REG - B.P. Marsh &Partners - Final Results for the Year to 31 January 2024
11/06/2024 07:00
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RNS Number : 8758R B.P. Marsh & Partners PLC 11 June 2024
11 June 2024
B.P. Marsh & Partners Plc
("B.P. Marsh", "the Company" or "the Group")
Final Results for the Year to 31 January 2024
B.P. Marsh & Partners Plc (AIM: BPM), the specialist private equity
investor in early stage financial services businesses, announces its audited
Group Final Results for the year ended 31 January 2024.
Highlights:
· Consolidated profit before tax of £43.6m (31 January 2023: £27.6m)
· Total Shareholder return of £41.7m (22.0%) for the year, comprising
growth in Net Asset Value and the dividends paid in February 2023, July 2023
and November 2023
· Net Asset Value has increased by £39.7m to £229.2m (31 January
2023: £189.5m), a 20.9% increase
· Net Asset Value per share increased by 102.8p to 629.0p* (31 January
2023: 526.2p)
· Disposal of Kentro Capital Limited and receipt of £51.5m in proceeds
· Disposal of Paladin Holdings Limited / CBC UK Limited agreed for
£42.1m upfront consideration, with post-year end completion
· Three new equity investments were made during the year
· Three further equity investments, including one new investment, made
post-year end
· Equity portfolio valuation increase of 35.9% (2023: 19.1%)
· £2.0m in dividends paid in aggregate in year to 31 January 2024
(5.56p/share)
· Since year end, further dividends totaling £4.0m (10.72p /share)
paid or declared
Commenting on the results, Brian Marsh OBE, Chairman, said:
"From inception over 30 years ago our investment philosophy has been
consistent and continues to deliver strong returns. This latest increase in
NAV is testament to our strategy, enabling the Company to continue to invest
in high quality management teams as well as rewarding shareholders.
"Looking across our portfolio and the new opportunities we see, I am confident
that B.P. Marsh remains the partner of choice for exciting start-up insurance
intermediaries, which will drive further growth in the future."
*The fully diluted Net Asset Value per share is 626.9p and includes the full
1,443,147 shares within the Employee Benefit Trust, but also includes £4.1m
of loan repayable if the shares, including 236,259 currently unallocated, are
sold. The diluted NAV per share also excludes 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 has not yet been met.
(31 January 2023: 516.8p).
Analyst and investor briefing:
There will be an analyst call today at 10:00am BST. Any analysts wishing to
join the call should register to receive an invitation by emailing
bpmarsh@tavistock.co.uk (mailto:bpmarsh@tavistock.co.uk) if they have not
already done so.
The Company will also provide a live presentation for all existing and
potential shareholders via the Investor Meet Company platform on 12 June 2024
at 09:30am BST.
Questions can be submitted pre-event via your Investor Meet Company dashboard
up until 09:00am BST the day before the meeting 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 & Partners Plc via:
https://www.investormeetcompany.com/bp-marsh-partners-plc/register-investor
(https://www.investormeetcompany.com/bp-marsh-partners-plc/register-investor)
.
Investors who already follow B.P. Marsh & Partners Plc on the Investor
Meet Company platform will automatically be invited.
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 fifteen companies. More detailed
descriptions of the portfolio can be found at www.bpmarsh.co.uk
(http://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.
For further
information:
B.P. Marsh & Partners Plc www.bpmarsh.co.uk (http://www.bpmarsh.co.uk/)
Brian Marsh OBE +44 (0)20 7233 3112
Nominated Adviser & Broker
Panmure Gordon
Atholl Tweedie / Amrit Mahbubani / Ailsa McMaster +44 (0)20 7886 2500
Financial PR & Investor Relations
Tavistock bpmarsh@tavistock.co.uk
Simon Hudson / Tim Pearson / Katie Hopkins +44 (0)20 7920 3150
Statement by the Chairman
We are pleased to present the audited Consolidated Financial Statements of
B.P. Marsh & Partners Plc for the year ended 31 January 2024.
Results
In the past year, the Group has seen significant growth in its Net Asset Value
("NAV") (net of dividends), rising by 20.9% from £189.5m to £229.2m. There
has been a £43.6m increase in the equity value of our portfolio, increasing
from an adjusted value of £121.8m (taking out acquisition costs and
disposals) to £165.4m.
This translates to an undiluted Net Asset Value per share of 629.0p (up from
526.2p in 2023), or 626.9p on a fully diluted basis after factoring in the
vesting of shares in the Group's Joint Share Ownership Plan (compared to
516.8p in 2023).
As at 31 January 2024, the Group's cash and treasury balance was £40.5m,
marking a £28.4m increase from the previous year. As of the date of this
announcement, this balance has risen to £81.2m due to the completion of the
sale of Paladin Holdings Limited ("Paladin") to Specialist Risk Group Limited
and the completion of the sale of Aspira Corporate Solutions Limited to Titan
Wealth Holdings Limited.
Dividend
During the Financial Year under review the Group paid £2.0m in dividends by
way of an Interim Dividend of £0.5m in February 2023, a Final Dividend of
£0.5m in July 2023 and then a Special Dividend following the receipt of the
funds from the sale of Kentro Capital Limited ("Kentro") of £1.0m.
Dividend and share buy-back policy
Following the sales of Kentro and Paladin, the Group announced its Dividend
Policy for the Financial Years ending 31 January 2024, 2025 and 2026. This
being that each year an aggregate dividend of £4.0m would be paid by way of a
£2.0m Interim Dividend and then a £2.0m Final Dividend (subject to
shareholder consent at each Annual General Meeting).
Since the year-end, the Company paid a dividend of £1.0m in March 2024 whilst
awaiting final receipt of the proceeds of sale from Paladin, and when received
paid a further dividend in May 2024 of £1.0m. The Group is recommending a
final dividend of 5.36p per share (£2.0m) to be paid on 26 July 2024 to all
shareholders on the register on 28 June 2024, with the ex-dividend date being
27 June 2024. This final dividend will be subject to Shareholder Approval at
the Group's Annual General Meeting to be held on 23 July 2024.
During the Year under Review, the Company undertook 85 individual Share
Buy-Back transactions, purchasing a total of 283,480 shares from the market
for a total cost of £1.05m, or a weighted average of 371 pence per share.
On 24 November 2023, the Company cancelled 178,000 Shares it held in treasury.
The total Issued Share Capital is now 37,288,000. The Company currently has
55,170 Shares in treasury and therefore total number of shares with voting
rights amount to 37,232,830.
The Group remains committed to its Share Buy-Back Policy of being able to
purchase shares when able to. Following the strong Share Price Performance the
Group has agreed to amend its Share Buy-Back Policy to reduce the discount to
Net Asset Value threshold from 20% to 15% and has allocated up to £1m in the
aggregate for this purpose.
Disposals
In October 2023 the Group announced that it had completed the sale of its
18.38% stake in Kentro to Brown & Brown, Inc for £51.5m.
Furthermore in November 2023, it was announced that LEBC Holdings Limited had
agreed to sell its wholly owned subsidiary, Aspira Corporate Solutions
Limited, to Titan Wealth Holdings Limited.
In December 2023, the Company announced the conditional sale of its
shareholding in Paladin, the parent company of CBC UK Limited ("CBC").
More information on the above is included in the Chief Investment Officer's
Statement.
Portfolio
New Investments
During the Year, the Group's Portfolio has welcomed three new Investments as
previously announced: Verve Risk Services Limited ("Verve"), Pantheon
Specialty Group Limited ("Pantheon Specialty") and Ai Marine Risk Limited ("Ai
Marine").
Verve is a Managing General Agency specialising in the Professional and
Management Liability business established by Scott Simmons and Alan Lambert.
The Group invested in April 2023.
Pantheon Specialty is a newly established Insurance Broker specialising in
complex international placements, founded in June 2023 by Robert Dowman, a
long-time associate of the Company.
Ai Marine is a start-up marine hull Managing General Agency founded by Tom
Fulford-Smith and Charles D'Alton. The Group invested in December 2023 by way
of a newly established Holding Company.
Follow on Investment and funding
The Group has also acquired further holdings in XPT Group LLC by way of
subscription for $3.5m of new Preferred Shares in October 2023 in addition to
the further $4.0m of net Loan Funding provided in February 2023.
The Company also provided a £4.5m Loan Facility to Pantheon Specialty which
was drawn down in full.
Other highlights
Stewart Specialty Risk Underwriting Ltd ("SSRU"), the Toronto-based Managing
General Agency secured additional capacity for its Property and Residential
Realty programme.
Lilley Plummer Risks Limited ("LPR") the Lloyd's Broker continued to diversify
its product offering by making strategic hires, opening up the North American
Property and Accident & Health space.
More detailed updates on the Company's Portfolio is included in the Chief
Investment Officer's Statement.
Post year-end disposal
On 7 December 2023, the Company announced the conditional sale of its
shareholding in Paladin, the parent company of CBC, to Specialist Risk Group
Limited. Following the end of the Financial Year under review, on 22 March
2024, all conditions were met and the sale of the Group's holding in Paladin
completed, with the Group receiving upfront consideration of £42.1m.
There is also the possibility of further deferred consideration being paid
subject to the future performance of CBC and further updates on this will be
announced at the time.
Post year-end activity
On 27 March 2024, the Group announced that it had subscribed for a 30% stake
in Devonshire UW Limited ("Devonshire"), a newly established Underwriting
Agency specialising in transactional risks. The investment was through a mix
of equity subscription and provision of loan funding and conducted through a
newly established holding company. Devonshire's founders, Natasha Attray,
James Dodd, James Fletcher and Charles Turnham are experienced industry
practitioners with a collective 30 years of experience.
On 9 May 2024 the Company acquired a further 7% stake in Pantheon Specialty
for £7.3m with the ability to acquire a further 5% for nil consideration
subject to certain performance criteria of Pantheon Specialty over their 2024
and 2025 Financial Years. More information is provided in the Chief Investment
Officer's Statement.
Outlook
The Group's Year under review demonstrates the effective strategy of
partnering with strong entrepreneurial management teams to grow successful
businesses. The realisations made are testament to how the Group can add value
and aid in growth and the new investments made highlight the Group's tried and
tested ability to find interesting and well placed new opportunities.
The Group continues to support its partners with additional funding required
to deliver on each individual Portfolio Company's goals and provides strategic
assistance where possible to maximise growth.
The Group has an exciting pipeline of new business it is exploring, both
domestically in the UK and internationally. Bolstered by its strong cash
balance, the Group can and will invest in high quality opportunities that it
sees, but will continue its rigorous selective approach that has served it so
well over the past three decades. A balanced approach is being taken between
carefully considering new opportunities and utilising its cash balance.
The Group looks forward to the upcoming year and building on its current
growth trajectory.
Brian Marsh, OBE
Chairman
11 June 2024
Chief Investment Officer Statement
Portfolio Update and Outlook
The Group's performance in its financial year to 31 January 2024 is the
strongest since the business floated on the AIM Market in 2006.
Over the financial year to 31 January 2024, the valuation of the Group's
equity portfolio has increased by 35.9% (year ending 31 January 2023: 19.1%),
adjusting for realisations, with NAV increasing by 20.9% (year ending 31
January 2023: 13.8%).
These results demonstrate two key components of B.P. Marsh's long term
success, being to:-
· identify, invest and nurture businesses over an extended period of
time; and
· assist in Management led sale processes which produce considerable
returns for all stakeholders.
Since 1 February 2023, B.P. Marsh completed three realisations:-
· Kentro Capital Limited - sold to Brown and Brown;
· CBC UK Limited - sold to Specialist Risk Group Limited; and
· Aspira Corporate Solutions Limited - sold to Titan Wealth Holdings
Limited.
These realisations have further strengthened B.P. Marsh's liquidity, with
current cash of £81.2m.
This strong liquidity has allowed B.P. Marsh to undertake three new
investments in the financial year to 31 January 2024, being:-
· Verve Risk Services Limited - A Managing General Agency, which
specialises in Professional and Management Liability business for the
insurance industry;
· Pantheon Specialty Group Limited - A new insurance broker led by
Robert Dowman, a recognised leading London Market broker, specialising in
complex placements worldwide; and
· Ai Marine Risk Limited - A start-up Managing General Agency, which
specialises in Marine Hull insurance and will underwrite a global portfolio of
business.
Post year end, the Group invested in Devonshire UW Limited, a Managing General
Agency specialising in transactional risks insurance.
These new investments demonstrate that the Group's long term strategic goals
remain unaltered, irrespective of recent realisations, being to:-
· Invest in early-stage businesses with strong management teams and
significant growth potential;
· Assist our investments, deploying capital to support continued strong
growth; and
· Undertake the above alongside an increasing dividend policy. The
Group have agreed to pay an annual dividend of £4m in each year for three
years. This policy commenced in the Group's current financial year, from 1
February 2024.
These strategic goals produce returns for our shareholders, via a blend of
ongoing equity growth of the portfolio and regular returns of capital to
shareholders. For the year ended 31 January 2024, the Group produced
shareholder returns of £41.7m / 22%.
The Group remains focussed on sourcing new business. B.P. Marsh continues to
be approached by entrepreneurial individuals and teams and has an active
pipeline of new business opportunities.
The Group continues to see a high number of potential new business
opportunities, having received 71 new business enquiries in the year to 31
January 2024, increasing from 51 received enquiries in the preceding year.
The Group currently has 6 potential opportunities under review to consider
during the next quarter of 2024, all of which are in the insurance heartland
upon which we focus.
Disposals
Paladin Holdings Limited ("Paladin") / CBC UK Limited ("CBC")
In December 2023, the Group agreed to sell its shareholding in Paladin, the
parent company of CBC, the London-based Insurance Broker, to Specialist Risk
Group Limited, a PE backed insurance broker consolidator.
This transaction completed on 22 March 2024, and delivered £42.1m in cash
(net of transaction costs). The Group also received £0.8m in August 2023 on
the exercise of an option with CBC and in total this represented a 42% uplift
on the Group's latest valuation of the investment as at 31 July 2023.
Additionally, the Group received repayment in full of its £5.9m loans to CBC,
resulting in an aggregate cash receipt of £48.8m since July 2023.
The sale represents an Internal Rate of Return of 44% at completion, based on
the initial consideration received.
There is also a potential for £17.8m of further cash consideration if CBC
achieves defined performance hurdles.
LEBC Holdings Limited ("LEBC") / Aspira Corporate Solutions Limited ("Aspira")
In November 2023, LEBC, in which the Group has a 59.3% shareholding, agreed to
sell its wholly owned subsidiary Aspira to Titan Wealth Holdings Limited,
subject to regulatory approval.
This transaction completed on 16 April 2024 and has allowed LEBC to meet all
its obligations as agreed with the Financial Conduct Authority regarding
historical defined benefit pension transfer advice.
Upon completion the Group received full repayment of its £3.3m loans to LEBC.
Further proceeds of the sale will be received over a three year earn-out
period. 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 at 31 January 2024.
Kentro Capital Limited ("Kentro")
In October 2023, the Group confirmed that the sale of its 18.38% stake in
Kentro to Brown & Brown, Inc had completed, delivering sale proceeds of
£51.5m.
This disposal produced an Internal Rate of Return of 23.66% (inclusive of all
income and fees) over a 9 year period.
New Investments
During the Group's financial year to 31 January 2024, three new investments
were completed.
The Group is confident that the these new investments will deliver on their
goals, producing long term growth for B.P. Marsh and its shareholders.
Ai Marine Risk Limited ("Ai Marine") - London - December 2023
A start-up Managing General Agency, which specialises in Marine Hull insurance
and will underwrite a global portfolio of business.
The business was established by its co-founders, Tom Fulford-Smith and Charles
D'Alton, who are experienced marine insurance specialists with a track record
of delivering growth.
B.P. Marsh subscribed for a 30% shareholding, providing £1.6m of funding via
a mixture of equity and a loan facility.
Since inception, Ai Marine has performed in line with the Group's
expectations, writing business from day one and having secured Lloyd's
coverholder status and additional capacity from Ascot Syndicate.
Date of initial investment: December 2023
Equity stake: 30%
Cost of Equity: £30,000
31 January 2024 valuation: £30,000
Pantheon Specialty Limited ("Pantheon") - London - June 2023
+ 39.6 pence NAV per share uplift in Year
A start-up insurance broker, led by Rob Dowman, a recognised leading London
Market broker, specialising in complex placements worldwide, in which the
Group subscribed for a 25% stake.
Since investment, Pantheon has performed strongly, reflected in the increase
to our valuation of Pantheon.
In the year to 31 January 2024, the Group provided Pantheon with a loan
facility of £4.5m, which was fully drawn down. The provision of this loan,
alongside cash generated from Pantheon's strong performance to date, allowed
the business to make a number of key hires, continuing Pantheon's strategy to
build a market leading independent specialist broker across multiple markets.
Post year end, Pantheon announced that it will be appointing Howard Green, the
former Chairman of Besso Insurance Group Limited ("Besso"), to the Board,
subject to regulatory approval. Howard will also assume the role of Group
Chairman.
Howard was one of Besso's founding members and architects and has considerable
experience in building and leading international broking businesses.
Additionally, post year end, in May 2024, the Group acquired from Pantheon's
founders a further 7% shareholding in Pantheon for an upfront consideration
paid of £7.3m.
In Pantheon's current financial year to 31 December 2024, the business is
forecast to produce revenue of more than £18m and EBITDA of more than £12m.
