Final Results

RNS Number : 6139H

B.P. Marsh & Partners PLC

01 June 2011

 



Date:                     1^st June 2011

On behalf of:          B. P. Marsh & Partners Plc ("B. P. Marsh", "the Company" or "the Group")

Embargoed until:    0700hrs

B. P. Marsh & Partners Plc

Final Results

B. P. Marsh & Partners Plc (AIM: BPM), a niche venture capital provider to early stage financial services businesses, announces its audited Group final results for the year to 31^st January 2011.

The highlights of the results are:

¡  Net asset value up 5.2% to £46.5m (2010: £44.2m), or 159p per share (2010: 151p)

¡  Profit before tax £3.0m (£0.1m 2010)

¡  Annual compound growth rate of 10.3% achieved

¡  £0.9m of cash currently available for further investments, excluding any realisations

Chairman's Statement

I am pleased to present the audited Consolidated Accounts of B. P. Marsh & Partners Plc for the year ended 31^st January 2011.

Over the past year the portfolio has witnessed a number of areas of strong performance, and has also experienced individual challenges. The year to 30^th September 2010 saw revenue growth at Hyperion of 26% while EBITDA grew by 41% and continued strong growth in both revenue and EBITDA is predicted to continue for 2011. LEBC, too, saw significant revenue growth, with an increase of 25% achieved for the year to 30^th September 2010 and further growth is forecast for 2011.

However, some of our other investments have found the economic climate more challenging, particularly the smaller investments. Larger investments face similar issues, albeit usually on a different scale. For example, the recent deterioration of the Spanish economy has been well documented, but in the face of this our Spanish Insurance broking investee company, Summa, did well to achieve 90% of its budgeted profit for 2010. 

The Group believes that it has weathered the recent collapse of the financial markets with a steady and robust performance and we look forward to building upon this in the current year and beyond.

Given that the Group has drawn down on part of its loan facility, no dividends will be paid from the year to 31^st January 2011. As successful realisations are made and loan funds are repaid, the Board hopes to be able to reconsider this position in future years.

Financial Performance

At 31^st January 2011, the net asset value of the Group was £46.5m (2010: £44.2m), after making allowance for deferred corporation tax, an increase of 5.2% (+5.9% excl. dividend). This equates to a net asset value of 159p per ordinary share as at 31^st January 2011 (2010: 151p).

The Group has therefore achieved an annual compound growth rate of 10.3% after running costs, realisations, losses and distributions and having made an appropriate allowance for deferred corporation tax, since the Group's establishment in 1990.

Reflecting investment portfolio movement, including the unrealised increase on revaluation of the portfolio, the consolidated profit on ordinary activities after tax for the year was £2.6m (2010: profit of £0.3m). However, excluding portfolio movement the Group made a pre-tax profit of £0.15m (2010: profit of £0.18m). The Group aims each year to at least break even on an underlying basis, before taking into account any portfolio movement.

Deferred Tax

The Consolidated Accounts to 31^st January 2011 do not reflect the Government's recently announced reduction in corporation tax from 27% to 26% with effect from 6^th April 2011 as this was not substantially enacted by 31^st January 2011. If this does become substantially enacted, it would reduce deferred tax liabilities by £0.25m based upon the portfolio valuation at 31^st January 2011 and therefore increase overall net asset value by the same amount.

Shareholders

On this, the Group's 21^st anniversary year, I am pleased to report to Shareholders that my colleagues and I believe that our companies and our investments remain strongly positioned for the future. We are looking forward to the current year and beyond in the firm expectation of a further period of growth.

Shareholders should also be fully aware that the Board always has one eye on the weather and is constantly on the lookout for fresh growth and development opportunities, including the possibilities of acquisitions, mergers or disposals within the portfolio.

It is in the nature of things that no such opportunities ever come ready made, but on our Shareholders' behalf, we regularly and rigorously review every prospect that emerges.

As set out above, my fellow Directors and I are fully aware of the fact that we are responsible for securing and growing Shareholders' Net Asset Value and we have every intention of continuing to do so - whatever the weather.  We further recognise that the share price of B. P. Marsh has, in the past, failed to reflect the Group's underlying value.  Whilst this is not an unusual problem in investment companies, the Board remains determined to narrow the discount between the share price and NAV.

Summary of Developments in the Portfolio

During the financial year ended 31^st January 2011, the Group made the following investment:

·        U.S. Risk (UK) Limited ("US Risk")

We completed an investment in US Risk, the parent company of Oxford Insurance Brokers, a London-based Lloyd's insurance and reinsurance broker, on 22nd July 2010. We acquired a 30% stake in US Risk for a cash consideration of £1.40m together with an agreement to provide additional funding of up to £1.95m, subject to conditions. The equity investment was funded from existing cash resources.

We saw this as an excellent investment opportunity, falling within the heartland of our skills and experiences, with a compelling business plan, good management and strong investment partners. The majority shareholder in US Risk is US Risk Inc, a Dallas-based insurance intermediary focusing on wholesale brokerage and speciality insurance products that is one of the largest in the US, with eleven domestic and international branches.

Both we and our partners in Dallas are very supportive of management's growth targets for Oxford Insurance Brokers and are working with them to achieve their ambitions. Our investment will be used to further diversify core areas of the business; Professional Indemnity, North American property and specialty lines, special risk and reinsurance and to develop new areas and territories.

Other notable developments within the portfolio during the year were as follows:

·        Hyperion Insurance Group Ltd ("Hyperion")

Hyperion, in which the Group has a 19.5% stake, continues to grow at an impressive rate, with revenue growth of 26% and EBITDA growth of 41% in the year to 30^th September 2010. Hyperion has again been nominated in the IMAS Top 50 Brokers list as one of the fastest growing insurance broking companies in the UK.

During the course of 2010, Hyperion announced that it has agreed to acquire Singapore's Accette Insurance Group, subject to regulatory approval. The acquisition will give Hyperion a strong footing in Asia, with Accette trading from offices in Hong Kong, Indonesia, Malaysia, the Philippines, Thailand as well as Singapore, where Hyperion has recently secured a reinsurance licence. The acquisition continues Hyperion's penetration into the Asian market.

·        Besso Holdings Ltd ("Besso")

During the course of last year Besso developed an in-house underwriting agency, Gladstone Underwriting Agency Ltd. The focus of this agency is commercial liability insurance for small and middle-sized enterprises and this venture will further add to Besso's service offering and boost its position in this sector.

