers and MGAs can be found here:-

Insurance Brokers

Investments:

The Group's Broking investments are budgeting to place over £739m of GWP, producing over £69m of commission income in 2023, accessing specialty markets around the world.

Underwriting Agencies / Managing General Agents ("MGAs")

Investments:

The Group's MGAs are budgeting to place almost £605m of GWP, producing over £71m of commission income in 2024, across over 30 product areas, on behalf of more than 50 insurers.

Holding Company for exited investment with Deferred Consideration

LEBC Holdings Limited ("LEBC")

- 2.4 pence NAV per share change in the Period

In the Period, the previously announced transaction whereby LEBC sold its wholly owned subsidiary Aspira Corporate Solutions Limited to Titan Wealth Holdings Limited, completed on 16 April 2024.

The transaction allowed LEBC to meet all its obligations as agreed with the Financial Conduct Authority regarding historical defined benefit pension transfer advice.

Further proceeds of the sale will be received over a three year earn-out period. As at our last set of results, due to the number of variables involved, the Group have taken a conservative approach to potential proceeds, which has been factored into its valuation of LEBC as at 31 July 2024.

Date of initial investment: April 2007

31 July 2024 valuation: £4,156,000

Cost of Equity: £13,473,657

Equity stake: 61.86%

Portfolio Company Highlights:

ATC Insurance Solutions PTY Limited ("ATC")

+ 13.6 pence NAV per share change in the Period

ATC continues to perform strongly across its many product offerings in accident & health, motor and sports insurance, amongst others.

For the financial year ending 30 June 2024, ATC achieved substantial year-on-year growth in Gross Written Premium, Revenue, and EBITDA.

Specifically, ATC generated EBITDA approaching AU $15m, marking an increase of over 40% compared to the previous financial year.

Looking ahead, ATC are looking to increase GWP by over 20% to over AU $225m in their current financial year to June 2025, which demonstrates ATC's continued ambition to continue their impressive growth record to date.  

Date of initial investment: July 2018

31 July 2024 valuation: £23,566,000

Cost of Equity: £6,476,595

Equity stake: 25.39%

Lilley Plummer Risks Limited ("LPR")

+ 9.5 pence NAV per share change in the Period

Lilley Plummer Risks (LPR) has continued to deliver outstanding performance, driven by growth in its core marine insurance portfolio and expansion into additional sectors.

The company has made strategic hires to support its entry into new business lines, reflecting a long-term goal of evolving into a multi-line specialist insurance broker. LPR is actively exploring the market for team acquisitions to accelerate this growth.

In terms of financial expectations, the company forecasts an EBITDA of no less than £5m for its financial year ending December 2024 as previously announced.

Date of initial investment: October 2019

31 July 2024 valuation: £17,132,000

Cost of Equity: £308,242

Equity stake: 28.43%

Stewart Specialty Risk Underwriting Ltd ("SSRU")

0 pence NAV per share change in the Period

SSRU continues to deliver specialist insurance products to a wide array of clients in the Construction, Manufacturing, Onshore Energy, Public Entity and Transportation sectors.

In SSRU's year to 31 December 2023, Gross Written Premium exceeded CA $75m, with the budget of approaching CA $100m for 2024, with further growth expected into 2025.

If SSRU achieves its 2024 budget, EBITDA would have over doubled since 2020, from c. CA $3.5m to CA $9.2m, with further growth expected into 2025. 

During the Period, SSRU entered into two new carrier partnerships. These new strategic alliances not only expand SSRU's capacity but also reinforce its commitment to offering innovative solutions to their broker partners and insureds.

These new carrier partnerships will allow SSRU to continue on its journey of organic growth of its existing, highly profitable business lines.

Date of initial investment: January 2017

31 July 2024 valuation: £11,870,000

Cost of Equity: £19.00

Equity stake as at 31 July 2024: 28.41%

Dan Topping

Chief Investment Officer

23 October 2024

Chief Finance Officer Update

I am pleased to present my first update as Group Chief Finance Officer.

The Group had another strong period, delivering an increase in NAV of £23.7m (10.3%) to £252.9m, compared with an increase of £13.9m (7.3%) in the same period in 2023. Including the £4.0m aggregate dividend paid in March 2024, May 2024 and July 2024, this represented an overall return of 12.1% for the Period.