Date of initial investment: June 2023
Equity stake: 25%
Cost of Equity: £25 (£7.3m post year end further investment in May 2024)
31 January 2024 valuation: £14.8m
Verve Risk Services Limited ("Verve") - London - April 2023
+ 0.6 pence NAV per share uplift in Year
A Managing General Agency, which specialises in Professional and Management
Liability business for the insurance industry in the USA, Canada, Bermuda,
Cayman Islands and Barbados.
Verve was established in 2016 by its founders Scott Simmons and Alan Lambert,
both of whom have over 20 years' experience underwriting U.S Professional and
Management liability insurance.
B.P. Marsh subscribed for a 35% shareholding through the provision of £1.0m
of funding via a mixture of equity and a loan facility, which was drawn down
in full upon completion as part of a management buy-out.
Since investment, Verve has performed well, exceeding their budget for 2023,
and showing strong year on year growth into 2024.
Date of initial investment: April 2023
Equity stake: 35%
Cost of Equity: £430,791
31 January 2024 valuation: £643,000
New Investments - Post Year End Event
Devonshire UW Limited ("Devonshire") - London - March 2024
A Managing General Agency specialising in transactional risks insurance,
including Warranty & Indemnity, Specific Tax, and Legal Contingency
Insurance.
B.P. Marsh subscribed for a 30% shareholding through the provision of £1.9m
of funding via a mixture of equity and a loan facility.
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.
Devonshire is London-based and has the ability to underwrite transactions in
the UK, Europe, Middle East, Africa, Asia, South America, Central
America and Australasia.
Date of initial investment: March 2024
Equity stake: 30%
Cost of Equity: £300,000
31 January 2024 valuation: N/A
Follow-on Investments and Funding
XPT Group Limited ("XPT") - USA
+ 3.9 pence NAV per share uplift in Year
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).
The Group expects XPT to continue its strong growth, both via its acquisition
strategy, individual and team hires and underlying organic growth.
In October 2023, the Group provided a further $3.5m (£2.9m) of funding to
XPT, subscribing to a new issue of Preferred shares. The Group also provided a
$6m Term Loan in February 2023 of which $2m has been repaid.
This further funding, alongside continued support from bank financing, has
allowed XPT to continue to grow, both organically and via acquisitions.
As has been previously reported, XPT has made 16 business acquisitions since
the Group invested in 2017. XPT now has offices in 22 locations across 13
States, acting for insureds across the USA.
XPT's most recent acquisition was in Flood Risk Solutions, a Managing General
Agency specialising in insurance solutions for flood risks, based in Florida.
Flood Risk provides insurance for a number of flood risks, including primary
Flood insurance, Excess Flood insurance, parametric solutions and custom flood
risk transfer products.
This transaction brings a number of synergies that can benefit both Flood Risk
and the wider XPT business, including carrier relationships, access to new
programs and products and distribution opportunities.
This is the third acquisition made by XPT in over a year, the other two being
Cal Inspection Bureau, a premier underwriting survey and audit business, and
Craig and Leicht, a Texas-based wholesale agency. Both businesses have
integrated successfully into XPT and have performed well since their
acquisition.
Over the year, XPT have also made a number of individual and team hires, which
are contributing to XPT's current strong performance. This includes an
experienced binding & brokerage team based out of Philadelphia, and a
number of new property and casualty brokers, to bring about substantial growth
across these business lines, including (but not limited to), commercial
property, contractors, workers compensation, farm & ranches and the
hospitality industry.
Date of initial investment: June 2017
Equity stake: 29.10%
Cost of Equity: £13,042,085
31 January 2024 valuation: £39,572,000
Portfolio Update & Activity
NAV breakdown by portfolio company
The composition of B. P. Marsh's underlying portfolio companies is shown on
the chart below:
The Group's current investments are in the Insurance Intermediary sector. Our
current insurance investments are budgeting to produce in aggregate over
£1.27bn of insurance premium during 2024, and a breakdown between brokers and
MGAs is shown below:
Insurance Brokers
The Group's Broking investments are budgeting to place over £707m of GWP,
producing over £73m of brokerage income in 2024, accessing specialty markets
around the world.
Underwriting Agencies / Managing General Agents ("MGAs")
The Group's MGAs are budgeting to place over £562m of GWP, producing over
£55m of commission income in 2024, across many specialist product areas, on
behalf of more than 50 insurers.
Other Portfolio Company Highlights
Lilley Plummer Risks Limited ("LPR") - London
+ 17.3 pence NAV per share uplift in Year
LPR continues to perform well, due to the growth of its underlying marine
portfolio and diversification into different classes of business.
Throughout the Group's financial year, LPR made several strategic hires to
support growth. These hires have allowed LPR to enter the North American
property and Accident & Health space, while also bolstering its existing
marine broking operations.
Aligned with this vision, LPR actively explores new opportunities in the
market through team hires and acquisitions as part of its commitment to
achieving accelerated growth. This expansion is not confined to its core
marine offerings but extends into new diverse sectors of the insurance
industry.
In LPR's current financial year to 31 December 2024, the business is forecast
to produce revenue of c.£12m and EBITDA of approaching£7m. As at this stage
of the year, LPR are on course to achieve this budget.
Date of initial investment: October 2019
Equity stake: 30%
Cost of Equity: £308,242
31 January 2024 valuation: £13,446,000
ATC Insurance Solutions PTY Limited ("ATC") - Australia
+ 3.2 pence NAV per share uplift in Year
ATC continues to perform strongly across its many product offerings in
accident & health, motor and sports insurance, amongst others.
In their year ending 30 June 2023, ATC produced EBITDA of AU$11m, an increase
of AU$ 1.8m over their 2022 year. In their current financial year to 30 June
2024, ATC are on track to outperform their budget, which already showed strong
year on year growth.
ATC is run by a longstanding and experienced management team led by Chairman
and Founder, Chris Anderson, alongside co-founder and Chief Commercial Officer
Shane Sheppard.
Date of initial investment: July 2018
Equity stake: 25.6%
Cost of Equity: £6,476,595
31 January 2024 valuation: £18,261,000
Stewart Specialty Risk Underwriting Ltd ("SSRU") - Canada
+ 2.3 pence NAV per share uplift in Year
SSRU continues to deliver specialist insurance products to a wide array of
clients in the Construction, Manufacturing, Onshore Energy, Public Entity and
Transportation sectors.
Since its inception in 2017, SSRU has demonstrated robust growth and
anticipates surpassing CA$ 100m in Gross Written Premium in 2024.
This performance has been brought about by continuous organic growth across
SSRU's highly profitable business lines. Growth has been further driven by
expanded line sizes made possible through strengthened relationships with both
existing and new capacity partners.
Recently, SSRU entered into two new carrier partnerships, being:-
· Sompo Japan Insurance (Canada Branch), introducing increased capacity
within their Commercial Property and Residential Realty product offerings.
· Millennium Insurance Corporation, introducing increased capacity
within their Commercial Property for risks in the Energy, Mining and
Manufacturing sectors.
Securing this new capacity will enable SSRU to continue on its impressive
growth trajectory seen since original investment.
Date of initial investment: January 2017
Equity stake: 30%
Cost of Equity: £19
31 January 2024 valuation: £11,870,000
Sage Program Underwriters, Inc ("SAGE") - USA
+ 0.2 pence NAV per share uplift in Year
SAGE continues to build traction in its space of expertise, being Worker's
Compensation insurance to the ground delivery and field sport sectors.
SAGE's performance is strong in 2024, with substantial year on year growth in
terms of Gross Written Premium, Revenue and EBITDA.
This growth has been brought about organically, but SAGE is also actively
exploring hiring new individuals to expand its product lines into new
affiliated product lines.
Accordingly, SAGE has recently secured the ability to write General Liability
insurance for the scaffolding and crane industries, amongst other specialty
contractor sectors. This programme will focus on the medium sized section of
the market.
As part of this new product offering, SAGE has hired an industry veteran with
decades of experience in this sector.
The Group look forward to working with SAGE as it continues to grow and expand
its product offering.
Date of initial investment: June 2020
Equity stake: 30%
Cost of Equity: £202,758
31 January 2024 valuation: £1,689,000
Market Commentary
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.
Both the Group and its portfolio companies continue to be approached by
entrepreneurial individuals and teams who do not wish to be part of this
consolidation process.
The Group continues to monitor trends in the insurance market, specifically
when it comes to premium rates.
The global property and casualty market rates continue to increase, although
the pace is slowing. Global property insurance rates increased 3% (6% in Q4
2023) with global casualty rates increased by 3% (3% in Q4 2023). Global
commercial insurance rates rose 1%, compared to a 2% increase in the prior
quarter. This is the 26(th) consecutive quarter of rate increases, however,
down from the peak of 22% in the fourth quarter of 2020.
Generally, the slowing of rate increases is due to overall market capacity
increasing, via new market entrants and existing carriers increasing their
exposure. Whilst rate increases remained highest across property lines,
business with assets in CAT (catastrophe) zones, have begun to see lower
increases in rates.
Overall, whilst the market is softening, the Group does not see the market
returning to the pricing of the last soft market in the short to medium 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.
Notwithstanding the current market trends, the Group and its portfolio are
well positioned to take advantage of the opportunities this environment
presents, with strong liquidity and a positive track record, to help support
our portfolio and attract new talent.
Daniel Topping
Chief Investment Officer
11 June 2024
Finance Director Statement
Financial performance summary
The table below summarises the Group's financial results and key performance
indicators for the year to 31 January 2024:
Year to/as at Year to/as at
31st January 31st January
2024 2023
Net asset value £229.2m £189.5m
Net asset value per share - undiluted 629.0p 526.2p
Net asset value per share - diluted 626.9p 516.8p
Profit on ordinary activities before tax £43.6m £27.6m
Dividend per share paid 5.56p 2.78p
Total shareholder return (including dividends) £41.7m £23.9m
Total shareholder return on opening shareholders' funds 22.0% 14.4%
Net cash (used by) / from operating activities (net of equity investments, £(1.2)m £0.5m
realisations and loans)
Equity cash investment for the year £3.4m £2.9m
Realisations (net of disposal costs) £53.1m £8.2m
Loans issued in the year £20.3m £3.0m
Loans repaid by investee companies in the year £2.7m £2.0m
Cash and treasury funds at end of year £40.5m £12.1m
Borrowing / Gearing £Nil £Nil
The Group had a strong year, delivering an increase in the NAV of £39.7m
(2023: £22.9m), or +20.9% (2023: +13.8%). At 31 January 2024 the NAV of the
Group was £229.2m which equates to 629.0p per share undiluted (2023:
£189.5m, or 526.2p per share). On a diluted basis this equates to 626.9p per
share (2023: 516.8p per share).
The NAV of £229.2m at 31 January 2024 represents a total increase in NAV of
£200.0m 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 of 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 9.4% in Group NAV after running costs,
realisations, losses, distributions and corporation tax since flotation and
12.1% since 1990.
Investment performance
The Group's equity portfolio movement during the year was as follows:
31st January 2023 valuation Acquisitions at cost Disposal proceeds Adjusted 31st January 2023 valuation 31st January 2024 valuation
£171.5m £3.4m £(53.1)m £121.8m £165.4m
This equates to an increase in the portfolio valuation of 35.9% (2023: 19.1%).
The Group made realisations totalling £53.1m, including £51.5m from the sale
of Kentro, £0.8m from Paladin on the exercise of an option and £0.7m on the
redemption of preference shares in Lilley Plummer Holdings Limited ("LPH").
The Group invested a total of £3.4m in equity in the portfolio during the
year (2023: £2.9m):
· £2.9m in XPT to fund further acquisitions
· £0.5m into three new investments: Pantheon, Verve and Ai Marine
Liquidity and loan portfolio
The Group's loan portfolio balance increased from £11.5m as at 31 January
2023 to £28.9m (+£17.4m) at 31 January 2024. The key movements were:
· £13.8m was provided to the investment portfolio, including £4.9m to
XPT, £4.5m to Pantheon, and £2.8m to Paladin
· £6.0m was provided to Alchemy Underwriting Limited in connection
with the Group's agreed sale of its investment in Paladin
· £0.5m was provided to Brown & Brown (Europe) Holdco Limited as
part of the Group's sale of its investment in Kentro
· £2.7m of loans were repaid during the year, including £1.6m from
XPT, £0.7m from Fiducia and £0.3m from LPH
Cash and treasury funds at 31 January 2024 were £40.5m (2023: £12.1m).
Since the year-end the Group completed the sale of Paladin and received
£42.1m from equity disposal and £5.9m in loan repayments.
The Group has also invested a further £9.2m in follow-on funding into the
portfolio including £7.3m in Pantheon and £0.8m in XPT, plus £0.3m in
equity in Devonshire, a new investment.
Other significant cash movements include receipt of £5.0m in further loan
repayments, including £3.3m from LEBC who have now repaid their loans in
full, and £1.5m from Pantheon and £1.0m in new loans granted to the existing
portfolio. The loan portfolio balance is currently £19.0m.
In addition, £2.0m has been distributed in dividends. The current cash and
treasury balance is £81.2m and the Group is debt free. Treasury funds are all
in one month or less deposit accounts.
Operating income
Net gains from investments were £43.7m (2023: £27.5m), a 58.9% increase over
the previous year, which all related to the revaluation of the investment
portfolio at 31 January 2024 (2023: £27.3m related to revaluation of the
investment portfolio). The Kentro sale resulted in a £36.4m realised gain on
disposal, which has been reflected within a movement from the fair value
reserve to retained earnings within the consolidated statement of financial
position.
Overall, income from investments increased by £2.6m, or 53% to £7.5m (2023:
£4.9m). The increase was primarily due to receiving significantly greater
loan interest income from the enlarged loan portfolio, along with increased
fees re-charged in relation to professional fees for new investments.
Operating expenses
Operating expenses increased by £3.0m, or 61% during the year to £7.9m
(2023: £4.9m) predominantly as a result of professional fees incurred for new
investment activity, general cost inflation and one-off bonuses in respect of
the successful sale of Kentro.
Profit on ordinary activities
The consolidated profit on ordinary activities before taxation increased by
£16.0m, or 58% to £43.6m (2023: up £8.2m to £27.6m). The consolidated
profit on ordinary activities after taxation increased by £18.7m, or 78.6% to
£42.5m (2023: up £6.4m to £23.8m).
The Group's strategy is to cover expenses from the portfolio yield. On an
underlying basis, including treasury returns and realised gains in cash, but
excluding unrealised investment activity (unrealised gains on equity and
provision against loans receivable from investee companies), this was achieved
with a pre-tax profit of £0.1m for the year (2023: £0.3m).
Undiluted / diluted NAV per share
The NAV per share at 31 January 2024 is 629.0p (2023: 526.2p). 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 have voting or dividend rights. However,
in October 2023 voting and dividend rights for 1,206,888 shares were granted.
These shares are now included within the undiluted NAV per share calculation,
along with £3.4m of loan due to be repaid by the Trust in respect of the
original transfer of shares that cannot currently be consolidated within the
accounts, but is repayable should these shares be sold.
The diluted NAV per share at 31 January 2024 is 626.9p (2023: 516.8p). This
includes the full 1,443,147 shares within the Employee Benefit Trust, but also
includes £4.1m of loan repayable if the shares, including 236,259 currently
unallocated, are sold.
The diluted NAV per share excludes 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 has not yet been met. This is forecast
to be 1.1% dilutive from NAV of 643p/share and 4.5% dilutive from NAV of
649p/share.
Jonathan Newman
Group Finance Director
11 June 2024
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.
Investments
As at 31 January 2024 the Group's equity interests were as follows:
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 January 2024 valuation: £30,000
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 January 2024 valuation: £3,361,000
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 January 2024 valuation: £0
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: 25.6%
31 January 2024 valuation: £18,261,000
CBC UK Limited
(www.cbcinsurance.co.uk)
CBC is a Retail and Wholesale Lloyd's Insurance Broker, offering a wide range
of services to commercial and personal clients as well as broking solutions to
intermediaries. The Group holds its investment in CBC through CBC's parent
company, Paladin Holdings Limited.
Date of investment: February 2017
Equity stake: 43.8%
31 January 2024 valuation: £49,549,000
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 January 2024 valuation: £0
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 January 2024 valuation: £4,902,000
LEBC Holdings Limited
LEBC is a holding company that, until April 2024, owned two businesses that
were national Independent Financial Advisory companies providing services to
individuals, corporates and partnerships, principally in employee benefits,
investment and life product areas.
Date of investment: April 2007
Equity stake: 59.3%
31 January 2024 valuation: £3,987,000
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.
Date of investment: October 2019
Equity stake: 30.0%
31 January 2024 valuation: £13,446,000
New Denison Limited
Date of investment: June 2023
Equity stake:40%
31 January 2024 valuation: £0
Pantheon Specialty Group Limited
(www.pantheonspecialty.com)
Pantheon is a holding company established in partnership with Robert Dowman.
Pantheon acquired 100% of the share capital of the Lloyd's broker Denison and
Partners Limited. 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: 25.0%
31 January 2024 valuation: £14,775,000
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 January 2024 valuation: £1,689,000
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: 30.0%
31 January 2024 valuation: £11,870,000
Sterling Insurance PTY Limited
(www.sterlinginsurance.com.au (http://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 January 2024 valuation: £3,297,000
Verve Risk Services Limited
(www.ververisk.com)
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 January 2024 valuation: £643,000
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: 29.1%
31 January 2024 valuation: £39,572,000
These investments have been valued in accordance with the accounting policies
on Investments set out in note 1 of the Consolidated Financial Statements.
