Interim Results

RNS Number : 1139E

B.P. Marsh & Partners PLC

16 October 2018

Date: 16 October 2018

On behalf of: B.P. Marsh & Partners Plc

Embargoed until: 0700hrs

B.P. Marsh & Partners Plc

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

Interim Results

B.P. Marsh & Partners Plc, the specialist investor in financial services intermediary businesses, announces its unaudited Group interim results for the six months to 31 July 2018 (the "Period").

The financial highlights for the Period are:

· Net Asset Value ("NAV") at 31 July 2018 of £120.1m (31 July 2017: £88.8m)

· NAV per share of 333p (31 Jan 2018: 339p, adjusted NAV post July 2018 Placing: 321p)

· 6.7% increase in the equity value of the portfolio in the Period

· Increased final dividend of 4.76p per share for the year to 31 January 2018 declared and paid in July 2018

· 6.4% total shareholder return in the period

· Intended dividend of at least 4.76p per share for the current year ending 31 January 2019

· Dividend covered 7 times by uncommitted cash as at 15 October 2018

· £16.6m cash raised (after costs) in Placing and Open Offer completed in July 2018

· Cash and treasury funds balance of £15.4m, of which £15.1m uncommitted at 31 July 2018

· As at 15 October 2018 uncommitted cash of £12.7m available for investment

The portfolio highlights for the Period are:

· New investment in ATC Insurance Solutions PTY Limited

· LEBC Holdings Limited's acquisition of Aspira Corporate Solutions Limited completed

· Nexus Underwriting Management Limited acquisitions of two specialist MGAs

Brian Marsh, B.P. Marsh Chairman, commented,

"The performance of our portfolio of eighteen investments has been pleasing during the Period with the majority of our investments delivering strong returns. We expect this to continue for the remainder of the year."

For further information:

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

Brian Marsh OBE / Camilla Kenyon +44 (0)20 7233 3112

Nominated Adviser & Broker

Panmure Gordon

Atholl Tweedie / Charles Leigh-Pemberton / Sandra Bjorck +44 (0)20 7886 2500

Financial PR

Redleaf Communications

Emma Kane / Elisabeth Cowell +44 (0)20 7382 4732

Chairman's Statement

I am pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the six month period to 31 July 2018.

Our NAV has increased to £120.1m from £88.8m as at 31 July 2017 including £16.6m raised from the Placing and Open Offer in July 2018. This represents a NAV per share of 333p (31 Jan 2018: 339p; adjusted NAV post July 2018 Placing: 321p). The Group's NAV performance during the Period is in line with the 11.9% annual compound growth in the NAV excluding all new funds raised since inception. Our unaudited profit after tax in the Period was £6.3m, compared to £10.2m in the six months to 31 July 2017. The comparable profit after tax number at our Interim results in 2017 included a significant unrealised gain on equity investment (£5.7m) relating to the revision of the Company's valuation methodology for LEBC Holdings to reflect LEBC Holdings's strong growth during that period.

Following the Placing and Open Offer the Company is entering a new phase of development, with a strategic investor, PSC Insurance Group taking a 19.6% shareholding. We continue to preside over a diverse portfolio with several strong performers and a healthy current uncommitted cash balance of £12.7m for future investment in the existing portfolio as well as new opportunities.

The Board is pleased to note the increase in NAV of 4.7% (excluding the proceeds raised from the Placing and Open Offer) and the 6.7% increase in the equity value of the portfolio during the Period.

Delivering returns to our shareholders continues to drive all that we do and I am pleased to report a 6.4% total shareholder return for the Period. We have already noted our intention to pay a dividend of 4.76p for the year ending 31 January 2019, subject to ongoing review and approval by the Board and Shareholders.

We continue to strike a balance between providing a dividend yield to investors and using available funds to invest in opportunities to generate long-term capital growth. We continue to see a healthy flow of new investment opportunities, with 32 received in the interim period and one completed, namely ATC Insurance Solutions of Melbourne, Australia. We are known for being patient in our consideration of new investments and we maintain this measured approach.

From a wider perspective, we continue to watch global political developments, including the UK's exit from the European Union, with the reassurance that the geographic spread of the portfolio provides sufficient diversification to minimise any consequential impact.

Business Update

Summary of Developments in the Portfolio

New Investments

Investment in ATC Insurance Solutions (PTY) Limited ("ATC")

On 10 July 2018 the Group announced an investment into the Australian based company ATC, taking a 20% equity stake for a total cash consideration of AUD $5.1m (£2.8m).

ATC is a Managing General Agency ("MGA") which provides insurance underwriting services to a wide array of clients across a number of sectors, including Accident & Health, Construction & Engineering, Plant & Equipment and Sports Liability.

Chief Executive Officer, Chris Anderson and Director, Shane Sheppard established ATC as a Lloyd's Coverholder in 2009. ATC is headquartered in Melbourne, with offices in Sydney and Brisbane, employing approximately 30 people.

For the year ended 30 June 2018 ATC reported Gross Written Premium of AUD $61m (2017: AUD $47m). The budget for the year ending 30 June 2019 demonstrates substantial year on year growth for ATC, with expected Gross Written Premium of circa AUD $76m.

Portfolio news

The Group's portfolio businesses have continued to develop as anticipated during the Period. Specific instances or developments are noted below:

LEBC Group Limited ("LEBC")

LEBC announced strong half-year results for the six-month period to 31 March 2018, with revenue growth of 20% from £8.5m last year to £10.2m. Trading profit grew by 100% from £1.2m to £2.4m.

LEBC strengthened its senior management team in October 2018, with Derek Miles being appointed Managing Director of the corporate and private client division, supported by David Lloyd as head of private clients and Todd Rowlands leading the corporate proposition. Derek Miles was formerly Managing Director of Aspira, acquired by LEBC in December 2017, with formal completion occurring in February 2018. Three new senior management hires will also join the business.

In September 2018 LEBC was appointed as corporate pension partner for the Recruitment and Employment Confederation (the "REC"). The REC represents businesses through its corporate membership and individuals through the Institute of Recruitment Professionals. It has a partnership agreement with the Department for Work & Pensions to help get people into work.

LEBC has also stated that it is considering options for a potential shareholder liquidity event, alongside strategies to further accelerate growth.

Nexus Underwriting Management Limited ("Nexus")

Nexus announced that it had completed the acquisitions of Huntington Underwriting Limited ("Huntington") on 6 September 2018 and Altitude Risk Partners LLP ("Altitude") on 7 September 2018.

Altitude is a specialist aviation MGA based in London, acquired by Nexus as an asset purchase from Castel Underwriting Agencies. Altitude has become a trading division of Nexus Underwriting Limited. Altitude underwrites a portfolio of seven lines of aerospace insurance across 130 territories and for the year ending 31 December 2018 is forecasting Gross Written Premium Income in excess of US$80m.

Huntington is a structured solutions MGA based in Malaysia's Labuan International Business and Financial Centre. Huntington offers tailored, non-traditional (re)insurance programmes that manage the volatility in groups of risks, over several years, incorporating aggregate limits of liability and rewarding underwriting profitability.

As a result of these two transactions, the Nexus Group estimates that, for the year ending 31 December 2018, the business will write total Gross Written Premium of £275m across 14 specialty classes of business and generate annualised EBITDA of £13.8m. Nexus continues its M&A growth strategy, targeting three acquisitions per annum and has completed 12 acquisitions in total.

EC3 Brokers Limited ("EC3")

Since the Group's investment in December 2017, EC3 has continued to perform broadly in line with expectations.

