Interim Results

RNS Number : 1625D

B.P. Marsh & Partners PLC

18 October 2022

B.P. Marsh & Partners Plc

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

Interim Results

B.P. Marsh & Partners Plc (AIM: BPM), the specialist investor in early stage financial services businesses, announces its unaudited Group Interim Results for the six months to 31 July 2022 (the "Period").

Highlights:

· Net Asset Value at 31 July 2022 £179.8m (31 July 2021: £155.0m; 31 January 2022: £166.6m)

· Net Asset Value per share 499.0p* (31 July 2021 430.4p; 31 January 2022: 462.7p)

· Consolidated profit before tax of £17.0m for the Period (six months to 31 July 2021: £6.2m; year ending 31 January 2022: £19.4m)

· Total Shareholder return of 8.5 % for the Period including the dividend paid in July 2022 (16.6% for the 12 months since 31 July 2021, inclusive of the July 2022 dividend paid)

· Group liquidity of £14.1m as at 31 July 2022

· Current liquidity £12.7m

*The diluted Net Asset Value per share is 490.8p including shares held within an Employee Benefit Trust which have met certain performance criteria (31 July 2021: 424.6p; 31 January 2022: 455.6p).

Commenting on the results, Brian Marsh OBE, Chairman, said:

"I am delighted the Company has achieved such a strong set of results, highlighting the success of our investment strategy. These results are a testament to the hard work that goes on across our team and at all of our investee companies.

"Our performance demonstrates the benefits of having a diverse portfolio both by business line and geography and shows that the financial intermediary space continues to have room for young, dynamic entrepreneurial businesses.

"Following a series of disposals in the past 12 months, we are actively seeking new investment opportunities to add to our portfolio while further supporting our investee companies fund their growth plans."

Analyst briefing:

An analyst presentation, hosted by the Company, will be held on Tuesday 18 October 2022 at 10:00 a.m. BST.

Please contact Tim Pearson at Tavistock Communications on 07983118502 or tim.pearson@tavistock .co.uk should any analyst wish to attend.

B.P. Marsh & Partners Plc will also provide a live presentation for all existing and potential shareholders via the Investor Meet Company platform on 20^th October 2022 at 10:00am BST.

Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet B.P. Marsh & Partners Plc via: https://www.investormeetcompany.com/bp-marsh-partners-plc/register-investor

Note

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

For further information, please visit www.bpmarsh.co.uk or contact:

B.P. Marsh & Partners Plc

Brian Marsh OBE / Alice Foulk

+44 (0)20 7233 3112

Panmure Gordon (UK) Limited

Atholl Tweedie / Charles Leigh Pemberton / Ailsa MacMaster

+44 (0)20 78862500

Tavistock

Simon Hudson / Tim Pearson

bpmarsh@tavistock.co.uk

+44 (0)20 7920 3150

Notes to Editors:

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

Since formation over 30 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for approaching ten years.

Statement by the Chairman and Managing Director

We are pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the Period to 31 July 2022.

Interim Results

During the Period, the Group's Net Asset Value ("NAV") has grown by £13.2m from £166.6m to £179.8m which together with the dividend paid in July 2022, represents an increase of 8.5%. This equals a NAV per share of 499.0p, an increase of 36.3p from 31 January 2022.

The Group was pleased to announce that it had completed a new investment during the Period in Denison and Partners Ltd ("Denison and Partners") led by Alasdair Ritchie. The Company is confident that Denison and Partners will be a valuable addition to the Portfolio. Furthermore during the Period the Group provided an additional $3.5m (£2.8m) to XPT Group LLC ("XPT") through a mixture of redeemable shares and equity. XPT will use the additional funding to support its positive growth trajectory.

Additionally during the Period the Group also finalised the disposal of its Spanish Broking consolidator, Summa Insurance Brokerage S.L. delivering net cash proceeds of £9.6m.

Elsewhere in the Portfolio Kentro Capital Limited ("Kentro") (formerly Nexus Underwriting Management Limited) continues to deliver its successful strategy and remains one of the 10 largest independent Managing General Agencies in the world.

However, EC3 Brokers Group Limited ("EC3") continues to experience difficulty, and we are working closely with the management team at EC3 to provide appropriate support and, out of caution, have written this investment down.

Post Period-end the Group provided a AU$1.2m (£0.7m) loan to Ag Guard PTY Limited to support their growth objectives as they develop a new product for QBE Insurance (Australia) Limited.

There is a healthy new business pipeline currently being considered by the Group, however we also have a number of opportunities for follow-on funding within our existing portfolio. As such, the Group's current cash balance is likely to be deployed through a mixture of new investments and into the Group's current portfolio.

We are conscious that we are entering a world that comes with challenges, including the rising cost of living crisis with inflation at a 40 year high and the ongoing conflict in Ukraine. The Team at B.P. Marsh continue to review the impact these macro-events could have on both the business and our underlying portfolio and work with our partners to deliver the long term growth we are well experienced in achieving.

The Period under review has predominantly been a time of "business as usual" with the Group demonstrating that it is able to deliver on its business aims. We have a positive outlook for the rest of the year and are confident we will be able to deliver the Group's long term strategy.

Chief Investment Officer's Portfolio Update, New Business and Outlook

Over the Period, the valuation of the Group's equity portfolio has increased by 11.4% adjusting for additions and disposals, with NAV increasing by 7.9%.

Over the past 12 months, the equity portfolio has increased by 23.2% adjusting for additions and disposals, with NAV increasing by 16.0%.

The Period under review continues to demonstrate the Group's successful investment strategy. Our diverse portfolio across the insurance intermediary sector, both by line of business written and geography, has resulted in sustained resilience, notwithstanding the wider economic challenges.

This has resulted in the Group producing a stellar set of results in the Period to 31 July 2022, with the majority of B.P. Marsh's portfolio companies showing substantial growth.

The Group continues to work closely with its investee companies' respective Management Teams, providing advice and support, to assist in long term growth. The Management teams the Group support are experienced and well-rooted in their local markets, across the UK, North America, Australia and elsewhere.

The Group believes that the portfolio is well positioned to take advantage of the ever-changing environment and, whilst our portfolio businesses are not immune from the current widely-reported global political and macro-economic headwinds, the Group believes that most are operating from a position of strength.

Overall, the Group is looking to continue its clear and consistent strategy of investing and supporting 'people' businesses in the financial intermediary sector, delivering long term attractive returns to our shareholders.

The Group remains positive about the prospects for the Company throughout the remainder of its current financial year to 31 January 2023.

New Business

Following a number of successful disposals, the Group currently has £12.7m of liquidity, which is available for further investment within the existing portfolio and for new investments.

The Group continues its renewed focus on new business and it is the Board's expectation that some of these will complete in a reasonable time frame. B.P. Marsh continues to focus on investing in niche SME businesses in the financial services space, managed by capable management teams.

The Group has a healthy pipeline of new business opportunities having received 41 in the Period (for the six months to 31 July 2021 the Group received 31 proposals). Continued M&A activity at the larger end of the insurance market tends to lend itself to creation of opportunities at the smaller end of the market. These opportunities fit in the Company's investment model, and we therefore remain prepared to take advantage of this phase in the insurance cycle.

Outlook

The Insurance sector continues to see rate increases across most of the lines in which our investee companies operate. The pace of these increases is slowing across the industry, although the Group does not anticipate the market returning to the low pricing of the last soft market in the short to medium term.

The Group continues to monitor the macro-economic challenges facing the world economy, the Group and our underlying investee companies. This includes inflation at its highest rate for two generations, increased interest rates and political uncertainty. The effect of these challenges is likely to be increased costs for the insurance market, mainly due to the impact of economic stimulus packages linked to Covid-19, supply chain issues and the increases in energy prices due to the ongoing conflict in the Ukraine. The impact will develop in different ways, varying by business lines and region.

In the short to medium term, the Group remains of the view that increased insurance rates will at least match any cost increases. Additionally, sections of the industry which are most exposed to inflationary costs should also be the first parts of the industry to receive increased premium, linked to inflation. As such, with inflation on one side and increased yield on the other, the net impact should be positive.

Portfolio Update

New Investments

Denison and Partners Limited - London, United Kingdom

As previously announced in March 2022, the Group acquired a 40% Cumulative Preferred Ordinary shareholding in Denison and Partners, providing funding of up to £802,000, via equity and debt.

Denison and Partners is a start-up London-based Lloyd's Insurance Broker, established by Alasdair Ritchie, with a focus on delivering (re)insurance delegated authority solutions and services to Managing General Agencies, Coverholders and (re)insurers.

Alasdair Ritchie has several decades of experience in (re)insurance providing boutique risk management and transfer solutions to a wide array of clients.

Date of initial investment: March 2022

31 July 2022 valuation: £0.1m

Equity stake: 40.0%

Follow-on Investments and Funding

XPT Group LLC ("XPT") - New York, USA

+ 22.7 pence NAV per share uplift in Period

The Group's investment in XPT, the specialty lines insurance distribution company, continues to perform well, with the business on track to produce Gross Written Premium of over US$500m in its financial year which ends on 31 December 2022 (2021: US$400m).

In the Period, the Group provided XPT with further funds of US$3.5m.

This was provided via:-

· Redeemable shares - US$2.8m; and

· Equity - US$0.7m.