Besso has further expanded its international reach with the establishment of offices in Hong Kong and Turkey, as well as developing business relationships in Qatar. Besso's management believes that these developments will diversify Besso's income stream and enable them to look beyond their primary focus on North American wholesale business.

Post-Balance Sheet Events:

·       Besso Holdings Ltd ("Besso")

On 31^st March 2011 the Group acquired a further 11% equity stake in Besso from Union Hamilton Reinsurance Limited ("Union Hamilton") for a cash consideration of £0.74m. Further consideration of up to £0.3m may be payable by the Group in the event that 50% or more of the voting shares in Besso are acquired within 18 months, at a higher price per share. This investment was made alongside two other parties, namely, Brian Marsh Enterprises Ltd and Mr Michael Wade, who acquired the remaining 26.3% stake from Union Hamilton for an aggregate consideration of £1.72m. These acquiring parties are also subject to the same anti-embarrassment provisions as described above.

As a result of this transaction, the Group's equity interest in Besso has increased from 22.7% to 34% and Brian Marsh Enterprises Limited and Mr Michael Wade hold 11.3% and 15% respectively.

In addition, the Group subscribed for £0.77m of loan stock, part of a refinancing of Union Hamilton's preference shareholding of £2.55m.

Directors' Loan

As previously announced, during the period the Group secured a loan facility of £4.32m from several of its Directors. The line of credit is intended to enable the Group to take advantage of further investment opportunities as and when they arise. The Directors are confident in the Group's future prospects and believe that their willingness to provide their own funds in this way demonstrates this confidence.

£1.25m of this loan was used to fund the Besso acquisition after the year end as set out above.

Business Strategy

The Group typically invests amounts of up to £2.5m and only takes minority equity positions, normally acquiring between 15% and 45% of an investee company's total equity. Based on our current portfolio, the average investment has been held for approximately six years. The Group requires its investee companies to adopt certain minority shareholder protections and appoints a director to its board.  The Group's successful track record is based upon a number of factors that include, amongst other things, a robust investment process, the management's considerable experience of the Financial Services sector and a flexible approach towards exit-strategies.

At the year-end, the Group had £0.5m in cash, plus a further £4.32m loan facility available, of which it had committed to provide a further £2.4m of loan funding for its existing investments.

After taking this into consideration, together with £1.5m relating to the Besso acquisition, the Group currently has approximately £0.9m of funds available for further investments, excluding any realisations.

Investment Opportunities

The Group realigned its approach to seeking new investment opportunities at the beginning of the year and moved to a more selective approach. By placing the emphasis on renewing and maintaining relationships with key corporate and individual contacts, we succeeded in increasing the number of enquiries directly applicable to our investment strategy by 25%.

The Group's investment goal remains unchanged; to take minority positions in profitable businesses with strong management teams and good growth potential. In the insurance industry, global M&A activity increased in 2010 and this looks set to continue in 2011, with recent announcements in the London market including the acquisition of Heath Lambert by AJ Gallagher and the agreement by Ryan Speciality Group to buy Jubilee Group Holdings. The influx of enquiries from the sector remains strong.

The forthcoming regulatory requirements of the Retail Distribution Review continue to cause movement and consolidation within the wealth management sector, resulting in a steady flow of enquiries.

The Directors consider that the Group remains unique in its investment sector. We continue to see a large number of investment opportunities with good management and business plans that fit with our tried and tested business strategy.

Brian Marsh OBE

1^st June 2011

Investments

As at 31st January 2011 the Group's equity interests were as follows:

Amberglobe Limited

(www.amberglobe.co.uk)

In March 2008 the Group assisted in establishing Amberglobe, a business sales platform that provides valuation and negotiation services for the sale of SME businesses in the sub £3m sector.

Date of investment: March 2008

Equity stake: 49.0%

31st January 2011 valuation: £98,000

Besso Holdings Limited

(www.besso.co.uk)

In February 1995 the Group assisted a specialist team departing from insurance broker Jardine Lloyd Thompson Group in establishing Besso Holdings. The company specialises in insurance broking for the North American wholesale market.

Date of investment: February 1995

Equity stake: 22.73%

31st January 2011 valuation: £5,005,000

HQB Partners Limited

(www.hqbpartners.com )

In January 2005 the Group made an investment in HQB Partners, a company which provides strategic transaction advice, proxy solicitation services, voting analysis and investor relations services.

Date of investment: January 2005

Equity stake: 27.72%

31st January 2011 valuation: £0

Hyperion Insurance Group Limited

(www.hyperiongrp.com)

The Group first invested in Hyperion in 1994. The Hyperion owns, amongst other things, an insurance broker specialising in directors' and officers' ("D&O") and professional indemnity ("PI") insurance. A subsidiary of Hyperion became a registered Lloyd's insurance broker. In 1998 Hyperion set up an insurance managing general agency specialising in developing D&O and PI business in Europe.

Date of investment: November 1994

Equity: 19.5%

31st January 2011 valuation: £29,368,000

LEBC Holdings Limited

(www.lebc-group.com)

In April 2007 the Group invested in LEBC, 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: 21.95%

31st January 2011 valuation: £3,277,000

Paterson Squared, LLC

(www.paterson2.com)

Paterson Squared was founded by a group of professionals from the actuarial, capital markets and reinsurance advisory sectors in conjunction with the Group. The company uses sophisticated modelling techniques to assess risk, with a view to providing counter-party risk transaction advice.

Date of investment: April 2004

Equity stake: 22.5%

31st January 2011 valuation: £0

Portfolio Design Group International Limited

(www.surrendalink.co.uk)

In March 1994 the Group invested in the Portfolio Design Group, a company which sells with-profits life endowment policies to large financial institutions. In 2002 the company diversified into investment management.

Date of investment: March 1994

Equity stake: 20.0%

31st January 2011 valuation: £1,906,000

Randall & Quilter Investment Holdings plc

(www.rqih.com)

Randall & Quilter Investment Holdings is an AIM listed run-off management service provider and acquirer of solvent insurance companies in run-off. The Group invested in Randall & Quilter in January 2010, the result of a share exchange with the Group's shareholding in JMD Specialist Insurance Services Group Limited, which Randall & Quilter have now wholly acquired

Date of investment: January 2010

Equity stake: 1.23%

31st January 2011 valuation: £610,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain.