Management continues to review a number of opportune personnel and team hires and M&A activity in order to deliver further growth.

CBC UK Limited ("CBC")

On 2 July 2018 CBC completed the 100% acquisition of PBS Insurance Limited ("PBS"). PBS is a general insurance broker based in Jersey. As part of the transaction, Si Aziz, the Managing Director of PBS, subscribed for a shareholding in Paladin Holdings Limited, CBC's parent company, in which B.P. Marsh has a c. 45% shareholding.

The transaction is an important development for CBC, being its first acquisition since the investment by B.P. Marsh in February 2017 and expanding the business into a new territory, with the resulting opportunities this should bring.

CBC's audited accounts for the financial year ended 31 December 2017, the first year following the Management Buy-Out backed by the Group, report revenue of £5.4m and profit before tax of £0.7m (2016: £nil).

On 18 April 2018 the Group completed the purchase of an additional 10% stake in Paladin Holdings Limited ("Paladin"), CBC's parent company, for £400,000 from a founding shareholder. It has been agreed between the

Group and Paladin Management that these shares will be kept available for repurchase by Paladin at a fixed option price most likely to be utilised as part of a non-dilutive Management Incentive Scheme at any point in the next 12 months.

CBC is actively seeking individuals or teams that would complement the existing business, to further its growth ambitions.

Walsingham Motor Insurance Limited ("Walsingham")

Walsingham, the London-based fleet MGA, continued its positive growth, reporting a 20% increase in revenues from £2.2m to £2.6m, and an increase in profit before tax from £0.1m to £0.5m in the year to 30 September 2017.

Garry Watson, Walsingham's CEO, stated "The company continues to make excellent progress as we build on relationships with brokers, emphasising the benefits of using A rated paper."

Europe

Summa Insurance Brokerage, S.L. ("Summa")

The Group continues to work with Summa's Management team to develop the business in a market which remains competitive, with rates continuing to soften.

Notwithstanding this, Summa remains in a strong position to take advantage of the fragmented insurance intermediary market in Spain and to assess all opportunities as and when they materialise.

Canada

Stewart Specialty Risk Underwriting Ltd ("SSRU")

The Group's investment in Canada, SSRU, an MGA which commenced writing business in April 2017, has performed well since launch and has reported strong year on year growth to date.

Australia

ATC Insurance Solutions (PTY) Limited, Sterling Insurance (PTY) Limited ("Sterling") & MB Prestige Holdings (PTY) Limited ("MB Group")

The Group's three investments in Australia are all performing in line with or above the Group's expectations at the current time.

Since the Group's investment in 2012, MB Group has continued to show strong growth year on year with 2017 being MB's best year from a performance standpoint to date.

Sterling, in which the Group has held an investment since 2013, also reported a positive financial year to June 2018, exceeding its EBITDA budget by c. 42%.

Dividend

A final dividend of 4.76p per share was declared and paid in July 2018.

It is the Board's intention to maintain a dividend of at least 4.76p per share for the current year ending 31 January 2019, subject to ongoing review and approval by the Board and the shareholders.

Share Buy-Back

The Group announced a change to its Share Buy-Back Policy on 11 October 2018, which states that Buy-Backs can be undertaken when the discount to NAV of the Group's share price exceeds 15% (previously 20%). The change was agreed by the Board in recognition of the reduction made in the share price discount to NAV over the preceding six months.

The Group's Share Buy-Back Committee meets periodically to decide if Buy-Back transactions should be undertaken, when the discount to Net Asset Value of the Group's share price exceeds 15%. The suitability of the

15% threshold is regularly monitored by the Board. The Buy Backs are intended as a stabilising mechanism and have been particularly useful during periods of market instability.

During the period of six months to 31 July 2018 the Group undertook no Buy-Back transactions from the Market as the discount never breached the 20% threshold.

Business Strategy

The Group invests amounts of up to £5m in the first round of funding and takes minority equity positions in financial services intermediaries, normally acquiring between 20% and 40% of an investee company's total equity. During the holding period, additional investment can lead to the Group having a majority holding, as is the case currently in LEBC and Summa. In these circumstances, day to day business operation remains with management, with the Group providing input, advice and assistance, as with all of its portfolio businesses.

The Group is comfortable with taking a long-term investment horizon with an average holding period post-float of 6.2 years, with our current portfolio being held on average for approximately 3.5 years. As ever, we do not invest in companies that are exposed to underwriting insolvency risk.

The Group requires its investee companies to adopt minority shareholder protections and appoint a director to its board.

Since 1990 the Group has generated an average NAV annual compound growth rate of 11.9% (excluding the £10.1m proceeds raised on flotation and £16.6m proceeds raised as part of the Placing & Open Offer completed in July 2018). Its successful track record can be attributed to a number of factors that include a robust investment process, management's considerable sector experience and a flexible approach to exit.

Cash Balance

The Group has a current uncommitted cash balance of £12.7m available for new investment opportunities and for developing the existing portfolio.

Outlook and New Business Opportunities

During the six-month period the Group has seen a strong flow of new investment opportunities, both in the UK and internationally. Discussions are ongoing on a number of these.

During the Period the Group reviewed 32 opportunities, of which 41% were insurance intermediaries, 9% insuretech, 19% wealth management, 22% fintech and 9% fell outside the Group's investment criteria. By way of comparison, during the interim period to 31 July 2017 the Group reviewed 38 new opportunities.

Brian Marsh OBE, Chairman

16 October 2018

Investments

As at 31 July 2018 the Group's equity interests were as follows:

ATC Insurance Solutions Pty Limited

(www.atcis.com.au)

Group invested in July 2018 in ATC, an Australian-based MGA and Lloyd's Coverholder, specialising in Accident & Health, Construction & Engineering, Trade Pack and Sports insurance.

Date of investment: July 2018

Equity stake: 20%

31 July 2018 valuation: £3,009,000

Asia Reinsurance Brokers Pte Limited

(www.arbrokers.asia)

In April 2016 the Group invested in Asia Reinsurance Brokers Pte Limited ("ARB"), the Singapore headquartered independent specialist reinsurance and insurance risk solutions provider. ARB was established in 2008, following a management buy-out of the business from AJ Gallagher, led by the CEO, Richard Austen.

Date of investment: April 2016

Equity stake: 25%

31 July 2018 valuation: £793,000

Bastion Reinsurance Brokerage (PTY) Limited

(www.bastionre.co.za)

In December 2014 the Group invested in Bastion Reinsurance Brokerage (PTY) Limited ("Bastion"), a start-up Reinsurance Broker based in South Africa. Established in May 2013 by its CEO and Chairman, Bastion specialises in the provision of reinsurance solutions over a number of complex issues, engaged by various insurance companies and managing general agents.

Date of investment: December 2014

Equity stake: 35%

31 July 2018 valuation: £0

Bulwark Investment Holdings (PTY) Limited

In April 2015 the Group, alongside its existing South African Partners, established a new venture, Bulwark Investment Holdings (PTY) Limited ("Bulwark"), a South African based holding company which establishes Managing General Agents in South Africa. To date Bulwark has established two new Managing General Agents: Preferred Liability Underwriting Managers (PTY) Limited and Mid-Market Risk Acceptances (PTY) Limited.

Date of investment: April 2015

Equity stake: 35%

31 July 2018 valuation: £0

CBC UK Limited

(www.cbcinsurance.co.uk)

Established in 1985, 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 assisted in an MBO of CBC allowing Management to buy out a major shareholder via parent company Paladin Holdings Limited.