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31ST JANUARY 2024
Notes 2024 2023
£'000 £'000 £'000 £'000
GAINS ON INVESTMENTS 1
Realised (losses) / gains on disposal of equity investments (net of costs) 14 (37) 155
Release of provision made against equity investments and loans 16 24 30
Unrealised gains on equity investment revaluation
12 43,711 27,275
43,698 27,460
INCOME
Dividends 1,25 3,504 3,119
Income from loans and receivables 1,25 1,861 749
Fees receivable 1,25 2,103 1,051
7,468 4,919
OPERATING INCOME 2 51,166 32,379
Operating expenses (7,881) (4,889)
2 (7,881) (4,889)
OPERATING PROFIT 43,285 27,490
Financial income 2,4 721 130
Financial expenses 2,3 (55) (88)
Exchange movements 2,8 (333) 58
333 100
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 8 43,618 27,590
Income taxes 9 (1,089) (3,747)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS
20 £42,529 £23,843
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 20
£42,529 £23,843
Earnings per share - basic (pence) 10 114.7p 66.2p
Earnings per share - diluted (pence) 10 114.0p 63.6p
The result for the year is wholly attributable to continuing activities.
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION
31ST JANUARY 2024
(Company Number: 05674962)
Group Company
Notes 2024 2023 2024 2023
£'000 £'000 £'000 £'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 11 65 79 - -
Right-of-use asset 21 507 671 - -
Investments - equity portfolio 12 115,833 171,461 190,860 158,333
Investments - subsidiaries 12 - - 38,383 31,274
Loans and receivables 15 16,197 8,120 2,948 4,106
132,602 180,331 232,191 193,713
CURRENT ASSETS
Investments - assets held for sale 12 49,549 - - -
Investments - treasury portfolio 13 78 591 - -
Trade and other receivables 16 15,633 5,283 1,157 -
Cash and cash equivalents 40,435 11,564 7 8
TOTAL CURRENT ASSETS 105,695 17,438 1,164 8
TOTAL ASSETS 238,297 197,769 233,355 193,721
LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities 21 (416) (596) - -
Deferred tax liabilities 17 (6,687) (5,631) - -
TOTAL NON-CURRENT LIABILITIES (7,103) (6,227) - -
CURRENT LIABILITIES
Trade and other payables (1,843) (1,830) - -
Lease liabilities 21 (180) (175) - -
TOTAL CURRENT LIABILITIES 18 (2,023) (2,005) - -
TOTAL LIABILITIES (9,126) (8,232) - -
NET ASSETS £229,171 £189,537 £233,355 £193,721
CAPITAL AND RESERVES - EQUITY
Called up share capital 19 3,729 3,747 3,729 3,747
Share premium account 20 29,345 29,350 29,345 29,350
Fair value reserve 20 112,768 106,509 188,717 156,190
Reverse acquisition reserve 20 393 393 - -
Capital redemption reserve 20 25 7 25 7
Capital contribution reserve 20 72 72 - -
Retained earnings 20 82,839 49,459 11,539 4,427
SHAREHOLDERS' FUNDS - EQUITY
20 £229,171 £189,537 £233,355 £193,721
Net asset value per share - undiluted (pence) 10 629.0p 526.2p 627.1p 517.1p
Net asset value per share - diluted (pence) 10 626.9p 516.8p 627.1p 517.1p
The Financial Statements were approved by the Board of Directors and
authorised for issue on 10th June 2024
and signed on its behalf by:
B.P. Marsh & J.S. Newman
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31ST JANUARY 2024
Notes 2024 2023
£'000 £'000
Cash from operating activities
Income from loans to investee companies 1,861 749
Dividends 3,504 3,119
Fees received 2,103 1,051
Operating expenses (7,881) (4,889)
Net corporation tax payable 9 (33) (14)
Purchase of equity investments 12 (3,364) (2,941)
Net proceeds from sale of equity investments 12,14 53,117 8,259
Net loan payments to investee companies (17,630) (1,039)
Adjustment for non-cash share incentive and share option plans
186 104
Exchange movement (53) (36)
Increase in receivables (1,052) (35)
Increase in payables 13 160
Depreciation and amortisation 11,21 191 193
Net cash from operating activities
30,962 4,681
Net cash from / (used by) investing activities
Purchase of property, plant and equipment 11 (13) (11)
Purchase of treasury investments net of cash and cash equivalents
- (8,371)
Net proceeds from the sale of treasury investments 1,130 7,867
Net cash from / (used by) investing activities
1,117 (515)
Net cash used by financing activities
Financial income 4 87 2
Financial expenses 3 (39) (47)
Net decrease in lease liabilities 21 (175) (168)
Dividends paid 7 (2,028) (1,001)
Payments made to repurchase company shares 10 (1,053) (16)
Net cash used by financing activities
(3,208) (1,230)
Change in cash and cash equivalents 28,871 2,936
Cash and cash equivalents at beginning of the year
11,564 8,628
Cash and cash equivalents at end of year £40,435 £11,564
( )
All differences between the amounts stated in the Consolidated Statement of
Cash Flows and the Consolidated Statement of Comprehensive Income are
attributed to non-cash movements.
PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31ST JANUARY 2024
Notes 2024 2023
£'000 £'000
Cash from operating activities
Dividends received from subsidiary undertakings 10,003 -
Net cash from operating activities 10,003 -
Net cash used by financing activities
(Increase) / decrease in amounts owed by group undertakings
(7,109) 913
Adjustment relating to non-cash items 186 104
Dividends paid 7 (2,028) (1,001)
Payments made to repurchase company shares 10 (1,053) (16)
Net cash used by financing activities (10,004) -
Change in cash and cash equivalents (1) -
Cash and cash equivalents at beginning of the year 8 8
Cash and cash equivalents at end of year £ 7 £ 8
( )
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31ST JANUARY 2024
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Opening total equity 189,537 166,607 193,721 170,791
Comprehensive income for the year 42,529 23,843 42,529 23,843
Dividends paid (2,028) (1,001) (2,028) (1,001)
Repurchase of company shares (1,053) (16) (1,053) (16)
Share incentive and share option plan 186 104 186 104
TOTAL EQUITY £229,171 £189,537 £233,355 £193,721
Refer to Note 20 for detailed analysis of the changes in the components of
equity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST JANUARY 2024
1. ACCOUNTING POLICIES
B.P. Marsh & Partners Plc is a public limited company incorporated in
England and Wales under the Companies Act 2006 and domiciled in the United
Kingdom. The address of the Company's registered office is 5th Floor, 4
Matthew Parker Street, London SW1H 9NP. The consolidated financial statements
for the year ended 31st January 2024 comprise the financial statements of the
Parent Company and its consolidated subsidiaries (collectively "the Group").
Basis of preparation of financial statements
These consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards, and in accordance with the
Companies Act 2006.
The consolidated financial statements are presented in sterling, the
functional currency of the Group, rounded to the nearest thousand pounds
(£'000) except where otherwise indicated.
The preparation of financial statements in conformity with UK-adopted
international accounting standards requires management to make judgments,
estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other
factors that are believed to be reasonable in the circumstances, the results
of which form the basis of judgements about the carrying amounts of assets and
liabilities. Actual results may differ from those amounts.
In the process of applying the Group's accounting policies, management has
made the following judgments, which have the most significant effect on the
amounts recognised in the financial statements:
Assessment as an investment entity
Entities that meet the definition of an investment entity within IFRS 10:
Consolidated Financial Statements ("IFRS 10") are required to account for
their investments in controlled entities, as well as investments in associates
at fair value through profit or loss. Subsidiaries that provide investment
related services or engage in permitted investment related activities with
investees that relate to the parent investment entity's investment activities
continue to be consolidated in the Group results. The criteria which define an
investment entity are currently as follows:
a) an entity that obtains funds from one or more investors for the purpose
of providing those investors with investment services;
b) an entity that commits to its investors that its business purpose is to
invest funds solely for returns from capital appreciation, investment income
or both; and
c) an entity that measures and evaluates the performance of substantially
all of its investments on a fair value basis.
The Group's annual and interim consolidated financial statements clearly state
its objective of investing directly into portfolio investments and providing
investment management services to investors for the purpose of generating
returns in the form of investment income and capital appreciation. The Group
has always reported its investment in portfolio investments at fair value. It
also produces reports for investors of the funds it manages and its internal
management report on a fair value basis. The exit strategy for all investments
held by the Group is assessed, initially, at the time of the first investment
and this is documented in the investment paper submitted to the Board for
approval.
The Board has also concluded that the Company meets the additional
characteristics of an investment entity, in that it has more than one
investment; the investments are predominantly in the form of equities and
similar securities; it has more than one investor and its investors are not
related parties. The Board has concluded that B.P. Marsh & Partners Plc
and its two trading subsidiaries, B.P. Marsh & Company Limited and B.P.
Marsh (North America) Limited, which provide investment related services on
behalf of B.P. Marsh & Partners Plc, all meet the definition of an
investment entity. These conclusions will be reassessed on an annual basis for
changes to any of these criteria or characteristics.
Application and significant judgments
When it is established that a parent company is an investment entity, its
subsidiaries are measured at fair value through profit or loss. However, if an
investment entity has subsidiaries that provide services that relate to the
investment entity's investment activities, the exception to the Amendment of
IFRS 10 is not applicable as in this case, the parent investment entity still
consolidates the results of its subsidiaries. Therefore, the results of B.P.
Marsh & Company Limited and B.P. Marsh (North America) Limited continue to
be consolidated into its Group financial statements for the year.
The most significant estimates relate to the fair valuation of the equity
investment portfolio as detailed in Note 12 to the Financial Statements. The
valuation methodology for the investment portfolio is detailed below. The
estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The accounting policies set out below have been applied consistently to all
periods presented in these consolidated financial statements.
New Accounting Standards
There are no new standards that have been issued, but are not yet effective
for the year ended 31st January 2024, which might have a material impact on
the Group's financial statements in future periods.
Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control, as defined by IFRS
10, is achieved when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those
returns through its power over the investee. Specifically, the Group controls
an investee if and only if the Group has:
a) power over the investee (i.e. existing rights that give it the current
ability to direct the relevant activities of the investee);
b) exposure, or rights, to variable returns from its involvement with the
investee; and
c) the ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an
investee, the Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including:
a) rights arising from other contractual arrangements; and
b) the Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the elements
of control.
B.P. Marsh & Partners Plc ("the Company"), an investment entity, has two
subsidiary investment entities, B.P. Marsh & Company Limited and B.P.
Marsh (North America) Limited, that provide services that relate to the
Company's investment activities. The results of these two subsidiaries,
together with other subsidiaries (except for LEBC Holdings Limited ("LEBC")),
are consolidated into the Group consolidated financial statements. The Group
has taken advantage of the Amendment to IFRS 10 not to consolidate the results
of LEBC. Instead, the investment in LEBC is valued at fair value through
profit or loss.
(ii) Associates
Associates are those entities in which the Group has significant influence,
but not control, over the financial and operating policies. Investments that
are held as part of the Group's investment portfolio are carried in the
Consolidated Statement of Financial Position at fair value even though the
Group may have significant influence over those companies.
Business combinations
The results of subsidiary undertakings are included in the consolidated
financial statements from the date that control commences until the date that
control ceases. Control exists where the Group has the power to govern the
financial and operating policies of the entity so as to obtain benefits from
its activities. Accounting policies of the subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the Group.
All business combinations are accounted for by using the acquisition
accounting method. This involves recognising identifiable assets and
liabilities of the acquired business at fair value. Goodwill represents the
excess of the fair value of the purchase consideration for the interests in
subsidiary undertakings over the fair value to the Group of the net assets and
any contingent liabilities acquired. The one exception to the use of the
acquisition accounting method was in 2006 when B.P. Marsh & Partners Plc
became the legal parent company of B.P. Marsh & Company Limited in a share
for share exchange transaction. This was accounted for as a reverse
acquisition, such that no goodwill arose, and a merger reserve was created
reflecting the difference between the book value of the shares issued by B.P.
Marsh & Partners Plc as consideration for the acquisition of the share
capital of B.P. Marsh & Company Limited. This compliance with IFRS 3:
Business Combinations ("IFRS 3") also represented a departure from the
Companies Act.
Intra-group balances and any unrealised gains and losses or income and
expenses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements.
Associates are those entities in which the Group has significant influence,
but not control, over the financial and operating policies. Investments that
are held as part of the Group's investment portfolio are carried in the
Consolidated Statement of Financial Position at fair value even though the
Group may have significant influence over those companies. This treatment is
permitted by IAS 28: Investment in Associates ("IAS 28"), which requires
investments held by venture capital organisations to be excluded from its
scope where those investments are designated, upon initial recognition, as at
fair value through profit or loss and accounted for in accordance with IAS 39:
Financial Instruments ("IAS 39"), with changes in fair value recognised in the
profit or loss in the period of the change. The Group has no interests in
associates through which it carries on its business.
No Statement of Comprehensive Income is prepared for the Company, as permitted
by Section 408 of the Companies Act 2006. The Company made a profit for the
year of £42,529,132, prior to a dividend distribution of £2,028,206 (2023:
profit of £23,843,539 prior to a dividend distribution of £1,001,435).
Employee services settled in equity instruments
The Group has entered into a joint share ownership plan ("JSOP") with certain
employees and directors.
On 12th June 2021 (the "vesting date") the performance criteria was met for
1,206,888 of 1,461,302 shares held under joint share ownership arrangements
within the Employee Benefit Trust, after which the members of the scheme
became joint beneficial owners of the shares and became entitled to any gain
on sale of the shares in excess of 312.6 pence per share.
On 26th October 2023 following the removal of a dividend waiver and block on
voting rights on the 1,206,888 allocated ordinary shares held by the Employee
Benefit Trust, these ordinary shares became eligible for dividend and voting
rights and therefore became fully dilutive for the Group.
236,259 ordinary shares held within the Employee Benefit Trust are unallocated
and do not have voting or dividend rights. The Employee Benefit Trust remains
the owner of these unallocated shares, however if these shares are sold from
the Employee Benefit Trust in the future they would then, post-sale, have
voting and dividend rights attached, such that they would become fully
dilutive for the Group.
Provided that the shares are eventually sold from the Employee Benefit Trust
for at least 284.5 pence per share on average, the Group would be entitled to
receive £4,106,259 in total.
The Group has established an HMRC approved Share Incentive Plan ("SIP").
Ordinary shares in the Company, previously repurchased and held in Treasury by
the Company, have been transferred to The B.P. Marsh SIP Trust ("the SIP
Trust"), an employee share trust, in order to be issued to eligible employees.
Under the rules of the SIP, eligible employees can each be granted up to
£3,600 worth of ordinary shares ("Free Shares") by the SIP Trust in each tax
year. The number of shares granted is dependent on the share price at the date
of grant. In addition, all eligible employees have been invited to take up the
opportunity to acquire up to £1,800 worth of ordinary shares ("Partnership
Shares") in each tax year and for every Partnership Share that an employee
acquires, the SIP Trust will offer two ordinary shares in the Company
("Matching Shares") up to a total of £3,600 worth of shares. The Free and
Matching Shares are subject to a one year forfeiture period, however the
awards are not subject to any vesting conditions, hence the related expenses
are recognised when the awards are made and are apportioned over the
forfeiture period.
The fair value of the services received is measured by reference to the listed
share price of the Parent Company's shares listed on the AIM on the date of
award of the free and matching shares to the employee.
The Group has also established a Share Option Plan ("SOP") for certain
employees and directors. Share Options ("Options") over 1,682,500 ordinary
shares of 10p each in the Company, in aggregate, have been granted. 3,470
Options of the total 1,685,970 available for allocation are unallocated.
Each of the Options will vest, on a ratchet basis, subject to certain Net
Asset Value growth targets being achieved for the three consecutive financial
years ending 31st January 2024, 31st January 2025 and 31st January 2026 (the
"Performance Period"). The first exercise date is 6th September 2026 whereby
50% of vested Options will be exercisable at 10p per share, with the remaining
50% exercisable at 10p per share from 6th September 2027.
The number of Options which vest will vary depending on the level of Net Asset
Value growth achieved, subject to the growth performance criteria as set out
below, alongside the percentage of Options that will vest at each value:
Compounded annual growth of Net Asset Value over the Performance Period % vesting of Options
Less than 8.5% 0%
Between 8.5% and less than 9.25% 25%
Between 9.25% and less than 10% 50%
10% or above 100%
For these purposes, Net Asset Value is defined as "audited Total Assets less
Total Liabilities for the consolidated Group plus any dividends or other form
of shareholder return that are paid in the relevant Financial Year".
Therefore, for all Options to vest, the Net Asset Value (as defined above)
would need to exceed £252.2m, adjusted for any shareholder distributions.
Investments - equity portfolio
All equity portfolio investments are designated as "fair value through profit
or loss" assets and are initially recognised at the fair value of the
consideration. They are measured at subsequent reporting dates at fair value.
The Board conducts the valuations of equity portfolio investments. In valuing
equity portfolio investments, the Board applies guidelines issued by the
International Private Equity and Venture Capital Valuation Committee ("IPEVCV
Guidelines"). The following valuation methodologies have been used in reaching
the fair value of equity portfolio investments, some of which are in early
stage companies:
a) at cost, unless there has been a significant round of new equity
finance in which case the investment is valued at the price paid by an
independent third party. Where subsequent events or changes to circumstances
indicate that an impairment may have occurred, the carrying value is reduced
to reflect the estimated extent of impairment;
b) by reference to underlying funds under management;
c) by applying appropriate multiples to the earnings and revenues and/or
premiums of the investee company; or
d) by reference to expected future cash flow from the investment where a
realisation or flotation is imminent.