Following this further investment, the Group's shareholding in XPT rose from 28.18% to 29.15%. Including this investment, B.P. Marsh has provided XPT with £11.7m in total.

Additionally, during the Period, XPT acquired Insurance Brokers, Inc. ("IBI"), the wholesale insurance broker and general agency, based in Indiana, USA.

IBI is XPT's 11^th acquisition since its formation in 2017. Over this time, XPT has built a national US presence, with 17 office locations across the US and employing over 250 people.

Date of initial investment: June 2017

31 July 2022 valuation: £29.9m

Equity stake: 29.2%

Agri Services Company PTY Limited ("Ag Guard") - Sydney, Australia

+ 5.0 pence NAV per share uplift in Period

In 2019 the Group invested in Ag Guard, a Managing General Agency which provides insurance to the Australian Agricultural Sector.

Since investment Ag Guard has performed well, producing significant year on year growth. Ag Guard's strategic partnership with Elders Insurance (Underwriting Agency) Pty Limited ("Elders"), owned by QBE Insurance (Australia) Limited ("QBE"), has been transformational for the business.

In Ag Guard's last financial year to June 2022, the business produced GWP of over AU$ 40m, an increase from AU$ 7m in its previous financial year to June 2021. In Ag Guard's current financial year to June 2023, further GWP growth is expected, with Ag Guard on track to achieve their budget of AU$ 59m.

The latest in its suite of rural products, Ag Guard recently launched a lifestyle farm insurance offering, Farmstyle Insurance, which is a package product tailored for small or lifestyle farmers across Australia. The product is currently being sold directly online and is underwritten by QBE.

Since formation Ag Guard has continued to expand its suite of products, and now offers over four products to the Australian Agricultural market, with a number of others in the pipeline.

Post Period-end, the Group has provided Ag Guard with a loan of AU$ 1.2m (£0.7m), which was fully drawn down on completion. The purpose of this loan was to allow Ag Guard to retain suitable levels of working capital whilst also developing their IT systems to support their core business and to develop new product offerings.

Date of initial investment: July 2019

31 July 2022 valuation: £5.4m

Equity stake: 41.0%

Investee Company Disposal

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

As previously reported, in March 2022 the Group sold its 77.25% holding in Summa to Acrisure España S.L., part of Acrisure LLC, the global financial services business.

The Group received cash proceeds of 9.6m in relation to the disposal, comprising of:

· £8.1m net of transaction costs, for its 77.25% shareholding in Summa; and

· £1.5m being the Group's outstanding loan to Summa.

This transaction represented an IRR of 5.5% (inclusive of all income and fees) and a money multiple of 1.3x. In isolation this return can be seen as below B.P. Marsh's portfolio expectations, however the Group sees this return as a testament to Summa's Management team, considering the effect of the 2008 global financial crisis on the Spanish economy, and then the Covid-19 Pandemic.

NAV breakdown by portfolio company

The composition of B.P. Marsh's underlying investment portfolio can be found here:

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The Group's current investments are in the Insurance Intermediary sector, with the exception of the independent financial adviser LEBC.

These insurance investments are budgeting to produce in the aggregate £1.49bn of insurance premium during 2022 (2021: £1.34bn*), and a breakdown between brokers and MGAs can be found here:-

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Insurance Brokers

Investments:

Brokers	Date of Investment	Jurisdiction	Equity % at 31 July 2022	Cost of Investment	Valuation at 31 July 2022	% of NAV at 31 July 2022
CBC	Feb-17	UK	47.06%	£803,500	£9,893,000	5.5%
Lilley Plummer Risks	Oct-19	UK	30.00%	£1,008,242	£4,101,000	2.3%
Denison and Partners	Mar-22	UK	40.00%	£132,000	£132,000	0.1%
Asia Reinsurance Brokers	Apr-16	Singapore	25.00%	£1,551,084	-	0.0%
EC3	Dec-17	UK	35.00%	£6,500,000	-	0.0%

The Group's Broking investments are budgeting to place over £758m of GWP (*2021: £637m), producing over £60m (*2021: £48m) of commission income in 2022, accessing specialty markets around the world.

Underwriting Agencies / Managing General Agents ("MGAs")

Investments:

MGAs	Date of Investment	Jurisdiction	Equity % at 31 July 2022	Cost of Investment	Valuation at 31 July 2022	% of NAV at 31 July 2022
Kentro	Aug-14	UK	19.01%	£15,126,554	£51,522,000	28.7%
XPT	Jun-17	USA	29.15%	£10,138,626	£29,910,000	16.6%
ATC	Jul-18	Australia	25.56%	£6,476,595	£17,237,000	9.6%
SSRU	Jan-17	Canada	30.00%	£19	£11,494,000	6.4%
Ag Guard	Jul-19	Australia	41.00%	£1,465,071	£5,425,000	3.0%
Fiducia	Nov-16	UK	35.18%	£227,909	£3,929,000	2.2%
Sterling	Jun-13	Australia	19.70%	£1,945,411	£3,245,000	1.8%
Sage	Jun-20	USA	30.00%	£202,758	£1,907,000	1.1%

The Group's MGAs are budgeting to place over £736m of GWP (*2021: £703m), producing over £88m (*2021: £75m) of commission income in 2022, across over 30 product areas, on behalf of more than 50 insurers.

*Please note that the comparative 2021 figures are provided on a 'like-for-like' basis, adjusted for disposals

IFA Investment

Investment:

IFA	Date of Investment	Jurisdiction	Equity % at 31 July 2022	Valuation at 31 July 2022	Cost of Investment	% of NAV at 31 July 2022
LEBC Holdings Limited	April-07	UK	59.34%	£21,603,000	£12,373,657	12.0%

LEBC Holdings Limited ("LEBC") - United Kingdom

- 9.1 pence NAV per share reduction in Period

B.P. Marsh continues to support its only non-insurance investment LEBC, through a period of restructuring, which has involved:-

· The strengthening of LEBC's core Management team;

· Implementing succession planning for advisors nearing retirement age;

· The building of an Employee Benefits Platform; and

· The continued improvement of LEBC's internal processes, to maintain best practice.

This restructuring process is taking longer to implement than management anticipated. Whilst underlying profitability continues to grow, this has impacted the rate of growth and is reflected in the Group's valuation of LEBC as at 31 July 2022.

Date of initial investment: April 2007

31 July 2022 valuation: £21.6m

Equity stake: 59.3%

Portfolio Company Highlights:

ATC Insurance Solutions PTY Limited ("ATC") - Melbourne, Australia

+ 11.5 pence NAV per share uplift in Period

ATC continues to perform within the Group's expectations, with strong year on year growth. ATC is now one of the largest Lloyd's Coverholders and independent underwriting agencies in Australia, providing insurance for construction & engineering, plant & equipment, accident & health, sports injury and high value motor.

ATC also provides trade pack insurance, which contains specialist insurance for electrical and renewable energy contractors such as public liability insurance, general property cover, and income protection policies.

The Group has now invested £6.5m in ATC and currently has a 25.56% shareholding. Since investment, through to 31 July 2022, our valuation in ATC has risen significantly, with the Group's 25.56% now valued at £17.2m, an increase of 166%.

When the Group originally invested in ATC, the business reported GWP of AU$61m. In ATC's year ending 30 June 2022, ATC achieved GWP of AU$132m.

ATC continues to look at opportunities to develop its product offerings to ensure that it can grow with the diverse insurance needs of its ever-expanding client base.

Date of initial investment: July 2018

31 July 2022 valuation: £17.2m

Equity stake: 25.6%

Stewart Speciality Risk Underwriting Ltd ("SSRU") - Toronto, Canada

+ 8.9 pence NAV per share uplift in Period

The Group's Canadian investment, SSRU, an MGA providing a variety of Property and Casualty products to a wide array of clients in the Construction, Manufacturing, Onshore Energy, Public Entity and Transportation sectors, continues to show substantial growth.

SSRU are now looking to produce GWP of c. CA$85m in 2022, which would represent a 70% year on year increase.

This level of growth has been achieved via organic growth across its existing commercial casualty and property book and through establishing a new program focused on residential condominiums across Canada (excluding Quebec).

SSRU is now one of the largest independent MGAs in Canada.

Date of initial investment: January 2017

31 July 2022 valuation: £11.5m

Equity stake: 30.0%

Lilley Plummer Risks Limited / Lilley Plummer Holdings Limited ("LPR") - London, United Kingdom

+ 3.9 pence NAV per share uplift in Period

LPR, the Group's specialist marine Lloyd's broker, continues to perform well and has had a positive first 6 months of 2022.

This positive performance is down to LPR growing its client base, winning new business and continuing to respond to the demand for coverage in war stricken areas.

The Group fully expects LPR to continue on its current growth trajectory.

Date of initial investment: October 2019

31 July 2022 valuation: £4.1m

Equity stake: 30.0%

CBC UK Limited / Paladin Holdings Limited ("CBC") - London, United Kingdom

+ 1.3 pence NAV per share uplift in Period

CBC, the London based retail and wholesale Lloyd's insurance broker, continues to perform significantly ahead of prior year.

During the Period, CBC hired an experienced Australian PI broking team comprising of four individuals who specialise in wholesale Australian PI, D&O and Financial Instructions business, which will substantially enhance CBC's international presence.