Date of investment: February 2017

Equity stake: 44.3%

31 July 2018 valuation: £2,884,000

Criterion Underwriting Pte Limited

The Group helped establish Criterion alongside its Partners in Asiare Holdings (PTE) Limited and Asia Reinsurance Brokers (PTE) Limited in July 2018. Criterion is a start-up Singapore-based Managing General Agency providing specialist insurance products to a variety of clients in the Cyber, Financial Lines and Marine sectors in Far East Asia.

Date of investment: July 2018

Equity stake: 29.4%

31 July 2018 valuation: £49,000

EC3 Brokers Limited

(www.ec3brokers.com)

In December 2017, the Group invested in EC3, an independent specialist Lloyd's broker and reinsurance broker, via a newly established NewCo, EC3 Brokers Group Limited. Founded by its current Chief Executive Officer Danny Driscoll, who led a management buyout to acquire EC3's then book of business from AJ Gallagher in 2014, EC3 provides services to a wide array of clients across a number of sectors, including construction, casualty, entertainment and cyber & technology.

Date of investment: December 2017

Equity Stake: 20%

31 July 2018 valuation: £5,000,000

The Fiducia MGA Company Limited

(www.fiduciamga.co.uk)

Fiducia is a recently established UK Marine Cargo Underwriting Agency, established by its CEO Gerry Sheehy. Fiducia is a 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%

31 July 2018 valuation: £105,000

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: 59.3%

31 July 2018 valuation: £36,803,000

Mark Edward Partners LLC

(www.markedwardpartners.com)

Founded in 2010 by Mark Freitas, its President & Chief Executive Officer, Mark Edward Partners LLC ("MEP") provides core insurance products in Financial & Liability, Property & Casualty, Personal Lines, Life Insurance, Cyber and Affinity Groups. MEP is a national U.S. firm with licenses to operate in all 50 states and has offices in New York, Palm Beach and Los Angeles.

Date of investment: October 2017

Equity stake: 30%

31 July 2018 valuation: £3,176,000

MB Prestige Holdings PTY Limited

(www.mbinsurance.com.au)

In December 2013 the Group invested in MB Group, the parent Company of MB Insurance Group PTY a Managing General Agent, headquartered in Sydney, Australia. MB Group is recognised as a market leader in respect of prestige motor vehicle insurance in all mainland states of Australia.

Date of investment: December 2013

Equity stake: 40%

31 July 2018 valuation: £2,105,000

Nexus Underwriting Management Limited

(www.nexusunderwriting.com)

In 2014 the Group invested in Nexus, an independent specialty Managing General Agency, founded in 2008. Through its operating subsidiaries Nexus specialises 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: 16.5%

31 July 2018 valuation: £22,087,000

Property & Liability Underwriting Managers (PTY) Limited

(www.plumsa.co.za)

In June 2015 the Group completed an investment in Property And Liability Underwriting Managers (PTY) Limited ("PLUM"), a Managing General Agent based in Johannesburg, South Africa. PLUM specialises in large corporate property insurance risks in South Africa and is supported by both domestic South African insurance capacity and A-rated international reinsurance capacity.

Date of investment: June 2015

Equity stake: 42.5%

31 July 2018 valuation: £0

Stewart Specialty Risk Underwriting Ltd

(www.ssru.ca)

A Canadian based Managing General Agent, providing insurance solutions to a wide array of clients in the Construction, Manufacturing, Onshore Energy, Public Entity and Transportation sectors. SSRU was established by its CEO Stephen Stewart, who has over 25 years' experience in the insurance industry having had senior management roles at both Ironshore and Lombard in Canada.

Date of investment: January 2017

Equity stake: 30%

31 July 2018 valuation: £268,000

Sterling Insurance PTY Limited

(www.sterlinginsurance.com.au)

In June 2013, in a joint venture enterprise alongside Besso, (Neutral Bay Investments Limited) the Group invested in Sterling, an Australian specialist underwriting agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition.

Date of investment: June 2013

Equity stake: 19.7%

31 July 2018 valuation: £2,453,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Madrid-based Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain. Through acquisition Summa is able to achieve synergistic savings, economies of scale and greater collective bargaining thereby increasing overall value.

Date of investment: January 2005

Equity stake: 77.3%

31 July 2018 valuation: £4,206,000

Walsingham Motor Insurance Limited

(www.walsinghamunderwriting.com)

In December 2013 the Group invested in Walsingham, a niche UK fleet motor Managing General Agency, which commenced trading in July 2013. In 2015 the Group acquired a further 10.5% equity, taking the current shareholding to 40.5%.

Date of investment: December 2013

Equity stake: 40.5%

31 July 2018 valuation: £779,000

XPT Group LLC

(www.xptspecialty.com)

In June 2017 the Group backed the ex-Swett & Crawford CEO Tom Ruggieri and a strong management team to develop a New York-based wholesale insurance broking and underwriting agency platform across

the U.S. Specialty Insurance Sector.

Date of investment: June 2017

Equity stake: 35%

31 July 2018 valuation: £4,574,000

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 PERIOD ENDED 31ST JULY 2018

	Notes	Unaudited		Unaudited		Audited
		6 months to		6 months to		Year to
		31^st July 2018		31^st July 2017		31^st January 2018
		£'000	£'000	£'000	£'000	£'000	£'000
GAINS ON INVESTMENT
Realised gains on disposal of equity investments (net of costs)	6	-		718		718
Provision against equity investments and loans		-		(650)		(2,122)
Unrealised gains on equity investment revaluation	4	5,540		11,701		18,119
			5,540		11,769		16,715
INCOME
Dividends		1,585		638		1,538
Income from loans and receivables		539		620		1,170
Fees receivable		572		674		1,154
			2,696		1,932		3,862
OPERATING INCOME			8,236		13,701		20,577

Operating expenses		(1,983)		(2,136)		(4,147)
Provision against deferred consideration		-		-		(341)
			(1,983)		(2,136)		(4,488)

OPERATING PROFIT			6,253		11,565		16,089

Financial income		66		337		582
Financial expenses	5	(4)		(75)		(111)
Exchange movements		27		58		(42)
			89		320		429
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION			6,342		11,885		16,518

Income taxes			(79)		(1,670)		3,731

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS	7		£6,263		£10,215		£20,249


TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	7		£6,263		£10,215		£20,249

Earnings per share - basic and diluted (pence)	3		20.8p		35.0p		69.3p

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST JULY 2018

(Company Number: 05674962)

		Unaudited		Unaudited		Audited
	Notes	31^st July 2018		31^st July 2017		31^st January 2018
		£'000	£'000	£'000	£'000	£'000	£'000
ASSETS

NON-CURRENT ASSETS
Property, plant and equipment		158		177		167
Investments - equity portfolio	4	88,291		62,982		79,122
Investments - treasury portfolio	5	4		15,449		2,756
Loans and receivables		14,753		12,531		14,421
Deferred tax assets		-		-		32
			103,206		91,139		96,498

CURRENT ASSETS
Trade and other receivables		2,412		1,475		2,393
Cash and cash equivalents		15,350		6,591		2,648
			17,762		8,066		5,041
LIABILITIES

NON-CURRENT LIABILITIES
Deferred tax liabilities	9	-		(4,923)		-
			-		(4,923)		-

CURRENT LIABILITIES
Trade and other payables		(825)		(871)		(1,472)
Corporation tax provision		(61)		(4,611)		(1,200)
			(886)		(5,482)		(2,672)