Both realised and unrealised gains and losses arising from changes in fair
value are taken to the Consolidated Statement of Comprehensive Income for the
year. In the Consolidated Statement of Financial Position the unrealised gains
and losses arising from changes in fair value are shown within a "fair value
reserve" separate from retained earnings. Transaction costs on acquisition or
disposal of equity portfolio investments are expensed in the Consolidated
Statement of Comprehensive Income.
Equity portfolio investments are treated as 'Non-current Assets' within the
Consolidated Statement of Financial Position unless the directors have
committed to a plan to sell the investment and an active programme to locate a
buyer and complete the plan has been initiated. Where such a commitment
exists, and if the carrying amount of the equity portfolio investment will be
recovered principally through a sale transaction rather than through
continuing use, the investment is classified as an 'Investments - Assets held
for sale' under 'Current Assets' within the Consolidated Statement of
Financial Position.
Income from equity portfolio investments
Income from equity portfolio investments comprises:
a) gross interest from loans, which is taken to the Consolidated
Statement of Comprehensive Income on an accruals basis;
b) dividends from equity investments are recognised in the Consolidated
Statement of Comprehensive Income when the shareholders rights to receive
payment have been established; and
c) advisory fees from management services provided to investee
companies, which are recognised on an accruals basis in accordance with the
substance of the relevant investment advisory agreement.
Investments - treasury portfolio
All treasury portfolio investments are designated as "fair value through
profit or loss" assets and are initially recognised at the fair value of the
consideration. They are measured at subsequent reporting dates at fair market
value as determined from the valuation reports provided by the fund investment
manager.
Both realised and unrealised gains and losses arising from changes in fair
market value are taken to the Consolidated Statement of Comprehensive Income
for the period. In the Consolidated Statement of Financial Position the
unrealised gains and losses arising from changes in fair value are shown
within the retained earnings as these investments are deemed as being easily
convertible into cash. Costs associated with the management of these
investments are expensed in the Consolidated Statement of Comprehensive
Income.
Income from treasury portfolio investments
Income from treasury portfolio investments comprises of dividends receivable
which are either directly reinvested into the funds or received as cash.
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation.
Depreciation is provided at rates calculated to write off the property, plant
and equipment cost less their estimated residual value, over their expected
useful lives on the following bases:
Furniture & equipment - 5 years
Leasehold fixtures and fittings and other costs - over the life
of the lease
Right-of-use asset
IFRS 16 requires lessees to recognise a lease liability, representing the
present value of the obligation to make lease payments, and a related right of
use ("ROU") asset. The lease liability is calculated based on expected future
lease payments, discounted using the relevant incremental borrowing rate. An
incremental borrowing rate of 5% was used to discount the future lease
payments when measuring the lease liability on adoption of IFRS 16.
The ROU asset is recognised at cost less accumulated depreciation and
impairment losses, with depreciation charged on a straight-line basis over the
life of the lease. In determining the value of the ROU asset and lease
liabilities, the Group considers whether any leases contain lease extensions
or termination options that the Group is reasonably certain to exercise.
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies at the
reporting period end are translated at the exchange rate ruling at the
reporting period end.
Transactions in foreign currencies are translated into sterling at the foreign
exchange rate ruling at the date of the transaction.
Exchange gains and losses are recognised in the Consolidated Statement of
Comprehensive Income.
Income taxes
The tax credit or expense represents the sum of the tax currently recoverable
or payable and any deferred tax. The tax currently recoverable or payable is
based on the estimated taxable profit for the year. Taxable profit differs
from net profit as reported in the Consolidated Statement of Comprehensive
Income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's receivable or liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the date of the Consolidated Statement of Financial Position.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and of liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and it is accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary differences arise from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each date of the
Consolidated Statement of Financial Position and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to the Consolidated Statement of Comprehensive Income,
except when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current assets and liabilities
on a net basis.
Pension costs
The Group operates a defined contribution scheme for some of its employees.
The contributions payable to the scheme during the period are charged to the
Consolidated Statement of Comprehensive Income.
Financial assets and liabilities
Financial instruments are recognised in the Consolidated Statement of
Financial Position when the Group becomes party to the contractual provisions
of the instrument. De-recognition occurs when rights to cash flows from a
financial asset expire, or when a liability is extinguished.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the reporting period which are classified as non-current assets. They are
stated at their cost less impairment losses.
Loans and borrowings
All loans and borrowings are initially recognised at the fair value of the
consideration received net of issue costs associated with the borrowings.
After initial recognition, these are subsequently measured at
amortised cost using the effective interest method, which is the rate that
exactly discounts the estimated future cash flows through the expected life of
the liabilities. Amortised cost is calculated by taking into account any issue
costs and any discount or premium on settlement.
Trade and other receivables
Trade and other receivables in the Consolidated Statement of Financial
Position are initially measured at original invoice amount and subsequently
measured after deducting any provision for impairment.
Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position
comprise cash at bank and in hand and short-term deposits with an original
maturity of three months or less. For the purposes of the Consolidated
Statement of Cash Flows, cash and cash equivalents comprise cash and
short-term deposits as defined above and other short-term highly liquid
investments that are readily convertible into cash and are subject to
insignificant risk of changes in value, net of bank overdrafts.
Trade and other payables
Trade and other payables are stated based on the amounts which are considered
to be payable in respect of goods or services received up to the date of the
Consolidated Statement of Financial Position.
2. SEGMENTAL REPORTING
The Group operates in one business segment, provision of consultancy services
to, as well as making and trading investments in, financial services
businesses.
Under IFRS 8: Operating Segments ("IFRS 8") the Group identifies its
reportable operating segments based on the geographical location in which each
of its investments is incorporated and primarily operates. For management
purposes, the Group is organised and reports its performance by two geographic
segments: UK and Non-UK.
If material to the Group overall (where the segment revenues, reported profit
or loss or combined assets exceed the quantitative thresholds prescribed by
IFRS 8), the segment information is reported separately.
The Group allocates revenues, expenses, assets and liabilities to the
operating segment where directly attributable to that segment. All indirect
items are apportioned based on the percentage proportion of revenue that the
operating segment contributes to the total Group revenue (excluding any
realised and unrealised gains and losses on the Group's current and
non-current investments).
Each reportable segment derives its revenues from three main sources from
equity portfolio investments as described in further detail in Note 1 under
'Income from equity portfolio investments' and also from treasury portfolio
investments as described in Note 1 under 'Income from treasury portfolio
investments'.
All reportable segments derive their revenues entirely from external clients
and there are no inter-segment sales.
Geographic segment 1: Geographic segment 2: Group
UK Non-UK
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Operating income 45,345 8,217 5,821 24,162 51,166 32,379
Operating expenses (4,356) (2,759) (3,525) (2,130) (7,881) (4,889)
Segment operating profit 40,989 5,458 2,296 22,032 43,285 27,490
Financial income 399 73 322 57 721 130
Financial expenses (31) (50) (24) (38) (55) (88)
Exchange movements (39) 30 (294) 28 (333) 58
Profit before tax 41,318 5,511 2,300 22,079 43,618 27,590
Income taxes - - (1,089) (3,747) (1,089) (3,747)
Profit for the year £41,318 £5,511 £1,211 £18,332 £42,529 £23,843
Included within the operating income reported above are the following amounts
requiring separate disclosure owing to the fact that they are derived from a
single investee company and the total revenues attributable to that investee
company are 10% or more of the total realised and unrealised income generated
by the Group during the period:
Total net operating income attributable to the investee company
£'000
% of total realised and unrealised operating income Reportable geographic segment
Investee Company
2024 2023 2024 2023 2024 2023
Paladin Holdings Limited 32,382 10,304 63 32 1 1
Pantheon Specialty Group Limited(1) 14,955 - 29 - 1 -
XPT Group LLC(1) - 13,594 - 42 - 2
Lilley Plummer Holdings Limited 6,888 5,186 13 16 1 1
ATC Insurance Solutions PTY Limited(1) - 4,726 - 15 - 2
Stewart Specialty Risk Underwriting Limited(1) - 3,211 - 10 - 2
(1)There are no disclosures for XPT Group LLC, ATC Insurance Solutions PTY
Limited and Stewart Specialty Risk Underwriting Limited in the current year as
the income derived from these investee companies did not exceed the 10%
threshold prescribed by IFRS 8. There is also no disclosure shown for Pantheon
Specialty Group Limited ("Pantheon") in the prior year as the Group did not
hold an investment in Pantheon in that year.
Geographic segment 1: Geographic segment 2: Group
UK Non-UK
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Property, plant and equipment 34 45 31 34 65 79
Right-of-use asset 268 386 239 285 507 671
Investments - equity portfolio 37,783 98,704 78,050 72,757 115,833 171,461
Loans and receivables 10,775 5,712 5,422 2,408 16,197 8,120
48,860 104,847 83,742 75,484 132,602 180,331
Current assets
Investments - assets held for sale 49,549 - - - 49,549 -
Investments - treasury portfolio 78 591 - - 78 591
Trade and other receivables 14,840 4,777 793 506 15,633 5,283
Cash and cash equivalents 40,435 11,564 - - 40,435 11,564
104,902 16,932 793 506 105,695 17,438
Total assets 153,762 121,779 84,535 75,990 238,297 197,769
Non-current liabilities
Lease liabilities (220) (343) (196) (253) (416) (596)
Deferred tax liabilities - - (6,687) (5,631) (6,687) (5,631)
(220) (343) (6,883) (5,884) (7,103) (6,227)
Current liabilities
Trade and other payables (1,838) (1,733) (5) (97) (1,843) (1,830)
Lease liabilities (95) (101) (85) (74) (180) (175)
(1,933) (1,834) (90) (171) (2,023) (2,005)
Total liabilities (2,153) (2,177) (6,973) (6,055) (9,126) (8,232)
Net assets £151,609 £119,602 £77,562 £69,935 £229,171 £189,537
Additions to property, plant and equipment 7 6 6 5 13 11
Depreciation and amortisation of property, plant and equipment (101) (111) (90) (82) (191) (193)
Release of provision against investments and loans 24 30 - - 24 30
Cash flow arising from:
Operating activities 37,534 (1,812) (6,572) 6,493 30,962 4,681
Investing activities 1,117 (515) - - 1,117 (515)
Financing activities (3,208) (1,230) - - (3,208) (1,230)
Change in cash and cash equivalents
35,443 (3,557) (6,572) 6,493 28,871 2,936
As outlined previously, under IFRS 8 the Group reports its operating segments
(UK and Non-UK) and associated income, expenses, assets and liabilities based
upon the country of domicile of each of its investee companies.
In addition to the segmental analysis disclosure reported above, the Group has
undertaken a further assessment of each of its investee companies' underlying
revenues, specifically focusing on the geographical origin of this revenue.
Geographical analysis of each investee company's 2024 and 2023 revenue budgets
was carried out and, based upon this analysis, the directors have determined
that on a look-through basis, the Group's portfolio of investee companies can
also be analysed as follows:
2024 2023
% %
UK 29 37
Non-UK 71 63
Total 100 100
3. FINANCIAL EXPENSES 2024 2023
£'000 £'000
Interest costs on lease liability (Note 21) 39 47
Investment management costs (Note 13) 16 41
£ 55 £ 88
4. FINANCIAL INCOME 2024 2023
£'000 £'000
Bank and similar interest 87 2
Income from treasury portfolio investments - interest, dividend and similar
income (Note 13)
467 165
Income from treasury portfolio investments - net unrealised gains / (losses)
on revaluation (Note 13)
167 (37)
£ 721 £ 130
5. STAFF COSTS
The average number of employees, including all directors (executive and
non-executive), employed by the Group during the year was 16 (2023: 16); 6 of
those are in a management role (2023: 6) and 10 of those are in a support role
(2023: 10). All remuneration was paid by B.P. Marsh & Company Limited.
The related staff costs were: 2024 2023
£'000 £'000
Wages and salaries 5,145 3,051
Social security costs 746 453
Pension costs 192 162
Other employment costs (Note 24) 167 85
£6,250 £3,751
During the year to 31st January 2017 the Group established a Share Incentive
Plan ("SIP") under which certain eligible directors and employees were granted
Ordinary shares in the Company. These shares are being held on behalf of these
directors and employees within the B.P. Marsh SIP Trust.
During the year to 31st January 2019, Joint Share Ownership Agreements were
also entered into between certain directors and employees and the Company.
During the current year the Group established a Share Option Plan ("SOP")
under which certain directors and employees were granted options over Ordinary
shares in the Company.
Share-based charges of £77,492 (2023: £84,714) relating to the SIP and
£89,437 (2023: N/A) relating to the SOP are included within 'Other employment
costs' above. No charges relating to the Joint Share Ownership Agreements are
included within 'Other employment costs' above as the scheme vested during the
year to 31st January 2022.
6. DIRECTORS' EMOLUMENTS
2024 2023
The aggregate emoluments of the directors were: £'000 £'000
Management services - remuneration 2,933 1,601
Fees 30 25
Pension contributions - remuneration 67 71
£ 3,030 £ 1,697
502,395 of the 1,461,302 shares, in respect of which joint interests were
granted during the year to 31st January 2019, were issued to current
directors.
Of the total 32,780 (2023: 31,801) Free, Matching and Partnership Shares
granted under the SIP during the year, 8,940 (2023: 8,673) were granted to
directors of the Company.
Of the £77,492 (2023: £84,714) charge relating to the SIP and £89,437
(2023: N/A) charge relating to the SOP, as set out in Note 5, £21,134 (2023:
£23,104) and £36,147 (2023: N/A) related to the directors respectively.
2024 2023
£'000 £'000
Highest paid director
Emoluments 1,451 458
Pension contribution 7 27
£ 1,458 £ 485
The Company contributes into defined contribution pension schemes on behalf of
certain employees and directors. Contributions payable are charged to the
Consolidated Statement of Comprehensive Income in the period to which they
relate.
During the year, 3 directors (2023: 3) accrued benefits under these defined
contribution pension schemes.
The key management personnel comprise only the directors.
7. DIVIDENDS 2024 2023
£'000 £'000
Ordinary dividends
Dividend paid:
5.56 pence each on 36,478,524* Ordinary shares (2023: 2.78 pence each on 2,028 1,001
36,022,853 Ordinary shares)
£ 2,028 £ 1,001
*Due to the Company making three separate dividend payments during the current
year (2023: one dividend payment made), the calculation of the number of
ordinary shares on which the dividend was paid is an average based upon the
total aggregate dividend distribution made divided by the total pence per
ordinary share distributed during the year.
In the current year total dividends of £13,304 (2023: £5,969) were payable
on the 247,476 (2023: 214,696) ordinary shares held by the B.P. Marsh SIP
Trust ("SIP Trust").
On 26th October 2023, following the removal of a dividend waiver and block on
voting rights on the 1,206,888 allocated ordinary shares held by the B.P.
Marsh Employees' Share Trust ("the Employee Benefit Trust") under the Joint
Share Ownership Plan ("JSOP"), these ordinary shares became eligible for full
dividend and voting rights. In the current year a total dividend of £33,551
was payable on the 1,206,888 allocated ordinary shares, of which £4,714 was
paid to participants of the JSOP based upon the employees' proportionate
ownership rights attached to the shares which is determined by the Company's
share price on the record date. No dividend was payable on the 236,259
unallocated ordinary shares held by the Employee Benefit Trust (2023: no
dividend was payable on both the 1,206,888 allocated and 236,259 unallocated
ordinary shares held by the Employee Benefit Trust).
In addition, no dividend is payable on unallocated ordinary shares held in
Treasury on the dividend record date.
8. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2024 2023
£'000 £'000
The profit for the year is arrived at after charging/(crediting):
Depreciation and amortisation of property, plant & equipment, and
right-of-use asset
191 193
Auditor's remuneration:
Audit fees for the Company 37 35
Other services:
-Audit of subsidiaries' accounts 18 17
-Taxation 14 15
-Other advisory 14 9
Exchange loss / (gain) 333 (58)
9. INCOME TAX EXPENSE 2024 2023
£'000 £'000
Current tax:
Current tax on profits for the year 33 14
Adjustments in respect of prior years - -
Total current tax 33 14
Deferred tax (Note 17):
Origination and reversal of temporary differences 1,056 3,733
Total deferred tax 1,056 3,733
Total income taxes charged in the Consolidated Statement of Comprehensive
Income
£ 1,089 £ 3,747
The tax assessed for the year is lower (2023: lower) than the standard rate of
corporation tax in the UK. The differences are explained below:
2024 2023
£'000 £'000
Profit before tax 43,618 27,590
Profit on ordinary activities at the standard rate of corporation tax in the 10,468 5,242
UK of 24.00% (2023: 19.00%)
Tax effects of:
Expenses not deductible for tax purposes 132 25
Withholding tax suffered at source on overseas income 33 14
Taxable/(non-taxable) capital gains on disposal of investments 31 (4)
Other effects:
Non-taxable income (dividends received) (841) (593)
Non-taxable income (unrealised gains on equity portfolio revaluation) (9,475) (1,442)
Management expenses unutilised 741 505
Total income taxes charged in the Consolidated Statement of Comprehensive
Income
£ 1,089 £ 3,747
The UK corporation tax increased from 19% to 25% effective 1st April 2023.