Date of initial investment: February 2017

31 July 2022 valuation: £9.9m

Equity stake: 47.1%

Kentro Capital Limited ("Kentro") - London, United Kingdom

formerly Nexus Underwriting Management Limited ("Nexus")

+ 0.2 pence NAV per share uplift in Period

In the Period, Nexus rebranded as Kentro, the new holding company for both Nexus, the specialty MGA, and Xenia Broking Holdings Limited ("Xenia"), the leading credit insurance and surety distribution specialist. These two businesses will operate as distinct, independent brands under Kentro.

Nexus received a 5-star rating in the annual Insurance Times MGA Survey, in which 1,300 brokers are asked to rate 43 MGAs. In the past two years Nexus have achieved 4-stars, slightly improving the overall score each time, and this year Nexus was one of only 7 MGAs to receive the top rating of 5 stars.

The Group first invested in Kentro in 2014, when the business was writing Gross Written Premium of c. £55.0m. Since investment, Kentro has grown consistently and is now on track to write Gross Written Premium of close to £450.0m in 2022, making Nexus one of the top 10 largest MGAs globally. Kentro has completed 23 acquisitions since formation, 15 of them since the Group invested. Kentro employs over 300 people, 250 of whom are also shareholders, working across 16 offices in 9 countries.

Date of initial investment: August 2014

31 July 2022 valuation: £51.5m

Equity stake: 19.0%

Group Finance Director Update

The Group's equity investment portfolio has continued to increase in value, rising by 11.4% to £160.4m (31 Jan 2022 £141.2m) adjusting for £5.3m of net investment realisations . Overall, the Net Asset Value of the Group increased by £13.2m (7.9%) to £179.8m, compared with an increase of £5.1m (3.4%) in the same period in 2021. Including the dividend paid in July 2022 of £1.0m, this represented an overall return of 8.5% for the Period.

Whilst the investment portfolio has continued to perform well over the Period, the Group has also benefitted from the weakening of Pound Sterling in its overseas investments, with £5.8m of the increase in Net Asset Value attributed to foreign exchange gains. Excluding this, the overall return including the dividend paid in July 2022 was 5.0%.

Over the year to 31 July 2022 the Net Asset Value has increased by £24.8m or 16.0%. Including the £1.0m dividend paid in July 2022 this represents an overall return of 16.6%.

The Net Asset Value of £179.8m at 31 July 2022 represents a total increase in Net Asset Value of £150.6m since the Group was originally formed in 1990 having adjusted for the original capital investment of £2.5m, the £10.1m net proceeds raised on AIM in 2006 and the £16.6m net proceeds raised through the Share Placing and Open Offer in July 2018. The Directors note that the Group has delivered an annual compound growth rate of 8.6% in Group Net Asset Value after running costs, realisations , losses, distributions and corporation tax since flotation and 11.7% since 1990.

Income from the portfolio for the Period was slightly lower at £2.5m versus £2.7m in H1 2021 as a result of the sale of the Group's shareholdings in Walsingham Motor Insurance Ltd in December 2021 and Summa in March 2022.

A significant proportion of the increase in operating expenses to £2.1m in the Period from £1.6m in H1 2021 reflects a combination of a full return to office working versus remote working in H1 2021 including the ability to travel to meet with the management teams in person after almost two years of restricted travel due to the Covid-19 pandemic, and legal and professional fees being expensed in relation to the various new investment and follow-on transactions (although these were covered by fees charged to the relevant investee company).

The Group's strategy is to cover expenses from the portfolio yield. On an underlying basis, excluding investment activity (unrealised gains on equity revaluation, provision against loans receivable from investee companies and treasury portfolio movement), this was achieved with a pre-tax profit of £0.7m for the Period (H1 2021: £0.9m).

Loan Portfolio

In addition to the provision of equity to the investment portfolio, the Group often provides loan financing either as part of the original investment structure, or for follow-on funding to enable further growth through acquisitions or working capital for recruitment and product development.

The loan portfolio was £9.2m at 31 July 2022 (31 July 2021: £16.7m, 31 January 2022: £10.4m). During the Period the Group received £1.5m in loan repayments from the sale of Summa in March 2022 and has provided £0.3m in loans to two investee companies.

Liquidity

As at the Period-end, the Group had total available cash and treasury funds of £14.1m (31 Jan 2022: £8.6m), pursuant to the receipt of £9.6m in total from the sale of Summa in March 2022, £2.8m provided in follow-on funding into XPT in June 2022, £1.0m in dividend paid in July 2022 and the investment into Denison and Partners in March 2022.

Since the Period-end, the Group has provided loans of £0.7m to Ag Guard, £0.2m to LPR and £0.2m to Denison and Partners to continue their growth plans. Adjusting for working capital, the current total available cash and treasury funds are £12.7m.

Diluted Net Asset Value per share

The Net Asset Value per share at 31 July 2022 is 499.0p (31 July 2021: 430.4p, 31 January 2022: 462.7p). As part of a long-term share incentive plan for certain directors and employees of the Group, in June 2018 1,461,302 shares were issued to an Employee Benefit Trust at 281 pence per share.

On 12 June 2021 (the "vesting date") the performance criteria were met for 1,206,888 of 1,461,302 shares held under joint share ownership arrangements within the Employee Benefit Trust, after which the members of the scheme became joint beneficial owners of the shares and became entitled to any gain on sale of the shares in excess of 312.6 pence per share.

Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the shares are sold in the future in excess of 281 pence per share, the Group would be entitled to receive £4,106,259 and these shares would become entitled to voting and dividend rights and therefore would become dilutive. Overall, this would therefore dilute the Net Asset Value per share as at 31 July 2022 to 490.8p (31 July 2021: 424.6p, 31 January 2022: 455.6p).

Jonathan Newman

Group Finance Director

17 October 2022

Investments

As at 31 July 2022 the Group's equity interests were as follows:

Ag Guard PTY Limited

( www.agguard.com.au )

Ag Guard is a Managing General Agency, which provides insurance to the agricultural sector, based in Sydney, Australia. The Group holds its investment through Ag Guard's Parent Company, Agri Services Company PTY Limited.

Date of investment: July 2019

Equity stake: 41%

31 July 2022 valuation: £5,425,000

Asia Reinsurance Brokers (Pte) Limited

(www.arbrokers.asia)

ARB is an independent specialist reinsurance and insurance risk solutions provider headquartered in Singapore.

Date of investment: April 2016

Equity stake: 25%

31 July 2022 valuation: £0

ATC Insurance Solutions PTY Limited

(www.atcis.com.au)

ATC is a Managing General Agency and Lloyd's Coverholder, specialising in accident & health, construction & engineering, trade pack, motor and sports insurance headquartered in Melbourne, Australia.

Date of investment: July 2018

Equity stake: 25.56%

31 July 2022 valuation: £17,237,000

CBC UK Limited

(www.cbcinsurance.co.uk)

CBC is a Retail and Wholesale Lloyd's Insurance Broker, offering a wide range of services to commercial and personal clients as well as broking solutions to intermediaries. The Group holds its investment in CBC through CBC's parent company, Paladin Holdings Limited.

Date of investment: February 2017

Equity stake: 47.1%

31 July 2022 valuation: £9,893,000

Criterion Underwriting (Pte) Limited

Criterion was established to provide specialist insurance products to a variety of clients in the cyber, financial lines and marine sectors in Far East Asia, based in Singapore.

Date of investment: July 2018

Equity stake: 29.4%

31 July 2022 valuation: £0

Denison and Partners Limited

(www.denisonpartners.com)

Denison and Partners is a start-up London-based Lloyd's Insurance Broker delivering (re)insurance delegated authority solutions and services to MGA's, Coverholders and (re)insurers.

Date of investment: March 2022

Equity stake: 40%

31 July 2022 valuation: £132,000

EC3 Brokers Limited

( www.ec3brokers.com )

EC3 is an independent specialist Lloyd's broker and reinsurance broker, that provides services to a wide array of clients across a number of sectors, including construction, casualty and cyber & technology. The Group holds its investment through EC3's Parent Company, EC3 Brokers Group Limited.

Date of investment: December 2017

Equity Stake: 35%

31 July 2022 valuation: £0

The Fiducia MGA Company Limited

(www.fiduciamga.co.uk)

Fiducia is a UK marine cargo Underwriting Agency and Lloyd's Coverholder which specialises in the provision of insurance solutions across a number of marine risks including, cargo, transit liability, engineering and terrorism Insurance.

Date of investment: November 2016

Equity stake: 35.2%

31 July 2022 valuation: £3,929,000

Kentro Capital Limited

(www.kentrocapital.com)

Kentro is an independent Managing General Agency and Broker specialising in the provision of directors & officers, professional indemnity, financial institutions, accident & health, trade credit, political risks insurance, surety, bond and latent defect insurance, both in the UK and globally.

Date of investment: August 2014

Equity stake: 19.0%

31 July 2022 valuation: £51,522,000

LEBC Holdings Limited

( www.lebc-group.com )

LEBC is an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.

Date of investment: April 2007

Equity stake: 59.3%

31 July 2022 valuation: £21,603,000

Lilley Plummer Risks Limited

(www.lprisks.co.uk)

Lilley Plummer Risks is a specialist marine Lloyd's broker that provides products across the marine insurance market. The Group holds its investment in Lilley Plummer Risks through its holding company Lilly Plummer Holdings Limited.