Over the year to 31 July 2024 the NAV has increased by £49.4m (24.3%). Including the £5.0m aggregate dividend paid in November 2023, March 2024, May 2024 and July 2024, this represents an overall return of 26.7%.

The NAV of £252.9m at 31 July 2024 represents a total increase in NAV of £223.7m since the Group was originally formed in 1990 having adjusted for the original capital investment of £2.5m, the £10.1m net proceeds raised on AIM in 2006 and the £16.6m net proceeds raised through the Share Placing and Open Offer in July 2018. The Directors note that the Group has delivered an annual compound growth rate of 9.7% in Group NAV after running costs, realisations, losses, distributions and corporation tax since flotation and 12.2% since 1990.

The equity investment portfolio continued to increase in value, rising by 24.0% to £153.4m (31 January 2024: £165.4m) after adjusting for £42.1m of net realisations and £9.5m of acquisitions in the Period, and after adjusting for a £9.0m reclassification of deferred consideration relating to the disposal of Paladin from the equity investment portfolio to a debtor within the Consolidated Statement of Financial Position.

The Group made one realisation during the Period totalling £42.1m, being the sale of the Group's entire 38.63% investment in Paladin which completed on 22 March 2024.

The Group invested a total of £9.5m in equity in the portfolio during the Period (6 months to 31 July 2023: £0.4m):-

·    £9.2m into the existing portfolio, including £7.3m in Pantheon, £1.1m in LEBC and £0.8m in XPT; and

·    £0.3m into one new investment, Devonshire.

Operating income

Net gains from investments were £28.3m for the Period, of which £28.1m related to unrealised gains on the revaluation of the investment portfolio, compared to £14.8m of net gains for the 6 months to 31 July 2023, a 91.2% increase.

Despite the Group making two significant realisations in the 12 month period to 31 July 2024, income from the portfolio for the Period increased from £4.0m in H1 2023 to £4.2m in H1 2024. Dividend income was £0.1m higher due to strong investment portfolio performance, whilst loan interest increased by £0.3m as a result of new loans granted and higher interest rates charged due to Bank of England base rate increases. Fee income decreased by £0.1m due to there being a higher amount of one-off transaction and loan arrangement fees charged in H1 2023 compared to H1 2024 as well as a general reduction in fees charged due to the realisations made over the 12 months to 31 July 2024.

Operating expenses

A significant proportion of the increase in operating expenses to £4.9m in the Period from £2.8m in H1 2023 related to increased staff costs of £1.9m in line with the Company's financial performance and realisations made, which resulted in one-off bonuses being awarded to staff. The remaining £0.2m increase related to general cost inflation and expenses relating to the implementation of the Group's Share Option Scheme.

Profit on ordinary activities

The consolidated profit on ordinary activities before taxation for the Period was £29.0m which represented an increase of 86% over the £15.6m reported in the same period in 2023. The consolidated profit on ordinary activities after tax was £26.6m, representing an increase of 71% over the £15.5m reported in H1 2023.

The Group's strategy is to cover expenses from the portfolio yield. On an underlying basis, including treasury returns and realised gains, but excluding unrealised investment activity (unrealised gains on equity revaluation and provision against loans receivable from investee companies), this was achieved with a pre-tax profit of £0.9m for the Period (H1 2023: £0.8m).

Liquidity and loan portfolio

In addition to contributing equity to its investment portfolio, the Group frequently extends loan financing, either as part of the initial investment structure or as subsequent funding to support further growth. This additional financing may be used for acquisitions, working capital, recruitment, or product development.

The loan portfolio decreased by £9.7m during the Period to £19.2m at 31 July 2024 (31 January 2024: £28.9m, 31 July 2023: £17.8m). The Group provided £1.4m in new loans - £0.4m to Ai Marine and £1.0m to Devonshire. The Group received £11.0m in loan repayments - £5.9m from Paladin, £3.3m from LEBC, £1.5m from Pantheon and £0.3m from Fiducia. In addition there was a £0.1m reduction due to foreign exchange movements and loan impairments.

