13 June 2023
B.P. Marsh & Partners Plc
("B.P. Marsh", "the Company" or "the Group")
Final Results for the Year to 31 January 2023
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 2023.
Highlights:
· Total Shareholder return of £23.9m (14.4%) for the year including the dividend paid in July 2022
· Net Asset Value has increased by £22.9m to £189.5m (31 January 2022: £166.6m), a 13.8% increase
· Net Asset Value per share increased by 63.5p to 526.2p* (31 January 2022: 462.7p)
· Post year end disposal of Kentro for £51.5m (subject to regulatory approval)
· New dividend and buy-back policy will see 25% of proceeds of Kentro sale to be returned to Shareholders
· Robust pipeline of new investments
· Consolidated profit before tax of £27.6m (31 January 2022: £19.4m)
· Equity portfolio valuation increase of 19.1% (2022: 14.7%)
· Completion of Summa realisation during the year (£9.6m including Loan)
· Interim Dividend paid on 28 February 2023 of 1.39p per share and proposed Final Dividend of 1.39p per share payable in July 2023 (2022: 2.78p total)
*The diluted Net Asset Value per share is 516.8p including shares held within an Employee Benefit Trust which have met certain performance criteria (31 January 2022: 455.6p).
Commenting on the results, Brian Marsh OBE, Chairman, said:
"The sale of our interest in Kentro, post year-end, for an expected £51.5 million validates both the strength of our long-term business model and our valuation methodology - producing a multiple on the equity investment at an exit price precisely in line with our valuation. This exit has enabled the Board to put in place a three-year strategy to return £13m to shareholders.
"The c.14% increase in NAV (net of dividend) reported in these results demonstrates the strength of our business model which focuses on difficult to replicate opportunities, principally in the growing insurance intermediary markets globally. I look forward to reporting further progress for the current financial year, subject as always to the absence of major macro-economic shocks."
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 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 15 June 2023 at 11:00am 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.
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.
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 | |
| Brian Marsh OBE | +44 (0)20 7233 3112 |
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| Nominated Adviser & Broker Panmure Gordon |
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| Atholl Tweedie / Stephen Jones / Amrit Mahbubani | +44 (0)20 7886 2500 |
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| Financial PR & Investor Relations |
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| Tavistock | bpmarsh@tavistock.co.uk |
| Simon Hudson / Tim Pearson / Katie Hopkins | +44 (0)20 7920 3150 |
Statement by the Chairman and Managing Director
We are pleased to present the audited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the year ended 31 January 2023.
Results
For the year under review, the Group has achieved an increase in Net Asset Value ("NAV") (net of dividend) of 13.8% from £166.6m to £189.5m and an increase in the equity value of our portfolio of £22.2m (19.1% increase adjusting for additions and disposals) from £149.3m to £171.5m.
This equates to an undiluted Net Asset Value per share of 526.2p (2022: 462.7p) or 516.8p on a fully diluted basis following the vesting of the shares in the Group's Joint Share Ownership Plan (2022: 455.6p).
The Group's cash and treasury balance as at 31 January 2023 stood at £12.1m, an increase of £3.5m over the previous year, and as at the date of this announcement, is £5.2m due to further investment activity post year end.
Dividend
The Group paid an interim Dividend on 28 February 2023 of 1.39p per share. The Group wanted to reward its shareholder base by paying the dividend in two instalments with the balance being paid in July 2023. The Group is recommending a final dividend of 1.39p per share to be paid on 28 July 2023 to all shareholders on the register on 30 June 2023, with the ex-dividend date being 29 June 2023. This final dividend will be subject to Shareholder Approval at the Group's Annual General Meeting to be held on 26 July 2023.
Post year-end Disposal
As announced on 23 May 2023, B.P. Marsh agreed the sale of its 18.7% shareholding in Kentro, the London-based insurance industry investment group, pursuant to an agreement by which Brown & Brown, Inc. ("Brown & Brown"), one of the largest US-based insurance intermediaries, has agreed to acquire the entire issued share capital of Kentro.
Completion will be subject to, inter alia, the FCA's approval of change of control. Upon completion, the Group expects to receive £51.5m in cash (net of all transaction costs), which is consistent with the Group's £51.5m valuation of the business, underlining our approach to investment valuation.
The Group is pleased once more to be able to demonstrate its successful track record of investing in strong solid management teams and taking a cooperative approach to the relationships that drive successful outcomes. More information on Kentro can be found in the Chief Investment Officer's report.
New Dividend and Share buy-back Policy
Following the expected receipt of £51.5m from the sale of Kentro, the Group will seek a healthy balance between returning cash to shareholders and reserving sufficient funds to be able to continue its proven strategy of making successful investments.
As announced on 6 June 2023, once the sale of Kentro has completed and funds have been received, the Group intends to declare a three-year dividend policy for 2024, 2025 and 2026, whereby its aspiration will be to distribute an aggregate cash dividend of £2m each year for the three years. These will be payable in two equal instalments in February and July of each year commencing February 2024, subject to Shareholder Approval at the Company's Annual General Meeting each year. In addition, the Group intends a special dividend of £1.0m in the aggregate to be paid upon receipt of the proceeds of sale, with further information regarding the proposed payment date to be announced in due course.
Additionally, the Group plans to commit a further £6.0m to share buy-backs, with more information to follow in due course with regard to mechanics and how best to deliver this.
The above represents up to £13m being returned to shareholders via both Dividends and Share Buy-Backs over the next three years.
As announced on 16 January 2023, the Group allocated £1.0m for the purposes of conducting Share buy-backs. These buy-backs are being conducted within the limits as approved by the Shareholders at the Group's Annual General Meeting held on 25 July 2022 and the Market Abuse Regulation. Since 16 January 2023, the Group has bought back [103] shares, for an average of [318]p per share, a total aggregate of [£0.3m] of the £1.0m allocated for this purpose. The Group continues to believe that the existing Share buy-back programme remains an appropriate means of achieving the Group's objective of reducing the discount to NAV and enhancing long term shareholder value.
Per our announcement on 6 June 2023 the Group remains of the view that offering a mixture of dividend and share buy-back transactions is the most effective way of rewarding and returning value to its shareholders.
Portfolio
During the year the Group provided an additional US$3.5m (£2.8m) to XPT Group LLC ("XPT") through a mixture of redeemable shares and equity to support XPT's ongoing and steep growth trajectory. The Group has also lent more modest amounts to Lilley Plummer Holdings Limited and LEBC Holdings Limited, to assist their respective corporate aspirations and to support working capital requirements.
Throughout the year under review, the Group's Portfolio saw continued growth in key Companies, XPT and Lilley Plummer Risks Limited. The Group's largest US Investment, XPT, has continued its impressive States-wide expansion year on year. XPT produced over US$400.0m of Gross Written Premium for the year to 31 December 2022. Further details of the Portfolio's performance is included in the Chief Investment Officer's report.
Post Year-end activity
Post Year-end, the Group provided further loan funding of US$6.0m to XPT which was utilised to acquire Cal Inspection Bureau Inc ("CAL"). CAL is a California-based physical inspection company that carries out surveys and inspections of sites, on behalf of insurers and insurance intermediaries and is XPT's thirteenth acquisition.
In February 2023, the Group provided a £2.0m loan facility to Paladin Holdings Limited, the holding company of CBC UK Limited ("CBC") to establish a new London Market Property Managing General Agency.
On 28 April 2023, the Group completed a new investment into Verve Risk Services Limited ("Verve"). The Group acquired a 35% holding in the London-based Managing General Agency. Verve specialises in Professional and Management Liability business for the insurance industry in the USA, Canada, Bermuda, Cayman Islands and Barbados.
Business Overview
The Group is pleased with the strong set of results it is able to announce for the year. The year under review is hoped to be the final year where the Covid-19 Pandemic has had a material impact on the global market. Unfortunately, the conflict in Ukraine and the Cost-of-Living crisis has arisen in its place.
The Group has taken steps to mitigate the full effect of the Cost-of-Living crisis on its staff members where possible and is grateful for the continued efforts of all its staff. The war in Ukraine continues to dominate the global economy and the Group is currently satisfied that ongoing sanctions against Russia and its allies do not have a material impact on the Group's business.
Outlook
The Group believes that these results demonstrate the strength of our business model which focuses on early-stage investment in the insurance intermediary market. This market continues to generate attractive opportunities for B.P. Marsh and our leading position within it means that we get first look at many such opportunities.
The recently announced sale of our interest in Kentro provides a compelling example of the returns that can be realised from investing early and supporting our investee companies over the longer term. The Group will finalise what we consider to be the most efficient route to action our announced strategy to allocate an additional £6.0m to share buy-backs and the timing of the dividend payments we have announced for the next three years.
B.P. Marsh will continue to work on producing sustained growth for the coming months and years ahead while at the same time delivering attractive returns for our shareholders.
| Brian Marsh, OBE | Alice Foulk |
| Chairman | Managing Director |
| 12 June 2023 | 12 June 2023 |
Chief Investment Officer Statement
Portfolio Update and Outlook
The Group has performed well for the financial year to 31 January 2023, with the underlying portfolio continuing to adapt well to the ongoing economic challenges facing the UK and the rest of the world.
Over the financial year, the valuation of the Group's equity portfolio has increased by 19.1% adjusting for realisations, with NAV increasing by 13.8%.
The Group's mantra of working closely with the Management Teams of our respective investee companies continues to contribute to long-term growth.
Post year end, the Group announced the disposal of its entire 18.7% shareholding in Kentro Capital Limited ("Kentro"), which is expected to deliver £51.5m of cash once regulatory approval has been received.
The Group's current cash balance is £5.2m, and when the funds from the Kentro sale have been received, the Group's liquidity will increase accordingly.
The receipt of these funds does not alter B.P. Marsh's long term strategic goals, which remain to:-
· identify businesses with strong management teams and good growth potential; and
· help fund, support, and develop these companies so they can deliver on growth opportunities
Over the course of B.P. Marsh's 33-year history, this strategy has been to the long term benefit of our shareholders. As such, the Group is committed to reinvesting part of the Kentro sale proceeds in both its existing portfolio and in new ventures, as well as provide an appropriate shareholder return strategy.
The Group remains focussed on sourcing new business and has an active pipeline of new business opportunities which are currently being considered. We continue to see a high number of potential new business opportunities, having received 60 new business enquiries in the year to 31 January 2023, increasing from 48 received enquiries in the preceding year.
Post year end, on 28 April 2023 the Group announced its investment in Verve Risk Services Limited ("Verve"), 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.
Current opportunities under consideration include (but are not limited to) the following:
· a start-up MGA/underwriting agency, looking to specialise in underwriting marine lines;
· an established broker, that specialises in insurance for High Net Worth clients and Fine Art & Specie lines; and
· a specialist Lloyd's start up broker.
In view of the Group's favourable cash position, we remain prepared to take advantage of opportunities emanating from the financial services industry generally and the insurance market specifically.
Disposals
Kentro Capital Limited ("Kentro") (Post Year End)
As previously announced, the Group has agreed to dispose of its shareholding in Kentro, the London-based insurance industry investment group, to Brown & Brown Inc, one of the largest US based insurance intermediaries following a strategic process run with Morgan Stanley. Completion of the transaction will be subject to FCA approval being granted.
The Transaction
Upon completion, the Group is expected to receive £51.5m in cash (net of all transaction costs), which is consistent with the Group's valuation of the business, providing a validation of our approach to investment valuation. Subject to adjustments at completion, this would increase the Group's current funds available to approximately £56.2m (after transaction costs and tax), prior to any distributions to shareholders.
The investment and subsequent sale of the Group's holding in Kentro is another example of B.P. Marsh's successful strategy of investing for the long term, in start-up and early stage businesses with ambitious management teams. This allows the Group to work with management to help them grow their business, before disposing of its stake at a beneficial time for management and B.P. Marsh.