Date of investment: October 2019

Equity stake: 30%

31 July 2022 valuation: £4,101,000

Sage Program Underwriters, Inc.

(www.sageuw.com)

Sage provides specialist insurance products to niche industries, initially in the inland delivery and field sport sectors based in Bend, Oregon.

Date of Investment: June 2020

Equity Stake: 30%

31 July 2022 Valuation: £1,907,000

Stewart Specialty Risk Underwriting Ltd

(www.ssru.ca)

SSRU is a Managing General Agency, providing insurance solutions to a wide array of clients in the construction, manufacturing, onshore energy, public entity and transportation sectors based in Toronto, Canada.

Date of investment: January 2017

Equity stake: 30%

31 July 2022 valuation: £11,494,000

Sterling Insurance PTY Limited

( www.sterlinginsurance.com.au )

Sterling is a specialist Underwriting Agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition based in Sydney Australia. The Group holds its investment in Sterling via a joint venture with Besso Insurance Group Limited, Neutral Bay Investments Limited.

Date of investment: June 2013

Equity stake: 19.7%

31 July 2022 valuation: £3,245,000

XPT Group LLC

(www.xptspecialty.com)

XPT is a wholesale insurance broking and Underwriting Agency platform across the U.S. Specialty Insurance Sector operating from many locations in the United States of America.

Date of investment: June 2017

Equity stake: 29.2%

31 July 2022 valuation: £29,910,000

These investments have been valued in accordance with the accounting policies on Investments set out in note 1 of the Interim Consolidated Financial Statements.

Forward-looking statements:

Certain statements in this announcement are forward-looking statements. In some cases, these forward looking statements can be identified by the use of forward looking terminology including the terms "anticipate", "believe", "intend", "estimate", "expect", "may", "will", "seek", "continue", "aim", "target", "projected", "plan", "goal", "achieve" and words of similar meaning or in each case, their negative, or other variations or comparable terminology. Forward-looking statements are based on current expectations and assumptions and are subject to a number of known and unknown risks, uncertainties and other important factors that could cause results or events to differ materially from what is expressed or implied by those statements. Many factors may cause actual results, performance or achievements of B.P. Marsh to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements of B.P. Marsh to differ materially from the expectations of B.P. Marsh, include, among other things, general business and economic conditions globally, industry trends, competition, changes in government and changes in regulation and policy, changes in its business strategy, political and economic uncertainty and other factors. As such, undue reliance should not be placed on forward-looking statements. Any forward-looking statement is based on information available to B.P. Marsh as of the date of the statement. All written or oral forward-looking statements attributable to B.P. Marsh are qualified by this caution. Other than in accordance with legal and regulatory obligations, B.P. Marsh undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement should be regarded as a profit forecast.

Interim Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31ST JULY 2022

	Notes	Unaudited		Unaudited		Audited
		6 months to		6 months to		Year to
		31^st July 2022		31^st July 2021		31^st January 2022
		£'000	£'000	£'000	£'000	£'000	£'000
GAINS ON INVESTMENT
Realised gains on disposal of equity investments (net of costs)		155		1		2,938
Release of provision made against equity investments and loans		7		-		1,117
Unrealised gains on equity investment revaluation	4	16,212		5,314		16,204
			16,374		5,315		20,259
INCOME
Dividends		1,636		1,562		1,903
Income from loans and receivables		326		575		1,092
Fees receivable		580		521		1,082
			2,542		2,658		4,077
OPERATING INCOME			18,916		7,973		24,336

Operating expenses			(2,066)		(1,633)		(4,770)

OPERATING PROFIT			16,850		6,340		19,566

Financial income		77		-		-
Financial expenses		(42)		(40)		(78)
Exchange movements		122		(64)		(93)
			157		(104)		(171)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION			17,007		6,236		19,395

Income taxes			(2,910)		(344)		(1,911)

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS	7		£14,097		£5,892		£17,484


TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	7		£14,097		£5,892		£17,484

Earnings per share - basic (pence)	3		39.1p		16.4p		48.6p
Earnings per share - diluted (pence)	3		37.6p		16.2p		47.3p

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST JULY 2022

(Company Number: 05674962)

		Unaudited		Unaudited		Audited
	Notes	31^st July 2022		31^st July 2021		31^st January 2022
		£'000	£'000	£'000	£'000	£'000	£'000
ASSETS

NON-CURRENT ASSETS
Property, plant and equipment		90		107		96
Right-of-use asset		754		919		836
Investments - equity portfolio	4	160,398		136,205		141,245
Loans and receivables		4,149		15,584		7,231
			165,391		152,815		149,408
CURRENT ASSETS
Investments - assets held for sale		-		-		8,104
Investments - treasury portfolio	5	2,563		-		-
Trade and other receivables		6,719		3,938		4,974
Cash and cash equivalents		11,558		1,057		8,628
			20,840		4,995		21,706
LIABILITIES

NON-CURRENT LIABILITIES
Lease liabilities		(684)		(856)		(772)
Deferred tax liabilities	9	(4,791)		(338)		(1,898)
			(5,475)		(1,194)		(2,670)
CURRENT LIABILITIES
Trade and other payables		(820)		(473)		(1,670)
Lease liabilities		(171)		(163)		(167)
Loans and other payables		-		(1,000)		-
			(991)		(1,636)		(1,837)

NET ASSETS			£179,765		£154,980		£166,607

CAPITAL AND RESERVES - EQUITY

Called up share capital			3,747		3,747		3,747
Share premium account			29,346		29,346		29,342
Fair value reserve			96,286		75,549		84,975
Reverse acquisition reserve			393		393		393
Capital redemption reserve			7		7		7
Capital contribution reserve			72		71		72
Retained earnings			49,914		45,867		48,071

SHAREHOLDERS' FUNDS - EQUITY	7		£179,765		£154,980		£166,607

Net Asset Value per share - undiluted (pence)	3		499.0p		430.4p		462.7p
Net Asset Value per share - diluted (pence)	3		490.8p		424.6p		455.6p

The Interim Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 17th October 2022

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31ST JULY 2022

	Unaudited	Unaudited	Audited
	31^st July 2022	31^st July 2021	31^st January 2022
	£'000	£'000	£'000
Cash from operating activities
Income from loans to investee companies	326	575	1,092
Dividends	1,636	1,562	1,903
Fees received	580	521	1,082
Operating expenses	(2,066)	(1,633)	(4,770)
Net corporation tax (paid) / repaid	(17)	(6)	(13)
Purchase of equity investments (Note 4)	(2,941)	(200)	(8,011)
Net proceeds from sale of equity investments	8,259	261	8,755
Net loan repayments from investee companies	1,300	418	7,837
Adjustment for non-cash share incentive plan	62	59	94
Exchange movement	40	(2)	(35)
Decrease in receivables	126	229	1,248
(Decrease) / increase in payables	(851)	(536)	660
Depreciation and amortisation	96	97	198
Net cash from operating activities	6,550	1,345	10,040

Net cash used by investing activities
Purchase of property, plant and equipment	(9)	-	(6)
Purchase of treasury investments net of cash and cash equivalents (Note 5)	(2,506)	-	-
Net cash used by investing activities	(2,515)	-	(6)

Net cash used by financing activities
Advances of borrowings	-	-	(1,000)
Financial income	2	-	-
Financial expenses	(23)	(40)	(78)
Net decrease in lease liabilities	(83)	(79)	(159)
Dividends paid	(1,001)	(878)	(878)
Net cash used by financing activities	(1,105)	(997)	(2,115)

Change in cash and cash equivalents	2,930	348	7,919
Cash and cash equivalents at beginning of the period	8,628	709	709

Cash and cash equivalents at end of period	£11,558	£1,057	£8,628

All differences between the amounts stated in the Consolidated Statement of Cash Flows and the Consolidated Statement of Comprehensive Income are attributed to non-cash movements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31ST JULY 2022

	Unaudited	Unaudited	Audited
	6 months to	6 months to	Year to
	31^st July 2022	31^st July 2021	31^st January 2022
	£'000	£'000	£'000

Opening total equity	166,607	149,907	149,907
Comprehensive income for the period	14,097	5,892	17,484
Dividends paid	(1,001)	(878)	(878)
Share incentive plan	62	59	94
Total equity	£179,765	£154,980	£166,607

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 2022

1. ACCOUNTING POLICIES

Basis of preparation of financial statements

These consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards, and in accordance with the Companies Act 2006.

The consolidated financial statements are presented in sterling, the functional currency of the Group, rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The preparation of financial statements in conformity with UK-adopted international accounting standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances, the results of which form the basis of judgements about the carrying amounts of assets and liabilities. Actual results may differ from those amounts.