This change in tax rate has not had a material impact on the Group financial
statements for the year ended 31st January 2024 and is not expected to have a
material impact on future periods. Refer to Note 17 for details.
10. EARNINGS AND NET ASSET VALUE PER SHARE FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS AND NET ASSET VALUE PER SHARE
2024 2023
£'000 £'000
Earnings
Earnings for the purpose of basic and diluted earnings per share being total
comprehensive income attributable to equity shareholders
42,529 23,843
Earnings per share - basic 114.7p 66.2p
Earnings per share - diluted 114.0p 63.6p
Number of shares Number Number
Weighted average number of ordinary shares for the purposes of basic earnings
per share
37,081,306 36,017,964
Number of dilutive shares under option 236,259 1,443,147
Weighted average number of ordinary shares for the purposes of dilutive
earnings per share
37,317,565 37,461,111
2024 2023
£'000 £'000
Net Asset Value
Basic Net Asset Value
Net Asset Value attributable to equity shareholders 229,171 189,537
Adjustment to Net Asset Value(1) 3,391 -
Adjusted Net Asset Value for the purposes of basic Net Asset Value per share
being total Net Asset Value attributable to equity shareholders
232,562 189,537
Diluted Net Asset Value
Net Asset Value attributable to equity shareholders 229,171 189,537
Adjustment to Net Asset Value(2) 4,106 4,106
Adjusted Net Asset Value for the purposes of diluted Net Asset Value per share
being total Net Asset Value attributable to equity shareholders
233,277 193,643
Net Asset Value per share - basic 629.0p 526.2p
Net Asset Value per share - diluted 626.9p 516.9p
Number of shares Number Number
Number of ordinary shares for the purposes of basic Net Asset Value per share
36,974,191 36,018,003
Number of dilutive shares under option 236,259 1,443,147
Number of ordinary shares for the purposes of dilutive Net Asset Value per
share
37,210,450 37,461,150
(1)Adjustment to Net Asset Value represents the cash receivable by the Group
when the 1,206,888 allocated ordinary shares that are held under joint
ownership arrangements within the Employee Benefit Trust, and which were
considered fully dilutive as at 31st January 2024, are sold.
(2)Adjustment to Net Asset Value represents the cash receivable by the Group
when the total 1,443,147 allocated and unallocated ordinary shares that are
held under joint ownership arrangements within the Employee Benefit Trust, are
sold.
During the year the Company paid a total of £1,052,751, including commission,
in order to repurchase 283,480 ordinary shares at an average price of 370
pence per share (2023: the Company paid a total of £16,191, including
commission, in order to repurchase 4,850 ordinary shares at an average price
of 330 pence per share).
On 9th December 2023 178,000 ordinary shares in the Company were cancelled.
These shares were previously held in Treasury. Following the cancellation, the
total number of ordinary shares in issue reduced from 37,466,000 as at 31st
January 2023 to 37,288,000 as at 31st January 2024.
Ordinary shares held by the Company in Treasury
Movement of ordinary shares held in Treasury:
2024 2023
Number Number
Opening total ordinary shares held in Treasury at 1st February 4,850 9,542
Ordinary shares repurchased into Treasury during the year 283,480 4,850
Ordinary shares transferred to the B.P. Marsh SIP Trust during the year (32,780) (9,542)
Ordinary shares cancelled from Treasury during the year (178,000) -
Total ordinary shares held in Treasury at 31st January 77,550 4,850
The Treasury shares do not have voting or dividend rights and have therefore
been excluded for the purposes of calculating Earnings per share and Net Asset
Value per share.
The repurchase of the ordinary shares is borne from the Group's commitment to
reduce share price discount to Net Asset Value. As outlined in the Group's
Share Buy-Back Policy announcement on 16th January 2023, its policy has been
throughout the year, subject to ordinary shares in the Company being available
to purchase, to be able to buy small parcels of shares (for up to a maximum
aggregate consideration of £1,000,000) at a price representing a discount of
at least 20% to the most recently announced Net Asset Value per share and
place them into Treasury. Prior to 16th January 2023, and in accordance with
its Share Buy-Back Policy announcement on 17th July 2019, the Group's policy
was to buy back shares when the share price was below 15% of its published Net
Asset Value.
On 14th November 2023 the Group announced a new Share Buy-Back Programme
allowing it to repurchase ordinary shares in the Company for up to a maximum
aggregate consideration of £500,000 and subject to ordinary shares being
available to purchase at a price representing a discount of at least 20% to
the most recently announced Net Asset Value per share.
There were 254,414 shares which remained unallocated within the Employee
Benefit Trust as at 31st January 2022. During the year to 31st January 2023,
18,155 of the 254,414 unallocated shares were transferred to the B.P. Marsh
SIP Trust ("SIP Trust") to be used as part of the 22-23 SIP awards made in
April 2022. Following this transfer and as at 31st January 2024 there were
1,443,147 shares held within the Employee Benefit Trust, of which 236,259
shares were unallocated. The Employee Benefit Trust remains the owner of these
unallocated shares.
On 26th October 2023, following the removal of a dividend waiver and block on
voting rights on the 1,206,888 allocated ordinary shares held by the Employee
Benefit Trust under the Joint Share Ownership Plan ("JSOP"), these ordinary
shares became eligible for full dividend and voting rights.
The weighted average number of shares used for the purposes of calculating the
basic earnings per share, net asset value and net asset value per share of the
Group includes the 1,206,888 allocated ordinary shares held within the
Employee Benefit Trust as these were considered fully dilutive as at 31st
January 2024 due to the dividend and voting rights attached to them. The Group
net asset value also includes an adjustment representing the economic right
the Group has to the first 281 pence per share (£3,391,355) on the 1,206,888
allocated ordinary shares held within the Employee Benefit Trust as when the
joint share ownership arrangements are eventually exercised, this would also
increase the Group's net asset value by £3,391,355.
236,259 unallocated shares currently held within the Employee Benefit Trust
have been excluded for the purposes of calculating the basic earnings per
share, net asset value and net asset value per share as these shares do not
have voting rights or dividend rights whilst they are held within this
Employee Benefit Trust. The Group net asset value has also excluded the
economic right the Group has to the first 281 pence per share on the 236,259
unallocated shares issued to the Employee Benefit Trust for the same reasons.
On this basis the current undiluted net asset value per share is 629.0 pence
for the Group. When the joint share ownership arrangements are eventually
exercised in full, although this would increase the number of shares in issue
entitled to voting and dividend rights, this would also increase the Group's
net asset value by a further £714,904 (total of £4,106,259 based upon the
total 1,461,302 shares originally issued to the Employee Benefit Trust at 281
pence per share). The diluted net asset value per share is therefore 626.9
pence.
The diluted weighted average number of ordinary shares at 31st January 2024
has been calculated by proportioning the 236,259 vested, but unallocated,
shares held under joint share ownership arrangements from the vesting date
over the period.
The diluted earnings per share and net asset value per share exclude the
1,682,500 options over ordinary shares granted as part of the Company's Share
Option Plan ("SOP") as these were not dilutive for the Group as at 31st
January 2024 based upon the performance conditions attached to the options
(Note 24).
The decrease to the weighted average number of ordinary shares between 2023
and 2024 is mainly attributable to the 283,480 ordinary shares repurchased
into Treasury during the year, offset by the 32,780 ordinary shares
transferred from Treasury to the SIP Trust during the year which have been
treated as re-issued for the purposes of calculating earnings per share.
32,780 ordinary shares (comprising 32,780 ordinary shares transferred from
Treasury to the SIP Trust in April 2023) were allocated to the participating
employees as Free, Matching and Partnership shares under the share incentive
plan arrangement on 14th April 2023 (Note 24).
11. PROPERTY, PLANT AND EQUIPMENT
Leasehold Fixtures and Fittings and Others
£'000
Furniture and Equipment
£'000 Total
£'000
Group
Cost
At 1st February 2022 142 152 294
Additions 11 - 11
Disposals (5) - (5)
At 31st January 2023 148 152 300
At 1st February 2023 148 152 300
Additions 13 - 13
Disposals - - -
At 31st January 2024 161 152 313
Depreciation
At 1st February 2022 119 79 198
Eliminated on disposal (5) - (5)
Charge for the year 14 14 28
At 31st January 2023 128 93 221
At 1st February 2023 128 93 221
Eliminated on disposal - - -
Charge for the year 12 15 27
At 31st January 2024 140 108 248
Net book value
At 31st January 2024 £ 21 £ 44 £ 65
At 31st January 2023 £ 20 £ 59 £ 79
At 31st January 2022 £ 23 £ 73 £ 96
12. INVESTMENTS - EQUITY PORTFOLIO
Group Shares in investee companies
Continuing investments Current Assets - Investments held for sale Total
£'000 £'000 £'000
At valuation
At 1st February 2022 141,245 8,104 149,349
Additions 2,941 - 2,941
Disposals - (8,104) (8,104)
Provisions - - -
Unrealised gains in this period 27,275 - 27,275
At 31st January 2023 £ 171,461 £ - £ 171,461
At 1st February 2023 171,461 - 171,461
Transfers between categories (18,380) 18,380 -
Additions 3,364 - 3,364
Disposals (53,154) - (53,154)
Provisions - - -
Unrealised gains in this period 12,542 31,169 43,711
At 31st January 2024 £ 115,833 £ 49,549 £ 165,382
At cost
At 1st February 2022 56,380 6,096 62,476
Additions 2,941 - 2,941
Disposals - (6,096) (6,096)
Provisions - - -
At 31st January 2023 £ 59,321 £ - £ 59,321
At 1st February 2023 59,321 - 59,321
Transfers between categories (4) 4 -
Additions 3,364 - 3,364
Disposals (16,758) - (16,758)
Provisions - - -
At 31st January 2024 £ 45,923 £ 4 £ 45,927
The additions relate to the following transactions in the year:
On 28th April 2023 the Group acquired a 35% cumulative preferred ordinary
equity stake in Verve Risk Services Limited ("Verve") for consideration of
£430,791. Verve is a London-based Managing General Agency which specialises
in Professional and Management Liability business for the insurance industry
in the USA, Canada Bermuda, Cayman Islands and Barbados. The Group also
provided Verve with a loan facility of £569,209 which was drawn down in full
on completion. The aggregate funding of £1,000,000 was utilised as part of a
management buy-out of Verve Risk Partners LLP, an underwriting cell within
Castel Underwriting Agencies Limited.
On 21st June 2023 the Group acquired a 25% cumulative preferred ordinary
equity stake in Pantheon Specialty Limited ("Pantheon") for consideration of
£25. Pantheon is a new holding company, established in Partnership with
Robert Dowman, a leading London Market Casualty broker specialising in the
larger, more complex liability placements across the world. On 9th September
2023 Pantheon formally changed its company name to Pantheon Specialty Group
Limited.
On 30th October 2023 the Group acquired, through its wholly-owned subsidiary
company B.P. Marsh (North America) Limited, a further 2.63% equity stake in
XPT Group LLC ("XPT") for USD 3,500,000 (£2,903,459). As at 31st January 2023
the Group's equity investment was 28.54% and at the time of investment the
Group's equity investment in XPT had reduced due to dilution to 27.30%. On
completion the Group's equity investment increased to 29.93%. As at 31st
January 2024 the Group's shareholding in XPT was 29.71% (29.10% on a fully
diluted basis).
On 21st December 2023 the Group acquired a 30% cumulative preferred ordinary
equity stake in Ai Marine Risk Limited ("Ai Marine") for consideration of
£30,000. The Group's investment was made directly into Ai Marine's holding
company, Dempsey Group Limited, which owns 100% of Ai Marine. Ai Marine is a
London-based Managing General Agency specialising in Marine Hull insurance
with a strong focus on the UK & Europe, Middle-East and Asia-Pacific
regions. The Group also provided Ai Marine with a loan facility of
£1,570,000, of which £500,000 was drawn down on completion. As at 31st
January 2024 total loans outstanding amounted to £500,000, with a remaining
undrawn facility of £1,070,000 (Note 22).
The disposals relate to the following transactions in the year:
On 19th June 2023 the Group received £700,000 following the redemption of
700,000 redeemable preferred shares it held in Lilley Plummer Holdings Limited
("Lilley Plummer"), as part of a capital restructure. As at 31st January 2024
the Group's equity holding in Lilley Plummer was 30%, which remained unchanged
following this redemption.
On 21st June 2023, and upon the establishment of Pantheon noted under the
additions above, Pantheon acquired a 100% shareholding in the existing Lloyd's
Broker, Denison and Partners Limited ("Denison and Partners"), including the
Group's entire 40% equity holding. No cash consideration was received by the
Group for the disposal, which represented a net loss of £132,000 (Note 14)
based upon the Group's carrying value of the investment of £132,000 as at
31st January 2023. However, as part of the transaction, the Group received a
40% equity holding in New Denison Limited ("New Denison"). New Denison was
incorporated on 20th June 2023 and is currently a dormant company until such
time that it receives its own regulatory approvals. On 9th September 2023
Denison and Partners formally changed its company name to Pantheon Specialty
Limited.
On 11th August 2023 Paladin Holdings Limited ("Paladin") exercised a Call
Option arrangement with the Group over 5.88% of shares in Paladin which the
Group held. The Group received £804,000, which was in line with the carrying
value of the shares included within the fair value of the Group's investment
of Paladin as at 31st January 2023 and represented an overall gain of £4,000
above the original cost of the shares of £800,000. Pursuant to the share
transfer, Paladin cancelled the shares and as a consequence of the transaction
the Group's shareholding in Paladin reduced from 47.06% to 43.75%. The
transaction was funded through the Group lending Paladin a further £804,000.
As at 31st January 2024 total loans to Paladin amounted to £5,900,500 and the
Group's diluted equity holding in Paladin, adjusted for options expected to
vest, was 38.63%.
On 9th October 2023 the Group completed the disposal of its entire 18.7%
shareholding in Kentro Capital Limited ("Kentro"), pursuant to an agreement
dated 22nd May 2023 by which Brown & Brown, Inc ("Brown & Brown"), one
of the largest US-based insurance intermediaries, agreed to acquire the entire
issued share capital of Kentro. On completion, the Group received proceeds of
£51,522,000 (net of all transaction costs) which was in line with the
carrying value of the Group's investment in Kentro of £51,522,000 as at 31st
January 2023 and represented an overall gain of £36,395,446 above the cost of
investment. As part of the agreement, on completion the Group provided a loan
facility of £524,253 to Brown & Brown (Europe) Holdco Limited, alongside
other major selling shareholders, in respect of certain identified indemnities
under the Sale and Purchase Agreement. Whilst the loan capital could reduce
due to potential claims, at this time the Group expects full repayment.
The unquoted investee companies, which are registered in England except for
Asia Reinsurance Brokers Pte Limited (Singapore), Stewart Specialty Risk
Underwriting Ltd (Canada), XPT Group LLC (USA), ATC Insurance Solutions PTY
Limited (Australia), Criterion Underwriting Pte Limited (Singapore), Agri
Services Company PTY Limited (Australia) and Sage Program Underwriters, Inc.
(USA) are as follows:
% holding Date Aggregate Post tax
of share information capital and profit/(loss)
Name of company capital available to reserves for the year Principal activity
£ £
Agri Services Company PTY Limited 41.00 30.06.23 1,465,168 64,998 Holding company for specialist Australian agricultural Managing General Agency
Asia Reinsurance Brokers Pte Limited 25.00 31.05.23 2,088,147 90,564 Specialist reinsurance broker
ATC Insurance Solutions PTY Limited 25.56 30.06.23 12,991,892 3,470,843 Specialist Australian Managing General Agency
Criterion Underwriting Pte Limited(1) 29.40 31.05.20 (445,842) (32,019) Specialist Singaporean Managing General Agency
Dempsey Group Limited(2) 30.00 - - - Holding company for specialist Managing General Agency
The Fiducia MGA Company Limited 35.18 31.12.22 (165,860) 772,640 Specialist UK Marine Cargo Underwriting Agency
LEBC Holdings Limited 59.34 30.09.22 7,614,550 2,431,313 Independent financial advisor company
Lilley Plummer Holdings Limited 30.00 31.12.22 1,518,455 1,191,783 Specialist Marine broker
Neutral Bay Investments Limited 49.90 31.03.23 4,054,833 218,553 Investment holding company
New Denison Limited(3) 40.00 - - - Dormant company
Paladin Holdings Limited 43.75 31.12.22 1,216,736 1,463,890 Investment holding company
Pantheon Specialty Group Limited(4) 25.00 - - - Holding company for specialist insurance broker
Sage Program Underwriters Inc(5) 30.00 31.12.23 (12,151) 48,267 Specialist Managing General Agency
Stewart Specialty Risk Underwriting Limited 30.00 31.12.22 5,625,734 3,525,742 Specialist Canadian Casualty Underwriting Agency
Verve Risk Services Limited(6) 35.00 - - - Specialist Managing General Agency
XPT Group LLC 29.10 31.12.22 (15,816,546) (13,034,338) USA Specialty lines insurance distribution company
(1)Recent statutory financial information is not available for Criterion
Underwriting Pte Limited as the company is not currently trading.
(2)Dempsey Group Limited is a newly incorporated company. Statutory accounts
are not available as these are not yet due.