Date of investment: January 2005

Equity stake: 48.63%

31st January 2011 valuation: £5,098,000

US Risk (UK) Limited

(www.oxfordinsurancebrokers.co.uk)

In July of this year the Group completed its investment in US Risk (UK), the parent company of Oxford Insurance Brokers Limited, a London-based Lloyd's insurance and reinsurance broker.

Date of investment: July 2010

Equity stake: 30%

31st January 2011 valuation: £1,781,000

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 2011

	Notes	2011		2010
		£'000	£'000	£'000	£'000
GAINS / (LOSSES) ON INVESTMENTS	1
Realised gains on disposal of investments	1,17	350		99
Impairment of investments and loans	14	(446)		(652)
Unrealised gains on investment revaluation	12	2,971		23
			2,875		(530)
INCOME
Dividends	1	599		328
Income from loans and receivables	1	599		474
Fees receivable	1	820		910
			2,018		1,712
OPERATING INCOME	2		4,893		1,182
Operating expenses	2		(1,837)		(1,562)
OPERATING PROFIT/ (LOSS)			3,056		(380)
Financial income	2,4	2		25
Financial expenses	2,3	(28)		-
Carried interest provision	2,15	(7)		412
Exchange movements	2,8	(10)		-
			(43)		437
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION	8		3,013		57
Taxation	9		(415)		230
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS	19		£2,598		£287
Earnings per share - basic and diluted (pence)	10		8.9p		1.0p

The result for the year is wholly attributable to continuing activities.

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

31ST JANUARY 2011

		Group			Company
	Notes	2011	2010		2011	2010
		£'000	£'000		£'000	£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	11	33	49		-	-
Investments	12	47,143	42,745		36,320	34,015
Loans and receivables	13	4,403	4,613		10,155	10,155
		51,579	47,407		46,475	44,170
CURRENT ASSETS
Trade and other receivables	14	1,672	1,085		-	-
Cash and cash equivalents		515	2,972		1	1
TOTAL CURRENT ASSETS		2,187	4,057		1	1
TOTAL ASSETS		53,766	51,464		46,476	44,171
LIABILITIES
NON-CURRENT LIABILITIES
Carried interest provision	15	(331)	(324)		-	-
Deferred tax liabilities	16	(6,683)	(6,268)		-	-
TOTAL NON-CURRENT LIABILITIES		(7,014)	(6,592)		-	-
CURRENT LIABILITIES
Trade and other payables	17	(276)	(701)		-	-
TOTAL CURRENT LIABILITIES		(276)	(701)		-	-
TOTAL LIABILITIES		(7,290)	(7,293)		-	-
NET ASSETS		£46,476	£44,171		£46,476	£44,171
CAPITAL AND RESERVES - EQUITY
Called up share capital	18	2,929	2,929		2,929	2,929
Share premium account	19	9,370	9,370		9,370	9,370
Fair value reserve	19	20,883	18,057		34,176	31,871
Reverse acquisition reserve	19	393	393		-	-
Retained earnings	19	12,901	13,422		1	1
SHAREHOLDERS' FUNDS - EQUITY	19	£46,476	£44,171		£46,476	£44,171

The Financial Statements were approved by the Board of Directors and authorised for issue on 1st June 2011

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2011

	Notes		2011		2010
			£'000		£'000
Cash from operating activities
Income from loans to investees			599		474
Dividends			599		328
Fees received from investment activity			820		910
Operating expenses			(1,837)		(1,562)
Decrease in receivables			4		38
(Decrease) / increase in payables			(93)		2
Depreciation	11		22		23
Net cash from operating activities			114		213
Net cash (used by) / from investing activities
Purchase of property, plant and equipment	11		(6)		-
Purchase of investments	12		(1,437)		(2,005)
Proceeds from investments			18		703
Net cash (used by) / from investing activities			(1,425)		(1,302)
Net cash (used by) / from financing activities
Net payments of loans to investee companies			(827)		(3,325)
Financial income	4		2		25
Financial expenses	3		(28)		-
Dividends paid	7		(293)		-
Net cash (used by) / from financing activities			(1,146)		(3,300)
Change in cash and cash equivalents			(2,457)		(4,389)
Cash and cash equivalents at beginning of the period			2,972		7,341
Exchange movement			-*		20*
Cash and cash equivalents at end of period			£515		£2,972

*The exchange movement as noted in the Consolidated Statement of Comprehensive Income is £10k (2010: £nil).  The exchange movement in the Consolidated Statement of Cash Flows excludes an exchange loss of £10k (2010: loss of £20k) relating to the revaluation of a loan denominated in Euros as this is a non-cash movement.

COMPANY STATEMENT OF CASH FLOWS

No Company Statement of Cash Flows has been prepared as there has been no cash flow movement in the Company during the current period other than dividends received from a subsidiary company which were then paid to the Company's members. There was no cash flow movement in the previous period. Accordingly the Company's "cash and cash equivalents" balance as at 31st January 2011 is £1k (2010: £1k).

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST JANUARY 2010

	Group		Company
FOR THE YEAR ENDED	2011	2010	2011	2010
	£'000	£'000	£'000	£'000
Opening total equity	44,171	43,884	44,171	43,884
Total recognised income and expense for period	2,598	287	2,598	287
Dividends paid	(293)	-	(293)	-
TOTAL EQUITY	£46,476	£44,171	£46,476	£44,171

Refer to Note 19, for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST JANUARY 2011

1.       ACCOUNTING POLICIES

Basis of preparation of financial statements

These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union ("IFRS"), and in accordance with the Companies Act 2006.

The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and financial liabilities through the profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates particularly in relation to investment valuation.  It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

IFRS 3 Business Combinations (revised) - The revised standard is required to be adopted for any acquisitions made in the year but had no impact on these financial statements.

IFRS 7 (revised) Financial Instruments Disclosure - The amendment requires enhanced disclosure of fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of hierarchy, further details which can be found in Note 23.

IAS 24 (revised) Related Party Disclosures - This revision is in response to concerns that the previous disclosure requirements and the definition of a related party were too complex and difficult to apply in practice, especially in environments where government control is pervasive. The Group has adopted the revised IAS 24 in these financial statements.