This disposal is expected to deliver an Internal Rate of Return of c.25% (inclusive of all income and fees) and a money multiple on the Equity Investment of 3.41x.
Background to the Investment
B.P. Marsh originally invested in Kentro (then known as Nexus Underwriting Management Limited) in August 2014, with an initial equity investment of £1.5m for a 5% shareholding.
B.P. Marsh has overseen Kentro's growth through a longstanding partnership and the further provision of £13.6m of capital, increasing its shareholding to 18.7%, becoming Kentro's largest single investor. This investment, alongside bank financing, allowed Kentro to commence its acquisitive growth strategy, via both Nexus Underwriting Limited ("Nexus"), the underwriting (or "MGA") arm, and Xenia Broking Group ("Xenia"), the broking arm.
Since B.P. Marsh's first investment, Kentro has made 23 acquisitions, growing from Gross Written Premium of c.£55m in its year ending 31 December 2014 to now over £500m.
With B.P. Marsh's support, the underwriting arm, Nexus, underwrites across a diversified portfolio of 20 risk classes, through a network of over 800 retail broker partners in nine countries. Xenia is one of the largest retail trade credit brokers in the UK, with over 1,500 policyholders ranging from large corporates to SME customers. The collective Kentro team is composed of more than 350 insurance professionals operating from offices in the UK, US, Europe, Asia and Dubai.
New Investments
Denison and Partners Limited ("Denison and Partners") - London, United Kingdom
As previously announced in March 2022, the Group acquired a 40% Cumulative Preferred Ordinary shareholding in Denison and Partners, providing funding of up to £0.8m, via equity and debt.
Denison and Partners is a start-up London-based Lloyd's Insurance Broker, established by Alasdair Ritchie, with a focus on delivering (re)insurance delegated authority solutions and services to Managing General Agencies, Coverholders and (re)insurers.
Date of initial investment: March 2022
31 January 2023 valuation: £0.1m
Cost of Equity: £0.1m
Equity stake: 40.0%
Verve Risk Services Limited ("Verve") (Post year end) - London, United Kingdom
Post Year End, the Group announced that it had acquired a 35% Cumulative Preferred Ordinary shareholding in Verve Risk Services Limited ("Verve"), a London-based Managing General Agency.
Verve specialises in Professional and Management Liability business for the insurance industry in the USA, Canada, Bermuda, Cayman Islands and Barbados.
B.P. Marsh has provided £1m of funding via a mixture of equity and a loan facility, which was drawn down in full upon completion as part of a management buyout.
Established in 2016 by Scott Simmons and Alan Lambert, Verve Risk Partners LLP had been an underwriting cell within Castel Underwriting Agencies Limited ("Castel"). Following the exclusive support from B.P. Marsh, Verve has completed a buyout from Castel, with Management owning the remaining 65% of Verve.
Date of initial investment: April 2023
31 January 2023 valuation: N/A
Cost of Equity: £0.4m
Equity stake: 35%
Follow-on Investments and Funding
CBC UK Limited / Paladin Holdings Limited - London, United Kingdom
+ 26.1 pence NAV per share uplift in Year
CBC, the London based Retail and Wholesale Lloyd's insurance broker, continues to perform strongly. In CBC's last financial year to 31 December 2022, CBC achieved an EBITDA of £3.8m, representing a 73% year on year increase.
The Group remains confident that CBC will continue this growth trajectory and will exceed its budget of £5.5m of EBITDA in its current financial year to 31 December 2023.
In February 2023, B.P. Marsh provided a £2m loan facility, of which £0.5m was drawn down immediately to fund the build-out of Alchemy Underwriting Limited. Alchemy Underwriting Limited is a new London-market property MGA in which Paladin, the holding company of CBC, has a 22.5% shareholding.
Date of initial investment: February 2017
31 January 2023 valuation: £19.2m
Cost of Equity: £0.8m
Equity stake as at 31 January 2023: 47.06%
XPT Group LLC ("XPT") - New York, USA
+ 24.0 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 over US$700m in its financial year to 31 December 2023 (2022: US$400m). The Group expects XPT to continue its strong growth, both via its continued acquisition strategy and underlying organic growth.
As previously announced, over the Group's financial year to 31st January 2023, the Group provided XPT with further funds of US$3.5m.
This was provided via:-
· Redeemable shares - US$2.8m (£2.2m); and
· Equity - US$0.7m (£0.6m).
Post year-end, the Group lent XPT a further US$6.0m (£4.9m), via a short term US$2.0m Revolving Loan facility and a US$4.0m Term Loan. These facilities were drawn down in full by XPT on completion.
Utilising these funds, alongside its existing resources and bank financing, XPT completed on a number of acquisitions, as per its M&A strategy.
This included the following acquisitions:-
· Insurance Brokers, Inc. ("IBI")
In February 2022, XPT acquired IBI, the wholesale insurance broker and general agency, based in Indiana, USA, which offers a broad range of personal, commercial, and E&S insurance products.
IBI was founded in 1974 and is now led by Glen Pomeroy offering specialty insurance throughout the Midwest and surrounding states. IBI will become part of XPT Specialty's Binding and Small Commercial Brokerage division headed by Kyle Stevens.
· Cal Inspection Bureau Inc ("CAL")
In February 2023, XPT acquired CAL, a California based physical inspection company that carries out surveys and inspections of sites on behalf of insurers and insurance intermediaries. CAL was established in 1988 by its founder and president Emil Moskowitz, who has joined XPT as part of the acquisition.
CAL is widely regarded as the premier underwriting survey and audit business on the west coast of the USA, working with almost every MGA and wholesale broker in their territory. With CAL as part of Platinum, (XPT's specialist MGA focused on niche product areas, including specific programmes in trucking liability and a Bars and Taverns programme, amongst others) the goal is for CAL to become the premier underwriting survey and audit business throughout the USA.
CAL is a natural adjunct to XPTs current wholesale channel business model, with XPT now being able to offer physical inspection services alongside other third-party claims adjusting administrator offerings.
· Craig & Leicht Inc ("C&L")
In February 2023, XPT also acquired C&L, the Texas-based wholesale agency with experience in a wide variety of industries, specialising in contractors, retail, and landlord risks.
C&L specialise in very niche market segments of the industries they support and have intuitive knowledge of high-risk and unusual businesses with a reputation for providing out-of-the-box solutions with a keen eye for gaps in coverage.
The unique and varied manner in which C&L transacts business has resulted in impressive growth, allowing them to reach beyond their Texas roots and earn recognition that transcends state borders.
The acquisition of C&L is XPT's 14th acquisition since formation.
Date of initial investment: June 2017
31 January 2023 valuation: £34.1m
Cost of Equity: £10.1m
Equity stake: 28.54%
Portfolio Update & Activity
NAV breakdown by portfolio company
The composition of B. P. Marsh's underlying portfolio companies can be found here:
The Group's current investments are in the Insurance Intermediary sector, with the exception of the independent financial adviser LEBC.
Our current insurance investments are budgeting to produce in aggregate over £1.64bn of insurance premium during 2023 (2022: £1.32bn), and a breakdown between brokers and MGAs can be found here:
Insurance Brokers
Investments:
| Brokers | Date of Investment | Jurisdiction | Equity % at 31 January 2023 | Cost of Investment | Valuation at 31 January 2023 | % of NAV at 31 January 2023 | Internal rate of return* to 31 January 2023 | Current Multiple on Invested Capital |
| CBC | Feb-17 | UK | 47.06% | £803,500 | £19,180,000 | 10.1% | 37.5% | 23.87x |
| Lilley Plummer Risks | Oct-19 | UK | 30.00% | £1,008,242 | £7,700,000 | 4.1% | 91.5% | 7.64x |
| Denison and Partners | Mar-22 | UK | 40.00% | £132,000 | £132,000 | 0.1% | 41.0% | 1.0x |
| Asia Reinsurance Brokers | Apr-16 | Singapore | 25.00% | £1,551,084 | £0 | 0.0% | -23.4% | 0.0x |
* Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2023
The Group's Broking investments are budgeting to place over £742m of GWP (2022: £567m), producing over £75m of brokerage income in 2023 (2022: £59m), accessing specialty markets around the world.
Underwriting Agencies / Managing General Agents ("MGAs")
Investments:
| MGAs | Date of Investment | Jurisdiction | Equity % at 31 January 2023 | Cost of Investment | Valuation at 31 January 2023 | % of NAV at 31 January 2023 | Internal rate of return* to 31 January 2023 | Current Multiple on Invested Capital |
| Kentro | Aug-14 | UK | 18.98% | £15,126,554 | £51,522,000 | 27.2% | 25.9% | 3.41x |
| XPT | Jun-17 | USA | 28.54% | £10,138,626 | £34,143,000 | 18.0% | 34.8% | 3.37x |
| ATC | Jul-18 | Australia | 25.56% | £6,476,595 | £17,049,000 | 9.0% | 42.6% | 2.63x |
| SSRU | Jan-17 | Canada | 30.00% | £19 | £11,000,000 | 5.8% | 107.4% | (NA - over 1000x) |
| Ag Guard | Jul-19 | Australia | 41.00% | £1,465,071 | £5,494,000 | 2.9% | 54.4% | 3.75x |
| Fiducia | Nov-16 | UK | 35.18% | £227,909 | £4,223,000 | 2.2% | 25.3% | 18.53x |
| Sterling | Jun-13 | Australia | 19.70% | £1,945,411 | £3,441,000 | 1.8% | 10.0% | 1.77x |
| Sage | Jun-20 | USA | 30.00% | £202,758 | £1,630,000 | 0.9% | 127.6% | 8.04x |
| Verve** | Apr-23 | UK | 35.00% | £430,791 | N/A | N/A | N/A | N/A |
* Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2023
**Post year-end investment
The Group's MGAs are budgeting to place over £900m of GWP (2022: £785m), producing over £109m of commission income in 2023 (2022: £95m), across over many specialist product areas, on behalf of more than 50 insurers.
IFA Investment
Investment
| IFA | Date of Investment | Jurisdiction | Equity % at 31 January 2023 | Cost of Investment | Valuation at 31 January 2023 | % of NAV at 31 January 2023 | Internal rate of return* to 31 January 2023 | Current Multiple on Invested Capital |
| LEBC Holdings Limited | April-07 | UK | 59.34% | £12,373,657 | £15,947,000 | 8.4% | 8.7% | 1.29x |
* Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2023
LEBC Holdings Limited ("LEBC") - London, United Kingdom
- 24.2 pence NAV per share reduction in Year
For LEBC's year ending 30 September 2022, LEBC produced an adjusted EBITDA of £3.2m.
B.P. Marsh continue to support LEBC through a period of restructuring, which has continued over the course of 2023.
Whilst this restructuring process has taking longer to implement then expected, in the long run it will deliver a more efficient and effective business.
LEBC has seen strong growth in its corporate advice arm, which continues to grow year on year. However, the continued restructuring has impacted the Group's valuation of LEBC.
Date of initial investment: April 2007
31 January 2023 valuation: £15.9m
Cost of Equity: £12.4m
Equity stake: 59.3%
Other Portfolio Company Highlights
United Kingdom
Lilley Plummer Risks Limited / Lilley Plummer Holdings Limited ("LPR") - London, United Kingdom
+ 13.5 pence NAV per share uplift in Year
The Group remains pleased with the continued success of LPR since its inception in late 2019.
Since that time, LPR has grown its underlying marine portfolio and has also expanded into new product lines in new geographic locations taking advantage of market conditions. This has included a number of niche and diverse areas, for example Political Violence, Terrorism and North American P&C insurance.
In LPR's year ending 31 December 2022, LPR achieved revenue of c.£5.0m and EBITDA of c.£2.0m. LPR continues to grow substantially and is on track to deliver considerable year on year growth in respect of revenue and EBITDA.