NET ASSETS			£120,082		£88,800		£98,867

CAPITAL AND RESERVES -
EQUITY

Called up share capital			3,599		2,923		2,923
Share premium account			25,327		9,390		9,398
Fair value reserve			37,562		20,739		32,022
Reverse acquisition reserve			393		393		393
Capital redemption reserve			6		6		6
Capital contribution reserve			10		6		7
Retained earnings			53,185		55,343		54,118

SHAREHOLDERS' FUNDS - EQUITY	7		£120,082		£88,800		£98,867

Net Asset Value per share (pence)			333p		304p		339p

The Interim Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 15th October 2018

and signed on its behalf by:

B.P. Marsh & J.S. Newman

B.P. MARSH & PARTNERS PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31ST JULY 2018

	Unaudited	Unaudited	Audited
	31^st July 2018	31^st July 2017	31^st January 2018
	£'000	£'000	£'000
Cash from operating activities
Income from loans to investees	539	620	1,170
Dividends	1,585	638	1,538
Fees received	572	674	1,154
Operating expenses	(1,983)	(2,136)	(4,488)
Net corporation tax paid	(1,168)	(93)	(3,076)
Purchase of equity investments (Note 4)	(3,629)	(11,931)	(21,653)
Net proceeds from sale of equity investments	-	24,935	24,935
Net loan repayments from / (loan payments to) investee companies	234	(2,151)	(6,695)
Adjustment for non-cash share incentive plan	69	56	88
Increase in receivables	(573)	(230)	(7)
(Decrease) / increase in payables	(647)	152	752
Depreciation and amortization	13	13	27
Net cash (used by) / from operating activities	(4,988)	10,547	(6,255)

Net cash from / (used by) investing activities
Purchase of property, plant and equipment	(5)	(176)	(179)
Purchase of treasury investments (Note 5)	(27)	(30,347)	(35,858)
Net proceeds from sale of treasury investments (Note 5)	2,834	20,382	38,784
Net cash from / (used by) investing activities	2,802	(10,141)	2,747

Net cash from / (used by) financing activities
Financial income	7	8	19
Dividends paid	(1,714)	(1,099)	(1,098)
Net proceeds on issue of company shares	16,597	-	-
Payments made to repurchase company shares	-	(54)	(54)
Net cash from / (used by) financing activities	14,890	(1,145)	(1,133)

Change in cash and cash equivalents	12,704	(739)	(4,641)
Cash and cash equivalents at beginning of the period	2,648	7,327	7,327
Exchange movement	(2)	3	(38)

Cash and cash equivalents at end of period†	£15,350	£6,591	£2,648

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.

†The above cash and cash equivalents balance excludes treasury portfolio funds which are referred to in Note 5. Including treasury portfolio balances of £4k, total available cash and treasury portfolio funds as at 31st July 2018 was £15,354k (as at 31st July 2017: £22,040k, including £15,449k of treasury portfolio funds and as at 31st January 2018: £5,404k, including £2,756k of treasury portfolio funds).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31ST JULY 2018

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	31^st July 2018	31^st July 2017	31^st January 2018
	£'000	£'000	£'000

Opening total equity	98,867	79,682	79,682
Comprehensive income for the period	6,263	10,215	20,249
Dividends paid	(1,714)	(1,099)	(1,098)
Repurchase of company shares	-	(54)	(54)
Share incentive plan	69	56	88
New shares issued (net funds raised)	16,597	-	-
Total equity	£120,082	£88,800	£98,867

Refer to Note 7 for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31ST JULY 2018

1. ACCOUNTING POLICIES

Basis of preparation of financial statements

These consolidated 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 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 IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances, the results of which form the basis of judgements about the carrying amounts of assets and liabilities. Actual results may differ from those amounts.

In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements:

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10: Consolidated Financial Statements ("IFRS 10") are required to account for their investments in controlled entities, as well as investments in associates at fair value through profit or loss. Subsidiaries that provide investment related services or engage in permitted investment related activities with investees that relate to the parent investment entity's investment activities continue to be consolidated in the Group results. The criteria which define an investment entity are currently as follows:

a) an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

b) an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

c) an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Group's annual and interim consolidated financial statements clearly state its objective of investing directly into portfolio investments and providing investment management services to investors for the purpose of generating returns in the form of investment income and capital appreciation. The Group has always reported its investment in portfolio investments at fair value. It also produces reports for investors of the funds it manages and its internal management report on a fair value basis. The exit strategy for all investments held by the Group is assessed, initially, at the time of the first investment and this is documented in the investment paper submitted to the Board for approval.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties. The Board has concluded that B.P. Marsh & Partners Plc and its two trading subsidiaries, B.P. Marsh & Company Limited and B.P. Marsh (North America) Limited, which provide investment related services on behalf of B.P. Marsh & Partners Plc, all meet the definition of an investment entity. These conclusions will be reassessed on an annual basis for changes to any of these criteria or characteristics.

Application and significant judgments

When it is established that a parent company is an investment entity, its subsidiaries are measured at fair value through profit or loss. However, if an investment entity has subsidiaries that provide services that relate to the investment entity's investment activities, exception to the Amendment of IFRS 10 is not applicable as in this case, the parent investment entity still consolidates the results of its subsidiaries. Therefore, the results of B.P. Marsh & Company Limited and B.P. Marsh (North America) Limited continued to be consolidated into its Group financial statements for the period.

The most significant estimates relate to the fair valuation of the equity investment portfolio as detailed in Note 4 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.

These interim consolidated financial statements were approved by the Board on 15th October 2018. They have not been audited nor reviewed by the Group's Auditors, as is the case with the comparatives to 31st July 2017, and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st January 2018. Those accounts, upon which the Group's Auditor issued an unqualified opinion, have been filed with the Registrar of Companies and do not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

b) exposure, or rights, to variable returns from its involvement with the investee; and

c) the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a) rights arising from other contractual arrangements; and

b) the Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

B.P. Marsh & Partners Plc ("the Company"), an investment entity, has two subsidiary investment entities, B.P. Marsh & Company Limited and B.P. Marsh (North America) Limited, that provide services that relate to the Company's investment activities. The results of these two subsidiaries, together with other subsidiaries (except for Summa Insurance Brokerage, S.L. ("Summa") and 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 Summa and LEBC. Instead the investments in Summa and LEBC are valued at fair value through profit or loss.

(ii) Associates

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.

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.

Employee services settled in equity instruments

The Group has entered into a joint share ownership plan ("JSOP") with certain employees and directors. A fair value for the cash settled share awards is measured at the date of grant. The Group measured the fair value using the Expected Return Methodology which was considered to be the most appropriate valuation technique to value the awards.

The fair value of the award is recognised as an expense over the vesting period on a straight-line basis. The level of vesting is assumed to be 100% and will be reviewed annually and the charge is adjusted to reflect actual or estimated levels of vesting with the corresponding entry to capital contribution.

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. In addition, new shares were issued and allocated to the SIP Trust during the period.

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 ("IPEV Guidelines"). The following valuation methodologies have been used in reaching 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 period. 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 a 'Non-current asset as 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 reserve 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

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 into sterling at the 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 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 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 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.