Basis of consolidation

The Group financial statements consolidate the results and net assets of the Company and all of its subsidiary undertakings.

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 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 operatingpolicies. Investments that are held as part of the Group's investment portfolio are carried in the 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, with changes in fair value recognised in the profit and 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 £2,598,106 (2010: profit of £287,231), prior to a dividend distribution of £292,861(2010: £nil).

Employee services settled in equity instruments

Where the Group issues equity settled share-based awards to certain employees and advisors, a fair value for the equity settled share awards is measured at the date of grant.  The Group measures the fair value using the valuation technique most appropriate to value each class of award, either the Black-Scholes or a Trinomial valuation method.

The fair value of each award is recognised as an expense over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will eventually vest.  The level of vesting is reviewed annually and the charge is adjusted to reflect actual or estimated levels of vesting with the corresponding entry to equity.

Cancellation of the rights to the equity settled share-based awards by the employees is accounted for as if the relevant employees have left the Group with the related amounts recorded previously in reserves being transferred to retained earnings.

Investments

All 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 investments.  In valuing investments, the Board applies guidelines issued by the International Private Equity and Venture Capital Valuation ("IPEVCV").  The following valuation methodologies have been used in reaching the fair value of 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 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 Statement of Comprehensive Income for the year.  In the 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 investments are expensed in the Statement of Comprehensive Income.

          Income from investments

Income from investments comprises:

a)    gross interest from loans, which is taken to the Statement of Comprehensive Income on an accruals basis;

b)    dividends from equity investments are recognised in the 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.

Carried interest provision

This represents the amount payable to a director in the event of a particular investment being sold and is calculated on the fair value of that investment at the reporting period.

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 - over the life of the lease

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies at the reporting period are translated at the exchange rate ruling at the reporting period.

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.

Exchange gains and losses are recognised in the Statement of Comprehensive Income.

Taxation

The tax expense represents the sum of the tax currently payable and any deferred tax.  The tax currently payable is based on the estimated taxable profit for the year.  Taxable profit differs from net profit as reported in the 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 liability for current tax is calculated using tax rates that have been enacted or substantially enacted by the date of the 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 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 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 Statement of Comprehensive Income.

Operating leases

Rentals under operating leases are charged on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight- line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate.

Financial assets and liabilities

Financial instruments are recognised in the 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.  These are classified as non-current assets. 

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 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 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 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 Statement of Financial Position.

International Financial Reporting Standards in issue but not yet effective

At the date of authorisation of these consolidated financial statements, the International Accounting Standards Board ("IASB") and International Financial Reporting Interpretations Committee ("IFRIC") have issued the following standard, which is effective for annual accounting periods beginning on or after the stated effective date. 

As part of the IASB's preparation to replace IAS 39 "Financial Instruments: Recognition and Measurements", in November 2009, the IASB issued the first phase of IFRS 9 "Financial Instruments", dealing with the classification and measurement of financial assets. In October 2010, the IASB updated IFRS 9 by incorporating the requirements for the accounting for financial liabilities. The new standard is effective for annual periods beginning on or after 1 January 2013 with transitional arrangements depending on the date of initial application. The Group has not yet decided the date of adoption of this standard and has not yet completed its evaluation of the effect of adoption. The new standard has not yet been adopted by the EU.

Other standards, amendments and interpretations have been issued but are not yet effective, and are not expected to have a material effect on the reported income or net assets of the Group.  These are not referred to above.

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.

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 & Channel Islands and Non-UK & Channel Islands.

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 Operating Segments ("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 unrealised gains and losses on the Group's non-current investments).

Each reportable segment derives its revenues from three main sources.  These are described in further detail in Note 1 under 'Income from investments'.

All reportable segments derive their revenues entirely from external clients and there are no inter-segment sales.

The transition from the provisions of IAS 14 Segment Reporting ("IAS 14") to IFRS 8, which became mandatory for accounting periods beginning on or after 1st January 2009, did not given rise to any specific changes in the way the Group reports on its operating segments.

	Geographic segment 1: UK & Channel Islands		Geographic segment 2: Non-UK & Channel Islands		Group
	2011	2010	2011	2010	2011	2010
	£'000	£'000	£'000	£'000	£'000	£'000
Operating income / (loss)	5,524	574	(631)	608	4,893	1,182
Operating expenses	(1,353)	(1,270)	(484)	(292)	(1,837)	(1,562)
Segment operating profit / (loss)	4,171	(696)	(1,115)	316	3,056	(380)
Financial income	2	20	-	5	2	25
Financial expenses	(21)	-	(7)	-	(28)	-
Carried interest provision	(7)	412	-	-	(7)	412
Exchange movements	-	(5)	(10)	5	(10)	-
Profit before tax	4,145	(269)	(1,132)	326	(3,013)	57
Income tax	(732)	321	317	(91)	(415)	230
Profit for the year	£3,413	£52	£(815)	£235	£2,598	£287

	Geographic segment 1: UK & Channel Islands		Geographic segment 2: Non-UK & Channel Islands		Group
	2011	2010	2011	2010	2011	2010
	£'000	£'000	£'000	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	29	42	4	7	33	49
Investments	41,207	36,484	5,936	6,261	47,143	42,745
Loans and receivables	2,952	4,155	1,451	458	4,403	4,613
	44,188	40,681	7,391	6,726	51,579	47,407
Current assets
Trade and other receivables	1,361	329	311	756	1,672	1,085
Cash and cash equivalents	515	2,972	-	-	515	2,972
	1,876	3,301	311	756	2,187	4,057
Total assets	46,064	43,982	7,702	7,482	53,766	51,464
Non-current liabilities
Carried interest provision	(331)	(324)	-	-	(331)	(324)
Deferred tax liabilities	(7,009)	(6,187)	326	(81)	(6,683)	(6,268)
	(7,340)	(6,511)	326	(81)	(7,014)	(6,592)
Current liabilities
Trade and other payables	(276)	(701)	-	-	(276)	(701)
Total liabilities	(7,616)	(7,212)	326	(81)	(7,290)	(7,293)
Net assets	£38,448	£36,770	£8,028	£7,401	£46,476	£44,171
Additions to property, plant and equipment	6	-	-	-	6	-
Depreciation of property, plant and equipment	19	20	3	3	22	23
Impairment of investments and loans	446	652	-	-	446	652

3.       FINANCIAL EXPENSES	2011	2010
	£'000	£'000
Other interest	£28	£-

4.       FINANCIAL INCOME	2011	2010
	£'000	£'000
Bank interest	2	25
Other interest	-	-
	£2	£25

5.       STAFF COSTS

          The average number of employees, including all directors (executive and non-executive), employed by the Group during the year was 16 (2010: 15). All remuneration was paid by B. P. Marsh & Company Limited.