Since 31 July 2024 the Group has provided £2.2m in further loans, including £1.6m in respect of its new investments in Volt (£1.2m) and CEE Specialty (£0.4m) and £0.6m to its existing portfolio in respect of further drawdowns from agreed loan facilities, with £0.3m provided to Devonshire, £0.2m to Ai Marine and £0.1m to Verve. The Group also received £1.1m in loan repayments, including £1.0m from Pantheon and £0.1m from Fiducia. The loan portfolio balance is currently £20.2m.

At 31 July 2024 the Group had total available cash and treasury funds of £80.2m (31 January 2024: £40.5m, 31 July 2023: £4.3m).

Between 31 January 2024 and 31 July 2024 the Group paid dividends totalling £4.0m and bought back £0.3m in shares.

The Group is debt free.

Undiluted / diluted NAV per share

The NAV per share at 31 July 2024 is 690.8p (31 January 2024: 629.0p and 31 July 2023: 567.3p). Previously, 1,461,302 shares being held within an Employee Benefit Trust as part of a long-term share incentive plan for certain directors and employees of the Group were excluded as they did not carry voting or dividend rights. However, in October 2023, voting and dividend rights were granted for the 1,206,888 allocated shares which resulted in them being included in the undiluted NAV per share calculation. During the Period 404,448 of these allocated shares were sold, leaving 802,440 allocated shares within the Employee Benefit Trust. During the period the Group received £1.2m of loan debt owed by the Trust in relation to the original transfer of shares which is reflected within the Group's NAV of £252.9m as at 31 July 2024. The remaining 802,440 allocated shares are included in the undiluted NAV per share calculation, alongside £2.2m of loan debt, which remains repayable by the Trust in relation to the original transfer of shares. This debt cannot currently be consolidated within the accounts but will be repaid if the shares are sold.

The diluted NAV per share as at 31 July 2024 is 658.5p (31 January 2024: 626.9p and 31 July 2023: 556.3p). This includes the full 1,038,699 shares remaining within the Employee Benefit Trust and also includes £2.9m of loan repayable if the shares, including the 236,259 shares that are currently unallocated, were sold.

The diluted NAV per share calculation also includes the 1,682,500 options over ordinary shares granted to certain Directors and employees of the Group in November 2023, which became dilutive as at 31 July 2024 as the performance criteria for NAV growth had been met.

Francesca Chappell

Chief Finance Officer

23 October 2024

Investments

As at 31 July 2024 the Group's equity interests were as follows:

Ag Guard PTY Limited

(www.agguard.com.au)

Ag Guard is a Managing General Agency, which provides insurance to the agricultural sector, based in Sydney, Australia. The Group holds its investment through Ag Guard's Parent Company, Agri Services Company PTY Limited.

Date of investment: July 2019

Equity stake: 41.0%

31 July 2024 valuation: £1,818,000

Ai Marine Risk Limited

(www.aimarinerisk.com)

Ai Marine is a start-up MGA with a focus on marine hull insurance and with a strong focus on the UK & Europe, Middle East and Asia Pacific regions.

Date of investment: December 2023

Equity stake: 30.0%

31 July 2024 valuation: £30,000

Asia Reinsurance Brokers (Pte) Limited

(www.arbrokers.asia)

ARB is an independent specialist reinsurance and insurance risk solutions provider headquartered in Singapore. 

Date of investment: April 2016

Equity stake: 25.0%

31 July 2024 valuation: £1,734,000

ATC Insurance Solutions PTY Limited

(www.atcis.com.au)

ATC is a Managing General Agency and Lloyd's Coverholder, specialising in accident & health, construction & engineering, trade pack, motor and sports insurance headquartered in Melbourne, Australia.

Date of investment: July 2018

Equity stake: 25.4%

31 July 2024 valuation: £23,566,000

Criterion Underwriting (Pte) Limited

Criterion was established to provide specialist insurance products to a variety of clients in the cyber, financial lines and marine sectors in Far East Asia, based in Singapore.

Date of investment: July 2018

Equity stake: 29.4%

31 July 2024 valuation: £0

Devonshire UW Limited

Devonshire is a London-based Underwriting Agency specialising in transactional risks.