This performance is due to strong organic growth (with LPR growing its client base and winning new business), LPR continuing to respond to the demand for coverage in war-stricken locations and the performance of new teams across new business lines.
LPR remain actively looking at new opportunities, within and outside of its core marine offering and the Group is confident regarding its performance over the course of the current financial year and beyond.
Date of initial investment: October 2019
31 January 2023 valuation: £7.7m
Cost of Equity: £1.0m
Equity stake as at 31 January 2023: 30%
North America
Stewart Specialty Risk Underwriting Ltd ("SSRU")
+ 7.6 pence NAV per share uplift in Year
Performance of the Group's Canadian investment, SSRU, remains a highlight:
· In SSRU's year to 31 December 2022, Gross Written Premium exceeded CA$75m, representing an over 50% uplift on prior year results; and
· A similar trend was seen in EBITDA, with SSRU achieving over CA$7m in 2022, a 51% increase over the prior year.
Growth continues to be achieved via organic growth across its existing commercial casualty and property book and makes SSRU one of Canada's largest MGAs.
Date of initial investment: January 2017
31 January 2023 valuation: £11.0m
Cost of Equity: £19
Equity stake as at 31 January 2023: 30.00%
Australia
Agri Services Company PTY Limited ("Agri Services")
+ 5.2 pence NAV per share uplift in Year
The performance of Agri Services, one of the Group's Australian investments, remains strong.
Since the Group's initial investment into Agri Services in July 2019, the company has undergone considerable growth:
· Gross Written Premium has increased from c.AU$5m in 2019 to over AU$40m in 2022
· EBITDA, in the same time frame, has seen an increase from c.AU$0.3m to over AU$1.1m
Such impressive growth has continued into 2023.
Date of initial investment: July 2019
31 January 2023 valuation: £5.5m
Cost of Equity: £1.5m
Equity stake as at 31 January 2023: 41.00%
B.P. Marsh's other investments in Australia (ATC and Sterling Insurance PTY Limited) continue to perform well with premium income and profitability increasing year on year across both entities.
Market Commentary
The insurance industry continues to discuss rate increases across global commercial lines of business. The first quarter of 2023 resulted in an overall rate increase of 4% across all global commercial lines. This increase represented the 22nd consecutive quarter of rate increases, although rate increases are well below the peak, being 22% in the fourth quarter of 2020.
In the UK rates have increased by 25% over the past four quarters, this compares to 22% in the US and 23% in Europe.
Rate increases were highest across property lines, which has been primarily driven by continued restrictions in capacity due to constrained risk appetite in areas with high CAT (Catastrophe) Risk exposure.
Financial and Professional lines have seen a small reduction in rates over the first quarter of 2023. This deceleration, with a particular focus on the D&O market, is prominently due to new capacity providers entering the market and the relative low levels of IPO activity.
Given that most of our portfolio companies provide risk solutions in specialty markets, we have seen rates increasing at a higher rate than average and generally at a higher level than inflation.
Overall, the Group does not anticipate the market returning to the pricing of the last soft market in the short to medium term.
Daniel Topping
Chief Investment Officer
12 June 2023
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 2023:
| | Year to/as at | | Year to/as at | |
| | 31st January |
| 31st January |
|
| | 2023 |
| 2022 |
|
| |
|
| |
|
| | | | | |
| Net asset value | £189.5m | | £166.6m | |
| Net asset value per share - undiluted | 526.2p | | 462.7p | |
| Net asset value per share - diluted | 516.8p | | 455.6p | |
| | | | | |
| Profit on ordinary activities before tax | £27.6m | | £19.4m | |
| Dividend per share paid | 2.78p | | 2.44p | |
| Total shareholder return (including dividends) | £23.9m | | £17.6m | |
| Total shareholder return on opening shareholders' funds | 14.4% | | 11.7% | |
| | | | | |
| Net cash from operating activities (net of equity investments, realisations and loans) | £0.5m | | £1.5m | |
| Equity cash investment for the year | £2.9m | | £8.0m | |
| Realisations (net of disposal costs) | £8.2m | | £8.8m | |
| Loans issued in the year | £3.0m | | £0.3m | |
| Loans repaid by investee companies in the year | £2.0m | | £8.1m | |
| Cash and treasury funds at end of year | £12.1m | | £8.6m | |
| Borrowing / Gearing | £Nil | | £Nil | |
| | | | | |
The Group had a strong year, delivering an increase in the NAV of £22.9m (2022: £16.7m). At 31 January 2023 the NAV of the Group was £189.5m which equates to 526.2p per share undiluted (2022: £166.6m, or 462.7p per share). On a diluted basis this equates to 516.8p per share (2022: 455.6p per share). This equates to an increase in NAV of 13.8% (2022: 11.1%) for the year undiluted.
The NAV of £189.5m at 31 January 2023 represents a total increase in NAV of £160.3m 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 8.7% in Group NAV after running costs, realisations, losses, distributions and corporation tax since flotation and 11.7% since 1990.
Investment performance
The Group's investment portfolio movement during the year was as follows:
| 31st January 2022 valuation | Acquisitions at cost | Disposal proceeds | Adjusted 31st January 2022 valuation | 31st January 2023 valuation |
| £149.3m | £2.9m | £(8.2)m | £144.0m | £171.5m |
This equates to an increase in the portfolio valuation of 19.1% (2022: 14.7%).
The Group invested a total of £2.9m in equity in the portfolio during the year (2022: £8.0m). This mainly related to a follow-on investment of £2.8m in XPT in June 2022.
In addition, the Group provided £3.0m of loans (2022: £0.3m) during the year. £1.5m was provided to LEBC to fund an acquisition, together with £0.7m to Agri Services, £0.5m to Denison and £0.3m to LPH as working capital to further develop the business.
There were £8.2m of investment realisations during the year (2022: £8.8m). £8.1m was realised from the disposal of the Group's holding in Summa Insurance Brokerage S.L. ("Summa") which completed in March 2022, together with additional consideration received from the sale of MB of £0.1m (sold in September 2021).
£2.0m of loan repayments were received by the Group from investee companies (2022: £8.1m) of which £1.5m was received from Summa repaying their outstanding loan in full on disposal, together with £0.2m from Fiducia and £0.2m from LPH and £0.1m from others.
Operating income
Net gains from investments were £27.5m (2022: £20.3m), a 35.5% increase over the previous year. This included £0.2m in realised gains from the sale of the Group's interests (2022: £2.9m in realised gains and £1.1m in loan repayments where the loan had previously been provided against in full). £27.3m related to the revaluation of the investment portfolio at 31 January 2023 (2022: £16.2m).
Overall, income from investments increased by £0.8m, or 20.7% to £4.9m (2022: £4.1m). The increase was primarily due to receiving significantly greater dividend income demonstrating the strong underlying performance within the portfolio.
Operating expenses
Operating expenses increased by £0.1m, or 2.5% during the year to £4.9m (2022: £4.8m). Expenses continued to be closely managed to minimise the impact of inflation.
Profit on ordinary activities
The consolidated profit on ordinary activities before taxation increased by £8.2m, or 42.3% to £27.6m (2022: £19.4m).
The consolidated profit on ordinary activities after taxation increased by £6.4m, or 36.4% to £23.8m (2022: £17.5m).
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 £0.3m for the year (2022: £3.2m). The prior year included £2.9m of realised gains on disposal of investments.
Liquidity
Cash and treasury funds at 31 January 2023 were £12.1m (2022: £8.6m).
Since the year-end the Group completed a new investment in Verve for £1.0m in a combination of equity and debt, and has provided net £4.6m in loans as follow-on funding into the existing portfolio, notably £4.9m to XPT (of which £0.8m has since been repaid) and £0.5m to CBC. In addition, the Group paid a dividend of £0.5m in February 2023 and has bought back £0.3m in shares. Currently the Group has cash funds of £5.2m adjusting for working capital.
As announced on 23 May 2023, the Group has agreed to sell its 18.7% shareholding in Kentro for £51.5m, subject to regulatory approval. Net of adjustments, this is expected to increase funds available to £55.2m, prior to any distributions.
Dividend
The Group paid a dividend of £1.0m (or 2.78p per share) during the year, an increase of 11% over the preceding year (2022: £0.9m or 2.44p per share). The dividend payment reflected the Group's strategy to strike a balance between investing in new opportunities alongside the existing portfolio, whilst also rewarding Shareholders for their continuing loyalty. As announced previously, the Group proposed a dividend of £1.0m (or 2.78p per share) in respect of the year to 31 January 2023, of which £0.5m was paid in February 2023 and £0.5m is payable in July 2023 subject to shareholder approval.
Total shareholder return for the year was therefore 14.4% (2022: 11.7%) including the dividend payment in July 2022 and the NAV increase.
Diluted NAV per share
The NAV per share at 31 January 2023 is 526.2p (2022: 462.7p). A long-term share incentive plan for certain directors and employees of the Group matured on 12 June 2021, with 1,461,302 shares being held within an Employee Benefit Trust. Whilst they remain within the Trust they do not have voting or dividend rights. However, if the shares are sold in the future in excess of 281 pence per share (noting that the participants only benefit from a sale in excess of 312.6p per share), the Group would be entitled to receive £4,106,259 and these shares would then become entitled to voting and dividend rights and therefore these shares would become dilutive. Overall, this would therefore dilute the NAV per share as at 31 January 2023 to 516.8p (2022: 455.6p).
Jonathan Newman
Group Finance Director
12 June 2023
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 2023 the Group's equity interests were as follows:
Ag Guard PTY Limited
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 2023 valuation: £5,494,000
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 2023 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 2023 valuation: £17,049,000
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: 47.1%
31 January 2023 valuation: £19,180,000
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 2023 valuation: £0
Denison and Partners Limited
(www.denisonpartners.com)
Denison and Partners is a start-up London-based Lloyd's Insurance Broker delivering (re)insurance delegated authority solutions and services to MGA's, Coverholders and (re)insurers.
Date of investment: March 2022
Equity stake: 40%
31 January 2023 valuation: £132,000
The Fiducia MGA Company Limited
(www.fiduciamga.co.uk)
Fiducia is a UK marine cargo Underwriting Agency and Lloyd's Coverholder which specialises in the provision of insurance solutions across a number of marine risks including, cargo, transit liability, engineering and terrorism Insurance.
Date of investment: November 2016
Equity stake: 35.2%
31 January 2023 valuation: £4,223,000
LEBC Holdings Limited
LEBC is an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.
Date of investment: April 2007
Equity stake: 59.3%
31 January 2023 valuation: £15,947,000
Lilley Plummer Risks Limited
(www.lprisks.co.uk)
Lilley Plummer Risks is a specialist marine Lloyd's broker that provides products across the marine insurance market. The Group holds its investment in Lilley Plummer Risks through its holding company Lilley Plummer Holdings Limited.
Date of investment: October 2019
Equity stake: 30.0%
31 January 2023 valuation: £7,700,000
Kentro Capital Limited
(www.kentrocapital.com)
Kentro is an independent Managing General Agency and Broker specialising in the provision of directors & officers, professional indemnity, financial institutions, accident & health, trade credit, political risks insurance, surety, bond and latent defect insurance, both in the UK and globally.
Date of investment: August 2014
Equity stake: 19.0%
31 January 2023 valuation: £51,522,000
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 2023 Valuation: £1,630,000
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 2023 valuation: £11,000,000
Sterling Insurance PTY Limited
(www.sterlinginsurance.com.au)
Sterling is a specialist Underwriting Agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition based in Sydney Australia. The Group holds its investment in Sterling via a joint venture with Besso Insurance Group Limited, Neutral Bay Investments Limited.