2. SEGMENTAL REPORTING

The Group operates in one business segment; the 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. The UK segment includes the 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), 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 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

	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July
	2018	2017	2018	2017	2018	2017
	£'000	£'000	£'000	£'000	£'000	£'000
Operating income	7,238	13,534	998	167	8,236	13,701
Operating expenses	(1,368)	(1,514)	(615)	(622)	(1,983)	(2,136)
Segment operating profit / (loss)	5,870	12,020	383	(455)	6,253	11,565

Financial income	46	239	20	98	66	337
Financial expenses	(3)	(53)	(1)	(22)	(4)	(75)
Exchange movements	(1)	5	28	53	27	58
Profit / (loss) before tax	5,912	12,211	430	(326)	6,342	11,885
Income taxes	(79)	(1,732)	-	62	(79)	(1,670)
Profit / (loss) for the period	£5,833	£10,479	£430	£(264)	£6,263	£10,215

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 income generated by the Group during the period:

	Total income attributable to the investee company (£'000)		% of total realised operating income		Reportable geographic segment

	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July
	2018	2017	2018	2017	2018	2017
Investee Company
LEBC Holdings Limited	930	531	35	27	1	1
Nexus Underwriting Management Limited	313	192	12	10	1	1
Paladin Holdings Limited	285	199	11	10	1	1

	Geographic segment 1: UK		Geographic segment 2: Non-UK		Group

	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July	6 months to 31^st July
	2018	2017	2018	2017	2018	2017
	£'000	£'000	£'000	£'000	£'000	£'000

Non-current assets
Property, plant and equipment	121	131	37	46	158	177
Investments - equity portfolio	67,658	46,486	20,633	16,496	88,291	62,982
Investments - treasury portfolio	4	15,449	-	-	4	15,449
Loans and receivables	11,838	8,711	2,915	3,820	14,753	12,531
	79,621	70,777	23,585	20,362	103,206	91,139
Current assets
Trade and other receivables	976	628	1,436	847	2,412	1,475
Cash and cash equivalents	15,350	6,591	-	-	15,350	6,591
	16,326	7,219	1,436	847	17,762	8,066

Total assets	95,947	77,996	25,021	21,209	120,968	99,205
Non-current liabilities
Deferred tax liabilities	-	(4,998)	-	75	-	(4,923)
	-	(4,998)	-	75	-	(4,923)
Current liabilities
Trade and other payables	(825)	(871)	-	-	(825)	(871)
Corporation tax provision	(61)	(4,611)	-	-	(61)	(4,611)
	(886)	(5,482)	-	-	(886)	(5,482)

Total liabilities	(886)	(10,480)	-	75	(886)	(10,405)

Net assets	£95,061	£67,516	£25,021	£21,284	£120,082	£88,800


Additions to property, plant and equipment	4	130	1	46	5	176

Depreciation and amortisation of property, plant and equipment	9	9	3	4	12	13


Cash flow arising from:
Operating activities	(1,329)	16,007	(3,659)	(5,460)	(4,988)	10,547
Investing activities	2,802	(10,141)	-	-	2,802	(10,141)
Financing activities	14,890	(1,145)	-	-	14,890	(1,145)
Change in cash and cash equivalents	16,363	4,721	(3,659)	(5,460)	12,704	(739)

	Geographic segment 1: UK	Geographic segment 2: Non-UK	Group

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2018	2018	2018
	£'000	£'000	£'000

Operating income	25,650	(5,073)	20,577
Operating expenses	(3,046)	(1,442)	(4,488)
Segment operating profit / (loss)	22,604	(6,515)	16,089

Financial income	395	187	582
Financial expenses	(75)	(36)	(111)
Exchange movements	(4)	(38)	(42)
Profit / (loss) before tax	22,920	(6,402)	16,518
Income taxes	2,515	1,216	3,731
Profit / (loss) for the year	£25,435	£(5,186)	£20,249

	Total income attributable to the investee company (£'000)	% of total realised operating income (excluding gains on investments)	Reportable geographic segment

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2018	2018	2018
Investee Company
LEBC Holdings Limited	836	22	1
Nexus Underwriting Management Limited	749	19	1

	Geographic segment 1: UK	Geographic segment 2: Non-UK	Group

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2018	2018	2018
	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	131	36	167
Investments - equity portfolio	61,849	17,273	79,122
Investments - treasury portfolio	2,756	-	2,756
Loans and receivables	11,770	2,651	14,421
	32	-	32
	76,538	19,960	96,498
Current assets
Trade and other receivables	1,441	952	2,393
Cash and cash equivalents	2,648	-	2,648
	4,089	952	5,041

Total assets	80,627	20,912	101,539

Current liabilities
Trade and other payables	(1,472)	-	(1,472)
Corporation tax provision	(1,200)	-	(1,200)
	(2,672)	-	(2,672)

Total liabilities	(2,672)	-	(2,672)

Net assets	£77,955	£20,912	£98,867


Additions to property, plant and equipment	140	39	179

Depreciation and amortisation of property, plant and equipment	21	6	27

Impairment of investments and loans	-	2,122	2,122

Cash flow arising from:
Operating activities	4,383	(10,638)	(6,255)
Investing activities	2,747	-	2,747
Financing activities	(1,133)	-	(1,133)
Change in cash and cash equivalents	5,997	(10,638)	(4,641)

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 2018 and 2017 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:

	Unaudited	Unaudited	Audited
	31^st July 2018	31^st July 2017	31^st January 2018
	%	%	%

UK	48	68	49
Non-UK	52	32	51
Total	100	100	100

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

	Unaudited	Unaudited	Audited
	31^st July 2018	31^st July 2017	31^st January 2018
	£'000	£'000	£'000
Earnings
Earnings for the period	6,263	10,215	20,249
Earnings for the purposes of basic and diluted earnings per share being total comprehensive income attributable to equity shareholders	6,263	10,215	20,249
Earnings per share - basic and diluted	20.8p	35.0p	69.3p

Number of shares	Number	Number	Number
Weighted average number of ordinary shares for the purposes of basic earnings per share	30,077,669	29,200,362	29,202,716

Number of dilutive shares under option	Nil	Nil	Nil

Weighted average number of ordinary shares for the purposes of dilutive earnings per share	30,077,669	29,200,362	29,202,716

During the period the Company issued a total of 8,252,037 new ordinary shares.

On 12th June 2018 the Company made a Placing Announcement to the market outlining details of a proposed placing of 6,169,194 new ordinary shares (the "Placing") to a new investor, an entity within the PSC Insurance Group ("PSC Group"), at a price of 252 pence per share ("Issue Price"). In addition, in order to provide existing shareholders with an opportunity to participate in the issue of new ordinary shares, the Company launched an open offer (the "Open Offer") to all qualifying shareholders to subscribe for an aggregate of up to 595,238 new ordinary shares at the Issue Price (on the basis of 1 open offer share for every 21 existing ordinary shares held). All new open offer shares were fully subscribed for.

The Placing also included the transfer of 1,166,310 existing ordinary shares in the Company by B.P. Marsh Management Limited (a company wholly owned by Mr B.P. Marsh, the Executive Chairman of the Group) to PSC Group at the Issue Price.

In addition,1,461,302 new ordinary shares of 10 pence each were issued and allotted as part of a new joint share ownership plan ("2018 JSOP"), representing 5.00% of the existing issued share capital at the time the awards were made. This was to provide eligible employees of the Group with a joint beneficial ownership in and opportunity to benefit from any possible appreciation in the value of ordinary shares in the Company subject to a hurdle rate. The new ordinary shares have been issued in the name of RBC cees Trustee Limited ("RBC") as trustee of the B.P. Marsh Employees' Share Trust ("Share Trust") at a subscription price of 281 pence, being the mid-market closing price on 12th June 2018. The ordinary shares issued to the Share Trust were partly paid for via a loan from the Company to RBC to cover the subscription cost of the aggregate nominal value of the shares, amounting to £146,130. Refer to Note 10 for further details of the joint share ownership plan.