The related staff costs were:	2011	2010
	£'000	£'000
Wages and salaries	1,021	856
Social security costs	130	100
Pension costs	38	40
	£1,189	£996

In addition staff were paid £60,000 (2010: £nil) out of the B. P. Marsh Employee Benefit Trust in the year (see Note 6 below). This cost is not reflected in the Statement of Comprehensive Income in the current year as it is funded through prior year contributions.

6.       DIRECTORS' EMOLUMENTS
	2011	2010
The aggregate emoluments of the directors were:	£'000	£'000
Management services - remuneration	758	574
Fees	16	20
Pension contributions - remuneration	21	20
	£ 795	£ 614

In addition to the above, Mr S. S. Clarke has an entitlement to a gain based on a carried interest, as outlined in Note 15.

	2011	2010
	£'000	£'000
Highest paid director
Emoluments	95	185
Long term incentive payments	200	-
Pension contribution	9	-
	£ 304	£ 185

The highest paid director disclosure for the current year includes a payment of £60,000 out of the B. P. Marsh Employee Benefit Trust.  This cost is not reflected in the Statement of Comprehensive Income in the current year as it is funded through prior year contributions.

The Company contributes into its defined contribution pension scheme on behalf of certain employees and directors.  Contributions payable are charged to the Statement of Comprehensive Income in the period to which they relate.

During the period, 2 directors (2010: 2) accrued benefits under the defined contribution pension scheme.

7.       DIVIDENDS	2011	2010
	£'000	£'000
Ordinary dividends
Final dividend paid on:
1 pence each on 29,286,143 Ordinary shares	293	-
	£293	£ -

8.       PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION	2011	2010
	£'000	£'000
The profit for the period is arrived at after charging:
Depreciation of owned tangible fixed assets	22	23
Auditors remuneration :-
Audit fees for the Company	23	20
Other services:
-Audit of subsidiaries' accounts	11	10
-Taxation	8	6
-Other advisory	11	14
Exchange loss	10	-
Operating lease rentals of land and buildings	115	106

9.       TAXATION	2011	2010
	£'000	£'000
The charge / (credit) for tax comprises:
UK corporation tax charge for the year	-	-
Deferred tax charge / (credit) for the year (Note 16)	415	(230)
	£415	£(230)

Factors affecting the charge for the year

Profit on ordinary activities before tax	3,013	57
Tax at 28% on profit on ordinary activities (2010: 28%)	844	16
Effects of:
Expenses not deductible for tax purposes	13	17
Non taxable (income, impairments and unrealised gains)	(830)	(122)
Capital (gains) on disposal of investments	-	(28)
Other effects:
Management expenses unutilised	141	110
Provisions against investments not allowable for tax	-	99
Non-taxable income (dividends received)	(168)	(92)
Corporate tax charge for the year	£ -	£ -

There are no factors which may affect future tax charges.

10.     EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS

	2011 £'000	2010 £'000
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit  attributable to equity shareholders	2,598	287
Earnings per share - basic and diluted	8.9p	1.0p
Number of shares	Number	Number
Weighted average number of ordinary shares for the purposes of basic earnings per share	29,286,143	29,286,143
Number of dilutive shares under option	Nil	Nil
Weighted average number of ordinary shares for the purposes of dilutive earnings per share	29,286,143	29,286,143

11.     PROPERTY, PLANT AND EQUIPMENT	Furniture & Equipment £'000	Leasehold Fixtures & Fittings £'000	Total £'000
Group
Cost
At 1st February 2009	57	51	108
Additions	-	-	-
Disposals	-	-	-
At 31st January 2010	57	51	108
At 1st February 2010	57	51	108
Additions	6	-	6
Disposals	-	-	-
At 31st January 2011	63	51	114
Depreciation
At 1st February 2009	31	5	36
Eliminated on disposal	-	-	-
Charge for the year	7	16	23
At 31st January 2010	38	21	59
At 1st February 2010	38	21	59
Eliminated on disposal	-	-	-
Charge for the year	6	16	22
At 31st January 2011	44	37	81
Net book value
At 31st January 2011	£ 19	£ 14	£ 33
At 31st January 2010	£ 19	£ 30	£ 49
At 31st January 2009	£ 26	£ 46	£ 72

12.     NON-CURRENT INVESTMENTS
Group		Shares in investee companies
		Total
		£'000
At valuation
At 1st February 2009		41,673
Additions		2,005
Disposals		(604)
Provisions		(352)
Unrealised gains in this period		23
At 31st January 2010		£42,745
At 1st February 2010		42,745
Additions		1,437
Disposals		(10)
Provisions		-
Unrealised gains in this period		2,971
At 31st January 2011		£47,143
At cost
At 1st February 2009		17,043
Additions		2,005
Disposals		(600)
Provisions		(500)
At 31st January 2010		£17,948
At 1st February 2010		17,948
Additions		1,437
Disposals		(10)
Provisions		-
At 31st January 2011		£19,375

The principal addition in the year relates to the acquisition on 22 July 2010 of 30% equity holding in US Risks (UK) limited for £1,396,417.