Date of investment: June 2013
Equity stake: 19.7%
31 January 2023 valuation: £3,441,000
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: 28.5%
31 January 2023 valuation: £34,143,000
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 2023
| | Notes | 2023 | 2022
| ||
| | | £'000 | £'000 | £'000 | £'000 |
|
| | | | | |
| GAINS ON INVESTMENTS | 1 | | | | |
| Realised gains on disposal of equity investments (net of costs) | 14 | 155 | | 2,938 | |
| Release of provision made against equity investments and loans | 15,16 | 30 | | 1,117 | |
| Unrealised gains on equity investment revaluation |
12 |
27,275 | |
16,204 | |
| | | | 27,460 | | 20,259 |
| INCOME | | | | | |
| Dividends | 1,25 | 3,119 | | 1,903 | |
| Income from loans and receivables | 1,25 | 749 | | 1,092 | |
| Fees receivable | 1,25 | 1,051 | | 1,082 | |
|
| | | 4,919 | | 4,077 |
|
| | | | | |
| OPERATING INCOME | 2 | | 32,379 | | 24,336 |
| | | | | | |
| Operating expenses | | (4,889) | | (4,770) | |
|
| 2 | | (4,889) | | (4,770) |
|
| | | | | |
| OPERATING PROFIT | | | 27,490 | | 19,566 |
| | | | | | |
| Financial income | 2,4 | 130 | | - | |
| Financial expenses | 2,3 | (88) | | (78) | |
| Exchange movements | 2,8 | 58 | | (93) | |
| | | | 100 | | (171) |
|
| | | | | |
| PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION | 8 |
| 27,590 |
| 19,395 |
| | | | | | |
| Income taxes | 9 | | (3,747) | | (1,911) |
|
| | | | | |
| PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS |
20 | |
£23,843 | |
£17,484 |
| | | | | | |
| | | | | | |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 20 | |
£23,843 | |
£17,484 |
| | | | | | |
| | | | | | |
|
Earnings per share - basic (pence) |
10 | |
66.2p | |
48.6p |
| Earnings per share - diluted (pence) | 10 | | 63.6p | | 47.3p |
The result for the year is wholly attributable to continuing activities.
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION
31ST JANUARY 2023
(Company Number: 05674962)
| | | Group | | Company | ||
| | Notes | 2023 | 2022 | | 2023 | 2022 |
| | | £'000 | £'000 | | £'000 | £'000 |
| ASSETS | | | | | | |
|
| | | | | | |
| NON-CURRENT ASSETS | | | | | | |
| Property, plant and equipment | 11 | 79 | 96 | | - | - |
| Right-of-use asset | 21 | 671 | 836 | | - | - |
| Investments - equity portfolio | 12 | 171,461 | 141,245 | | 158,333 | 134,490 |
| Investments - subsidiaries | 12 | - | - | | 31,274 | 32,187 |
| Loans and receivables | 15 | 8,120 | 7,231 | | 4,106 | 4,106 |
|
| | 180,331 | 149,408 | | 193,713 | 170,783 |
| CURRENT ASSETS | | | | | | |
| Investments - assets held for sale | 12 | - | 8,104 | | - | - |
| Investments - treasury portfolio | 13 | 591 | - | | - | - |
| Trade and other receivables | 16 | 5,283 | 4,974 | | - | - |
| Cash and cash equivalents | | 11,564 | 8,628 | | 8 | 8 |
| TOTAL CURRENT ASSETS | | 17,438 | 21,706 | | 8 | 8 |
| TOTAL ASSETS | | 197,769 | 171,114 | | 193,721 | 170,791 |
|
| | | | | | |
| LIABILITIES | | | | | | |
| | | | | | | |
| NON-CURRENT LIABILITIES | | | | | | |
| Lease liabilities | 21 | (596) | (772) | | - | - |
| Deferred tax liabilities | 17 | (5,631) | (1,898) | | - | - |
| TOTAL NON-CURRENT LIABILITIES | | (6,227) | (2,670) | | - | - |
| | | | | | | |
| CURRENT LIABILITIES | | | | | | |
| Trade and other payables | | (1,830) | (1,670) | | - | - |
| Lease liabilities | 21 | (175) | (167) | | - | - |
| TOTAL CURRENT LIABILITIES | 18 | (2,005) | (1,837) | | - | - |
|
| | | | | | |
| TOTAL LIABILITIES | | (8,232) | (4,507) | | - | - |
|
| | | | | | |
| NET ASSETS | | £189,537 | £166,607 | | £193,721 | £170,791 |
|
| | | | | | |
| CAPITAL AND RESERVES - EQUITY | | | | | | |
| Called up share capital | 19 | 3,747 | 3,747 | | 3,747 | 3,747 |
| Share premium account | 20 | 29,350 | 29,342 | | 29,350 | 29,342 |
| Fair value reserve | 20 | 106,509 | 84,975 | | 156,190 | 132,347 |
| Reverse acquisition reserve | 20 | 393 | 393 | | - | - |
| Capital redemption reserve | 20 | 7 | 7 | | 7 | 7 |
| Capital contribution reserve | 20 | 72 | 72 | | - | - |
| Retained earnings | 20 | 49,459 | 48,071 | | 4,427 | 5,348 |
| SHAREHOLDERS' FUNDS - EQUITY |
20 |
£189,537 |
£166,607 | |
£193,721 |
£170,791 |
|
| | | | | | |
| Net asset value per share - undiluted (pence) | 10 | 526.2p | 462.7p | | 517.1p | 455.9p |
| Net asset value per share - diluted (pence) | 10 | 516.8p | 455.6p | | 517.1p | 455.9p |
The Financial Statements were approved by the Board of Directors and authorised for issue on 12th June 2023
and signed on its behalf by:
B.P. Marsh & J.S. Newman
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31ST JANUARY 2023
| | Notes | | 2023 | | 2022 |
| | | | £'000 | | £'000 |
| Cash from operating activities | | | | | |
| Income from loans to investee companies | | | 749 | | 1,092 |
| Dividends | | | 3,119 | | 1,903 |
| Fees received | | | 1,051 | | 1,082 |
| Operating expenses | | | (4,889) | | (4,770) |
| Net corporation tax payable | 9 | | (14) | | (13) |
| Purchase of equity investments | 12 | | (2,941) | | (8,011) |
| Net proceeds from sale of equity investments | 12,14 | | 8,259 | | 8,755 |
| Net loan (payments to) / repayments from investee companies |
| | (1,039) | | 7,837 |
| Adjustment for non-cash share incentive plan | | | 104 | | 94 |
| Exchange movement | | | (36) | | (35) |
| (Increase) / decrease in receivables | | | (35) | | 1,248 |
| Increase in payables | | | 160 | | 660 |
| Depreciation and amortisation | 11,21 | | 193 | | 198 |
| Net cash from operating activities | | |
4,681 | |
10,040 |
| | | | | | |
| Net cash used by investing activities | | | | | |
| Purchase of property, plant and equipment | 11 | | (11) | | (6) |
| Purchase of treasury investments net of cash and cash equivalents |
13 | |
(8,371) | |
- |
| Net proceeds from the sale of treasury investments | 13 | | 7,867 | | - |
| Net cash used by investing activities | | |
(515) | |
(6) |
| | | | | | |
| Net cash used by financing activities | | | | | |
| Repayment of borrowings | | | - | | (1,000) |
| Financial income | 4 | | 2 | | - |
| Financial expenses | 3 | | (47) | | (78) |
| Net decrease in lease liabilities | 21 | | (168) | | (159) |
| Dividends paid | 7 | | (1,001) | | (878) |
| Payments made to repurchase company shares | 10 | | (16) | | - |
| Net cash used by financing activities | | |
(1,230) | |
(2,115) |
| | | | | | |
| Change in cash and cash equivalents | | | 2,936 | | 7,919 |
| Cash and cash equivalents at beginning of the year | | |
8,628 | |
709 |
| | | | | | |
|
Cash and cash equivalents at end of year | | |
£11,564 | |
£8,628 |
|
| | | | | |
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 2023
| | Notes | | 2023 | | 2022 |
| | | | £'000 | | £'000 |
| Cash from operating activities | | | | | |
| Dividends received from subsidiary undertakings | | | - | | 5,750 |
| Net cash from operating activities | | | - | | 5,750 |
| | | | | | |
| Net cash used by financing activities | | | | | |
|
Decrease / (increase) in amounts owed by group undertakings | | |
913 | |
(4,910) |
| Adjustment relating to non-cash items | | | 104 | | 38 |
| Dividends paid | 7 | | (1,001) | | (878) |
| Payments made to repurchase company shares | 10 | | (16) | | - |
| Net cash used by financing activities | | | - | | (5,750) |
| | | | | | |
| Change in cash and cash equivalents | | | - | | - |
| Cash and cash equivalents at beginning of the year | | | 8 | | 8 |
| | | | | | |
|
Cash and cash equivalents at end of year | | |
£8 | |
£8 |
|
| | | | | |
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31ST JANUARY 2023
| | Group | Company | ||
|
| 2023 | 2022 | 2023 | 2022 |
| | £'000 | £'000 | £'000 | £'000 |
| | | | | |
| Opening total equity | 166,607 | 149,907 | 170,791 | 154,091 |
| Comprehensive income for the year | 23,843 | 17,484 | 23,843 | 17,492 |
| Dividends paid | (1,001) | (878) | (1,001) | (878) |
| Repurchase of company shares | (16) | - | (16) | - |
| Share incentive plan | 104 | 94 | 104 | 86 |
| TOTAL EQUITY | £189,537 | £166,607 | £193,721 | £170,791 |
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 2023
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 2023 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 three trading subsidiaries, B.P. Marsh & Company Limited, Marsh Insurance Holdings 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, Marsh Insurance Holdings 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 2023, 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 three subsidiary investment entities, B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited and B.P. Marsh (North America) Limited, that provide services that relate to the Company's investment activities. The results of these three 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 £23,843,539, prior to a dividend distribution of £1,001,435 (2022: profit of £17,491,719 prior to a dividend distribution of £878,282).
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. Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would become fully dilutive for the Group.
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.
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: UK | Geographic segment 2: Non-UK | Group | |||
| | | | | | | |
| | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
| | | | | | |
| Operating income | 8,217 | 6,844 | 24,162 | 17,492 | 32,379 | 24,336 |
| Operating expenses | (2,759) | (2,242) | (2,130) | (2,528) | (4,889) | (4,770) |
|
Segment operating profit |
5,458 |
4,602 |
22,032 |
14,964 |
27,490 |
19,566 |
|
| | | | | | |
| Financial income | 73 | - | 57 | - | 130 | - |
| Financial expenses | (50) | (37) | (38) | (41) | (88) | (78) |
| Exchange movements | 30 | (40) | 28 | (53) | 58 | (93) |
| | | | | | | |
| Profit before tax | 5,511 | 4,525 | 22,079 | 14,870 | 27,590 | 19,395 |
| Income taxes | - | - | (3,747) | (1,911) | (3,747) | (1,911) |
| Profit for the year | £5,511 | £4,525 | £18,332 | £12,959 | £23,843 | £17,484 |
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:
|
Investee Company | Total net operating income attributable to the investee company £'000 |
% of total realised and unrealised operating income |
Reportable geographic segment | |||
| | | | | | | |
| | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| XPT Group LLC | 13,594 | 6,342 | 42 | 26 | 2 | 2 |
| Paladin Holdings Limited1 | 10,304 | - | 32 | - | 1 | - |
| Lilley Plummer Holdings Limited1 | 5,186 | - | 16 | - | 1 | - |
| ATC Insurance Solutions PTY Limited | 4,726 | 2,604 | 15 | 11 | 2 | 2 |
| Stewart Specialty Risk Underwriting Limited | 3,211 | 2,758 | 10 | 11 | 2 | 2 |
| Kentro Capital Limited1 | - | 7,755 | - | 32 | 1 | 1 |
| Walsingham Motor Insurance Limited1 | - | 2,529 | - | 10 | - | 1 |
1There are no disclosures for Kentro Capital Limited and Walsingham Motor Insurance Limited ("Walsingham") in the current year as the income derived from these investee companies either did not exceed the 10% threshold prescribed by IFRS 8, or, in the case of Walsingham, had been sold prior to the start of the current year. There is also no disclosure shown for Paladin Holdings Limited and Lilley Plummer Holdings Limited in the prior year as the income derived from these investee companies did not exceed the 10% threshold prescribed by IFRS 8 in that year.