26,303 new ordinary shares, representing 0.09% of the existing issued share capital, were also issued and allotted to the participants of the Company's Share Incentive Plan ("SIP"). Refer to Note 10 for further details.

Both the 1,461,302 and the 26,303 new ordinary shares issued respectively for the purposes of the 2018 JSOP and the SIP were admitted to trading on AIM on 19th June 2018.

On 5th July 2018, at a General Meeting of the Company, all resolutions set out in a Circular dated 13th June 2018 outlining the conditions of the Placing and Open Offer were duly passed.

Both the Placing and the Open Offer raised total gross proceeds of £17,046,369 (net proceeds of £16,589,132 after costs) and 6,764,432 new ordinary shares were admitted to trading on AIM on 9th July 2018.

Following admission of the aforementioned new ordinary shares, the Company's issued share capital increased from 29,226,040 as at 31st January 2018 to 37,478,077 as at 31st July 2018.

The weighted average number of ordinary shares at 31st July 2018 has been calculated by proportioning the Placing and Open Offer shares over the period.

The Company made no share repurchases during the period. During the interim 6 months to 31st July 2017 and full year to 31st January 2018 the Company paid £53,967 in order to repurchase 28,646 ordinary shares at an average price of 188 pence per share. Distributable reserves were reduced by £53,967 as a result during those periods.

Ordinary shares held by the Company in Treasury

Movement of ordinary shares held in Treasury:	Unaudited	Unaudited	Audited
	31^st July 2018	31^st July 2017	31^st January 2018
	Number	Number	Number

Opening total ordinary shares held in Treasury	21,009	5,726	5,726

Ordinary shares repurchased into Treasury during the period	-	28,646	28,646

Ordinary shares transferred to the B.P. Marsh SIP Trust during the period	(21,009)	(13,363)	(13,363)

Total ordinary shares held in Treasury at period end	-	21,009	21,009

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 period (and previously) to be able to buy small parcels of shares when the share price is below 20% of its published Net Asset Value (or adjusted Net Asset Value following the Placing and Open Offer referred to above) and place them into Treasury. On 11th October 2018 the Group announced an updated Share Buy-Back Policy confirming that the threshold had been reduced from 20% to 15%.

The increase to the weighted average number of ordinary shares between the 2017 and 2018 interim periods is mainly attributable to the issue of new ordinary shares during the period from the Placing and Open Offer, as well as the new SIP shares issued. The weighted average number of shares used for the purposes of calculating the earnings per share and net asset value of the Company excludes the 1,461,302 shares held under joint share ownership arrangements (Note 10) as these were non-dilutive in the period to 31st July 2018 and subject to performance criteria that have not yet been achieved. These shares are therefore considered equivalent to shares held in Treasury.

The 21,009 ordinary shares transferred from Treasury to the SIP Trust in June 2018 have been treated as re-issued for the purposes of calculating earnings per share and have therefore also contributed to the increase to the weighted average number of shares in the current period.

35,222 ordinary shares (comprising the 21,009 ordinary shares transferred from Treasury to the SIP Trust during the period together with 14,213 of the 26,303 unallocated ordinary shares acquired by the SIP Trust as part of the new issue of shares by the Company during the period) were allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement in June 2018 (Note 10).

The decrease to the weighted average number of shares in the 6 months to 31st July 2017 and the 12 months to 31st January 2018 was attributable to the buy-back of 28,646 ordinary shares in the Company during those periods. 13,363 ordinary shares were also transferred from Treasury to the SIP Trust during those periods and these shares were therefore treated as re-issued for the purposes of earnings per share. 37,935 ordinary shares (comprising the 13,363 ordinary shares transferred from Treasury to the SIP Trust in those periods together with 24,572 unallocated ordinary shares already held by the SIP Trust at the start of those periods) were subsequently allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement in those periods.

4. NON-CURRENT INVESTMENTS - EQUITY PORTFOLIO

Group Investments
	Unaudited	Unaudited	Unaudited	Unaudited
	31^st July 2018	31^st July 2017	31^st July 2017	31^st July 2017
	Continuing investments	Continuing investments	Non-current investments as held for sale	Total
	£'000	£'000	£'000	£'000
At valuation
At 1^st February	79,122	39,350	24,217	63,567
Additions	3,629	11,931	-	11,931
Disposals	-	-	(24,217)	(24,217)
Movement in valuation	5,540	11,701	-	11,701

At period end	£88,291	£62,982	£ -	£62,982

At cost
At 1^st February	47,100	25,447	5,240	30,687
Additions	3,629	11,931	-	11,931
Disposals	-	-	(5,240)	(5,240)

At period end	£50,729	£37,378	£ -	£37,378

	Audited	Audited	Audited
	31^st January 2018	31^st January 2018	31^st January 2018
	Continuing investments	Non-current investments as held for sale	Total
	£'000	£'000	£'000

At valuation
At 1^st February 2017	39,350	24,217	63,567
Additions	21,653	-	21,653
Disposals	-	(24,217)	(24,217)
Movement in valuation	18,119	-	18,119

At 31^st January 2018	£79,122	£ -	£79,122

At cost
At 1^st February 2017	25,447	5,240	30,687
Additions	21,653	-	21,653
Disposals	-	(5,240)	(5,240)

At 31^st January 2018	£47,100	£ -	£47,100

The principal additions relate to the following transactions in the period:

On 9th April 2018 the Group subscribed for a further 10% equity in The Fiducia MGA Company Limited for consideration of £30,000, increasing the Group's holding from 25% as at 31st January 2018 to 35% as at 31st July 2018.

On 18th April 2018 the Group acquired 100,000 ordinary shares (10% equity stake) in Paladin Holdings Limited ("Paladin") from a minority shareholder and director for consideration of £400,000. These shares are being held by the Group under a call option arrangement which Paladin can call at any time during the next three years and buy-back at a fixed option price of £4.02 per share (£402,000). This acquisition increased the Group's equity holding in Paladin from 35% as at 31st January 2018 to 45% at the time of investment. Following a small amount of dilution (resulting from the issue of new shares following an acquisition made by Paladin) the Group's holding stood at 44.3% as at 31st July 2018.

On 14th May 2018 the Group subscribed, alongside other Walsingham Motor Insurance Limited ("Walsingham") shareholders, for 299 (of a total 1,498) new ordinary shares in Walsingham Holdings Limited ("Walsingham Holdings") for consideration of £300. Following this share reorganisation, the Group's equity holding in Walsingham Holdings reduced from 50% as at 31st January 2018 to 20% at 31st July 2018, however the Group retained its 40.5% holding in Walsingham. On the same date the Group also provided a £300,000 loan facility to Walsingham Holdings which was provided to allow Walsingham Holdings, a previously dormant company, to acquire an 11.7% equity holding in Walsingham from an exiting shareholder. The loan from the Group is secured on the acquired Walsingham shares via a debenture containing a cross guarantee with Walsingham.

On 3rd July 2018 the Group subscribed for a further 5% equity stake in Asia Reinsurance Brokers Pte Limited ("ARB") for consideration of SGD 500,000 (£282,747), increasing the Group's equity holding from 20% as at 31st January 2018 to 25% as at 31st July 2018.

On 10th July 2018 the Group acquired a 20% equity stake in ATC Insurance Solutions PTY Limited ("ATC"), for total cash consideration AUD 5,080,000 (£2,865,523). ATC, headquartered in Melbourne, Australia, is a Managing General Agency which provides insurance services to a wide array of clients across a number of sectors, including Accident & Health, Construction & Engineering, Plant & Equipment and Sports Liability.