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

Assessment as an investment entity

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

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

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

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

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

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

Application and significant judgments

When it is established that a parent company is an investment entity, its subsidiaries are measured at fair value through profit or loss. However, if an investment entity has subsidiaries that provide services that relate to the investment entity's investment activities, the exception to the Amendment of IFRS 10 is not applicable as in this case, the parent investment entity still consolidates the results of its subsidiaries. Therefore, the results of B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited and B.P. Marsh (North America) Limited continue 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 17th October 2022. They have not been audited nor reviewed by the Group's Auditors, as is the case with the comparatives to 31st July 2021, 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 2022. 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 three subsidiary investment entities, B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited and B.P. Marsh (North America) Limited, that provide services that relate to the Company's investment activities. The results of these three subsidiaries, together with other subsidiaries (except for LEBC Holdings Limited ("LEBC")), are consolidated into the Group consolidated financial statements. The Group has taken advantage of the Amendment to IFRS 10 not to consolidate the results of LEBC. Instead the investment in LEBC is valued at fair value through profit or loss.

(ii) Associates

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.

On 12th June 2021 (the "vesting date") the performance criteria was met for 1,206,888 of 1,461,302 shares held under joint share ownership arrangements within the Employee Benefit Trust, after which the members of the scheme became joint beneficial owners of the shares and became entitled to any gain on sale of the shares in excess of 312.6 pence per share. Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would become fully dilutive for the Group.

The Group has established an HMRC approved Share Incentive Plan ("SIP"). Ordinary shares in the Company previously repurchased and held in Treasury by the Company have been transferred to The B.P. Marsh SIP Trust ("the SIP Trust"), an employee share trust, in order to be issued to eligible employees.

Under the rules of the SIP, eligible employees can each be granted up to £3,600 worth of ordinary shares ("Free Shares") by the SIP Trust in each tax year. The number of shares granted is dependent on the share price at the date of grant. In addition, all eligible employees have been invited to take up the opportunity to acquire up to £1,800 worth of ordinary shares ("Partnership Shares") in each tax year and for every Partnership Share that an employee acquires, the SIP Trust will offer two ordinary shares in the Company ("Matching Shares") up to a total of £3,600 worth of shares. The Free and Matching Shares are subject to a one year forfeiture period, however the awards are not subject to any vesting conditions, hence the related expenses are recognised when the awards are made and are apportioned over the forfeiture period.

The fair value of the services received is measured by reference to the listed share price of the parent company's shares listed on the AIM on the date of award of the free and matching shares to the employee.

Investments - equity portfolio

All equity portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair value.

The Board conducts the valuations of equity portfolio investments. In valuing equity portfolio investments the Board applies guidelines issued by the International Private Equity and Venture Capital Valuation Committee ("IPEVCV Guidelines"). The following valuation methodologies have been used in reaching 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 an 'Investments - Assets held for sale' under 'Current Assets' within the Consolidated Statement of Financial Position.

Income from equity portfolio investments

Income from equity portfolio investments comprises:

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

b) dividends from equity investments are recognised in the Consolidated Statement of Comprehensive Income when the shareholders rights to receive payment have been established; and

c) advisory fees from management services provided to investee companies, which are recognised on an accruals basis in accordance with the substance of the relevant investment advisory agreement.

Investments - treasury portfolio

All treasury portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair market value as determined from the valuation reports provided by the fund investment manager.

Both realised and unrealised gains and losses arising from changes in fair market value are taken to the Consolidated Statement of Comprehensive Income for the period. In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within the retained earnings as these investments are deemed as being easily convertible into cash. Costs associated with the management of these investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from treasury portfolio investments

Income from treasury portfolio investments comprises of dividends receivable which are either directly reinvested into the funds or received as cash.

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the property, plant and equipment cost, less their estimated residual value, over their expected useful lives on the following bases:

Furniture & equipment - 5 years

Leasehold fixtures and fittings and other costs - over the life of the lease

Right-of-use asset

IFRS 16 requires lessees to recognise a lease liability, representing the present value of the obligation to make lease payments, and a related right of use ("ROU") asset. The lease liability is calculated based on expected future lease payments, discounted using the relevant incremental borrowing rate. An incremental borrowing rate of 5% was used to discount the future lease payments when measuring the lease liability on adoption of IFRS 16.

The ROU asset is recognised at cost less accumulated depreciation and impairment losses, with depreciation charged on a straight-line basis over the life of the lease. In determining the value of the ROU asset and lease liabilities, the Group considers whether any leases contain lease extensions or termination options that the Group is reasonably certain to exercise.

Foreign currencies

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

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

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

Income taxes

The tax credit or expense represents the sum of the tax currently recoverable or payable and any deferred tax. The tax currently recoverable or payable is based on the estimated taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's receivable or liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Consolidated Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and of liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and it is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each date of the Consolidated Statement of Financial Position and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis.

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.

If material to the Group overall (where the segment revenues, reported profit or loss or combined assets exceed the quantitative thresholds prescribed by IFRS 8), the segment information is reported separately.

The Group allocates revenues, expenses, assets and liabilities to the operating segment where directly attributable to that segment. All indirect items are apportioned based on the percentage proportion of revenue that the operating segment contributes to the total Group revenue (excluding any realised and unrealised gains and losses on the Group's current and non-current investments).

Each reportable segment derives its revenues from three main sources from equity portfolio investments as described in further detail in Note 1 under 'Income from equity portfolio investments' and also from treasury portfolio investments as described in Note 1 under 'Income from treasury portfolio investments'.

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

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

	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
	2022	2021	2022	2021	2022	2021

	£'000	£'000	£'000	£'000	£'000	£'000
Operating income	(851)	2,210	19,767	5,763	18,916	7,973
Operating expenses	(1,019)	(1,069)	(1,047)	(564)	(2,066)	(1,633)
Segment operating (loss) / profit	(1,870)	1,141	18,720	5,199	16,850	6,340

Financial income	38	-	39	-	77	-
Financial expenses	(21)	(26)	(21)	(14)	(42)	(40)
Exchange movements	32	(27)	90	(37)	122	(64)
(Loss) / profit before tax	(1,821)	1,088	18,828	5,148	17,007	6,236
Income taxes	-	-	(2,910)	(344)	(2,910)	(344)
(Loss) / profit for the period	£(1,821)	£1,088	£15,918	£4,804	£14,097	£5,892

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised and unrealised income generated by the Group during the period:

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

	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
	2022	2021	2022	2021	2022	2021
Investee Company
XPT Group LLC	8,939	1,301	47	16	2	2
ATC Insurance Solutions PTY Limited	4,709	1,302	25	16	2	2
Stewart Specialty Risk Underwriting Limited¹	3,697	-	20	-	2	-
Agri Services Company PTY Limited	1,938	1,777	10	22	2	2
Kentro Capital Limited¹	-	3,719	-	47	-	1
Walsingham Motor Insurance Limited¹	-	1,541	-	19	-	1

¹ There are no disclosures for Kentro Capital Limited and Walsingham Motor Insurance Limited ("Walsingham") in the current period as the income derived from these investee companies either did not exceed the 10% threshold prescribed by IFRS 8, or, in the case of Walsingham, had been sold prior to the start of the current period. There is also no disclosure shown for Stewart Specialty Risk Underwriting Ltd in the prior period as the income derived from this investee company did not exceed the 10% threshold prescribed by IFRS 8 in that period.

	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
	2022	2021	2022	2021	2022	2021
	£'000	£'000	£'000	£'000	£'000	£'000

Non-current assets
Property, plant and equipment	51	70	39	37	90	107
Right-of-use asset	428	603	326	316	754	919
Investments - equity portfolio	91,180	89,368	69,218	46,837	160,398	136,205
Loans and receivables	2,469	12,777	1,680	2,807	4,149	15,584
	94,128	102,818	71,263	49,997	165,391	152,815
Current assets
Investments - treasury portfolio	2,563	-	-	-	2,563	-
Trade and other receivables	6,187	2,790	532	1,148	6,719	3,938
Cash and cash equivalents	11,558	1,057	-	-	11,558	1,057
	20,308	3,847	532	1,148	20,840	4,995

Total assets	114,436	106,665	71,795	51,145	186,231	157,810

Non-current liabilities
Lease liabilities	(389)	(562)	(295)	(294)	(684)	(856)
Deferred tax liabilities	-	-	(4,791)	(338)	(4,791)	(338)
	(389)	(562)	(5,086)	(632)	(5,475)	(1,194)
Current liabilities
Trade and other payables	(727)	(470)	(93)	(3)	(820)	(473)
Lease liabilities	(97)	(107)	(74)	(56)	(171)	(163)
Loans and other payables	-	(1,000)	-	-	-	(1,000)
	(824)	(1,577)	(167)	(59)	(991)	(1,636)

Total liabilities	(1,213)	(2,139)	(5,253)	(691)	(6,466)	(2,830)

Net assets	£113,223	£104,526	£66,542	£50,454	£179,765	£154,980


Additions to property, plant and equipment	5	-	4	-	9	-

Depreciation and amortisation of property, plant and equipment	(55)	(64)	(41)	(33)	(96)	(97)

Release of provision against investments and loans	7	-	-	-	7	-

Cash flow arising from:
Operating activities	(896)	50	7,446	1,295	6,550	1,345
Investing activities	(2,515)	-	-	-	(2,515)	-
Financing activities	(1,105)	(997)	-	-	(1,105)	(997)
Change in cash and cash equivalents	(4,516)	(947)	7,446	1,295	2,930	348

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

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2022	2022	2022
	£'000	£'000	£'000

Operating income	6,844	17,492	24,336
Operating expenses	(2,242)	(2,528)	(4,770)
Segment operating profit	4,602	14,964	19,566