(3)New Denison Limited is a newly incorporated company that is not currently
trading. Statutory accounts are not available as these are not yet due.
(4)Pantheon Specialty Group Limited is a newly incorporated company. Statutory
accounts are not available as these are not yet due.
(5)Statutory accounts are not available for Sage Program Underwriters, Inc. as
these are not required to be filed in the jurisdiction in which the company
operates. The financial information included above is therefore based upon
management accounts information received for the relevant accounting period.
(6)Verve Risk Services Limited is a newly incorporated company. Statutory
accounts are not available as these are not yet due.
The Group's 35% equity investment in EC3 Brokers Group Limited has not been
listed above as the company went into administration in November 2022 and
remained in administration as at 31st January 2024. The Group does not expect
to recover any amounts in respect of this investment which has been provided
against in full.
The aggregate capital and reserves and profit/(loss) for the year shown above
are extracted from the relevant local GAAP accounts of the investee companies.
Shares in
Company group
undertakings
£'000
At valuation
At 1st February 2022 134,490
Additions -
Unrealised gains in this period 23,843
At 31st January 2023 £ 158,333
At 1st February 2023 158,333
Additions -
Unrealised gains in this period 32,527
At 31st January 2024 £ 190,860
At cost
At 1st February 2022 2,143
Additions -
At 31st January 2023 £ 2,143
At 1st February 2023 2,143
Additions -
At 31st January 2024 £ 2,143
Shares in group undertakings
All group undertakings are registered in England and Wales. The details and
results of group undertakings held throughout the year, which are extracted
from the UK-adopted international accounting standards accounts of B.P. Marsh
& Company Limited, Marsh Insurance Holdings Limited, B.P. Marsh Asset
Management Limited, B.P. Marsh (North America) Limited and the UK GAAP
accounts for the other companies, are as follows:
Aggregate Profit/(loss)
% capital and for the
Holding reserves at year to
of share 31st January 31st January
Name of company Capital 2024 2024 Principal activity
£ £
B.P. Marsh & 100 229,168,734 42,529,133 Consulting services and investment holding company
Company Limited
Marsh Insurance 100 6,099,974 - Investment
Holdings Limited holding company - dormant
B.P. Marsh Asset 100 1 - Dormant
Management Limited
B.P. Marsh (North America) 100 16,646,090 1,655,105 Investment holding company
Limited*
B.P. Marsh & Co. Trustee 100 1,000 - Dormant
Company Limited
Marsh Development 100 1 - Dormant
Capital Limited
XPT London Limited 100 2 - Dormant
*At the year end B.P. Marsh (North America) Limited held a 100% economic
interest in RHS Midco I LLC, a US registered entity incorporated during the
year to 31st January 2018 for the purpose of holding the Group's equity
investment in XPT Group LLC. In addition, at the year end B.P. Marsh (North
America) Limited also held a 100% economic interest in B.P. Marsh US LLC, a US
registered entity, which was incorporated during the year to 31st January
2018. There were no profit or loss transactions in either of these two US
registered entities during the current or prior year.
In addition, the Group also controls the B.P. Marsh SIP Trust and the B.P.
Marsh Employees' Share Trust (Note 24).
Loans to the subsidiaries of £38,382,626 (2023: £31,274,143) are treated as
capital contributions.
13. CURRENT INVESTMENTS - TREASURY PORTFOLIO
Group
At valuation 2024 2023
£'000 £'000
Market value at 1st February 11,337 -
Additions at cost 64,000 19,117
Disposals (48,430) (7,867)
Change in value in the year 618 87
Market value at 31st January £27,525 £11,337
Disclosed as:
Cash and cash equivalents 27,447 10,746
Investments - treasury portfolio 78 591
Total £27,525 £11,337
Investment fund split:
GAM London Limited 7,175 3,045
Rathbone Investment Management Limited
10,310 8,292
Rothschild & Co Wealth Management UK Limited
10,040 -
Total £27,525 £11,337
The treasury portfolio comprises of investment funds managed and valued by the
Group's investment managers, GAM London Limited, Rathbone Investment
Management Limited and Rothschild & Co Wealth Management UK Limited. All
investments in securities are included at year end market value.
The initial investment into the funds was made following the realisation of
the Group's investment in Summa Insurance Brokerage, S.L. during the prior
year. Further funds have been invested following the sale of Kentro Capital
Limited during the current year.
The purpose of the funds is to hold (and grow) the Group's surplus cash until
such time that suitable investment opportunities arise.
As at 31st January 2024, of the total £27,525,222 held within the funds (as
at 31st January 2023: £11,336,879), only £78,462 (31st January 2023:
£590,897) was risk bearing, with the remaining funds of £27,446,760 (31st
January 2023: £10,745,982) being non-risk interest bearing deposits.
The risk bearing fund values can increase, but also have the potential to fall
below the amount initially invested by the Group. However, the performance of
each fund is monitored on a regular basis and the appropriate action is taken
if there is a prolonged period of poor performance.
Investment management costs of £15,569 (2023: £40,737) were charged to the
Consolidated Statement of Comprehensive Income during the period.
14. REALISED (LOSSES) / GAINS ON DISPOSAL OF EQUITY INVESTMENTS
The realised (losses) / gains on disposal of investments for the year
comprises of a net loss of £(36,689) (2023: £155,121 net gains on disposal
of investments).
£132,000 of this net loss is in respect of the Group's disposal of its entire
40% equity investment in Denison and Partners Limited ("Denison and Partners")
for nil cash consideration, compared to the fair value of £132,000 at 1st
February 2023 (Note 12). On 9th September 2023 Denison and Partners formally
changed its company name to Pantheon Specialty Limited.
The above realised loss arising from the disposal of Denison and Partners has
been offset by the following realised gains:
A £4,000 realised gain relating to the Group's partial disposal of 250,000
ordinary shares (c.5.9% at the time of divestment) in Paladin Holdings Limited
("Paladin") which were held under a call option arrangement, for consideration
of £804,000, compared to the fair value of £800,000 at 1st February 2023.
A £91,311 realised gain relating to an additional capital distribution
recognised during the year from the Group's former investment in Summa
Insurance Brokerage, S.L. ("Summa") which was sold during the year to 31st
January 2022.
There were no releases of previously unrealised gains or losses to Retained
Earnings from the Fair Value Reserve as a result of the disposal of Denison
and Partners and partial disposal of Paladin as the investments had been held
at cost.
The amount included in realised gains on disposal of investments for the year
ended 31st January 2023 comprised of a net gain of £155,121.
£135,283 of this net gain related to an additional capital distribution
received during the year from the Group's former investment in MB Prestige
Holdings PTY Limited ("MB") which was sold during the year to 31st January
2022.
£19,838 of this net gain was in respect of the Group's disposal of its entire
77.25% investment in Summa Insurance Brokerage, S.L. ("Summa") for
consideration of £8,123,838, compared to the fair value of £8,104,000 at 1st
February 2022. The disposal of Summa resulted in a net release of previously
unrealised gains to Retained Earnings from the Fair Value Reserve of
£2,007,857 in that year.
Refer to Note 12 for further details relating to the above disposals.
15. LOANS AND RECEIVABLES - NON-CURRENT
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Loans to investee companies (Note 25) 16,197 8,120 - -
Amounts owed by group undertakings - - 2,948 4,106
£ 16,197 £ 8,120 £ 2,948 £ 4,106
The amounts owed to the Company by group undertakings are interest free and
repayable on demand.
See Note 16 for the provisions against loans to investee companies and Note 25
for terms of the loans.
16. TRADE AND OTHER RECEIVABLES - CURRENT
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade receivables 1,040 319 - -
Less provision for impairment of receivables
- - - -
1,040 319 - -
Loans to investee companies (Note 25) 12,706 3,409 - -
Other receivables 1 6 - -
Prepayments and accrued income 1,886 1,549 - -
Amounts owed by group undertakings - - 1,157 -
£ 15,633 £ 5,283 £ 1,157 £ -
No provisions were made against loans to investee companies in the current or
prior year. A provision of £24,000 previously made against a loan was
released during the current year due to repayments being received (2023: a
provision of £30,000 previously made against a loan was released during that
year due to repayments being received). The total provision as at 31st January
2024 was £107,718 (31st January 2023: £131,718) with a potential of
recovery.
Included within net trade receivables is a gross amount of £922,989 (2023:
£247,475) owed by the Group's participating interests. No provision for bad
debts has been made in either the current or prior year.
Trade receivables are provided for based on estimated irrecoverable amounts
from the fees and interest charged to investee companies, determined by the
Group's management based on prior experience and their assessment of the
current economic environment.
Movement in the allowance for doubtful debts:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Balance at 1st February - - - -
Decrease in allowance recognised in the Statement of Comprehensive Income
- - - -
Balance at 31st January £ - £ - £ - £ -
In determining the recoverability of a trade receivable, the Group considers
any change in the credit quality of the trade receivable from the date credit
was initially granted up to the reporting date.
The Group's net trade receivable balance includes debtors with a carrying
amount of £1,039,891 (2023: £318,999), of which £485,086 (2023: £146,543)
of debtors are past due at the reporting date for which the Group has not made
a provision as all amounts are considered recoverable by the directors. The
Group does not hold any collateral over these balances other than over
£244,160 (2023: £54,823) included within the net trade receivables balance
relating to loan interest due from investee companies which is secured on the
assets of the investee company.
Ageing of past due but not impaired:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Not past due 555 172 - -
Past due: 0 - 30 days 43 59 - -
Past due: 31 - 60 days 283 2 - -
Past due: more than 60 days 159 86 - -
£ 1,040 £ 319 £ - £ -
See Note 25 for terms of the loans and Note 23 for further credit risk
information.
17. DEFERRED TAX LIABILITIES - NON-CURRENT
Group Company
£'000 £'000
At 1st February 2022 1,898 -
Tax movement relating to investment revaluation for the year (Note 9) 3,733 -
At 31st January 2023 £ 5,631 £ -
At 1st February 2023 5,631 -
Tax movement relating to investment revaluation for the year (Note 9) 1,056 -
At 31st January 2024 £ 6,687 £ -
Finance (No.2) Act 2017 introduced significant changes to the Substantial
Shareholding Exemption ("SSE") rules in Taxation of Chargeable Gains Act 1992
Sch. 7AC which applied to share disposals on or after 1 April 2017. In general
terms, the rule changes relaxed the conditions for the Group to qualify for
SSE on a share disposal.
New tax legislation was introduced in the US in 2018 which taxes at source
gains on disposal of any foreign partnership interests in US limited liability
companies ("LLCs"). As such, deferred tax needs to be assessed on any
potential net gains from the Group's investment interests in US LLCs.
Having reviewed the Group's current investment portfolio, the directors
consider that the Group should benefit from this reform to the SSE rules on
all non-US LLC investments. As a result, the directors anticipate that on a
disposal of shares in the Group's current non-US LLC investments, so long as
the shares have been held for 12 months they should qualify for SSE and no tax
charge should arise on their disposal.
The requirement for a deferred tax provision is subject to continual
assessment of each investment to test whether the SSE conditions continue to
be met based upon information that is available to the Group and that there is
no change to the accounting treatment in this regard under UK-adopted
international accounting standards. It should also be noted that, until the
date of the actual disposal, it will not be possible to ascertain if all the
SSE conditions are likely to have been met and, moreover, obtaining agreement
of the tax position with HM Revenue & Customs may possibly not be
forthcoming until several years after the end of a period of accounts.
Having assessed the current US portfolio, the directors anticipate that there
is a requirement to provide for deferred tax in respect of the unrealised
gains on investments under the current requirements of UK-adopted
international accounting standards as the US LLC investments currently show a
net gain. As such, a provision of £6,687,000 has been made as at 31st January
2024 (2023: £5,631,000).
The deferred tax provision of £6,687,000 as at 31st January 2024 (2023:
£5,631,000) has been calculated based upon an assessment of the US tax
liability arising from the valuations of the Group's holdings within US LLCs
at 31st January 2024, using the US Federal rate of 21% together with US State
Tax rates prevailing in the states where the Group's US LLCs operate, which
range between 0% and 11.5%. Adjustments were then made based upon available
allowances and taxable losses. Given the complexity, the Group utilised the
services of a specialist US tax advisory firm.
The UK corporation tax increased from 19% to 25% effective 1st April 2023.
This change in tax rate has not had a material impact on the Group financial
statements for the year ended 31st January 2024 and is not expected to have a
material impact on future periods as the directors do not consider there is
any deferred tax due at the period end in respect of its non-US LLC
investments due to the SSE rules.
18. CURRENT LIABILITIES
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade and other payables
Trade payables 90 111 - -
Other taxation & social security costs 142 239 - -
Accruals and deferred income 1,561 1,336 - -
Amounts owed to participating interests 50 50 - -
Other payables - 94 - -
Lease liabilities (Note 21) 180 175 - -
£ 2,023 £ 2,005 £ - £ -
All of the above liabilities are measured at amortised cost.
19. CALLED UP SHARE CAPITAL
2024 2023
£'000 £'000
Allotted, called up and fully paid
37,288,000 Ordinary shares of 10p each (2023: 37,466,000) 3,729 3,747
£ 3,729 £ 3,747
During the year the Company paid a total of £1,052,751, including commission,
in order to repurchase 283,480 ordinary shares at an average price of 370
pence per share (2023: the Company paid a total of £16,191, including
commission, in order to repurchase 4,850 ordinary shares at an average price
of 330 pence per share).
Distributable reserves have been reduced by £1,052,751 (2023: £16,191) as a
result.
On 9th December 2023 178,000 ordinary shares in the Company were cancelled.
These shares were previously held in Treasury. Following the cancellation, the
total number of ordinary shares in issue reduced from 37,466,000 as at 31st
January 2023 to 37,288,000 as at 31st January 2024.
As at 31st January 2024 a total of 77,550 ordinary shares were held by the
Company in Treasury (31st January 2023: 4,850 ordinary shares were held by the
Company in Treasury).
The Treasury shares do not have voting or dividend rights and have therefore
been excluded for the purposes of calculating earnings per share and Net Asset
Value per share.
The repurchase of the ordinary shares is borne from the Group's commitment to
reduce share price discount to Net Asset Value. As outlined in the Group's
Share Buy-Back Policy announcement on 16th January 2023, its policy has been
throughout the year, subject to ordinary shares in the Company being available
to purchase, to be able to buy small parcels of shares (for up to a maximum
aggregate consideration of £1,000,000) at a price representing a discount of
at least 20% to the most recently announced Net Asset Value per share and
place them into Treasury. Prior to 16th January 2023, and in accordance with
its Share Buy-Back Policy announcement on 17th July 2019, the Group's policy
was to buy back shares when the share price was below 15% of its published Net
Asset Value.
On 14th November 2023 the Group announced a new Share Buy-Back Programme
allowing it to repurchase ordinary shares in the Company for up to a maximum
aggregate consideration of £500,000 and subject to ordinary shares being
available to purchase at a price representing a discount of at least 20% to
the most recently announced Net Asset Value per share.
20. STATEMENT OF CHANGES IN EQUITY
Group Share Reverse Capital Capital
Share premium Fair value acquisition redemption contribution Retained
capital account reserve reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
3,747 29,342 84,975 393 7 72 48,071 166,607
At 1st February 2022
Comprehensive income - - 23,542 - - - 301 23,843
for the year
Net transfers on disposal - - (2,008) - - - 2,008 -
of investments (Note 14)
Dividends paid
- - - - - - (1,001) (1,001)
(Note 7)
Repurchase of Company shares (Note 19) - - - - - - (16) (16)
Share based payment arrangements - 8 - - - - 96 104
£3,747 £29,350 £106,509 £393 £7 £72 £49,459 £189,537
At 31st January 2023
3,747 29,350 106,509 393 7 72 49,459 189,537
At 1st February 2023
Comprehensive income - - 42,654 - - - (125) 42,529
for the year
Net transfers on disposal - - (36,395) - - - 36,395 -
of investments (Note 12)
Dividends paid
- - - - - - (2,028) (2,028)
(Note 7)
Repurchase of Company shares (Note 19) - - - - - - (1,053) (1,053)
Cancellation of Company shares (Note 19) (18) - - - 18 - - -
Share based payment arrangements - (5) - - - - 191 186
£3,729 £29,345 £112,768 £393 £25 £72 £82,839 £229,171
At 31st January 2024
Company Share Capital Capital
Share premium Fair value redemption contribution Retained
capital account reserve reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
3,747 29,342 132,347 7 - 5,348 170,791
At 1st February 2022
- - 23,843 - 23,843
- -
Comprehensive income for the year
Dividends paid
- - - - - (1,001) (1,001)
(Note 7)
Repurchase of Company shares (Note 19) - - - - - (16) (16)
Share based payment arrangements - 8 - - - 96 104
£3,747 £29,350 £156,190 £7 £ - £4,427 £193,721
At 31st January 2023
3,747 29,350 156,190 7 - 4,427 193,721
At 1st February 2023
- - 32,527 10,002 42,529
- -
Comprehensive income for the year
Dividends paid
- - - - - (2,028) (2,028)
(Note 7)
Repurchase of Company shares (Note 19) - - - - - (1,053) (1,053)
Cancellation of Company shares (Note 19) (18) - - 18 - - -
Share based payment arrangements - (5) - - - 191 186
£3,729 £29,345 £188,717 £25 £ - £11,539 £233,355
At 31st January 2024
21. LEASES
Group
The Group has applied IFRS 16: Leases ("IFRS 16") using the retrospective
approach. The Group has one lease, that of its main office premises.