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage S. L. (Spain), Preferred Asset Management Ltd (Jersey), New Horizons Ltd (Isle of Man) and Paterson Squared, LLC (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
			£	£
Amberglobe Limited	49.00	30.04.10	(650,932)	(288,358)	Business sales platform
Besso Holdings Limited	22.73	31.12.09	9,605,838	(91,777)	Investment holding
					company
HQB Partners Limited	27.72	31.12.10	(42,855)	(164,777)	Investor relations consultants

		% holding		Date		Aggregate		Post tax
		of share		information		capital and		profit/(loss)
Name of company		capital		available to		reserves		for the year		Principal activity
						£		£
Hyperion Insurance    Group Limited		19.50		30.09.10		41,444,000		4,390,000		Insurance holding company
	LEBC Holdings Limited		21.95		30.09.10		671,419		9,334		Independent financial advisor company
Portfolio Design Group  International Limited			20.00		31.12.09		7,827,121		(1,356,340)		Fund managers of traded endowment policies
Morex Commercial Ltd			20.00		31.12.09		367,254		28,824		Trading in secondary life policies
Preferred Asset    Management Ltd			20.00		30.09.09		816,451		368,135		Fund management company
New Horizons Ltd    (formerly Surrenda-Link    Nominees Ltd)			20.00		31.12.08		1,595,863		66,732		Investment holding company
	Paterson Squared, LLC		22.50		31.12.10		364,411		279,575		Independent reinsurance transaction consultants
	Summa Insurance Brokerage, S. L.		48.625		31.12.09		10,292,415		104,242		Consolidator of regional insurance brokers
	US Risks (UK) Limited		30.00		31.12.09		1,654,073		556,716		Holding company for insurance intermediaries

In addition, as a result of the disposal of the Group's interest in JMD Specialist Insurance Services Group Limited in the year to 31st January 2010, the Group acquired an investment of £698,750 in respect of 650,000 ordinary shares in Randall & Quilter Investment Holdings Plc ("R&Q"), which represents 1.16% of the share capital of R&Q. In June 2010 the Group acquired 40,000 additional ordinary shares in R&Q for £40,800, which increased the holding to 1.23% of the share capital of R&Q. R&Q is listed on the AIM Market.

In November 2007 the Group acquired a 20% equity holding in London Endowments Limited.  On 22nd December 2010 the Group disposed its holding for £9,538, which approximated its carrying value.

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 except for those of Hyperion Group Limited which are prepared under IFRS with effect from its year ended 30 September 2010.

On 3rd September 2009 Trillium Partners Limited, an associated company, was placed into administration.   Full provision was made against this investment in the prior year. During the year a distribution of £17,990 was recovered from the liquidation proceeds. No further amounts are anticipated.

Under FRS 25 the HQB Partners Limited accounts have included the Group's 27.72% interest as a long-term creditor. As this is in reality an equity investment the aggregate capital and reserves shown have therefore been adjusted to include this as equity and the profit has been adjusted by the dividend paid out.

12.     NON-CURRENT INVESTMENTS (continued)

	Shares in
Company	group
	undertakings
	£'000
At valuation
At 1st February 2009	33,728
Additions	-
Unrealised gains in this period	287
At 31st January 2010	£34,015
At 1st February 2010	34,015
Additions	-
Unrealised gains in this period	2,305
At 31st January 2011	£36,320
At cost
At 1st February 2009	2,143
Additions	-
At 31st January 2010	£2,143
At 1st February 2010	2,143
Additions	-
At 31st January 2011	£2,143

Company

Shares in group undertakings

All group undertakings are registered in England and Wales.  The details and results of group undertakings, which are extracted from the UK GAAP accounts of these 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	2011		2011	Principal activity
		£		£
B.P. Marsh &    Company Limited	100	43,003,408	13,378		Consulting services and investment holding company
Marsh Insurance    Holdings Limited	100	11,035,001	35,847		Investment holding company
B.P. Marsh & Co. Trustee    Company Limited	100	1,000	-		Dormant
Marsh Development    Capital Limited	100	1	-		Dormant

13.        LOANS AND RECEIVABLES - NON-CURRENT	Group			Company
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
Loans to investee companies (Note 24)	4,403	4,613		-	-
Amounts due from subsidiary undertakings	-	-		10,155	10,155
	£    4,403	£    4,613		£    10,155	£    10,155

See Note 24 for terms of the loans.

14.        TRADE AND OTHER RECEIVABLES - CURRENT	Group			Company
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
Trade receivables	221	177		-	-
Less provision for impairment of receivables	(68)	(20)		-	-
	153	157		-	-
Loans to investee companies (Note 24)	1,089	497		-	-
Other receivables	6	20		-	-
Prepayments and accrued income	424	411		-	-
	£    1,672	£    1,085		£           -	£           -

Included within trade receivables is £153,057 (2010: £128,760) owed by the Group's participating interests.

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
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
Balance at 1st February	20	10		-	-
Increase in allowance recognised in the Statement of Comprehensive Income	48	10		-	-
Balance at 31st January	£    68	£    20		£    -	£    -

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 £153,580 (2010: £154,493) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable.  The Group does not hold any collateral over these balances.

Ageing of past due but not impaired:

	Group			Company
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
0 - 30 days	52	108		-	-
31 - 60 days	68	35		-	-
61 - 90 days	17	-		-	-
More than 90 days	16	11		-	-
	£    153	£    154		£           -	£           -

£446,000 has been provided against loans to investee companies in the year.  The total provision against loans relating to Fixed Asset investments therefore stands at £446,000 (2010: £694,875).

See Note 24 for terms of the loans and Note 23 for further credit risk information.

15.      CARRIED INTEREST PROVISION	Group			Company
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
Carried interest provision	331	324		-	-
	£    331	£    324		£           -	£           -

This carried interest provision represents S. S. Clarke's entitlement to a maximum of 20% of any gain, after deducting expenses and following the repayment of all loans, redemption of all preference shares, loan stock and equivalent finance provided by the Company, on the sale of certain agreed investments of the Company and its subsidiaries.

No amounts were paid under this contract during the year (2010: £nil).

16.    DEFERRED TAX LIABILITIES - NON- CURRENT			Group			Company
			£'000			£'000
At 1st February 2009			6,498			-
Credited to Statement of Comprehensive Income			(230)			-
At 31st January 2010			£    6,268			£           -
At 1st February 2010			6,268			-
Charged to Statement of Comprehensive Income			415			-
At 31st January 2011			£    6,683			£           -

The directors estimate that, if the Group were to dispose of all its investments at the amount stated in the Statement of Financial Position, £6,683,000 (2010: £6,268,000) of tax on capital gains would become payable by the Group at a corporation tax rate of 27% (2010: 28%).

The government recently announced a reduction in the corporation tax rate from 27% to 26% with effect from 6 April 2011. As this was not substantially enacted at the year end, this rate of 26% has not been used in calculating the deferred tax liabilities arising from the unrealised gains on the revaluation of the Group's investments. This rate is expected to be used in next year's financial statements once substantially enacted.

If the lower rate of 26% had been used in these financial statements, the deferred tax liabilities would have been reduced from the current £6,683,000 to £6,436,000 resulting in an increase in net assets of £247,000.