| | Geographic segment 1: UK | Geographic segment 2: Non-UK | Group | |||||||||
| | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||||||
| Non-current assets | | | | | | |
| |||||
| Property, plant and equipment | 45 | 65 | 34 | 31 | 79 | 96 | ||||||
| Right-of-use asset | 386 | 567 | 285 | 269 | 671 | 836 | ||||||
| Investments - equity portfolio | 98,704 | 93,161 | 72,757 | 48,084 | 171,461 | 141,245 | ||||||
| Loans and receivables | 5,712 | 5,633 | 2,408 | 1,598 | 8,120 | 7,231 | ||||||
|
| 104,847 | 99,426 | 75,484 | 49,982 | 180,331 | 149,408 | ||||||
| Current assets | | | | | | | ||||||
| Investments - assets held for sale | - | - | - | 8,104 | - | 8,104 | ||||||
| Investments - treasury portfolio | 591 | - | - | - | 591 | - | ||||||
| Trade and other receivables | 4,777 | 2,770 | 506 | 2,204 | 5,283 | 4,974 | ||||||
| Cash and cash equivalents | 11,564 | 8,628 | - | - | 11,564 | 8,628 | ||||||
|
| 16,932 | 11,398 | 506 | 10,308 | 17,438 | 21,706 | ||||||
|
| | | | | | | ||||||
| Total assets | 121,779 | 110,824 | 75,990 | 60,290 | 197,769 | 171,114 | ||||||
|
| | | | | | | ||||||
| Non-current liabilities | | | | | | | ||||||
| Lease liabilities | (343) | (523) | (253) | (249) | (596) | (772) | ||||||
| Deferred tax liabilities | - | - | (5,631) | (1,898) | (5,631) | (1,898) | ||||||
| | (343) | (523) | (5,884) | (2,147) | (6,227) | (2,670) | ||||||
| Current liabilities | | | | | | | ||||||
| Trade and other payables | (1,733) | (1,667) | (97) | (3) | (1,830) | (1,670) | ||||||
| Lease liabilities | (101) | (113) | (74) | (54) | (175) | (167) | ||||||
|
| (1,834) | (1,780) | (171) | (57) | (2,005) | (1,837) | ||||||
|
| | | | | | | ||||||
| Total liabilities | (2,177) | (2,303) | (6,055) | (2,204) | (8,232) | (4,507) | ||||||
| | | | | | | | ||||||
| Net assets | £119,602 | £108,521 | £69,935 | £58,086 | £189,537 | £166,607 | ||||||
|
Additions to property, plant and equipment |
6 |
4 |
5 |
2 |
11 |
6 | ||||||
|
Depreciation and amortisation of property, plant and equipment |
(111) |
(134) |
(82) |
(64) |
(193) |
(198) | ||||||
| | | | | | | | ||||||
| Release of provision against investments and loans | 30
| -
| - | 1,117 | 30 | 1,117 | ||||||
| | | | | | | | ||||||
| Cash flow arising from: | | | | | | | ||||||
| | | | | | | | ||||||
| Operating activities | (1,812) | 8,178 | 6,493 | 1,862 | 4,681 | 10,040 | ||||||
| Investing activities | (515) | (6) | - | - | (515) | (6) | ||||||
| Financing activities | (1,230) | (2,115) | - | - | (1,230) | (2,115) | ||||||
| Change in cash and cash equivalents |
(3,557) |
6,057 |
6,493 |
1,862 |
2,936 |
7,919 | ||||||
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 2023 and 2022 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:
| |
2023 |
2022 |
| | % | % |
| | | |
| UK | 37 | 41 |
| Non-UK | 63 | 59 |
| Total | 100 | 100 |
| | | |
| 3. FINANCIAL EXPENSES | 2023 | 2022 |
| | £'000 | £'000 |
| | | |
| Interest costs on loans and other payables (Note 18) | - | 23 |
| Interest costs on lease liability (Note 21) | 47 | 55 |
| Investment management costs (Note 13) | 41 | - |
| | £88 | £78 |
| | | |
| 4. FINANCIAL INCOME | 2023 | 2022 |
| | £'000 | £'000 |
| | | |
| Bank and similar interest | 2 | - |
| Income from treasury portfolio investments - dividend and similar income (Note 13) |
165 |
- |
| Income from treasury portfolio investments - net unrealised (losses) / gains on revaluation (Note 13) |
(37) |
- |
| | £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 (2022: 16); 6 of those are in a management role (2022: 6) and 10 of those are in a support role (2022: 10). All remuneration was paid by B.P. Marsh & Company Limited.
| The related staff costs were: | 2023 | 2022 |
| | £'000 | £'000 |
| | | |
| Wages and salaries | 3,051 | 2,992 |
| Social security costs | 453 | 418 |
| Pension costs | 162 | 148 |
| Other employment costs (Note 24) | 85 | 76 |
| | £3,751 | £3,634 |
| | | |
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.
Charges of £84,714 (2022: £68,070) relating to the SIP are included within 'Other employment costs' above. No charges (2022: £7,685) relating to the Joint Share Ownership Agreements are included within 'Other employment costs' above as the scheme vested in the prior year.
6. DIRECTORS' EMOLUMENTS
| | 2023 | 2022 |
| The aggregate emoluments of the directors were: | £'000 | £'000 |
| | | |
| Management services - remuneration | 1,601 | 1,717 |
| Fees | 25 | 23 |
| Pension contributions - remuneration | 71 | 63 |
| | £1,697 | £1,803 |
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 31,801 (2022: 31,210) Free, Matching and Partnership Shares granted under the SIP during the year, 8,673 (2022: 9,363) were granted to directors of the Company.
Of the £Nil (2022: £7,685) charge relating to the Joint Share Ownership Plan and the £84,714 (2022: £68,070) charge relating to the SIP, £Nil (2022: £2,643) and £23,104 (2022: £20,421) related to the directors respectively.
|
| 2023 | 2022 |
| | £'000 | £'000 |
| Highest paid director | | |
| Emoluments | 458 | 486 |
| Pension contribution | 27 | 24 |
| | £485 | £510 |
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 (2022: 3) accrued benefits under these defined contribution pension schemes.
The key management personnel comprise only the directors.
| 7. DIVIDENDS | 2023 | 2022 |
| | £'000 | £'000 |
| Ordinary dividends | | |
| | | |
| Dividend paid: | | |
| | | |
| 2.78 pence each on 36,022,853 Ordinary shares (2022: 2.44 pence each on 35,995,156 Ordinary shares) | 1,001 | 878 |
| | | |
| | £1,001 | £878 |
In the current year a total dividend of £5,969 (2022: £5,752) was payable on the 214,696 (2022: 235,719) ordinary shares held by the B.P. Marsh SIP Trust ("SIP Trust").
No dividend was payable on the 1,443,147 (2022: 1,461,302) ordinary shares held by the B.P. Marsh Employees' Share Trust ("Share Trust") under the Joint Share Ownership Plan.
In addition, no dividend is payable on unallocated ordinary shares held in Treasury on the dividend record date. No unallocated ordinary shares were held in Treasury on the dividend record date in the current year (2022: 9,542).
| 8. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION | 2023 | 2022 |
| | £'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 |
193 |
198 |
| Auditor's remuneration :- | | |
| Audit fees for the Company | 35 | 31 |
| Other services: | | |
| -Audit of subsidiaries' accounts | 17 | 17 |
| -Taxation | 15 | 14 |
| -Other advisory | 9 | 36 |
| Exchange (gain) / loss | (58) | 93 |
| 9. INCOME TAX EXPENSE | 2023 | 2022 |
| | £'000 | £'000 |
| Current tax: | | |
| Current tax on profits for the year | 14 | 13 |
| Adjustments in respect of prior years | - | - |
| | | |
| Total current tax | 14 | 13 |
| | | |
| Deferred tax (Note 17): | | |
| Origination and reversal of temporary differences | 3,733 | 1,898 |
| | | |
| Total deferred tax | 3,733 | 1,898 |
| | | |
| Total income taxes charged in the Consolidated Statement of Comprehensive Income |
£3,747 |
£1,911 |
The tax assessed for the year is lower (2022: lower) than the standard rate of corporation tax in the UK. The differences are explained below:
|
| 2023 | 2022 |
|
| £'000 | £'000 |
|
| | |
| Profit before tax | 27,590 | 19,395 |
| | | |
| Profit on ordinary activities at the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%) | 5,242 | 3,685 |
| Tax effects of: | | |
| Expenses not deductible for tax purposes | 25 | 22 |
| Withholding tax suffered at source on overseas income | 14 | 13 |
| Non-taxable capital gains on disposal of investments | (4) | (518) |
| Other effects: | | |
| Non-taxable income (dividends received) | (593) | (362) |
| Non-taxable income (unrealised gains on equity portfolio revaluation) | (1,442) | (1,181) |
| Management expenses unutilised | 505 | 252 |
| | | |
| Total income taxes charged in the Consolidated Statement of Comprehensive Income |
£3,747 |
£1,911 |
The March 2021 Budget announced that the UK corporation tax would increase from 19% to 25% (effective 1st April 2023) and Finance Bill 2021 was considered substantively enacted in May 2021. This change in tax rate has had no material impact on the Group financial statements for the year ended 31st January 2023 and future periods. Refer to Note 17 for details.
10. EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS AND NET ASSET VALUE PER SHARE
| | 2023 £'000 | 2022 £'000 |
| Earnings | | |
| Earnings for the purpose of basic and diluted earnings per share being total comprehensive income attributable to equity shareholders |
23,843 |
17,484 |
| | | |
| Earnings per share - basic | 66.2p | 48.6p |
| Earnings per share - diluted | 63.6p | 47.3p |
| |
|
|
| Number of shares | Number | Number |
| Weighted average number of ordinary shares for the purposes of basic earnings per share |
36,017,964 |
35,988,766 |
| | | |
| Number of dilutive shares under option | 1,443,147 | 1,461,302 |
| | | |
| Weighted average number of ordinary shares for the purposes of dilutive earnings per share |
37,461,111 |
36,925,601 |
During the year 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 (2022: no share repurchases undertaken).
Ordinary shares held by the Company in Treasury
| Movement of ordinary shares held in Treasury: | | |
| | 2023 | 2022 |
| | Number | Number |
| | | |
| Opening total ordinary shares held in Treasury at 1st February | 9,542 | 42,862 |
| | | |
| Ordinary shares repurchased into Treasury during the year | 4,850 | - |
| | | |
| Ordinary shares transferred to the B.P. Marsh SIP Trust during the year | (9,542) | (33,320) |
| | | |
| Total ordinary shares held in Treasury at 31st January | 4,850 | 9,542 |
| | | |
The Treasury shares do not have voting or dividend rights and have therefore been excluded for the purposes of calculating earnings per share.
The repurchase of the ordinary shares is borne from the Group's commitment to reduce share price discount to Net Asset Value. Its policy has been throughout the year (and previously) to be able to buy small parcels of shares when the share price is below 15% of its published Net Asset Value and place them into Treasury, as outlined in the Group's Share Buy-Back Policy announcement on 17th July 2019. On 16th January 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 £1,000,000 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.
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 (Note 24) within an Employee Benefit Trust, 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. 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 current year, 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 on 7th April 2022 (Note 24). Following this transfer and as at 31st January 2023 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.
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 excludes the 1,443,147 shares currently held within the Employee Benefit Trust 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 (£4,106,259) on the 1,461,302 shares issued to the Employee Benefit Trust for the same reasons. On this basis the current undiluted net asset value per share is 526.2 pence for the Group. When the joint share ownership arrangements are eventually exercised, 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 £4,106,259. The diluted net asset value per share is therefore 516.8 pence.