Information about this lease, for which the Group is a lessee, is presented
below.
Right-of-use asset
Land and Buildings
£'000
At 1st February 2022 836
Depreciation charge (165)
At 31st January 2023 £ 671
At 1st February 2023 671
Depreciation charge (164)
At 31st January 2024 £ 507
Lease liabilities
The Group was committed to making the following future aggregate minimum
payments under its leases:
2024 2023
Land and Land and
Buildings Buildings
£'000 £'000
Maturity analysis - contractual undiscounted cash flows:
Earlier than one year 214 214
Between two and five years 444 658
More than five years - -
£ 658 £ 872
Lease liabilities included in Consolidated Statement of Financial Position
at 31st January: £ 596 £ 771
Maturity analysis:
Current liabilities (Note 18) 180 175
Non-current liabilities 416 596
£ 596 £ 771
Amounts recognised in profit or loss: 2024 2023
£'000 £'000
Interest on lease liabilities (Note 3) £ 39 £ 47
Amounts recognised in the Consolidated Statement of Cash Flows: 2024 2023
£'000 £'000
Total cash outflow for leases £ (214) £ (214)
Company
There are no right-of-use assets or associated lease liabilities recognised in
the Company's Statement of Financial Position.
22. LOAN AND EQUITY COMMITMENTS
On 26th June 2020 (as amended on 1st June 2023) the Group entered into an
agreement to provide Sage Program Underwriters, Inc. with a loan facility of
USD 300,000. As at 31st January 2024 USD 150,000 had been drawn down, leaving
a remaining undrawn facility of USD 150,000. Any drawdown is subject to
satisfying certain agreed criteria.
On 9th August 2023 the Group entered into an agreement to provide LEBC
Holdings Limited with a further loan facility of £600,000 in addition to the
existing loans outstanding of £3,000,000 at 31st January 2023 (agreed in
prior years). £300,000 of the loan facility was drawn down on completion and
as at 31st January 2024 total loans outstanding amounted to £3,300,000,
leaving a remaining undrawn facility of £300,000.
On 21st December 2023 the Group entered into an agreement to provide Dempsey
Group Limited with a loan facility of £1,570,000. £500,000 was drawn down on
completion and was outstanding as at 31st January 2024, leaving a remaining
undrawn facility of £1,070,000.
Please refer to Note 26 for details of equity payments made together with loan
facilities offered and amounts drawn down after the year end.
23. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise loans to participating interests,
cash and liquid resources and various other items, such as trade debtors,
trade creditors, other debtors and creditors and loans. These arise directly
from the Group's operations.
It is, and has been throughout the period under review, the Group's policy
that no trading in financial instruments shall be undertaken unless there are
economic reasons for doing so, as determined by the directors.
The main risks arising from the Group's financial instruments are price risk,
credit risk, liquidity risk, interest rate risk, currency risk, new investment
risk, concentration risk, geopolitical risk and conflict risk and the wider
issues arising from it. The Board reviews and agrees policies for managing
each of these risks and they are summarised in the Group Strategic Report
under "Financial Risk Management".
Interest rate profile
The Group has cash and cash equivalent balances of £40,435,000 (2023:
£11,564,000), which are part of the financing arrangements of the Group. The
cash and cash equivalent balances comprise bank current accounts and deposits
placed at investment rates of interest, which ranged up to 5.25% p.a. in the
period (2023: deposit rates of interest ranged up to 2.65% p.a.). During the
year all cash and cash equivalent balances were held in immediate access
accounts or on short term deposits of up to 1 month (2023: all cash balances
were held in immediate access accounts or on short-term deposits of up to 14
days).
Currency hedging
During the year the Group engaged in two currency hedging transactions of USD
1,075,000 and AUD 600,000 (2023: two currency hedging transactions of
€11,500,000 and USD 1,075,000) to mitigate the exchange rate risk for
certain foreign currency receivables. These were settled before the year end.
A net gain of £30,049 (2023: net loss of £74,547) relating to these hedging
transactions was recognised under Exchange Movements within the Consolidated
Statement of Comprehensive Income when the transactions were settled. As at
the year end the Group had two currency hedging transactions amounting to USD
3,075,000 and AUD 600,000 which were entered into on 30th January 2024. The
fair values of these hedges are not materially different to the transaction
costs.
Financial liabilities
The Company had no borrowings as at 31st January 2024 (2023: no borrowings).
Fair values
The Group has adopted the amendment to IFRS 7 for financial instruments which
are measured at fair value at the reporting date. This requires disclosure of
fair value measurements by level of the following fair value measurement
hierarchy:
· Level 1: Quoted prices unadjusted in active markets for identical assets or
liabilities;
· Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, observed either directly as prices or
indirectly from prices; and
· Level 3: Inputs for the asset or liability that are not based on observable
market data.
Unquoted equity instruments are measured in accordance with the IPEVCV
Guidelines with reference to the most appropriate information available at the
time of measurement. Further information regarding the valuation of unquoted
equity instruments can be found in the section 'Investments - equity
portfolio' under the Accounting Policies (Note 1).
The following presents the classification of the financial instruments at fair
value into the valuation hierarchy at 31st January 2024:
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Equity portfolio investments designated as "fair value through profit or loss" - - 165,382 165,382
assets
- - £ 165,382 £ 165,382
The Group's classification of the financial instruments at fair value into the
valuation hierarchy at 31st January 2023 are presented as follows:
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Equity portfolio investments designated as "fair value through profit or loss" - - 171,461 171,461
assets
- - £ 171,461 £ 171,461
Level 3 inputs are sensitive to assumptions made when ascertaining fair value.
Setting the valuation policy is the responsibility of the Valuations
Committee, which is then reviewed by the Board. The policy is to value
investments within the portfolio at fair value by applying a consistent
approach and ensuring that the valuation methodology is compliant with the
IPEVCV Guidelines. Valuations of the investment portfolio of the Group are
performed twice a year, and the half-year valuations are subjected to the same
level of scrutiny and approach as the audited final year accounts by the
Valuations Committee.
Of assets held at 31st January 2024 classified as Level 3, 41% by value (2023:
66%) were valued using a multiple of earnings and 59% (2023: 34%) were valued
using alternative valuation methodologies.
Valuation multiple - the valuation multiple is the main assumption applied to
a multiple of earnings based valuation. The multiple is derived from
comparable listed companies or relevant market transaction multiples.
Companies in the same industry and geography and, where possible, with a
similar business model and profile are selected and then adjusted for factors
including size, growth potential and relative performance. A discount is
applied or a reduced multiple used to reflect that the investment being valued
is unquoted. The multiple is then applied to the earnings, which may be
adjusted to eliminate one-off revenues or costs to better reflect the ongoing
position, or to adjust for any minority interests. The resulting value is the
enterprise value of the investment, after which certain adjustments are made
to calculate the equity value. These adjustments may include debt, working
capital requirements, regulatory capital requirements, deferred consideration
payable, or anything that could be dilutive which is quantifiable. The Group's
investment valuation is then derived from this based upon its shareholding.
The weighted average post discount EBITDA earnings multiple used (based on the
valuations derived) when valuing the portfolio at 31st January 2024 was
11.4x (2023: 13.8x).
If the multiple used to value each unquoted investment valued on an earnings
basis as at 31st January 2024 moved by 10%, this would have an impact on the
investment portfolio of £8.5m (2023: £13.8m) or 5.1% (2023: 8.1%).
Alternative valuation methodologies - there are a number of alternative
investment valuation methodologies used by the Group, for reasons for specific
types of investment. These may include valuing on the basis of an imminent
sale where a price has been agreed but the transaction has not yet completed,
using a discounted cash flow model, at cost, using specific industry metrics
which are common to that industry and comparable market transactions have
occurred, and a multiple of revenues where the investments are not yet
profitable.
At 31st January 2024 the proportion of the investment portfolio that was
valued using these techniques were: 27% using industry metric (2023: 25%), 32%
using forecast cash flow (2023: 9.3%) and 0.02% at cost (2023: 0.1%).
If the value of all the investments valued under alternative methodologies
moved by 10%, this would have an impact on the investment portfolio of £4.2m
(2023: £4.1m) or 2.6% (2023: 2.4%).
24. SHARE BASED PAYMENT ARRANGEMENTS
Joint Share Ownership Plan
During the year to 31st January 2019, B.P. Marsh & Partners Plc entered
into joint share ownership agreements ("JSOAs") with certain employees and
directors.
On 12th June 2018 1,461,302 new 10p Ordinary shares in the Company were issued
and transferred into joint beneficial ownership for 12 employees (including 4
directors) under the terms of joint share ownership agreements. No
consideration was paid by the employees for their interests in the
jointly-owned shares.
The new Ordinary shares were issued into the name of RBC cees Trustee Limited
("the Trustee") as trustee of the B.P. Marsh Employees' Share Trust ("the
Employee Benefit Trust") at a subscription price of 281 pence per share, being
the mid-market closing price on 12th June 2018. Following the acquisition of
the Trustee by JTC Plc on 10th December 2020, the Trustee has since been
rebranded to JTC Employer Solutions Trustee Limited.
The jointly-owned shares are beneficially owned by (i) each of the 9 currently
participating employees and (ii) the trustee of the Employee Benefit Trust
upon and subject to the terms of the JSOAs entered into between the
participating employee, the Company and the Trustee.
Under the terms of the JSOAs, the employees and directors are entitled to
receive on vesting the growth in value of the shares above a threshold price
of 281 pence per share (market value at the date of grant) plus an annual
carrying charge of 3.75% per annum (simple interest) to the market value at
the date of grant to the date of vesting. The Employee Benefit Trust retains
the carrying cost, with 281 pence per share due back to the Company.
On 12th June 2021 (the "vesting date") the performance criteria were met,
after which the members of the scheme became joint beneficial owners of the
shares and therefore became entitled to any gain on sale of the shares in
excess of 312.6 pence per share. Alternatively, the participant and the
Trustee may exchange their respective interests in the jointly-owned shares
such that each becomes the sole owner of a number of Ordinary shares of equal
value to their joint interests.
There were 254,414 shares where the performance criteria was not met on the
vesting date that had been forfeited by departing employees and which remained
unallocated within the Employee Benefit Trust as at 31st January 2022.
During the year to 31st January 2023, 18,155 of the 254,414 unallocated shares
within the Employee Benefit Trust were transferred to the B.P. Marsh SIP Trust
("SIP Trust") to be used as part of the 22-23 SIP awards made in April 2022.
Following this transfer and as at 31st January 2024 there were 1,443,147
shares held within the Employee Benefit Trust, of which there were 236,259
shares where the performance criteria was not met on the vesting date and
which remained unallocated. The Employee Benefit Trust remains the owner of
these unallocated shares and they do not have dividend and voting rights
attached.
On 26th October 2023 following the removal of a dividend waiver and block on
voting rights on the 1,206,888 allocated ordinary shares held by the Employee
Benefit Trust, these ordinary shares became eligible for dividend and voting
rights and therefore became fully dilutive for the Group.
Provided that the shares are eventually sold from the Employee Benefit Trust
for at least 284.5 pence per share on average, the Group would be entitled to
receive £4,106,259 in total.
Since 31st January 2024, 362,882 of the shares held within the Employee
Benefit Trust have been sold, leaving 1,080,265 shares remaining within the
Employee Benefit Trust, of which 236,259 are unallocated. Of the £4,106,259
receivable by the Group in total, £1,157,000 was received, leaving a balance
outstanding of £2,949,259. As such, provided that the shares are eventually
sold from the Employee Benefit Trust for at least 273.0p/share on average, the
Group will receive this balance in full.
Share Incentive Plan
During the year to 31st January 2017 the Group established an HMRC approved
Share Incentive Plan ("SIP").
During the year a total of 32,780 ordinary shares in the Company, of which
4,850 were held in Treasury as at 31st January 2023 and 27,930 were from
shares bought back into Treasury during the current year (2023: 9,542 ordinary
shares in the Company, which were held in Treasury as at 31st January 2022)
were transferred to the B.P. Marsh SIP Trust ("SIP Trust"). As a result, a
total of 32,780 ordinary shares in the Company were available for allocation
to the participants of the SIP (2023: 31,801 ordinary shares were available
for allocation, including 4,104 unallocated ordinary shares already held
within the SIP Trust as at 31st January 2022 and 18,155 unallocated ordinary
shares transferred from the Employee Benefit Trust to the SIP Trust in April
2022).
On 14th April 2023, a total of 11 eligible employees (including 3 executive
directors of the Company) applied for the 23-24 SIP and were each granted
1,192 ordinary shares ("23-24 Free Shares"), representing approximately
£3,600 at the price of issue.
Additionally, on the same date, all eligible employees were also invited to
take up the opportunity to acquire up to £1,800 worth of ordinary shares
("Partnership Shares"). For every Partnership Share that an employee acquired,
the SIP Trust offered two ordinary shares in the Company ("Matching Shares")
up to a total of £3,600 worth of shares. All 11 eligible employees (including
3 executive directors of the Company) took up the offer and acquired the full
£1,800 worth of Partnership Shares (596 ordinary shares) and were therefore
awarded 1,192 Matching Shares.
The 23-24 Free and Matching Shares are subject to a 1 year forfeiture period.
A total of 32,780 (2023: 31,801) Free, Matching and Partnership Shares were
granted to the 11 (2023: 11) eligible employees during the year, including
8,940 (2023: 8,673) granted to 3 (2023: 3) executive directors of the Company.
No ordinary shares were withdrawn from the SIP Trust during the year (2023: no
withdrawals).
£77,492 of the IFRS 2 charges (2023: £84,714) associated with the award of
the SIP shares to 11 (2023: 11) eligible directors and employees of the
Company has been recognised in the Statement of Comprehensive Income as
employment expenses (Note 5).
As at 31st January 2024, and after adjusting for a total of 19,951 ordinary
shares withdrawn from the SIP Trust by employees on departure and 6,842
ordinary shares forfeited on departure (since inception), a total of 295,609
Free, Matching and Partnership Shares had been granted to 11 eligible
employees under the SIP, including 96,192 granted to 3 executive directors of
the Company.
The results of the SIP Trust have been fully consolidated within these
financial statements on the basis that the SIP Trust is effectively controlled
by the Company.
Share Option Plan
On 6th September 2023 the Group established a new employee Share Option Plan
("SOP").
On 17th October 2023 Share Options ("Options") over 1,682,500 ordinary shares
of 10p each in the Company, in aggregate, were granted to 12 employees,
including 3 executive directors of the Company.
The total number of Options available for allocation amounted to 1,685,970,
which represented 4.5% of the Company's total ordinary shares in issue at the
time the SOP was adopted. 3,470 Options remain unallocated as at 31st January
2024.
Each of the Options will vest, on a ratchet basis, subject to certain Net
Asset Value growth targets being achieved for the three consecutive financial
years ending 31st January 2024, 31st January 2025 and 31st January 2026
("Performance Period"). The first exercise date is 6th September 2026 whereby
50% of vested Options will be exercisable at 10p per share, with the remaining
50% exercisable at 10p per share from 6th September 2027.
The number of Options which vest will vary depending on the level of Net Asset
Value growth achieved, subject to the growth performance criteria as set out
below, alongside the percentage of Options that will vest at each value:
Compounded annual growth of Net Asset Value over the Performance Period % vesting of Options
Less than 8.5% 0%
Between 8.5% and less than 9.25% 25%
Between 9.25% and less than 10% 50%
10% or above 100%
For these purposes, Net Asset Value is defined as "audited Total Assets less
Total Liabilities for the consolidated Group plus any dividends or other form
of shareholder return that are paid in the relevant Financial Year".
Therefore, for all Options to vest, the Net Asset Value (as defined above)
would need to exceed £252.2m, adjusted for any shareholder distributions.
The details of the arrangements are described in the following table:
Nature of the arrangement Share options
Form of option Asian options
Type of option Nominal-cost option
Date of grant 17th October 2023
Number of instruments granted 1,682,500
Exercise price (pence) 10.00
Share price (market value) at grant (pence)
354.22
Vesting period (years) 3 years
Vesting conditions The recipient must remain an employee throughout the vesting period. The
awards vest after 3 years or earlier resulting from either:
a) a change of control resulting from a person, or another company,
obtaining control of the Company either (i) as a result of a making a General
Offer; (ii) pursuant to a court sanctioned Compromise or Scheme of
Arrangement; or (iii) in consequence of a Compulsory Acquisition; or
b) a person or another company becoming bound or entitled to acquire
shares in the Company pursuant to sections 974 to 991 of the Companies Act
2006; or
c) a winding up.
In such circumstances, an Option may be exercised at any time during the
period of six months following the date of the event. Any Option not exercised
within this period shall lapse immediately upon the expiry of the six-month
period.
If a Participant ceases to be a Group Employee before the Vesting Date by
reason of being a Good Leaver, the Pro-rated Portion of their Option shall be
capable of vesting on the Cessation Date.
If a Participant ceases to be a Group Employee by reason of being a Good
Leaver after the Vesting Date but before the Exercise Date the Participant
shall be entitled to exercise the vested Shares of such a vested Option at any
time after the Exercise Date.