On 11th July 2018 the Group acquired a 29.4% equity stake in Criterion Underwriting (Pte) Limited ("Criterion"), a start-up Singapore-based Financial Lines, Cyber and Marine Managing General Agency, for total consideration of SGD 88,200 (£49,935).

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage, S.L. (Spain), MB Prestige Holdings PTY Limited (Australia), Bastion Reinsurance Brokerage (PTY) Limited (South Africa), Bulwark Investment Holdings (PTY) Limited (South Africa), Property and Liability Underwriting Managers (PTY) Limited (South Africa), Asia Reinsurance Brokers Pte Limited (Singapore), Stewart Specialty Risk Underwriting Ltd (Canada), XPT Group LLC (USA) and Mark Edward Partners LLC (USA), ATC Insurance Solutions PTY Limited (Australia) and Criterion Underwriting Pte Limited (Singapore) 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
			£	£

Asia Reinsurance Brokers Pte Limited	25.00	31.12.17	2,377,299	(227,666)	Specialist reinsurance broker

Bastion Reinsurance Brokerage (PTY) Limited	35.00	31.12.17	(618,839)	(292,069)	Reinsurance broker

Bulwark Investment Holdings (PTY) Limited	35.00	31.12.16	(466,434)	(354,827)	Holding company for South African Managing General Agents

Criterion Underwriting Pte Limited¹	29.40	-	-	-	Specialist Singaporean Managing General Agency

EC3 Brokers Group Limited	20.00	31.12.17	893,851	(7,695)	Investment holding company

LEBC Holdings Limited	59.34	30.09.17	4,446,198	2,328,811	Independent financial advisor company

MB Prestige Holdings PTY Limited	40.00	31.12.17	1,664,120	508,503	Specialist Australian Motor Managing General Agency

Neutral Bay Investments Limited	49.90	31.03.17	3,928,552	225,337	Investment holding company

Nexus Underwriting Management Limited	16.45	31.12.17	20,664,585	3,715,665	Specialist Managing General Agency

Mark Edward Partners LLC	30.00	31.12.17	5,046,643	3,470,754	Specialty insurance broker

Paladin Holdings Limited	44.33	31.12.17	68,396	140,334	Investment holding company

Property and Liability Underwriting Managers (PTY) Limited	42.50	31.12.17	(306,965)	(255,986)	Specialist South African Property Managing General Agency

Stewart Specialty Risk Underwriting Ltd	30.00	31.12.17	(81,679)	(81,756)	Specialist Canadian Casualty Underwriting Agency

Summa Insurance Brokerage, S.L.	77.25	31.12.16	9,092,533	(85,960)	Consolidator of regional insurance brokers

The Fiducia MGA Company Limited	35.00	31.12.17	(1,196,046)	(1,098,549)	Specialist UK Marine Cargo Underwriting Agency

Walsingham Holdings Limited¹	20.00	-	-	-	Investment holding company

Walsingham Motor Insurance Limited	40.50	30.09.16	(1,704,245)	103,132	Specialist UK Motor Managing General Agency

XPT Group LLC¹	35.00	-	-	-	USA Specialty lines insurance distribution company

¹XPT Group LLC, Criterion Underwriting Pte Limited and Walsingham Holdings Limited are all newly incorporated companies. 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.

5. NON-CURRENT INVESTMENTS - TREASURY PORTFOLIO

Group	Unaudited	Unaudited	Audited
At valuation	31^st July 2018	31^st July 2017	31^st January 2018
	£'000	£'000	£'000

Market value at 1st February	2,756	5,230	5,230
Additions at cost	27	30,347	35,858
Disposals	(2,834)	(20,382)	(38,784)
Change in value in the year	55	254	452
Market value at period end	£4	£15,449	£2,756

Investment fund split:

GAM London Limited	2	7,209	1,517
Rathbone Investment Management Limited	2	8,240	1,239
Total	£4	£15,449	£2,756

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 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 £4,065 (interim 6 months to 31st July 2017: £75,233 and full year to 31st January 2018: £110,811) were charged to the Consolidated Statement of Comprehensive Income during the period.

6. REALISED GAINS ON DISPOSAL OF INVESTMENTS

During the period there were no realised gains on disposal of investments.

The amount included in realised gains on disposal of investments for the 6 months to 31st July 2017 and also for the 12 months to 31st January 2018 comprised of a net gain of £718,070. £698,796 of this net gain was in respect of the Group's disposal of its entire 37.94% investment in Besso Insurance Group Limited ("Besso") at its carrying value of £21,309,000 for a consideration of £22,007,796. The remaining net gain of £19,274 was in respect of the Group's disposal of its entire 29.94% investment in Trireme Insurance Group Limited ("Trireme") at its carrying value of £2,908,000 for a consideration of £2,908,350 as well as an additional net payment of £18,924.

In aggregate, during the period to 31st July 2017, the above disposals resulted in a net release to Retained Earnings from the Fair Value Reserve of £15,296,868, comprising of a £18,977,245 release of fair value which was reduced by estimated tax payable on disposal (gross of management expenses available for tax relief) of £3,680,377. During the year to 31st January 2018 the estimated tax payable on disposal was reduced to £3,586,262, resulting in a revised net release to Retained Earnings from the Fair Value Reserve of £15,390,983 as at 31st January 2018.

7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS


		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 31^st January 2018	2,923	9,398	32,022	393	6	7	54,118	98,867

Profit for the period	-	-	5,540	-	-	-	723	6,263

Dividends paid	-	-	-	-	-	-	(1,714)	(1,714)

Issue of new shares (Note 3)	825	19,952	-	-	-	-	-	20,777

Share based payments (Note 10)	-	-	-	-	-	3	(3)	-

Share Incentive Plan (Note 10)	-	8	-	-	-	-	61	69

Adjustment for shares issued treated as Treasury shares (Notes 3 and 10)	(149)	(4,031)	-	-	-	-	-	(4,180)

At 31^st July 2018	£3,599	£25,327	£37,562	£393	£6	£10	£53,185	£120,082

8. LOAN AND EQUITY COMMITMENTS

On 27th January 2017 the Group entered into an agreement to provide a loan facility of CAD 850,000 (subject to certain conditions) to Stewart Specialty Risk Underwriting Ltd ("SSRU"), an investee company. As at 31st July 2018 CAD 450,000 (£263,481) of this facility had been drawn down, leaving a remaining undrawn facility of CAD 400,000.

On 19th April 2017 (as varied on 23rd August 2017, 19th December 2017, 31st January 2018, 21st February 2018 and 22nd March 2018) the Group entered into an agreement to provide a loan facility of £1,452,617 to Property and Liability Underwriting Managers (PTY) Limited ("PLUM"), an investee company. As at 31st July 2018 £1,450,778 of this facility had been drawn down, leaving a remaining undrawn facility of £1,839.

On 11th December 2014 (as varied on 24th July 2018) the Group entered into an agreement to provide a loan facility of £431,831 to Bastion Reinsurance Brokerage (PTY) Limited ("Bastion"), an investee company. As at 31st July 2018 £402,831 of this facility had been drawn down, leaving a remaining undrawn facility of £29,000. Since 31st July 2018 a further £23,000 has been drawn down, bringing the total amount outstanding to £425,831 and leaving a remaining undrawn facility of £6,000 at the date of this report.

9. DEFERRED TAX AND CONTINGENT LIABILITIES

The directors estimate that, under the current taxation rules and the current investment profile, if the Group were to dispose of all its investments at the amount stated in the Consolidated Statement of Financial Position, no tax on capital gains (interim 6 months to 31st July 2017: £4,923,000 and full year to 31st January 2018: £Nil) would become payable by the Group at a corporation tax rate of 19%.