Financial income	-	-	-
Financial expenses	(37)	(41)	(78)
Exchange movements	(40)	(53)	(93)
Profit before tax	4,525	14,870	19,395
Income taxes	-	(1,911)	(1,911)
Profit for the year	£4,525	£12,959	£17,484

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

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2022	2022	2022
Investee Company
Kentro Capital Limited	7,755	32	1
XPT Group LLC	6,342	26	2
Stewart Specialty Risk Underwriting Limited	2,758	11	2
ATC Insurance Solutions PTY Limited	2,604	11	2
Walsingham Motor Insurance Limited	2,529	10	1

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

	Audited	Audited	Audited
	31^st January	31^st January	31^st January
	2022	2022	2022
	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	65	31	96
Right-of-use asset	567	269	836
Investments - equity portfolio	93,161	48,084	141,245
Loans and receivables	5,633	1,598	7,231
	99,426	49,982	149,408
Current assets
Investments - Assets held for sale	-	8,104	8,104
Trade and other receivables	2,770	2,204	4,974
Cash and cash equivalents	8,628	-	8,628
	11,398	10,308	21,706

Total assets	110,824	60,290	171,114

Non-current liabilities
Lease liabilities	(523)	(249)	(772)
Deferred tax liabilities	-	(1,898)	(1,898)
	(523)	(2,147)	(2,670)

Current liabilities
Trade and other payables	(1,667)	(3)	(1,670)
Lease liabilities	(113)	(54)	(167)
	(1,780)	(57)	(1,837)

Total liabilities	(2,303)	(2,204)	(4,507)

Net assets	£108,521	£58,086	£166,607


Additions to property, plant and equipment	4	2	6

Depreciation and amortisation of property, plant and equipment	(134)	(64)	(198)

Release of provision against investments and loans	-	1,117	1,117

Cash flow arising from:
Operating activities	8,178	1,862	10,040
Investing activities	(6)	-	(6)
Financing activities	(2,115)	-	(2,115)
Change in cash and cash equivalents	6,057	1,862	7,919

As outlined previously, under IFRS 8 the Group reports its operating segments (UK and Non-UK) and associated income, expenses, assets and liabilities based upon the country of domicile of each of its investee companies.

In addition to the segmental analysis disclosure reported above, the Group has undertaken a further assessment of each of its investee companies' underlying revenues, specifically focusing on the geographical origin of this revenue. Geographical analysis of each investee company's 2022 and 2021 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 2022	31^st July 2021	31^st January 2022
	%	%	%

UK	38	43	41
Non-UK	62	57	59
Total	100	100	100

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

	Unaudited	Unaudited	Audited
	31^st July 2022	31^st July 2021	31^st January 2022
	£'000	£'000	£'000
Earnings
Earnings for the purposes of basic and diluted earnings per share being total comprehensive income attributable to equity shareholders	14,097	5,892	17,484
Earnings per share - basic	39.1p	16.4p	48.6p
Earnings per share - diluted	37.6p	16.2p	47.3p

Number of shares	Number	Number	Number
Weighted average number of ordinary shares for the purposes of basic earnings per share	36,013,276	35,982,270	35,988,766

Number of dilutive shares under option	1,443,147	1,461,302	1,461,302

Weighted average number of ordinary shares for the purposes of dilutive earnings per share	37,456,423	36,385,944	36,925,601

No share repurchases were undertaken during both the current and prior period and full year to 31st January 2022.

Ordinary shares held by the Company in Treasury

Movement of ordinary shares held in Treasury:	Unaudited	Unaudited	Audited
	31^st July 2022	31^st July 2021	31^st January 2022
	Number	Number	Number

Opening total ordinary shares held in Treasury	9,542	42,862	42,862

Ordinary shares transferred to the B.P. Marsh SIP Trust during the period	(9,542)	(33,320)	(33,320)

Total ordinary shares held in Treasury at period end	-	9,542	9,542

The Treasury shares do not have voting or dividend rights and have therefore been excluded for the purposes of calculating earnings per share.

On 12th June 2021 (the "vesting date") the performance criteria was met for 1,206,888 of 1,461,302 shares held under joint share ownership arrangements (Note 10) within an Employee Benefit Trust, after which the members of the scheme became joint beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6 pence per share. There were 254,414 shares where the performance criteria was not met on the vesting date that had been forfeited by departing employees and which remained unallocated within the Employee Benefit Trust as at 31st January 2022.

During the current period, 18,155 of the 254,414 unallocated shares within the Employee Benefit Trust were transferred to the B.P. Marsh SIP Trust ("SIP Trust") to be used as part of the 22-23 SIP awards made on 7th April 2022 (Note 10). Following this transfer and as at 31st July 2022 there were 1,443,147 shares held within the Employee Benefit Trust, of which there were 236,259 shares where the performance criteria was not met on the vesting date and which remained unallocated. The Employee Benefit Trust remains the owner of these unallocated shares.

The weighted average number of shares used for the purposes of calculating the basic earnings per share, net asset value and net asset value per share of the Group excludes the 1,443,147 shares currently held within the Employee Benefit Trust as these shares do not have voting rights or dividend rights whilst they are held within this Employee Benefit Trust. The Group net asset value has also excluded the economic right the Group has to the first 281 pence per share (£4,106,259) on the 1,461,302 shares issued to the Employee Benefit Trust for the same reasons. On this basis the current undiluted net asset value per share is 499.0 pence for the Group. When the joint share ownership arrangements are eventually exercised, although this would increase the number of shares in issue entitled to voting and dividend rights, this would also increase the Group's net asset value by £4,106,259. The diluted net asset value per share is therefore 490.8 pence.

The diluted weighted average number of ordinary shares at 31st July 2022 has been calculated by proportioning the 1,443,147 shares held under joint share ownership arrangements from the vesting date over the period.

The increase to the weighted average number of ordinary shares between the 2021 and 2022 interim periods is mainly attributable to the inclusion of the 9,542 ordinary shares transferred from Treasury to the SIP Trust and 18,155 ordinary shares transferred from the Employee Benefit Trust to the SIP Trust during the period that have been treated as re-issued for the purposes of calculating earnings per share.

31,801 ordinary shares (comprising 9,542 ordinary shares transferred from Treasury to the SIP Trust in March 2022 together with 4,104 of unallocated ordinary shares already held within the SIP Trust and 18,155 unallocated ordinary shares transferred from the Employee Benefit Trust to the SIP Trust in April 2022) were allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement on 7th April 2022 (Note 10).

4. NON-CURRENT INVESTMENTS - EQUITY PORTFOLIO

Group Investments	Unaudited			Unaudited
	31^st July 2022			31^st July 2021

	Continuing investments	Current Assets - Investments held for sale	Total	Total
	£'000	£'000	£'000	£'000
At valuation
At 1^st February	141,245	8,104	149,349	130,951
Additions	2,941	-	2,941	200
Disposals	-	(8,104)	(8,104)	(260)
Movement in valuation	16,212	-	16,212	5,314

At period end	£160,398	£ -	£160,398	£136,205

At cost
At 1^st February	56,380	6,096	62,476	60,378
Additions	2,941	-	2,941	200
Disposals	-	(6,096)	(6,096)	(260)

At period end	£59,321	£ -	£59,321	£60,318

Group Investments
	Audited 31^st January 2022

	Continuing investments	Current Assets - Investments held for sale	Total
	£'000	£'000	£'000
At valuation
At 1^st February 2021	130,951	-	130,951
Transfers between categories	(7,435)	7,435	-
Additions	8,011	-	8,011
Disposals	(5,817)	-	(5,817)
Movement in valuation	15,535	669	16,204

At 31^st January 2022	£141,245	£8,104	£149,349

At cost
At 1^st February 2021	60,378	-	60,378
Transfers between categories	(6,096)	6,096	-
Additions	8,011	-	8,011
Disposals	(5,913)	-	(5,913)

At 31^st January 2022	£56,380	£6,096	£62,476

The additions relate to the following transactions in the period:

On 23rd March 2022 the Group acquired a 40% cumulative preferred equity stake in Denison and Partners Limited ("Denison and Partners") for consideration of £132,000. Denison and Partners is a start-up London-based Lloyds Insurance Broker with a focus on delivering (re)insurance delegated authority solutions and services to Managing General Agencies, Coverholders and (Re)insurers.

On 1st June 2022 the Group agreed to invest, through its wholly-owned subsidiary company B.P. Marsh (North America) Limited, a further USD 3,500,000 (£2,808,575) in XPT Group LLC ("XPT"). USD 2,780,000 was used to subscribe for a further 2,780 redeemable preference shares in XPT. The remaining USD 720,000 was used to acquire a further 0.97% equity stake in XPT. On completion, the total amount invested by the Group in redeemable preference shares increased from USD 3,220,000 as at 31st January 2022 to USD 6,000,000 as at 31st July 2022 and the Group's equity investment in XPT also increased from 28.18% as at 31st January 2022 to 29.15% as at 31st July 2022.