Date of investment: March 2024

Equity stake: 30.0%

31 July 2024 valuation: £300,000

The Fiducia MGA Company Limited

(www.fiduciamga.co.uk)

Fiducia is a UK marine cargo Underwriting Agency and Lloyd's Coverholder which specialises in the provision of insurance solutions across a number of marine risks including, cargo, transit liability, engineering and terrorism Insurance.

Date of investment: November 2016

Equity stake: 35.2%

31 July 2024 valuation: £5,631,000

LEBC Holdings Limited

(www.lebc-group.com)

LEBC is an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.

Date of investment: April 2007

Equity stake: 61.9%

31 July 2024 valuation: £4,156,000

Lilley Plummer Risks Limited

(www.lprisks.co.uk)

Lilley Plummer Risks is an independent Lloyd's broker that provides a wide array of offerings in several diverse and niche areas. The Group holds its investment in Lilley Plummer Risks through its holding company Lilley Plummer Holdings Limited.

Date of investment: October 2019

Equity stake: 28.4%

31 July 2024 valuation: £17,132,000

Pantheon Specialty Group Limited

(www.pantheonspecialty.com)

Pantheon is a holding company established in partnership with Robert Dowman. With the support of B.P Marsh, Robert Dowman is looking to build a market leading independent specialist broker, across multiple markets.

Date of investment: June 2023

Equity stake: 32.0%

31 July 2024 valuation: £32,694,000

Sage Program Underwriters, Inc.

(www.sageuw.com)

Sage provides specialist insurance products to niche industries, initially in the inland delivery and field sport sectors based in Bend, Oregon.

Date of Investment: June 2020

Equity Stake: 30.0%

31 July 2024 Valuation: £2,036,000

Sterling Insurance PTY Limited

(www.sterlinginsurance.com.au)

Sterling is a specialist Underwriting Agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition based in Sydney Australia. The Group holds its investment in Sterling via a joint venture with Besso Insurance Group Limited, Neutral Bay Investments Limited.

Date of investment: June 2013

Equity stake: 19.7%

31 July 2024 valuation: £3,326,000

Stewart Specialty Risk Underwriting Ltd

(www.ssru.ca)

SSRU is a Managing General Agency, providing insurance solutions to a wide array of clients in the construction, manufacturing, onshore energy, public entity and transportation sectors based in Toronto, Canada.

Date of investment: January 2017

Equity stake: 28.4%

31 July 2024 valuation: £11,870,000

Verve Risk Services Limited

Verve is a London based Managing General Agency specialising in Professional and Management Liability for the insurance industry. Verve operates in the USA, Canada, Bermuda, Cayman Islands and Barbados.

Date of investment: April 2023

Equity stake: 35.0%

31 July 2024 valuation: £365,000

XPT Group LLC

(www.xptspecialty.com)

XPT is a wholesale insurance broking and Underwriting Agency platform across the U.S. Specialty Insurance Sector operating from many locations in the United States of America.

Date of investment: June 2017

Equity stake: 27.5%

31 July 2024 valuation: £48,788,000

These investments have been valued in accordance with the accounting policies on Investments set out in note 1 of our Half Year Consolidated Financial Statements.

Forward-looking statements:

Certain statements in this announcement are forward-looking statements. In some cases, these forward looking statements can be identified by the use of forward looking terminology including the terms "anticipate", "believe", "intend", "estimate", "expect", "may", "will", "seek", "continue", "aim", "target", "projected", "plan", "goal", "achieve" and words of similar meaning or in each case, their negative, or other variations or comparable terminology. Forward-looking statements are based on current expectations and assumptions and are subject to a number of known and unknown risks, uncertainties and other important factors that could cause results or events to differ materially from what is expressed or implied by those statements. Many factors may cause actual results, performance or achievements of B.P. Marsh to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of B.P. Marsh to differ materially from the expectations of B.P. Marsh, include, among other things, general business and economic conditions globally, industry trends, competition, changes in government and changes in regulation and policy, changes in its business strategy, political and economic uncertainty and other factors. As such, undue reliance should not be placed on forward-looking statements. Any forward-looking statement is based on information available to B.P. Marsh as of the date of the statement. All written or oral forward-looking statements attributable to B.P. Marsh are qualified by this caution. Other than in accordance with legal and regulatory obligations, B.P. Marsh undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement should be regarded as a profit forecast.