17.    TRADE AND OTHER PAYABLES - CURRENT	Group			Company
	2011	2010		2011	2010
	£'000	£'000		£'000	£'000
Trade payables	37	47		-	-
Other taxation & social security costs	17	73		-	-
Other loans	-	332		-	-
Accruals and deferred income	222	249		-	-
	£    276	£    701		£           -	£           -

The other loan due within one year related to an unsecured, interest free loan repayable on the finalisation of the liquidation of Whitmar Holdings Limited ("Whitmar") (formerly Glenvaal Dewar Rand Limited). During the year it was confirmed on finalisation of the liquidation of Whitmar that no amount was payable to Whitmar, the amount having been settled by a dividend in specie in prior years. Accordingly, this amount together with the related exchange gain has been included in realised gains in the Consolidated Statement of Comprehensive Income.

18.     CALLED UP SHARE CAPITAL	2011	2010
	£'000	£'000
Allotted, called up and fully paid
29,286,143 Ordinary shares of 10p each (2010: 29,286,143)	2,929	2,929
	£  2,929	£  2,929

19.     RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

Group				Shares		Share			Reverse
		Share		to be		premium		Fair value	acquisition		Retained
		capital		issued		account		reserve	reserve		earnings		Total
	£'000		£'000		£'000		£'000			£'000		£'000		£'000
At 1st February 2009	2,929		-		9,370		17,396			393		13,796		43,884
Profit for the year	-		-		-		665			-		(378)		287
Transfers on sale of investments	-		-		-		(4)			-		4		-
At 31st January 2010	£2,929		£   -		£9,370		£18,057			£   393		£13,422		£44,171

At 1st February 2010	2,929	-	9,370	18,057	393	13,422	44,171
Profit for the year	-	-	-	2,826	-	(228)	2,598
Dividends Paid	-	-	-	-	-	(293)	(293)
At 31st January 2011	£2,929	£   -	£9,370	£20,883	£   393	£12,901	£46,476

Company			Share
	Share	Shares to	premium	Fair value	Retained
	capital	be issued	account	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 1st February 2009	2,929	-	9,370	31,584	1	43,884
Profit for the year	-	-	-	287	-	287
At 31st January 2010	£2,929	£   -	£9,370	£31,871	£   1	£44,171

At 1st February 2010	2,929	-	9,370	31,871	1	44,171
Profit for the year	-	-	-	2,305	293	2,598
Dividends paid	-	-	-	-	(293)	(293)
At 31st January 2011	£2,929	£   -	£9,370	£34,176	£   1	£46,476

20.     OPERATING LEASE COMMITMENT

The Group and Company was committed to making the following future aggregate minimum lease payments under non‑cancellable operating leases:

	2011	2010
	Land and	Land and
	buildings	buildings
	£'000	£'000
Earlier than one year	£  119	£   132
Between two and five years	£        -	£   121

21.      LOAN AND EQUITY COMMITMENTS

On 7th February 2005 the Group entered into an agreement to provide a loan facility of £140,000 to HQB Partners Limited, an investee company. As at 31st January 2011, this facility has been drawn down in full.

On 10th March 2008 the Group entered into an agreement to provide a loan facility of £630,000 to Amberglobe Limited, an investee company.  An additional loan facility of £65,000 was agreed on 30th November 2009 increasing the total facility to £695,000.  As at 31st January 2011 £670,000 of this facility had been drawn down.

On 1st April 2009 the Group entered into an agreement to provide a loan facility of £400,000 to LEBC Group Limited, an investee company.  As at 31st January 2011 no amounts had been drawn down.

On 2nd June 2009 the Group provided a £2,460,000 loan to Hyperion Insurance Group Limited ("Hyperion"), which was drawn down in full.  On the same date the Group entered into a further agreement with Hyperion to subscribe for €900,000 in loan notes to fund an acquisition, being part of a €4,500,000 loan note issue alongside other shareholders.  As at 31st January 2011, this facility has been drawn down in full.

On 22 July 2010 the Group entered into an agreement to provide a loan facility of £1,950,000 to US Risk (UK) Limited, an investee company.  As at 31st January 2011 none of this facility had been drawn down.

On 31 December 2010 the Group entered into an agreement to provide a further €650,000 (£556,936) loan to Summa Insurance Brokerage, S.L. for general working capital requirements.  This is in addition to the €2,000,000 loan facility previously agreed, of which €927,990 (£804,918) had been previously drawdown. As at 31st January 2011, a total of €1,577,990 (£1,350,556) had been drawn down to date.

22.      CONTINGENT LIABILITIES

The Group has entered into long-term incentive arrangements with certain employees and directors.  Provided they remain in employment with the Group as at specified dates in the future, the Group has agreed to pay bonuses totalling £445,000 together with the Employers' National Insurance due thereon.  £20,000, £100,000, £250,000 and £75,000 are due to be paid on 6th April 2011, 1st October 2011, 1st October 2012 and 1 October 2013 respectively. 

No amount has been included in these financial statements as the performance conditions relating to these incentives had not been met at the time of the reporting period.

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 and other debtors and creditors.  These arise directly from the Group's operations.

The Group has not entered into any derivatives transactions.

It is, and has been throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken.

The main risks arising from the Group's financial instruments are price risk, credit risk, liquidity risk, interest rate cash flow risk and currency risk.  The Board reviews and agrees policies for managing each of these risks and they are summarised in the Group Report of the Directors under "Financial Risk Management".

Interest Rate Profile

The Group has cash balances of £515,000 (2010: £2,972,000), which are part of the financing arrangements of the Company.  The cash balances comprise bank current accounts and deposits placed at investment rates of interest, which ranged between 0.1% p.a. and 0.3% p.a. in the period (2010: ranged between 0.2% p.a. and 1.4% p.a.).  Maturity periods ranged between immediate access and 1 month in both the current and prior years.

Currency hedging

During the period, the Group did not engage in any form of currency hedging transaction (2010: none).

Financial liabilities

The Company had no borrowings during the period (2010: none).

Fair values

The Group has adopted the amendment to IFRS 7 for financial instruments which are measured at fair value at the balance sheet 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.