The diluted weighted average number of ordinary shares at 31st January 2023 has been calculated by including the 1,443,147 vested shares held under joint share ownership arrangements.
The increase to the weighted average number of ordinary shares between 2022 and 2023 is mainly attributable to the inclusion of the 9,542 ordinary shares transferred from Treasury to the SIP Trust and 18,155 ordinary shares transferred from the Employee Benefit Trust to the SIP Trust during the year that have been treated as re-issued for the purposes of calculating earnings per share.
31,801 ordinary shares (comprising 9,542 ordinary shares transferred from Treasury to the SIP Trust in March 2022 together with 4,104 of unallocated ordinary shares already held within the SIP Trust and 18,155 unallocated ordinary shares transferred from the Employee Benefit Trust to the SIP Trust in April 2022) were allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement on 7th April 2022 (Note 24).
11. PROPERTY, PLANT AND EQUIPMENT
| |
Furniture and Equipment £'000 | Leasehold Fixtures and Fittings and Others £'000 |
Total £'000 |
| | | | |
| Group | | | |
| | | | |
| Cost | | | |
| At 1st February 2021 | 137 | 152 | 289 |
| Additions | 6 | - | 6 |
| Disposals | (1) | - | (1) |
| At 31st January 2022 | 142 | 152 | 294 |
| | | | |
| At 1st February 2022 | 142 | 152 | 294 |
| Additions | 11 | - | 11 |
| Disposals | (5) | - | (5) |
| At 31st January 2023 | 148 | 152 | 300 |
| | | | |
| Depreciation |
|
|
|
| At 1st February 2021 | 102 | 64 | 166 |
| Eliminated on disposal | (1) | - | (1) |
| Charge for the year | 18 | 15 | 33 |
| At 31st January 2022 | 119 | 79 | 198 |
| | | | |
| 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 |
| | | | |
| Net book value |
|
|
|
| At 31st January 2023 | £20 | £59 | £79 |
| At 31st January 2022 | £23 | £73 | £96 |
| At 31st January 2021 | £35 | £88 | £123 |
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 2021 | 130,951 | - | 130,951 |
| Transfers between categories | (7,435) | 7,435 | - |
| Additions | 8,011 | - | 8,011 |
| Disposals | (5,817) | - | (5,817) |
| Provisions | - | - | - |
| Unrealised gains in this period | 15,535 | 669 | 16,204 |
| At 31st January 2022 | £141,245 | £8,104 | £149,349 |
| | | | |
| 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 cost | | | |
| | | | |
| At 1st February 2021 | 60,378 | - | 60,378 |
| Transfers between categories | (6,096) | 6,096 | - |
| Additions | 8,011 | - | 8,011 |
| Disposals | (5,913) | - | (5,913) |
| Provisions | - | - | - |
| At 31st January 2022 | £56,380 | £6,096 | 62,476 |
|
| | | |
| 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 |
The additions relate to the following transactions in the year:
On 23rd March 2022 the Group acquired a 40% cumulative preferred equity stake in Denison and Partners Limited ("Denison and Partners") for consideration of £132,000. Denison and Partners is a start-up London-based Lloyds Insurance Broker with a focus on delivering (re)insurance delegated authority solutions and services to Managing General Agencies, Coverholders and (Re)insurers.
On 1st June 2022 the Group agreed to invest, through its wholly-owned subsidiary company B.P. Marsh (North America) Limited, a further USD 3,500,000 (£2,808,575) in XPT Group LLC ("XPT"). USD 2,780,000 was used to subscribe for a further 2,780 redeemable preference shares in XPT. The remaining USD 720,000 was used to acquire a further 0.97% equity stake in XPT. On completion, the total amount invested by the Group in redeemable preference shares increased from USD 3,220,000 as at 31st January 2022 to USD 6,000,000 as at 31st January 2023 and the Group's equity investment in XPT also increased from 28.18% as at 31st January 2022 to 29.15% at the time of investment. As at 31st January 2023 the Group's shareholding in XPT was 28.54%.
The disposal relates to the following transaction in the year:
On 1st March 2022 the Group sold its entire 77.25% stake in Summa Insurance Brokerage, S.L. ("Summa") to Acrisure España S.L. ("Acrisure"), part of Acrisure LLC, for consideration of €9,700,737 (£8,104,208), net of transaction costs. On 22nd July 2022 further consideration of €23,266 (£19,630) was received from Acrisure in respect of over-withheld legal expenses, bringing total consideration received to €9,724,003 (£8,123,838). The consideration received represented a net gain of £19,838 (Note 14 and Note 20) over the carrying value of the Group's investment in Summa of £8,104,000 as at 31st January 2022 and represented an overall gain of £2,027,695 above the cost of investment. Outstanding loans of €1,820,070 (£1,520,526) were also repaid in full on completion.
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 | 30.06.22 | 1,865,711 | 359,585 | Holding Company for specialist Australian agricultural Managing General Agency |
| | | | | | |
| Asia Reinsurance Brokers Pte Limited | 25.00 | 31.05.22 | 1,936,111 | (309,209) | Specialist reinsurance broker |
| | | | | | |
| ATC Insurance Solutions PTY Limited | 25.56 | 30.06.22 | 12,408,535 | 3,403,228 | Specialist Australian Managing General Agency |
| | | | | | |
| Criterion Underwriting Pte Limited1 | 29.40 | 31.05.20 | (445,842) | (32,019) | Specialist Singaporean Managing General Agency |
| | | | | | |
| Denison and Partners Limited2 | 40.00 | - | - | - | Specialist reinsurance broker |
| | | | | | |
| EC3 Brokers Group Limited | 35.00 | 31.12.20 | (9,705,910) | (6,757,003) | Investment holding company |
| | | | | | |
| The Fiducia MGA Company Limited | 35.18 | 31.12.21 | (938,500) | 542,602 | Specialist UK Marine Cargo Underwriting Agency |
| | | | | | |
| Kentro Capital Limited3 | 18.98 | 31.12.21 | 22,756,386 | (2,285,249) | Specialist Managing General Agency |
| | | | | | |
| LEBC Holdings Limited | 59.34 | 30.09.21 | 5,183,237 | 992,579 | Independent financial advisor company |
| | | | | | |
| Lilley Plummer Holdings Limited | 30.00 | 31.12.21 | 682,197 | 242,820 | Specialist Marine broker |
| | | | | | |
| Neutral Bay Investments Limited | 49.90 | 31.03.22 | 3,918,814 | 228,720 | Investment holding company |
| | | | | | |
| Paladin Holdings Limited4 | 47.06 | 31.12.21 | 232,397 | 1,037,846 | Investment holding company |
| | | | | | |
| Sage Program Underwriters, Inc.5 | 30.00 | - | - | - | Specialist Managing General Agency |
| | | | | | |
| Stewart Specialty Risk Underwriting Limited | 30.00 | 31.12.21 | 2,721,715 | 1,954,164 | Specialist Canadian Casualty Underwriting Agency |
| | | | | | |
| XPT Group LLC | 28.54 | 31.12.21 | (3,919,412) | (6,927,053) | USA Specialty lines insurance distribution company |
| | | | | | |
1Recent statutory financial information is not available for Criterion Underwriting Pte Limited as the company is not currently trading.
2Denison and Partners Limited is a newly incorporated company. Statutory accounts are not available as these are not yet due.
3On 22nd February 2022, as part of a rebranding exercise, Nexus Underwriting Management Limited rebranded and changed its name to Kentro Capital Limited.
4The Group's 47.06% equity investment in Paladin Holdings Limited includes 5.88% relating to shares held under option that can be bought back and cancelled. The Group envisages that this shareholding will reduce over time as the options are exercised.
5Sage Program Underwriters, Inc. is a newly incorporated company. Statutory accounts are not available as these are not yet due.
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 2021 | 122,748 |
| Additions | - |
| Unrealised gains in this period | 11,742 |
| At 31st January 2022 | £134,490 |
|
| |
| At 1st February 2022 | 134,490 |
| Additions | - |
| Unrealised gains in this period | 23,843 |
| At 31st January 2023 | £158,333 |
|
| |
| At cost | |
| | |
| At 1st February 2021 | 2,143 |
| Additions | - |
| At 31st January 2022 | £ 2,143 |
| | |
| At 1st February 2022 | 2,143 |
| Additions | - |
| At 31st January 2023 | £ 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 | 2023 | 2023 | Principal activity | |
| | | £ | £ | | |
| | | | | | |
| B.P. Marsh & Company Limited | 100 | 189,533,773 | 23,843,538 | Consulting services and investment holding company | |
| | | | | | |
| Marsh Insurance Holdings Limited | 100 | 6,099,974 | - | Investment holding company - dormant | |
| | | | | | |
| B.P. Marsh Asset Management Limited | 100 | 1 | - | Dormant | |
| | | | | | |
| B.P. Marsh (North America) Limited* | 100 | 14,990,985 | 9,161,449 | Investment holding company | |
| | | | | | |
| B.P. Marsh & Co. Trustee Company Limited | 100 | 1,000 | - | Dormant | |
| | | | | | |
| Marsh Development Capital Limited | 100 | 1 | - | Dormant | |
| | | | | | |
| 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).
Bastion London Limited, a dormant UK company and 100% owned subsidiary of B.P. Marsh & Company Limited, was dissolved on 5th July 2022.
Loans to the subsidiaries of £31,274,143 (2022: £32,187,221) are treated as capital contributions.
13. CURRENT INVESTMENTS - TREASURY PORTFOLIO
| Group |
| | | |
| At valuation | | 2023 | | 2022 |
|
| | £'000 | | £'000 |
| | | | | |
| Market value at 1st February | | - | | - |
| Additions at cost | | 19,117 | | - |
| Disposals | | (7,867) | | - |
| Change in value in the year | | 87 | | - |
|
Market value at 31st January |
|
£11,337 | |
£ - |
| | | | | |
| Disclosed as: | | | | |
| | | | | |
| Cash and cash equivalents | | 10,746 | | - |
| Investments - treasury portfolio | | 591 | | - |
|
Total |
|
£11,337 | |
£ - |
| | | | | |
| Investment fund split: | | | | |
| | | | | |
| GAM London Limited | | 3,045 | | - |
| Rathbone Investment Management Limited | |
8,292 | |
- |
|
Total |
|
£11,337 | |
£ - |
| | | | | |
The treasury portfolio comprises of investment funds managed and valued by the Group's investment managers, GAM London Limited and Rathbone Investment Management 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 year.
The purpose of the funds is to hold (and grow) the Group's surplus cash until such time that suitable investment opportunities arise.
The funds are risk bearing and therefore their value not only can increase, but also has 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 £40,737 (2022: £Nil) were charged to the Consolidated Statement of Comprehensive Income during the period.
14. REALISED GAINS ON DISPOSAL OF EQUITY INVESTMENTS
The realised gains on disposal of investments for the year comprises of a net gain of £155,121 (2022: £2,937,985 gains on disposal of investments).
£135,283 of this net gain relates 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 is 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 (Note 12). 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 (Note 20).
The amount included in realised gains on disposal of investments for the year to 31st January 2022 comprised of a net gain of £2,937,985.
£1,300 of this net gain was in respect of the Group's disposal of 250,000 ordinary shares (c.5.5% at the time of divestment) in Paladin Holdings Limited ("Paladin") which were held under a call option arrangement, for consideration of £261,300, compared to the fair value of £260,000 at 1st February 2021.
£392,673 of this net gain was in respect of the Group's disposal of its entire 40% investment in MB Prestige Holdings PTY Limited ("MB") at its carrying value of £3,237,000 for consideration of £3,629,673.