The deferred tax asset of £32,000 included within the Statement of Financial Position as at 31st January 2018 related to the estimated tax credit arising on the accumulated net unrealised losses within the Group's Treasury Portfolio (Note 5).

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 relax the conditions for the Group to qualify for SSE on a share disposal.

Having reviewed the Group's current investment portfolio, the directors consider that the Group should benefit from this reform to the SSE rules and, as a result, the directors would anticipate that on a disposal of shares in the Group's current investments, so long as the shares have been held for 12 months, they should qualify for SSE and no corporation tax charge should arise on the disposal.

As such, and having assessed the current portfolio, the directors anticipate that there should currently be no requirement to provide for deferred tax in respect of unrealised gains on those investments under the current requirements of the International Financial Reporting Standards ("IFRS"). As such no deferred tax provision has been made as at 31st July 2018. 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 IFRS. 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.

10. SHARE BASED PAYMENT ARRANGEMENTS

Joint Share Ownership Plan

During the period, 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 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	1,461,302
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 period ended 31st July 2018	£2,933

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 (4 of whom are 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 Trust") at a subscription price of £2.81, being the mid-market closing price on 12th June 2018.

The jointly-owned shares are beneficially owned by (i) each of the 12 participating employees and (ii) the trustee of the 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 enjoy the growth in value of the shares above a threshold price of £2.81 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. The Trust retains the initial market value of the jointly-owned shares plus the carrying cost.

Alternatively, on 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.

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.

No jointly-owned shares were sold or forfeited during the period. The number of jointly-owned shares expected to vest has therefore not been adjusted. In accordance with IFRS 2: Share-based Payment, the fair value of the expected cost of the award (measured at the date of grant) has been spread over the three-year vesting period.

There has been no movement during the period in terms of the numbers of shares to be exercised.

Share Incentive Plan

During the year to 31st January 2017 the Group established an HMRC approved Share Incentive Plan ("SIP").

During the period a total of 21,009 ordinary shares in the Company, which were held in Treasury as at 31st January 2018 (6 months to 31st July 2017 and also 12 months to 31st January 2018: 13,363 ordinary shares in the Company, which were either repurchased during those periods or held in Treasury as at 31st January 2017) were transferred to the B.P. Marsh SIP Trust ("SIP Trust"). In addition, 26,303 new ordinary shares were issued and allotted to the SIP Trust during the period (Note 3). As a result, 47,312 ordinary shares in the Company were available for allocation to the participants of the SIP.

On 13th June 2018, a total of 11 eligible employees (including 4 executive directors of the Company) applied for the 2018-19 SIP and were each granted 1,281 ordinary shares ("18-19 Free Shares"), representing approximately £3,600 at the price of issue.

Additionally, on 13th June 2018, 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 acquires, the SIP Trust will offer two ordinary shares in the Company ("Matching Shares") up to a total of £3,600 worth of shares. All 11 eligible employees (including 4 executive directors of the Company) took up the offer and acquired the full £1,800 worth of Partnership Shares (640 ordinary shares) and were therefore awarded 1,281 Matching Shares.

The 18-19 Free and Matching Shares are subject to a 1 year forfeiture period.

A total of 35,222 (6 months to 31st July 2017 and also 12 months to 31st January 2018: 37,935) Free, Matching and Partnership Shares were granted to the 11 (6 months to 31st July 2017 and also 12 months to 31st January 2018: 9) eligible employees during the period, including 12,808 (6 months to 31st July 2017 and also 12 months to 31st January 2018: 16,860) granted to 4 executive directors of the Company.

As at 31st July 2018 a total of 146,237 Free, Matching and Partnership Shares had been granted to 11 eligible employees under the SIP, including 62,148 granted to 4 executive directors of the Company.

£37,921 of the IFRS 2 charges (6 months to 31st July 2017: £34,373 and 12 months to 31st January 2018: £69,315) associated with the award of the SIP shares to the 11 (6 months to 31st July 2017 and also 12 months to 31st January 2018: 9) eligible directors and employees of the Company have been recognised in the Statement of Comprehensive Income as employment expenses.

The results of the SIP Trust have been fully consolidated within these financial statements on the basis that the SIP Trust is controlled by the Company.

This announcement contains inside information, disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016 and for UK Regulatory purposes the person responsible for making the announcement is Sinead O'Haire.

Analyst Briefing

An analyst presentation, hosted by the Company, will be held on Tuesday 16 October 2018 at 10:00 a.m. at the offices of B.P. Marsh & Partners Plc, 4 Matthew Parker Street, SW1H 9NP.

Please contact Elisabeth Cowell at Redleaf Communications on 020 7382 4732 or bpmarsh@redleafpr.com if you wish to attend.

For further information:

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

Brian Marsh OBE / Camilla Kenyon +44 (0)20 7233 3112

Nominated Adviser & Broker

Panmure Gordon

Atholl Tweedie / Charles Leigh-Pemberton / Sandra Bjorck +44 (0)20 7886 2500

Financial PR

Redleaf Communications bpmarsh@redleafpr.com

Emma Kane / Elisabeth Cowell +44 (0)20 7382 4732

Notes to Editors:

About B.P. Marsh & Partners Plc

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

Since formation over 25 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 at least five 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.

Alice Foulk joined B.P. Marsh in September 2011 having started her career at a leading Life Assurance company. In 2014 she took over as Executive Assistant to the Chairman, running the Chairman's Office and established herself as a central part of the management team.

In February 2015 she was appointed as a Director of B.P. Marsh and a member of the Investment Committee. In January 2016 Alice was appointed Managing Director of B.P. Marsh.

In her position as Managing Director, Alice is responsible for the overall performance of the Company and monitoring the Company's overall progress towards achieving the objectives and goals of the Company, as set by the Board.

Dan Topping is the Chief Investment Officer of B.P. Marsh, having been appointed as a Director in 2011. He joined the Company in February 2007, following two years at an independent London accountancy practice. Dan is the Senior Executive with overall responsibility for the portfolio and investment strategy of B.P. Marsh.

Dan graduated from the University of Durham in 2005 and is a member of the Securities and Investment Institute and the Institute of Chartered Secretaries and Administrators.

Dan is a standing member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director across the portfolio.

Camilla Kenyon (Millie) was appointed to the main Board in 2011, following her appointment as Head of Investor Relations in 2009. She has dual responsibilities within the Group, running both Investor Relations and the New Business Department and is Chair of the New Business Committee evaluating new investment opportunities.

Millie is nominee director in one investee company and is a member of the Investment Committee. She has over 20 years of experience in the financial services industry, including numerous Board appointments and is a Member of the Investor Relations Society.

Jonathan Newman is a Chartered Management Accountant and is the Group Director of Finance and has over 20 years' experience in the financial services industry. Jon graduated from the University of Sheffield with an honours degree in Business Studies and joined the Group in November 1999, following two years at Euler Trade Indemnity and two years at a Chartered Accountants. Jon is a Member of the Chartered Global Management Accountants, the Chartered Management Accountants and the Chartered Institute of Securities and Investment.

Jon was appointed a Director of B.P. Marsh & Company Limited in September 2001, and Group Finance Director in December 2003 and was instrumental in the admission of the Group to AIM in February 2006. Jon is a member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director for Walsingham Motor Insurance Limited, and provides senior financial support and advice to all companies within the Group's portfolio as well as evaluating new investment opportunities.

- Ends -

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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