The following table presents the Group's assets and liabilities that are measured at fair value at 31 January 2011:

		Level 1	Level 2	Level 3	Total
		£'000	£'000	£'000	£'000
Assets
Investments designated as "fair value through profit or loss" assets		610	-	46,533	47,143
		£610	-	£46,533	£47,143

24.     RELATED PARTY DISCLOSURES

The following loans owed by the associated companies of the Company and its subsidiaries were outstanding at the year end:

	2011	2010
	£	£
Amberglobe Ltd	670,000	670,000
Besso Holdings Ltd	400,000	400,000
HQB Partners Ltd	140,000	80,000
Hyperion Insurance Group Ltd	3,277,142	3,004,959
Paterson Squared, LLC	100,000	150,000
	€	€
Summa Insurance Brokerage S. L.	1,577,990	927,990

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.

During the year, the Group agreed a loan facility with the directors, or other related parties, including Mr B.P. Marsh (£3,500,000), Ms J.K.N. Dunbar (£500,000), Mr P.J. Mortlock (£250,000) and Mrs M. Newman (£75,000) which is secured on the assets of the Company. The loan will accrue interest at a rate of 6.5% and is repayable in full by 9th June 2013. Interest is payable on a quarterly basis. This new facility bears a charge of 1% p.a. on any undrawn amount. As at 31st January 2011 none of this facility had been drawn down.

Income receivable, consisting of consultancy fees and interest on loans credited to the Statement of Comprehensive Income in respect of the associated companies of the Company and its subsidiaries for the year were as follows:

	2011	2010
	£	£
Amberglobe Ltd	58,963	68,873
Berkeley (Insurance) Holdings Ltd	-	6,053
Besso Holdings Ltd	184,676	184,174
HQB Partners Ltd	28,826	28,185
Hyperion Insurance Group Ltd	490,591	500,810
JMD Specialist Insurance Services Group Ltd	-	138,034
LEBC Group Ltd	80,177	44,161
Oakbridge Insurance Services, LLC	52,250	51,479
Paterson Squared, LLC	28,256	36,458
Portfolio Design Group International Ltd	36,000	36,000
Summa Insurance Brokerage S. L.	391,510	232,204
Trillium Partners Ltd	-	18,290
US Risks (UK) Limited	28,756	-

In addition, the Group made management charges of £39,000 (2010: £39,000) to Marsh Christian Trust. Mr B. P. Marsh, the Chairman and majority shareholder of the Company, is also the Trustee and Settlor of Marsh Christian Trust.

S. S. Clarke is entitled to a maximum of 20% of any gain, after deducting expenses and following the repayment of all loans, redemption of all preference shares, loan stock and equivalent finance provided by the Company, on the sale of certain agreed investments of the Company and its subsidiaries.  The carried interest provided for at the year end was £331,000 (2010: £324,000).

All the above transactions were conducted on an arms length basis.

25.     POST BALANCE SHEET EVENTS

On 18th February 2011 the Group provided a further £15,000 of an agreed £695,000 loan facility to Amberglobe Limited for general working capital requirements. A total of £685,000 has been drawn down to date.

On 31st March 2011 the Group's £1,775,000 preferred shares in Besso Holdings Limited were redeemed and the Group subscribed for £2,540,000 of 14% loan stock. In addition the Group acquired a further 11.3% shareholding in Besso Holdings Limited for £735,000 with a further consideration of £300,000 payable under certain events.

On 31st March 2011 the Group utilised £1,250,000 of the Directors Loan facility (see Note 17) to finance the Besso related transaction noted above.

On 1st April 2011 the Group provided a further £50,000 of an agreed £250,000 loan facility to Paterson Squared, LLC for general working capital requirements. Atotal of £150,000 has been drawn down to date.

On 6th April 2011 the Group paid a bonus of £20,000, together with Employers' National Insurance due thereon, to one of its employees (who is also a director of the Company) as part of the Group's long-term incentive arrangements.

26.     ULTIMATE CONTROLLING PARTY

The directors consider Mr B. P. Marsh to be the 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 31st January 2011 but is derived from those accounts. The statutory accounts for the year to 31st January 2011 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 Company's affairs as at 31st January 2011 and of the Group's profit for the year then ended;

·      the Group's financial statements have been properly prepared in accordance with IFRSs as adopted by the EU;

·      the Company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied in accordance with the provisions of the Companies Act 2006; 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 1st June 2011.

Analyst Briefing

An analyst briefing, hosted by Brian Marsh OBE, Chairman, Jonathan Newman, Finance Director and fellow Directors Millie Kenyon and Dan Topping, will be held at 10:00am on Wednesday 1st June 2011 at B.P. Marsh & Partners Plc, 2nd Floor, 36 Broadway, London SW1H 0BH.

For further information:

B.P. Marsh & Partners Plc                                       www.bpmarsh.co.uk

Brian Marsh OBE                                                        [phone]

Camilla Kenyon

Arbuthnot Securities (Nominated Adviser)

Nick Tulloch / Rebecca Gordon                                 [phone]

Redleaf Polhill (PR to BP Marsh)

Emma Kane                                                                [phone]

- ends -

Notes to Editors:

About B.P. Marsh & Partners Plc

B.P. Marsh's current portfolio contains 10 companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Over the past 20 years, 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 four years.

Prior to Brian Marsh's involvement in the Company, he spent many years in insurance broking and underwriting in Lloyd's as well as the London and overseas market. He has over 30 years' experience in building, buying and selling financial services businesses, particularly in the insurance sector.

Jonathan Newman is the Group Director of Finance and has over 13 years' experience in the financial services industry. Jonathan advises investee companies through several non-executive board appointments and evaluates new investment opportunities.

Robert King is a Director and Group Company Secretary. He joined B.P. Marsh in May 2003 having started his career at PricewaterhouseCoopers. Since joining B.P. Marsh he has taken on responsibility for the Group's legal, compliance and secretarial functions and played a key role in the flotation of the Company.

Daniel Topping is a Member of the Chartered Institute of Securities and Investment (MCSI) and an Associate Member of the Institute of Chartered Secretaries and Administrators (ACIS). Daniel joined the Company in February 2007 and currently holds three non-executive board appointments.

Camilla Kenyon was appointed as Head of Investor Relations at B. P. Marsh in February 2009, having four years of prior experience with the Company. Since then she has also been appointed as Head of the New Business Department, with responsibility for coordinating new investment opportunities and Chairing the New Business Committee.

 

END

 

 

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