The disposal relates to the following transaction in the period:

On 1st March 2022 the Group sold its entire 77.25% stake in Summa Insurance Brokerage, S.L. ("Summa") to Acrisure España S.L. ("Acrisure"), part of Acrisure LLC, for consideration of €9,700,737 (£8,104,208), net of transaction costs. On 22nd July 2022 further consideration of €23,266 (£19,630) was received from Acrisure in respect of over-withheld legal expenses, bringing total consideration received to €9,724,003 (£8,123,838). The consideration received represented a net gain of £19,838 (Note 6 and Note 7) over the carrying value of the Group's investment in Summa of £8,104,000 as at 31st January 2022 and represented an overall gain of £2,027,695 above the cost of investment. Outstanding loans of €1,820,070 (£1,520,526) were also repaid in full on completion.

The unquoted investee companies, which are registered in England except Asia Reinsurance Brokers Pte Limited (Singapore), Stewart Specialty Risk Underwriting Ltd (Canada), XPT Group LLC (USA), ATC Insurance Solutions PTY Limited (Australia), Criterion Underwriting Pte Limited (Singapore), Agri Services Company PTY Limited (Australia) and Sage Program Underwriters Inc (USA) are as follows:

	% holding	Date	Aggregate	Post tax
	of share	information	capital and	profit/(loss)
Name of company	Capital	available to	reserves	for the year	Principal activity
			£	£

Agri Services Company PTY Limited	41.00	30.06.20	1,446,314	9,356	Holding company for specialist Australian agricultural Managing General Agency

Asia Reinsurance Brokers Pte Limited	25.00	31.05.21	2,208,110	173,422	Specialist reinsurance broker

ATC Insurance Solutions PTY Limited	25.56	30.06.21	5,238,361	2,158,688	Specialist Australian Managing General Agency

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

Denison and Partners Limited²	40.00	-	-	-	Specialist reinsurance broker

EC3 Brokers Group Limited	35.00	31.12.20	(9,705,910)	(6,757,003)	Investment holding company

The Fiducia MGA Company Limited	35.18	31.12.20	(1,481,102)	55,518	Specialist UK Marine Cargo Underwriting Agency

Kentro Capital Limited³	19.01	31.12.21	22,756,386	(2,285,249)	Specialist Managing General Agency

LEBC Holdings Limited	59.34	30.09.21	5,183,237	992,579	Independent financial advisor company

Lilley Plummer Holdings Limited	30.00	31.12.21	682,197	242,820	Specialist Marine broker

Neutral Bay Investments Limited	49.90	31.03.21	3,952,778	236,567	Investment holding company

Paladin Holdings Limited⁴	47.06	31.12.21	232,397	1,037,846	Investment holding company

Sage Program Underwriters Inc⁵	30.00	-	-	-	Specialist Managing General Agency

Stewart Specialty Risk Underwriting Limited	30.00	31.12.20	1,627,086	1,512,722	Specialist Canadian Casualty Underwriting Agency

XPT Group LLC	29.15	31.12.21	(3,919,412)	(6,927,053)	USA Specialty lines insurance distribution company

¹ Statutory financial information is not available for Criterion Underwriting Pte Limited as the company is not currently trading.

² Denison and Partners Limited is a newly incorporated company. Statutory accounts are not available as these are not yet due.

³On 22nd February 2022, as part of a rebranding exercise, Nexus Underwriting Management Limited rebranded and changed its name to Kentro Capital Limited.

⁴The Group's 47.06% equity investment in Paladin Holdings Limited includes 5.88% relating to shares held under option that can be bought back and cancelled. The Group envisages that this shareholding will reduce over time as the options are exercised.

⁵Sage Program Underwriters, Inc. is a newly incorporated company. Statutory accounts are not available as these are not yet due.

The Group's 35% equity investments in Bastion Reinsurance Brokerage (PTY) Limited and Bulwark Investment Holdings (PTY) Limited and its 42.5% equity investment in Property and Liability Underwriting Managers (PTY) Limited, all of which are based in South Africa, have not been listed above as they were in the process of being wound up as at 31st July 2022 and no recent financial information is available.

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. CURRENT INVESTMENTS - TREASURY PORTFOLIO

Group	Unaudited	Unaudited	Audited
At valuation	31^st July 2022	31^st July 2021	31^st January 2022
	£'000	£'000	£'000

Market value at 1st February	-	-	-
Additions at cost	10,000	-	-
Disposals	-	-	-
Change in value in the period	57	-	-
Market value at period end	£10,057	£ -	£ -

Disclosed as:

Cash and cash equivalents	7,494
Investments - treasury portfolio	2,563
Total	£10,057	£ -	£ -

Investment fund split:

GAM London Limited	5,000	-	-
Rathbone Investment Management Limited	5,057	-	-
Total	£10,057	£ -	£ -

The treasury portfolio comprises of investment funds managed and valued by the Group's investment managers, GAM London Limited and Rathbone Investment Management Limited. All investments in securities are included at year end market value.

The initial investment into the funds was made following the realisation of the Group's investment in Summa Insurance Brokerage, S.L. during the period.

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 £18,031 (6 months to 31st July 2021: £Nil and 12 months to 31st January 2022: £Nil) were charged to the Consolidated Statement of Comprehensive Income during the period.

6. REALISED GAINS ON DISPOSAL OF EQUITY INVESTMENTS

The realised gains on disposal of investments for the period comprises of a net gain of £155,121 (6 months to 31st July 2021: No realised gains or losses on disposal of investments and 12 months to 31st January 2022: £2,937,985 gains on disposal of investments).

£135,283 of this net gain relates to an additional capital distribution received during the period from the Group's former investment in MB Prestige Holdings PTY Limited ("MB") which was sold during the year to 31st January 2022.

£19,838 of this net gain is in respect of the Group's disposal of its entire 77.25% investment in Summa Insurance Brokerage, S.L. ("Summa") for consideration of £8,123,838, compared to the fair value of £8,104,000 at 1st February 2022 (Note 4). The disposal of Summa resulted in a net release of previously unrealised gains to Retained Earnings from the Fair Value Reserve of £2,007,857.

The amount included in realised gains on disposal of investments for the 12 months to 31st January 2022 comprised of a net gain of £2,937,985.

£1,300 of this net gain was in respect of the Group's disposal of 250,000 ordinary shares (c.5.5% at the time of divestment) in Paladin Holdings Limited ("Paladin") which were held under a call option arrangement, for consideration of £261,300, compared to the fair value of £260,000 at 1st February 2021.

£392,673 of this net gain was in respect of the Group's disposal of its entire 40% investment in MB Prestige Holdings PTY Limited ("MB") at its carrying value of £3,237,000 for consideration of £3,629,673.

£2,407,119 of this net gain was in respect of the Group's disposal of its entire 40.5% investment in Walsingham Motor Insurance Limited ("WMIL") for consideration of £4,654,119, compared to the fair value of £2,247,000 at 1st February 2021.

£136,893 of this net gain was in respect of the capital distribution from liquidating the Group's 20% investment in Walsingham Holdings Limited ("WHL") for consideration of £209,893, compared to the fair value of £73,000 at 1st February 2021.

In aggregate, the above disposals resulted in a net release of previously unrealised gains to Retained Earnings from the Fair Value Reserve of £4,476,991 in that year.

The disposal of the Group's entire 30% investment in Mark Edward Partners LLC ("MEP") during the 12 months to 31st January 2022 did not generate any realised gains or losses on disposal as this investment had been fully provided against during the year to 31st January 2019. However, the disposal did result in a net release of unrealised losses to Retained Earnings from the Fair Value Reserve of £4,572,822 (representing the original cost of investment) in that year.

The above releases of fair value resulted in a net transfer of £95,831 from the Fair Value Reserve to the Retained Earnings Reserve.

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 1^st February 2022	3,747	29,342	84,975	393	7	72	48,071	166,607

Profit for the period	-	-	13,319	-	-	-	778	14,097

Net transfers on disposal of investments (Note 6)	-	-	(2,008)	-	-	-	2,008	-

Dividends paid	-	-	-	-	-	-	(1,001)	(1,001)

Share Incentive Plan (Note 10)	-	4	-	-	-	-	58	62

At 31^st July 2022	£3,747	£29,346	£96,286	£393	£7	£72	£49,914	£179,765

8. LOAN AND EQUITY COMMITMENTS

On 26th June 2020 the Group entered into an agreement to provide Sage Program Underwriters, Inc. with a loan facility of USD 250,000. As at 31st July 2022 USD 150,000 had been drawn down, leaving a remaining undrawn facility of USD 100,000. Any drawdown is subject to satisfying certain agreed criteria.

On 23rd March 2022 the Group entered into an agreement to provide Denison and Partners Limited with a loan facility of £670,000. As at 31st July 2022 £150,000 had been drawn down, leaving a remaining undrawn facility of £520,000. Any drawdown is subject to satisfying certain agreed criteria. Since 31st July 2022 a further £150,000 has been drawn down from the facility, bringing the total amount drawn down to £300,000, with a remaining undrawn facility of £370,000 at the date of this report.

9. DEFERRED TAX AND CONTINGENT LIABILITIES

Group	Unaudited	Unaudited	Audited
	31^st July 2022	31^st July 2021	31^st January 2022
	£'000	£'000	£'000

At 1st February	1,898	-	-
Tax movement relating to investment revaluation for the period	2,893	338	1,898

At period end	£4,791	£338	£1,898

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, £4,791,000 tax on capital gains (interim 6 months to 31st July 2021: £338,000 and full year to 31st January 2022: £1,898,000) would become payable by the Group.

