Half Year Results Announcement
For the Period Ended 31 July 2017.
B.P. Marsh & Partners Plc, the niche venture capital provider to high growth businesses, announces its unaudited Group interim results for the six months to 31 July 2017.
The financial highlights for the Period are:
- Net Asset Value (“NAV”) at 31 July 2017 of £88.8m (31 July 2016: £73.8m)
- Increased NAV per share of 304p (31 Jan 2017: 273p, 31 July 2016: 253p)
- Increase in the equity value of the portfolio of 24.6% in the Period
- 8% total shareholder return (31 July 2016: 5.8%)
- Significant rise in profit after tax (unaudited) of £10.2m (31 July 2016: £4m)
- Final dividend of 3.76p per share declared and paid in July 2017
- Dividend of 3.76p per share intended for year to 31 January 2018
- Cash and treasury funds balance of £22m, of which £13.2m uncommitted
- Current uncommitted cash of £8.6m available for investment
- Increase to the top limit of funding to £5m from £3m
The portfolio highlights for the Period are:
- New investments in CBC UK Ltd (“CBC”) and XPT Group LLC (“XPT”)
- Disposals of Besso Insurance Group Limited (“Besso”) and Trireme Insurance Group Limited (“Trireme”) delivering combined proceeds of £32.0m before tax
- Additional investment in LEBC Holdings Limited (“LEBC”)
- Follow-on funding to Nexus Underwriting Management Limited (“Nexus”)
- New investment post-period end in Mark Edward Partners LLC (“MEP”)
Brian Marsh, B.P. Marsh Chairman, commented, “This solid set of results demonstrates substantial growth in our Investment Portfolio in line with our strategy to deliver value to shareholders.”
The valuations from 31 July 2007 include £10.1million net proceeds raised on AIM and all valuations below are net of deferred tax.
I am pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the six month period to 31 July 2017.
The Net Asset Value has increased to £88.8m from £73.8m as at 31 July 2016, representing an NAV per share of 304p (31 July 2016: 253p), and unaudited profit after tax in the Period was £10.2m, compared to £4m in the six months to 31 July 2016.
The disposals of Besso and Trireme during the Period provided the Company with combined proceeds of £32.0m before tax and we will deploy this into new investments and our existing investee companies.
We have for some time been following North America as an opportunity base and we are pleased to have made two new investments in US insurance intermediary businesses founded by industry veterans: XPT in June and Mark Edward Partners after the period end.
Meanwhile in London we made a new Lloyd’s broking investment in CBC, a typical B.P. Marsh venture in a small business with big ambitions and a capable team to fulfil them.
Within the portfolio we took the opportunity to make an additional investment into LEBC, the national UK financial advisory business. LEBC has grown strongly in recent years and continues to do so by developing its traditional advice model to incorporate the best in technology advancement and steadily growing its corporate project work.
In addition, we provided additional financial support to Nexus by means of a £4m loan facility to enable Nexus to continue its M&A activity, with three new acquisitions made in 2017 to date.
We have a strong pipeline of new opportunities to consider and a healthy cash balance and our decision to increase our top limit for new investments from £3m to £5m in February has proved fruitful, opening new investment avenues for us to explore. The portfolio now has a healthy geographic spread, reflecting our overseas investment strategy to only invest in territories with a well-developed regulatory and compliance framework and where there are good opportunities for growth in partnership with a London-based investor. Our portfolio businesses in Australia, Canada, Singapore, and South Africa, whilst currently small scale, provide a solid footprint for development.
The Board is pleased to note the continued narrowing of the share price discount to NAV per share, continuing the progress we have made over the past five years. We value all our shareholders, large and small, and are pleased to record a 12.8% shareholder return in the period. We paid a dividend of 3.76p per share in July 2017, with this intended to be repeated in the coming two years. In addition, we have a stated Buy-Back policy that enables us to buy back shares should the NAV discount threshold reach 25% or more.
On a wider note, the 2017 Atlantic hurricane season is expected to rank among the costliest in recent years after a decade or so without major losses to the insurance industry. None of our investee companies are exposed to underwriting risk and, indeed, they should benefit from any tightening of rates following these events. However, the full effects will not become clear for some time.
The global political situation remains uncertain and we continue to keep a watchful eye on events. Meanwhile, with the Company making solid progress, we remain measured, diligent and energetic in pursuing our objectives.