£2,407,119 of this net gain was in respect of the Group's disposal of its entire 40.5% investment in Walsingham Motor Insurance Limited ("WMIL") for consideration of £4,654,119, compared to the fair value of £2,247,000 at 1st February 2021.
£136,893 of this net gain was in respect of the capital distribution from liquidating the Group's 20% investment in Walsingham Holdings Limited ("WHL") for consideration of £209,893, compared to the fair value of £73,000 at 1st February 2021.
In aggregate, the above disposals resulted in a net release of previously unrealised gains to Retained Earnings from the Fair Value Reserve of £4,476,991 in that year.
The disposal of the Group's entire 30% investment in Mark Edward Partners LLC ("MEP") during the year to 31st January 2022 did not generate any realised gains or losses on disposal as this investment had been fully provided against during the year to 31st January 2019. However, the disposal did result in a net release of unrealised losses to Retained Earnings from the Fair Value Reserve of £4,572,822 (representing the original cost of investment) in that year.
The above releases of fair value resulted in a net transfer of £95,831 from the Fair Value Reserve to the Retained Earnings Reserve.
Refer to Note 12 for further details relating to the above disposals.
15. LOANS AND RECEIVABLES - NON-CURRENT
| | Group | | Company | ||
| | 2023 | 2022 | | 2023 | 2022 |
| | £'000 | £'000 | | £'000 | £'000 |
| | | | | | |
| Loans to investee companies (Note 25) | 8,120 | 7,231 | | - | - |
| Amounts owed by group undertakings | - | - | | 4,106 | 4,106 |
| | | | | | |
| | £8,120 | £7,231 | | £4,106 | £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 | ||
| | 2023 | 2022 | | 2023 | 2022 |
| | £'000 | £'000 | | £'000 | £'000 |
| | | | | | |
| Trade receivables | 319 | 356 | | - | - |
| Less provision for impairment of receivables |
- |
- | |
- |
- |
| | 319 | 356 | | - | - |
| Loans to investee companies (Note 25) | 3,409 | 3,135 | | - | - |
| Corporation tax repayable | - | - | | - | - |
| Other receivables | 6 | 218 | | - | - |
| Prepayments and accrued income | 1,549 | 1,265 | | - | - |
| | | | | | |
| | £5,283 | £4,974 | | £ - | £ - |
| | | | | | |
No provisions were made against loans to investee companies in the current or prior year. A provision of £30,000 previously made against a loan was released during the current year due to repayments being received (2022: a provision of £1,116,603 previously made against a loan was released during that year due to a repayment being received). Of total provisions of £3,631,756 at 31st January 2022, £3,470,038 had been written off in full as those companies were in the process of being dissolved or had been sold, with no expectation of further recovery, leaving £161,718 provided against at 31st January 2022 with a potential of recovery. The total provision as at 31st January 2023 was £131,718 with a potential of recovery.
Included within net trade receivables is a gross amount of £247,475 (2022: £293,450) 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 | ||
| | 2023 | 2022 | | 2023 | 2022 |
| | £'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 £318,999 (2022: £355,677), of which £146,543 (2022: £215,436) 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 £54,823 (2022: £16,712) 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 | ||
| | 2023 | 2022 | | 2023 | 2022 |
| | £'000 | £'000 | | £'000 | £'000 |
| | | | | | |
| Not past due | 172 | 140 | | - | - |
| Past due: 0 - 30 days | 59 | 15 | | - | - |
| Past due: 31 - 60 days | 2 | - | | - | - |
| Past due: more than 60 days | 86 | 201 | | - | - |
| | | | | | |
| | £319 | £356 | | £ - | £ - |
| | | | | | |
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 2021 | | - | | - |
| Tax movement relating to investment revaluation for the year (Note 9) | | 1,898 | | - |
| | | | | |
| At 31st January 2022 | | £1,898 | | £ - |
| | | | | |
| 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 | | £ - |
| | | | | |
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 £5,631,000 has been made as at 31st January 2023 (2022: £1,898,000).
The deferred tax provision of £5,631,000 as at 31st January 2023 (2022: £1,898,000) 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 2023, 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 12%. 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 March 2021 Budget announced that the UK corporation tax would increase from 19% to 25% (effective 1st April 2023) and Finance Bill 2021 was considered substantively enacted in May 2021. This change in tax rate has had no material impact on the Group financial statements for the year ended 31st January 2023 and for 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 | |||
| | 2023 | 2022 | | 2023 | 2022 |
|
| | £'000 | £'000 | | £'000 | £'000 |
|
| Trade and other payables | | | | | |
|
| Trade payables | 111 | 116 | | - | - |
|
| Other taxation & social security costs | 239 | 205 | | - | - |
|
| Accruals and deferred income | 1,336 | 1,265 | | - | - |
|
| Amounts owed to participating interests | 50 | 84 | | - | - |
|
| Other payables | 94 | - | | - | - |
|
| Lease liabilities (Note 21) | 175 | 167 | | - | - |
|
| | | | | | |
|
| | £2,005 | £1,837 | | £ - | £ - |
|
| | | | | | |
|
All of the above liabilities are measured at amortised cost.
19. CALLED UP SHARE CAPITAL
| | 2023 | 2022 |
| | £'000 | £'000 |
| Allotted, called up and fully paid | | |
| 37,466,000 Ordinary shares of 10p each (2022: 37,466,000) | 3,747 | 3,747 |
| | | |
| | £3,747 | £3,747 |
During the year 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 (2022: no share repurchases undertaken).
Distributable reserves have been reduced by £16,191 as a result.
As at 31st January 2023 a total of 4,850 ordinary shares were held by the Company in Treasury (31st January 2022: 9,542 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.
The repurchase of the ordinary shares is borne from the Group's commitment to reduce share price discount to Net Asset Value. Its policy has been throughout the year (and previously) to be able to buy small parcels of shares when the share price is below 15% of its published Net Asset Value and place them into Treasury, as outlined in the Group's Share Buy-Back Policy announcement on 17th July 2019. On 16th January 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 £1,000,000 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 |
|
At 1st February 2021 | 3,747 | 29,349 | 70,573 | 393 | 7 | 64 | 45,774 | 149,907 |
| | | | | | | | | |
| Comprehensive income for the year | - | - | 14,306 | - | - | - | 3,178 | 17,484 |
| | | | | | | | | |
| Net transfers on disposal of investments (Note 14) | - | - | 96 | - | - | - | (96) | - |
| | | | | | | | | |
| Dividends paid (Note 7) | - | - | - | - | - | - | (878) | (878) |
| | | | | | | | | |
| Share based payment arrangements | - | (7) | - | - | - | 8 | 93 | 94 |
| | | | | | | | | |
|
At 31st January 2022 | £3,747 | £29,342 | £84,975 | £393 | £7 | £72 | £48,071 | £166,607 |
| | | | | | | | | |
|
At 1st February 2022 | 3,747 | 29,342 | 84,975 | 393 | 7 | 72 | 48,071 | 166,607 |
| | | | | | | | | |
| Comprehensive income for the year | - | - | 23,542 | - | - | - | 301 | 23,843 |
| | | | | | | | | |
| Net transfers on disposal of investments (Note 14) | - | - | (2,008) | - | - | - | 2,008 | - |
| | | | | | | | | |
| Dividends paid (Note 7) | - | - | - | - | - | - | (1,001) | (1,001) |
| | | | | | | | | |
| Repurchase of Company shares (Note 10) | - | - | - | - | - | - | (16) | (16) |
| | | | | | | | | |
| Share based payment arrangements | - | 8 | - | - | - | - | 96 | 104 |
| | | | | | | | | |
|
At 31st January 2023 | £3,747 | £29,350 | £106,509 | £393 | £7 | £72 | £49,459 | £189,537 |
| | | | | | | | | |
| 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 |
| | | | | | | | |
|
At 1st February 2021 | 3,747 | 29,349 | 120,605 | 7 | - | 383 | 154,091 |
| | | | | | | | |
|
Comprehensive income for the year | - | - | 11,742 | - | - | 5,750 | 17,492 |
| | | | | | | | |
| Dividends paid (Note 7) | - | - | - | - | - | (878) | (878) |
| | | | | | | | |
| Share based payment arrangements | - | (7) | - | - | - | 93 | 86 |
| | | | | | | | |
|
At 31st January 2022 | £3,747 | £29,342 | £132,347 | £7 | £ - | £5,348 | £170,791
|
| | | | | | | | |
|
At 1st February 2022 | 3,747 | 29,342 | 132,347 | 7 | - | 5,348 | 170,791 |
| | | | | | | | |
|
Comprehensive income for the year | - | - | 23,843 | - | - | - | 23,843 |
| | | | | | | | |
| Dividends paid (Note 7) | - | - | - | - | - | (1,001) | (1,001) |
| | | | | | | | |
| Repurchase of Company shares (Note 10) | - | - | - | - | - | (16) | (16) |
| | | | | | | | |
| Share based payment arrangements | - | 8 | - | - | - | 96 | 104 |
| | | | | | | | |
|
At 31st January 2023 | £3,747 | £29,350 | £156,190 | £7 | £ - | £4,427 | £193,721
|
| | | | | | | | |
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 2021 | | 1,001 |
| Depreciation charge | | (165) |
| | | |
| At 31st January 2022 | | £836 |
| | | |
| At 1st February 2022 | | 836 |
| Depreciation charge | | (165) |
| | | |
| At 31st January 2023 | | £671 |
| | | |
Lease liabilities
The Group was committed to making the following future aggregate minimum payments under its leases:
| | 2023 | 2022 |
| | 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 | 658 | 856 |
| More than five years | - | 16 |
| | £872 | £1,086 |
| | | |
| Lease liabilities included in Consolidated Statement of Financial Position | | |
| at 31st January: | £771 | £939 |
| | | |
| Maturity analysis: | | |
| Current liabilities (Note 18) | 175 | 167 |
| Non-current liabilities | 596 | 772 |
| | £771 | £939 |
| | | |
| Amounts recognised in profit or loss: | 2023 | 2022 |
| | £'000 | £'000 |
| | | |
| Interest on lease liabilities (Note 3) | £47 | £55 |
| Amounts recognised in the Consolidated Statement of Cash Flows: | 2023 | 2022 |
| | £'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 the Group entered into an agreement to provide Sage Program Underwriters, Inc. with a loan facility of USD 250,000. As at 31st January 2023 USD 150,000 had been drawn down, leaving a remaining undrawn facility of USD 100,000. Any drawdown is subject to satisfying certain agreed criteria.
On 23rd March 2022 the Group entered into an agreement to provide Denison and Partners Limited with a loan facility of £670,000. As at 31st January 2023 £500,000 had been drawn down, leaving a remaining undrawn facility of £170,000. Any drawdown is subject to satisfying certain agreed criteria.
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, political risk and the Ukraine 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 £11,564,000 (2022: £8,628,000), 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 2.65% p.a. in the period (2022: deposit rates of interest ranged up to 0.01% 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 14 days (2022: 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 €11,500,000 and USD 1,075,000 (2022: five currency hedging transactions ranging from €910,000 to €1,165,000 and USD 1,000,000) to mitigate the exchange rate risk for certain foreign currency receivables. These were settled before the year end. A net loss of £74,547 (2022: net loss of £7,750) 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 1,075,000 and AUD 600,000 which were entered into on 30th January 2023. 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 2023 (2022: 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 2023:
| | | Level 1 | Level 2 | Level 3 | Total |
| | | £'000 | £'000 | £'000 | £'000 |
| Assets | | | | | |
| | | | | | |
| Equity portfolio investments designated as "fair value through profit or loss" assets | | - | - | 171,461 | 171,461 |
| | | | | | |
| | | | | | |
| | | - | - | £171,461 | £171,461 |
The Group's classification of the financial instruments at fair value into the valuation hierarchy at 31st January 2022 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" assets | | - | - | 149,349 | 149,349 |
| | | | | | |
| | | | | | |
| | | - | - | £149,349 | £149,349 |
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 2023 classified as Level 3, 66% by value (2022: 72%) were valued using a multiple of earnings and 34% (2022: 28%) 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 2023 was 13.8x (2022: 14.4x). There were no valuations using a weighted average post discount Price/Earnings multiple when valuing the portfolio at 31st January 2023 (2022: 19.2x).