Performance period The three consecutive financial years beginning 1st February 2023 (i.e. the
three periods ending on 31st January 2026)
Net Asset Value at which Options vest 10% compound annual growth over the Performance Period, or an Net Asset Value
threshold of £252.2m, adjusted for any shareholder distributions, with the
percentage of Options vesting as follows:
Compound Annual Growth achieved:
Less than 8.5%: 0% vest
Between 8.5% and less than 9.25%: 25% vest
Between 9.25% and less than 10%: 50% vest
10% or above: 100% vest
Exercise period 50% of the vested options may be exercised immediately after the end of the
Performance Period or 6th September 2026 (whichever is the latter) with the
remaining 50% being capable of exercise after 6th September 2027
Expected volatility 19% annual volatility
Risk free rate 5%
Expected annual dividends (pence) 2.78
Settlement Cash settled on sale of shares
% expected to vest (based upon leavers) 80%
Number expected to vest 1,346,000
Valuation model Monte Carlo techniques using the assumptions of Geometric Brownian Motion
Fair value per granted instrument (pence) 75.24
Charge for year ended 31st January 2024 £89,437
£89,437 of the IFRS 2 charges (2023: N/A) associated with the grant of the
SOP options to 12 (2023: N/A) eligible directors and employees of the Company
has been recognised in the Statement of Comprehensive Income as employment
expenses.
25. RELATED PARTY DISCLOSURES
The following loans owed by the investee companies (including their
subsidiaries and other related entities) of the Company and its subsidiaries
were outstanding at the year end:
2024 2023
£ £
Alchemy Underwriting Limited 6,000,000 -
Dempsey Group Limited 500,000 -
The Fiducia MGA Company Limited 1,481,000 2,224,500
LEBC Holdings Limited 3,300,000 3,000,000
Lilley Plummer Holdings Limited - 300,000
Paladin Holdings Limited 5,900,500 3,096,500
Pantheon Specialty Group Limited 4,536,000 -
Pantheon Specialty Limited (formerly Denison and Partners Limited) 670,000 500,000
Verve Risk Services Limited 569,209 -
AUD AUD
Agri Services Company PTY Limited 1,200,000 1,200,000
USD USD
XPT Group LLC 6,000,000 2,000,000
Sage Program Underwriters, Inc. 150,000 150,000
SGD SGD
Criterion Underwriting Pte Limited 120,000 120,000
The loans are typically secured on the assets of the investee companies and an
appropriate interest rate is charged based upon the risk profile of that
company.
On completion of the Group's disposal of its investment in Kentro Capital
Limited on 9th October 2023, and as part of the agreement to sell this
investment, the Group provided a loan facility of £524,253 to Brown &
Brown (Europe) Holdco Limited, alongside other major selling shareholders, in
respect of certain identified indemnities under the Sale and Purchase
Agreement. Whilst the loan capital could reduce due to potential claims, at
this time the Group expects full repayment (Refer to Note 12 for further
details).
The loans of £425,831 to Bastion Reinsurance Brokerage (PTY) Limited (2023:
£425,831), £665,000 to Bulwark Investment Holdings (PTY) Limited (2023:
£665,000) and £1,450,778 to Property and Liability Underwriting Managers
(PTY) Limited (2023: £1,450,778) have been written off as these businesses
are in the process of being dissolved with no expectation of recovery.
Income receivable, consisting of consultancy fees, interest on loans and
dividends recognised in the Consolidated Statement of Comprehensive Income in
respect of the investee companies (including their subsidiaries and other
related entities) of the Company and its subsidiaries for the year were as
follows:
2024 2023
£ £
Agri Services Company PTY Limited 190,685 205,902
Alchemy Underwriting Limited 254,110 -
Asia Reinsurance Brokers Pte Limited 17,702 (82,535)
ATC Insurance Solutions PTY Limited 457,722 617,223
Brown & Brown (Europe) Holdco Limited 5,399 -
Dempsey Group Limited 87,505 -
EC3 Brokers Group Limited - 35,555
The Fiducia MGA Company Limited 192,946 196,366
Kentro Capital Limited 637,709 1,176,956
LEBC Holdings Limited 854,337 586,787
Lilley Plummer Holdings Limited 441,643 115,434
Neutral Bay Investments Limited 118,508 130,665
Paladin Holdings Limited 1,208,851 527,907
Pantheon Specialty Group Limited 180,292 -
Pantheon Specialty Limited (formerly Denison and Partners Limited) 85,926 93,624
Sage Program Underwriters, Inc. 51,813 47,776
Stewart Specialty Risk Underwriting Limited 674,610 356,384
Summa Insurance Brokerage, S.L. - 10,564
Verve Risk Services Limited 132,166 -
XPT Group LLC 1,828,713 856,734
In addition, the Group made management charges of £39,000 (2023: £36,000) to
the Marsh Christian Trust ("the Trust"), a grant making charitable Trust, of
which Brian Marsh, the Executive Chairman and a significant shareholder of the
Company, is also the Trustee and Settlor.
The Group also made management charges of £8,000 (2023: £7,700) to Brian
Marsh Enterprises Limited ("BME"). Brian Marsh, the Chairman and a significant
shareholder of the Company is also the Chairman and majority shareholder of
BME.
All the above transactions were conducted on an arms-length basis.
Of the total dividend payments made during the year of £2,028,206, £857,193
was paid to the directors or parties related to them (2023: total dividend
payments of £1,001,435, of which £443,507 was paid to the directors or
parties related to them).
26. EVENTS AFTER THE REPORTING DATE
Group
On 22nd March 2024 the Group completed the disposal of its entire 38.63%
holding in Paladin Holdings Limited ("Paladin") to Specialist Risk Group
Limited ("SRG"), following receipt of regulatory approval. On completion, the
Group received £42,075,838 in initial cash consideration, net of transaction
costs, plus repayment in full of its £5,900,500 loans to Paladin. The initial
cash proceeds received represented an overall gain of £42,072,338 above the
net cost of investment. As well as the initial consideration, the Group will
also be entitled to receive its proportion of any net working capital
adjustment, expected to be finalised within three months of completion. The
Group will then be entitled to receive deferred consideration of up to
£17,800,000 in cash, based upon 20% EBITDA growth targets above Paladin's
actual adjusted EBITDA for 2023, in FY24 and FY25, payable in 2025 and 2026.
There is also the possibility for the Group to receive further consideration
in FY25 should Paladin outperform these growth targets.
On 27th March 2024 the Group acquired a 30% cumulative preferred ordinary
equity stake in Devonshire UW Limited ("Devonshire") via a holding company,
Devonshire UW Topco Limited, for consideration of £300,000. Devonshire is a
London-based Underwriting Agency specialising in transactional risks,
including Warranty & Indemnity, Specific Tax and Legal Contingency
Insurance, with the ability to underwrite transactions in the UK, Europe,
Middle East, Africa, Asia, South America, Central America and Australasia. The
Group also provided Devonshire with a loan facility of £1,600,000, of which
£390,125 was drawn down on completion, a further £300,000 on 29th May 2024,
with a remaining undrawn facility of £909,875 at the date of this report.
As at 31st January 2024 the Group had provided loans of £500,000 from a total
loan facility of £1,570,000 to Ai Marine Risk Limited, via its holding
company Dempsey Group Limited. On 10th April 2024 a further £250,000 was
drawn down. Total loans stand at £750,000, with a remaining undrawn facility
of £820,000 at the date of this report.
On 16th April 2024, further to the agreement entered into on 10th November
2023 and receipt of regulatory approval, LEBC Holdings Limited ("LEBC")
completed the sale of 100% of Aspira Corporate Solutions Limited ("Aspira"), a
wholly-owned subsidiary of LEBC, to Titan Wealth Holdings Limited ("Titan
Wealth"). On the same date, the Group received full repayment of its
£3,300,000 loans that were outstanding as at 31st January 2024.
On 17th April 2024, the Group acquired a further 2.52% ordinary equity holding
in LEBC for consideration of £1,100,000. On completion the ordinary shares
were immediately converted into preferred shares. The transaction increased
the Group's holding in LEBC from 59.34% as at 31st January 2024 to 61.86% at
the date of this report.
On 2nd May 2024 Pantheon Specialty Group Limited ("Pantheon") repaid
£1,000,000 of its outstanding loan balance to the Group. A further repayment
of £536,000 was received on 21st May 2024. As at 31st January 2024
£4,536,000 of loans were outstanding and following the aforementioned
repayments total loans stand at £3,000,000 at the date of this report.
On 9th May 2024 the Group acquired a further 7% cumulative preferred ordinary
equity stake in Pantheon for consideration of £7,300,000 increasing its
equity holding from 25% as at 31st January 2024 to 32% as at the date of this
report. There is a potential for the Group's equity holding to increase by a
further 5% if certain EBITDA targets are not achieved by 2025.
On 13th May 2024 the Group acquired, through its wholly-owned subsidiary
company B.P. Marsh (North America) Limited, a further 0.95% equity stake in
XPT Group LLC ("XPT") for USD 1,000,787 (£800,073) as part of a pre-emption
share offer. Following this investment, and the uptake of other shareholder's
pre-emptive rights, the Group's fully diluted shareholding in XPT reduced from
29.10% as at 31st January 2024 to 28.91% at the date of this report.
Company
On 2nd May 2024 the Company received a repayment of £1,157,000 in respect of
a loan made to an Employee Benefit Trust relating to shares held under joint
ownership (Note 24). As at 31st January 2024 the total loan balance
outstanding to the Company from the Employee Benefit Trust amounted to
£4,106,259 and following the aforementioned repayment, £2,949,259 was
outstanding at the date of this report.
27. FINANCIAL RISK MANAGEMENT
This note explains the Group's exposure to financial risks and how these risks
could affect the Group's future financial performance. Current year profit
and loss information has been included where relevant to add further context.
The Group's operations expose it to a variety of financial risks. The Group
manages the risk to limit the adverse effects on the financial performance of
the Group by monitoring those risks and acting accordingly.
The monitoring of the financial risk management is the responsibility of the
Board. The policies of the Board of directors are implemented by the Group's
various internal departments under specific guidelines.
The Group is a selective investor and each investment is subject to an
individual risk assessment through an investment approval process. The Group's
Investment Committee is part of the overall risk management framework. The
risk management processes of the Company are aligned with those of the Group
and both the Group and the Company share the same financial risks.
Price risk
The Group is exposed to private equity securities price risk as it invests in
unquoted companies. The Group manages the risk by ensuring that a director of
the Group is appointed to the board of each investee company. In this
capacity, the appointed director can advise the Group's Board of the investee
companies' activities and prompt action can be taken to protect the value of
the investment. Monthly management reports are required to be prepared by
investee companies for the review of the appointed director and for reporting
to the Group Board.
A 10% change in the fair value of those investments would have the following
direct impact on the Consolidated Statement of Comprehensive Income:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Fair value of investments - equity portfolio
165,382 171,461 190,860 158,333
Impact of a 10% change in fair value on Consolidated Statement of
Comprehensive Income
16,538 17,146 19,086 15,833
Credit risk
The Group is subject to credit risk on its unquoted investments, cash and
deposits. The maximum exposure is the amount stated in the Consolidated
Statement of Financial Position.
The credit quality of unquoted investments, which are held at fair value and
include debt and equity elements, is based on the financial performance of the
individual portfolio companies. The credit risk relating to these assets is
based on their enterprise value and is reflected through fair value movements.
The Group is exposed to the risk of default on the loans it has made available
to investee companies. The loans rank in preference to the equity shareholding
and the majority are secured by a charge over the assets of the investment.
The Group manages the risk by ensuring that there is a director of the Group
appointed to the board of each of its investee companies. In this capacity,
the appointed director can advise the Group's board of investee companies'
activities and prompt action can be taken to protect the value of the loan,
such that the directors believe the credit risk to the Group is adequately
managed. When a loan is assessed to be likely to be in default then the Group
will review the probability of recoverability, and if necessary, make a
provision for any amount considered irrecoverable.
The Group's cash is held with a variety of different counterparties with 100%
(2023: 100%) held with A rated institutions.
Liquidity risk
The Group invests in unquoted early stage companies. The timing of the
realisation of these investments can be difficult to estimate. The directors
assess and review the Group's liquidity position and funding requirements on a
regular basis and this is an agenda item for its Board meetings. A key
objective is to ensure that the income from the portfolio covers operating
expenses such that funds available for investment are not used for working
capital. The Group regularly reviews the cash flow forecast to ensure that it
has the ability to meet commitments as they fall due and to manage its working
capital. The Board considers that the Group has sufficient liquidity to manage
current commitments.
As at 31st January 2024 the Group had no borrowings (31st January 2023: no
borrowings).
Interest rate risk
Interest rate risk arises from changes in the interest receivable on cash and
deposits, on loans issued to investment companies and on certain preferred
dividend mechanisms linked to an interest rate. In addition, the risk arises
on any borrowings with a variable interest rate. At 31st January 2024, the
Group did not have any interest bearing liabilities but did have interest
bearing assets. The majority of loans provided by the Group are subject to a
minimum interest rate to protect the Group from a period of low interest
rates, and also a hurdle rate linked to the UK Base Rate.
An increase of 100 basis points, based upon the Group's closing balance sheet
position of its interest bearing assets, excluding any future contractual loan
repayments and loan balances provided against at the year end, over a 12-month
period, would lead to an approximate increase in total comprehensive income of
£281,000 for the Group (2023: £133,000 increase).
Currency risk
The Group currently has substantial exposure to foreign investment and derives
income outside the UK. As such some of the Group's income and assets are
subject to movement in foreign currencies which will affect the Consolidated
Statement of Comprehensive Income in accordance with the Group's accounting
policy. The Board monitors the movements and manages the risk accordingly.
At 31st January 2024, 66% of the Group's net assets were sterling denominated
(2023: 63%). The Group's general policy remains not to hedge its foreign
currency denominated investment portfolio.
The Group's net assets in US Dollar, Australian Dollar and all other
currencies combined are shown in the table below. The sensitivity analysis has
been undertaken based upon the sensitivity of the Group's net assets to
movements in foreign currency exchange rates, assuming a 10% movement in
exchange rates against sterling. The sensitivity of the Company to foreign
exchange risk is not materially different from the Group.
Australian dollar
As at 31st January 2024 Sterling US dollar Other Total
£'000 £'000 £'000 £'000 £'000
Net assets 152,386 25,540 39,375 11,870 229,171
Sensitivity analysis
Assuming a 10% movement of exchange rates against sterling
Impact on net assets N/A (2,294) (3,363) (1,079) (6,736)
Australian dollar
As at 31st January 2023 Sterling US dollar Other Total
£'000 £'000 £'000 £'000 £'000
Net assets 120,002 26,666 31,869 11,000 189,537
Sensitivity analysis
Assuming a 10% movement of exchange rates against sterling
Impact on net assets N/A (2,393) (2,820) (1,000) (6,213)
New investment risk
An inherent risk of realising an investment is the loss of a performing asset
and a potential lack of suitable new investments to replace the lost income
and capital growth. Prior to reinvestment, returns on cash can be
significantly lower, which may reduce underlying profitability on a short-term
basis until funds are reinvested. The Group has an active Investment
Department which continues to receive a strong pipeline of new investment
opportunities. In addition, there is often potential for further investment
within the Group's existing portfolio.
Concentration risk
Although the Group only invests in financial service businesses, and
specifically insurance intermediaries, the Group has a wealth of experience in
this specific sector. It seeks to manage concentration risk by making
investments across a variety of geographic areas, development stages of
business and classes of product. Quantitative data regarding the concentration
risk of the portfolio across geographies can be found in the Segmental
Reporting analysis in Note 2.
Political risk
As a UK domiciled business with overseas investments, the Group is exposed to
the risks associated with changes in UK foreign policy and overseas political
regimes. The Board is continually assessing the impact of these on the Group
and its underlying investments, however the direct impact on the Group's
investment portfolio of these has not been material to date. It remains the
Group's intention to continue to invest into the international financial
services market. As outlined under 'Currency risk' above, the Group continues
to monitor the movements in its foreign currency denominated income and assets
and manages this risk accordingly.
Ongoing conflicts and inflation risk
The Group is exposed to the risks associated with the ongoing overseas
conflicts. The Board continually assesses the potential impact of such
conflicts and the potential impact on the Group and its underlying
investments. Whilst the Group does not have any direct investments in the
affected regions, the impact on the wider global economy and associated
disruption to capital markets, foreign exchange volatility, price inflation
and supply chain issues could affect both the Group's operations and those of
its investment portfolio, which could, in turn, impact the future performance
of the Group.
The Board is continually assessing the wider economic impact of such conflicts
on the Group and its investment portfolio and whilst there has been price
inflation which has led to interest rate increases, and volatility within
foreign exchange currency rates, certain investments within the Group's
portfolio have seen premium rate increases and thus increased commission.
Therefore at the current time the Group does not consider these conflicts and
inflation to have had a material impact upon the Group.
28. ULTIMATE CONTROLLING PARTY
The directors consider there to be no ultimate controlling party.
Notice
The financial information set out above does not constitute B.P. Marsh &
Partners Plc's statutory accounts for the year to 31 January 2024 but is
derived from those accounts. The statutory accounts for the year to 31 January
2024 have not yet been delivered to the Registrar of Companies. The auditors
have reported on those accounts and have given the following opinion:-
· the financial statements give a true and fair view of the state of
the Group's and of the Parent Company's affairs as at 31 January 2024 and of
the Group's profit for the year then ended;
· the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the Parent Company financial statements have been properly prepared
in accordance with UK-adopted international accounting standards; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Approval
The financial statements were approved by the Board of Directors on 10 June
2024 for their release on 11 June 2024.
-Ends-
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