Finance (No.2) Act 2017 introduced significant changes to the Substantial Shareholding Exemption ("SSE") rules in Taxation of Chargeable Gains Act 1992 Sch. 7AC which applied to share disposals on or after 1 April 2017. In general terms, the rule changes relaxed the conditions for the Group to qualify for SSE on a share disposal.

New tax legislation was introduced in the US in 2018 which taxes at source gains on disposal of any foreign partnership interests in US limited liability companies ("LLCs"). As such, deferred tax needs to be assessed on any potential net gains from the Group's investment interests in US LLCs.

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

Having assessed the current portfolio, the directors anticipate that there is a requirement to provide for deferred tax in respect of the unrealised gains on investments under the current requirements of UK-adopted international accounting standards as the US LLC investments currently show a net gain. As such, a provision of £4,791,000 has been made as at 31st July 2022.

The deferred tax provision of £4,791,000 as at 31st July 2022 has been calculated based upon an assessment of the US tax liability arising from the valuations of the Group's holdings within US LLCs at 31st July 2022, using the US Federal rate of 21% together with US State Tax rates prevailing in the states where the Group's US LLCs operate, which range between 0% and 10%. Adjustments were then made based upon available allowances and taxable losses. Given the complexity, the Group utilised the services of a specialist US tax advisory firm.

The requirement for a deferred tax provision is subject to continual assessment of each investment to test whether the SSE conditions continue to be met based upon information that is available to the Group and that there is no change to the accounting treatment in this regard under UK-adopted international accounting standards. It should also be noted that, until the date of the actual disposal, it will not be possible to ascertain if all the SSE conditions are likely to have been met and, moreover, obtaining agreement of the tax position with HM Revenue & Customs may possibly not be forthcoming until several years after the end of a period of accounts.

The March 2021 Budget announced that the UK corporation tax would increase from 19% to 25% (effective 1st April 2023) and Finance Bill 2021 was considered substantively enacted in May 2021. This change in tax rate has had no material impact on the Group financial statements for the period ended 31st July 2022 as the directors do not consider there is any deferred tax due at the period end in respect of its non-US LLC investments due to the SSE rules.

10. SHARE BASED PAYMENT ARRANGEMENTS

Joint Share Ownership Plan

During the year to 31st January 2019, B.P. Marsh & Partners Plc entered into joint share ownership agreements ("JSOAs") with certain employees and directors. The details of the arrangements are described in the following table:

Nature of the arrangement	Share appreciation rights (joint beneficial ownership)
Date of grant	12th June 2018
Number of instruments granted	1,461,302
Exercise price (pence)	N/A
Share price (market value) at grant (pence)	281.00
Hurdle rate	3.75% p.a. (simple)
Vesting period (years)	3 years
Vesting conditions	There are no performance conditions other than the recipient remaining an employee throughout the vesting period. The awards vest after 3 years or earlier resulting from either: a) a change of control resulting from a person, or persons acting together, obtaining control of the Company either (i) as a result of a making a Takeover Offer; (ii) pursuant to court sanctioned Scheme of Arrangement; or (iii) in consequence of a Compulsory Acquisition); or b) a person becoming bound or entitled to acquire shares in the Company pursuant to sections 974 to 991 of the Companies Act 2006; or c) a winding up. If the employee is a bad leaver the co-owner of the jointly-owned share can buy out the employee's interest for 0.01p
Expected volatility	N/A
Risk free rate	1%
Expected dividends expressed as a dividend yield	1.9%
Settlement	Cash settled on sale of shares
% expected to vest (based upon leavers)	100%
Number expected to vest	1,443,147
Valuation model	Expected Return Methodology (ERM)
ERM value (pence)	36.00
Deduction for carry charge (pence)	31.60
Fair value per granted instrument (pence)	4.40
Charge for period ended 31st July 2022	£Nil

On 12th June 2018 1,461,302 new 10p Ordinary shares in the Company were issued and transferred into joint beneficial ownership for 12 employees (including 4 directors) under the terms of joint share ownership agreements. No consideration was paid by the employees for their interests in the jointly-owned shares.

The new Ordinary shares have been issued into the name of RBC cees Trustee Limited ("the Trustee") as trustee of the B.P. Marsh Employees' Share Trust ("the Employee Benefit Trust") at a subscription price of 281 pence per share, being the mid-market closing price on 12th June 2018. Following the acquisition of the Trustee by JTC Plc on 10th December 2020, the Trustee has since been rebranded to JTC Employer Solutions Trustee Limited.

The jointly-owned shares are beneficially owned by (i) each of the 9 currently participating employees and (ii) the trustee of the Employee Benefit Trust upon and subject to the terms of the JSOAs entered into between the participating employee, the Company and the Trustee.

Under the terms of the JSOAs, the employees and directors are entitled to receive on vesting the growth in value of the shares above a threshold price of 281 pence per share (market value at the date of grant) plus an annual carrying charge of 3.75% per annum (simple interest) to the market value at the date of grant to the date of vesting. The Employee Benefit Trust retains the carrying cost, with 281 pence per share due back to the Company.

Alternatively, on or after vesting, the participant and the Trustee may exchange their respective interests in the jointly-owned shares such that each becomes the sole owner of a number of Ordinary shares of equal value to their joint interests.

Participants will therefore receive value from the jointly-owned shares only if and to the extent that the share value grows above the initial market value plus the carrying cost to the date of vesting.

The employees and directors received an interest in jointly owned shares and a Joint Share Ownership Plan ("JSOP") is not an option, however the convention for JSOPs is to treat them as if they were options. The value of the employee's interest for accounting purposes is calculated using the Expected Return Methodology.

The risk-free rates are based on the yield on UK Government Gilts of a term consistent with the assumed option life.

On 12th June 2021 (the "vesting date") the performance criteria was met, after which the members of the scheme became joint beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6 pence per share. Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would become fully dilutive for the Group.

There were 254,414 shares where the performance criteria was not met on the vesting date that had been forfeited by departing employees and which remained unallocated within the Employee Benefit Trust as at 31st January 2022.

During the current period, 18,155 of the 254,414 unallocated shares within the Employee Benefit Trust were transferred to the B.P. Marsh SIP Trust ("SIP Trust") to be used as part of the 22-23 SIP awards made on 7th April 2022. Following this transfer and as at 31st July 2022 there were 1,443,147 shares held within the Employee Benefit Trust, of which there were 236,259 shares where the performance criteria was not met on the vesting date and which remained unallocated. The Employee Benefit Trust remains the owner of these unallocated shares.

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 9,542 ordinary shares in the Company, which were held in Treasury as at 31st January 2022 (6 months to 31st July 2021 and also 12 months to 31st January 2022, 33,320 ordinary shares in the Company, which were held in Treasury as at 31st January 2021) were transferred to the B.P. Marsh SIP Trust ("SIP Trust"). As a result, together with 4,104 unallocated ordinary shares already held within the SIP Trust as at 31st January 2022 and 18,155 unallocated ordinary shares transferred from the Employee Benefit Trust to the SIP Trust in April 2022, a total of 31,801 ordinary shares in the Company were available for allocation to the participants of the SIP (6 months to 31st July 2021 and also 12 months to 31st January 2022: 35,314 were available for allocation, including 1,994 ordinary shares forfeited by departing employees).

On 7th April 2022, a total of 11 eligible employees (including 3 executive directors of the Company) applied for the 22-23 SIP and were each granted 1,157 ordinary shares ("22-23 Free Shares"), representing approximately £3,600 at the price of issue.

Additionally, on the same date, all eligible employees were also invited to take up the opportunity to acquire up to £1,800 worth of ordinary shares ("Partnership Shares"). For every Partnership Share that an employee acquired, the SIP Trust offered two ordinary shares in the Company ("Matching Shares") up to a total of £3,600 worth of shares. All 11 eligible employees (including 3 executive directors of the Company) took up the offer and acquired the full £1,800 worth of Partnership Shares (578 ordinary shares) and were therefore awarded 1,156 Matching Shares.

The 22-23 Free and Matching Shares are subject to a 1 year forfeiture period.

A total of 31,210 (6 months to 31st July 2021 and also 12 months to 31st January 2022: 31,210) Free, Matching and Partnership Shares were granted to the 11 (6 months to 31st July 2021 and also 12 months to 31st January 2022: 10) eligible employees during the period, including 8,673 (6 months to 31st July 2021 and also 12 months to 31st January 2022: 9,363) granted to 3 (6 months to 31st July 2021 and also 12 months to 31st January 2022: 3) executive directors of the Company.

No ordinary shares were withdrawn from the SIP Trust during the period (6 months to 31st July 2021 and 12 months to 31st January 2022: No withdrawals).

As at 31st July 2022, and after adjusting for a total of 19,951 ordinary shares withdrawn from the SIP Trust by employees on departure and 6,842 ordinary shares forfeited on departure (since inception), a total of 262,829 Free, Matching and Partnership Shares had been granted to 11 eligible employees under the SIP, including 87,252 granted to 3 executive directors of the Company.

£42,009 of the IFRS 2 charges (6 months to 31st July 2021: £33,755 and 12 months to 31st January 2022: £68,070) associated with the award of the SIP shares to the 11 (6 months to 31st July 2021 and also 12 months to 31st January 2022: 10) 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.

-Ends-

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