If the multiple used to value each unquoted investment valued on an earnings basis as at 31st January 2023 moved by 10%, this would have an impact on the investment portfolio of £13.8m (2022: £11.0m) or 8.1% (2022: 7.3%).
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 2023 the proportion of the investment portfolio that was valued using these techniques were: 25% using industry metric (2022: 22%), 9.3% using forecast cash flow (2022: none), 0.1% at cost (2022: none), none using revenues (2022: 1%) and none at agreed sale value (2022: 5%).
If the value of all the investments valued under alternative methodologies moved by 10%, this would have an impact on the investment portfolio of £4.1m (2022: £3.6m) or 2.4% (2022: 2%).
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. The details of the arrangements are described in the following table:
| Nature of the arrangement | Share appreciation rights (joint beneficial ownership)
|
| Date of grant | 12th June 2018 |
| Number of instruments granted | 1,461,302 |
| Exercise price (pence) | N/A |
| Share price (market value) at grant (pence) |
281.00 |
| Hurdle rate | 3.75% p.a. (simple) |
| Vesting period (years) | 3 years |
| Vesting conditions | There are no performance conditions other than the recipient remaining 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 persons acting together, obtaining control of the Company either (i) as a result of a making a Takeover Offer; (ii) pursuant to a court sanctioned Scheme of Arrangement; or (iii) in consequence of a Compulsory Acquisition; or
b) a person 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.
If the employee is a bad leaver the co-owner of the jointly-owned share can buy out the employee's interest for 0.01p |
| Expected volatility | N/A |
| Risk free rate | 1% |
| Expected dividends expressed as a dividend yield | 1.9% |
| Settlement | Cash settled on sale of shares |
| % expected to vest (based upon leavers) | 100% |
| Number expected to vest | 1,443,147 |
| Valuation model | Expected Return Methodology (ERM) |
| ERM value (pence) | 36.00 |
| Deduction for carry charge (pence) | 31.60 |
| Fair value per granted instrument (pence) | 4.40 |
| Charge for year ended 31st January 2023 | £Nil |
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 have been 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.
Alternatively, on or after vesting, 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.
Participants will therefore receive value from the jointly-owned shares only if and to the extent that the share value grows above the initial market value plus the carrying cost to the date of vesting.
The employees and directors received an interest in jointly owned shares and a Joint Share Ownership Plan ("JSOP") is not an option, however the convention for JSOPs is to treat them as if they were options. The value of the employee's interest for accounting purposes is calculated using the Expected Return Methodology.
The risk-free rates are based on the yield on UK Government Gilts of a term consistent with the assumed option life.
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. Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would become fully dilutive for the Group.
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 current year, 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 on 7th April 2022. Following this transfer and as at 31st January 2023 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.
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 9,542 ordinary shares in the Company, which were held in Treasury as at 31st January 2022 (2022: 33,320 ordinary shares in the Company, which were held in Treasury as at 31st January 2021) were transferred to the B.P. Marsh SIP Trust ("SIP Trust"). As a result, together with 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, a total of 31,801 ordinary shares in the Company were available for allocation to the participants of the SIP (2022: 35,314 ordinary shares were available for allocation, including 1,994 ordinary shares forfeited by departing employees).
On 7th April 2022, a total of 11 eligible employees (including 3 executive directors of the Company) applied for the 2022-23 SIP and were each granted 1,157 ordinary shares ("22-23 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 (578 ordinary shares) and were therefore awarded 1,156 Matching Shares.
The 22-23 Free and Matching Shares are subject to a 1 year forfeiture period.
A total of 31,801 (2022: 31,210) Free, Matching and Partnership Shares were granted to the 11 (2022: 10) eligible employees during the year, including 8,673 (2022: 9,363) granted to 3 (2022: 3) executive directors of the Company.
No ordinary shares were withdrawn from the SIP Trust during the year (2022: no withdrawals).
£84,714 of the IFRS 2 charges (2022: £68,070) associated with the award of the SIP shares to 11 (2022: 10) 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 2023, 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 262,829 Free, Matching and Partnership Shares had been granted to 11 eligible employees under the SIP, including 87,252 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.
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:
| | 2023 | 2022 |
| | £ | £ |
| | | |
| Denison and Partners Limited | 500,000 | - |
| The Fiducia MGA Company Limited | 2,224,500 | 2,449,000 |
| LEBC Holdings Limited | 3,000,000 | 1,500,000 |
| Lilley Plummer Holdings Limited | 300,000 | 200,000 |
| Paladin Holdings Limited | 3,096,500 | 3,096,500 |
| | | |
| | AUD | AUD |
| | | |
| Agri Services Company PTY Limited | 1,200,000 | - |
| | | |
| | € | € |
| | | |
| Summa Insurance Brokerage, S.L. | - | 1,820,070 |
| | | |
| | USD | USD |
| | | |
| XPT Group LLC | 2,000,000 | 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.
The loans of £425,831 to Bastion Reinsurance Brokerage (PTY) Limited (2022: £425,831), £665,000 to Bulwark Investment Holdings (PTY) Limited (2022: £665,000) and £1,450,778 to Property and Liability Underwriting Managers (PTY) Limited (2022: £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:
|
| 2023 | 2022 |
| | £ | £ |
| | | |
| Agri Services Company PTY Limited | 205,902 | 125,133 |
| Asia Reinsurance Brokers Pte Limited | (82,535) | 123,177 |
| ATC Insurance Solutions PTY Limited | 617,223 | 121,362 |
| Denison and Partners Limited | 93,624 | - |
| EC3 Brokers Group Limited | 35,555 | (881,318) |
| The Fiducia MGA Company Limited | 196,366 | 203,465 |
| Kentro Capital Limited | 1,176,956 | 1,201,425 |
| LEBC Holdings Limited | 586,787 | 479,851 |
| Lilley Plummer Holdings Limited | 115,434 | 116,736 |
| MB Prestige Holdings PTY Limited | - | 702,778 |
| Neutral Bay Investments Limited | 130,665 | 119,597 |
| Paladin Holdings Limited | 527,907 | 550,570 |
| Sage Program Underwriters, Inc. | 47,776 | 39,544 |
| Stewart Specialty Risk Underwriting Limited | 356,384 | 283,771 |
| Summa Insurance Brokerage, S.L. | 10,564 | 152,274 |
| Walsingham Holdings Limited | - | 20,308 |
| Walsingham Motor Insurance Limited | - | 121,906 |
| XPT Group LLC | 856,734 | 557,099 |
| | | |
In addition, the Group made management charges of £36,000 (2022: £34,000) 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 £7,700 (2022: £5,000) 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 £1,001,435, £443,507 was paid to the directors or parties related to them (2022: total dividend payments of £878,282, of which £389,060 was paid to the directors or parties related to them).
26. EVENTS AFTER THE REPORTING DATE
Group
On 2nd February 2023 the Group entered into a new loan agreement to provide a further USD 6,000,000 (£4,925,231) of funding to XPT Group LLC ("XPT") in the form of a short term USD 2,000,000 Revolving Loan Facility and a USD 4,000,000 Term Loan. These facilities were drawn down in full on completion and were utilised by XPT to acquire Cal Inspection Bureau Inc and are in addition to an existing loan facility of USD 2,000,000 provided by the Group in earlier years. On 1st June 2023 USD 1,000,000 of the Revolving Loan Facility was repaid by XPT. As at 31st January 2023 USD 2,000,000 of loans were outstanding and following the aforementioned drawdown and repayment total loans stand at USD 7,000,000 at the date of this report.
On 15th February 2023 the Group entered into a new loan agreement to provide a further £2,000,000 of funding to Paladin Holdings Limited ("Paladin") for the purposes of funding an investment and is in addition to an existing loan facility of £3,096,500 provided by the Group in earlier years. £500,000 of the new facility was drawn down by Paladin on completion. As at 31st January 2023 £3,096,500 of loans were outstanding and following the aforementioned drawdown total loans stand at £3,596,500, with a remaining undrawn facility of £1,500,000 at the date of this report.
On 23rd March 2023 Denison and Partners Limited drew down the remaining £170,000 from its loan facility agreed by the Group in March 2022. As at 31st January 2023 £500,000 of loans were outstanding and following the aforementioned drawdown total loans stand at £670,000, with no remaining undrawn facility at the date of this report.
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 22nd May 2023 the Group agreed to dispose of its entire shareholding (18.7% at the time of agreement) in Kentro Capital Limited ("Kentro"), pursuant to an agreement by which Brown & Brown, Inc ("Brown & Brown"), one of the largest US-based insurance intermediaries, has agreed to acquire the entire issued share capital of Kentro, subject to FCA approval. Upon completion, which is expected to occur by 1st November 2023, the Group expects to receive proceeds of £51,522,000 (net of all transaction costs) which is in line with the carrying value of the Group's investment in Kentro of £51,522,000 as at 31st January 2023 and would represent an overall gain of £36,395,446 above the cost of investment. As part of the agreement, on completion the Group will provide a loan facility of at least £287,900 (and subject to a maximum of £1,286,481) to Brown & Brown Holdco UK 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.
Company
On 30th May 2023 the Company's subsidiary undertaking, B.P. Marsh & Company Limited, paid a dividend of £10,002,653 (3.97 pence per share) to the Company. This distribution was made in order to provide the Company with sufficient aggregate distributable reserves to allow for the payment of future dividends and to undertake share buy-backs.
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 | ||
| | 2023 | 2022 | | 2023 | 2022 |
| | £'000 | £'000 | | £'000 | £'000 |
|
| | | | | |
| Fair value of investments - equity portfolio |
171,461 |
149,349 | |
158,333 |
134,490 |
| | | | | | |
| Impact of a 10% change in fair value on Consolidated Statement of Comprehensive Income |
17,146
|
14,935
| |
15,833 |
13,449 |
| | | | | | |
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% (2022: 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 2023 the Group had no borrowings (31st January 2022: 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 2023, 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 £133,000 for the Group (2022: £108,000 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 2023, 63% of the Group's net assets were sterling denominated (2022: 64%). The Group's general policy remains not to hedge its foreign currency denominated investment portfolio.
The Group's net assets in Euro, 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.
|
As at 31st January 2023 |
Sterling |
Euro | Australian dollar |
US dollar |
Other |
Total |
| | £'000 | £'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) |
| | | | | | | |
|
As at 31st January 2022 |
Sterling |
Euro | Australian dollar |
US dollar |
Other |
Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| Net assets | 107,300 | 9,625 | 19,331 | 21,745 | 8,606 | 166,607 |
| | | | | | | |
| Sensitivity analysis | | | | | | |
| Assuming a 10% movement of exchange rates against sterling | | | | | | |
| Impact on net assets | N/A | (875) | (1,757) | (1,905) | (782) | (5,319) |
| | | | | | | |
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, the Group is exposed to the risks associated with the UK's decision to leave the European Union ("Brexit"). The Board is continually assessing the impact of Brexit on the Group and its underlying investments, however the direct impact on the Group's investment portfolio has not been material. 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.
Ukraine conflict and Inflation risk
The Group is exposed to the risks associated with the conflict in Ukraine, which intensified on 24th February 2022. Since then, the Board has been continually assessing the potential impact of the intensifying military action and associated significant economic sanctions imposed by the international community, and the potential impact on the Group and its underlying investments. Whilst the Group does not have any direct investment in the affected region, 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 the conflict in Ukraine 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 the conflict in Ukraine 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 2023 but is derived from those accounts. The statutory accounts for the year to 31 January 2023 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 2023 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 12 June 2023 for their release on 13 June 2023.
-Ends-
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