Use of Proceeds of Sale and Strategy Confirmation

B.P. Marsh & Partners PLC

23 January 2024

 

23 January 2024

B.P. Marsh & Partners Plc

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

Use of Proceeds of Sale (£41.8m) and Strategy Confirmation

B.P. Marsh and Partners Plc (AIM:BPM), the specialist private equity investor in early stage financial services businesses, is pleased to provide shareholders with an update regarding the intended use of proceeds of £41.8m that it expects to receive on the anticipated completion of the sale of its shareholding in Paladin Holdings Ltd (the "Sale"), as announced on 7 December 2023.

Enhanced dividend

In addition to the dividend policy announced on 6 June 2023, whereby the Board agreed its intention to distribute a cash dividend of £2m for the financial years 2024, 2025 and 2026 to shareholders; the Company will now pay an additional £2m per annum for this three year period.

As such, subject to completion of the Sale, it is the Board's intention to allocate a £4m aggregate distribution to shareholders in each year for the next three years, with payments commencing in the financial year beginning 1 February 2024, equating to £12m in total. This equates to 5.9% of our most recently published Net Asset Value. This represents a 100% increase on the previously stated dividend policy, and the additional £6m that has been allocated to this represents 14.4% of the Sale Proceeds.  

Since the Group paid its first dividend in 2010, the Group has paid out £12.6m in dividends which represents 6.2% of the current Net Asset Value, or 30.7% of the Company's market capitalisation at flotation. This has been delivered alongside a share price increase of 338.50p (351%), and an Net Asset Value increase of £158.6m (354%) since 2010.

The details surrounding the specific dates of the distributions will be confirmed following completion of the Sale, in due course.

Ongoing Investment Strategy

Following the allocation of funds for this enhanced dividend and recent investment activity, the Group will have £74.5m of cash balances available.

The Group will continue to utilise these remaining cash balances on its long-standing stated objectives to:

1.   assist our portfolio of investments, deploying capital to support continued strong growth in the value of the Group's equity portfolio. In the five years to 31 July 2023, the Group's underlying equity portfolio value has (on an adjusted basis) grown at a Compound Annual Growth Rate of 15.2% and the desire is to maintain this rate of growth; and

2.   invest in early-stage businesses with strong management teams and significant growth potential, providing funds and support to ensure these companies deliver on their growth opportunities. We continue to believe that we are unique in our approach and area of interest as the only minority investor with a focus on early stage and start-up businesses in the insurance distribution space, among others.

This is a continuation of the Group's strategy to deliver significant returns to our shareholders, via a blend of ongoing equity growth from the existing portfolio and regular returns of capital to shareholders via dividends.

The recent and continuing consolidation activity within the Insurance Market continues to drive substantial opportunities for the Group, both in terms of new investments and activity within our underlying portfolio.

As the Group's performance demonstrates, the existing investments remain strong, and the Company is confident regarding future growth over the years ahead. The Group anticipates deploying meaningful cash resources within this existing portfolio alongside new investment opportunities.

These growth opportunities include the following:

·    Expansion into further geographic territories;

·    Launching new products;

·    Team and individual hires;

·    Securing new / additional capacity; and

·    Merger & Acquisition activity.

The Group continues to be approached by entrepreneurial individuals and teams and has an active pipeline of new business opportunities.

During the course of 2023, the Group completed three new investments, as follows:-

·    Ai Marine Risk Limited ("Ai Marine") December 2023 - a start-up Managing General Agency, which specialises in Marine Hull insurance and will underwrite a global portfolio of business.

·    Pantheon Specialty Limited ("Pantheon") June 2023 - a start-up insurance broker, led by Rob Dowman, a recognised leading London Market broker, specialising in complex placements worldwide.

·    Verve Risk Services Limited ("Verve") April 2023 - a Managing General Agency, which specialises in Professional and Management Liability business for the insurance industry in the USA, Canada, Bermuda, Cayman Islands and Barbados.

The Group is confident that the three new investments as outlined above, will deliver on their set goals, producing long term growth.    

We will continue to focus on deploying start-up/early stage capital to this type of investment, where we are able to utilise our significant experience and expertise, and "stick to our knitting", an approach which has delivered meaningful shareholder returns since flotation in 2006.

The Group currently has 11 potential opportunities under review to consider during the first half of 2024, all of which are in the insurance heartland upon which we focus.

Further information regarding the performance of the Group will be published in B.P. Marsh's trading update, to be released in mid-February 2024. 

This announcement contains inside information.

For further information:

B.P. Marsh & Partners Plc	www.bpmarsh.co.uk
Brian Marsh OBE	[phone]
Nominated Adviser & Broker
Panmure Gordon
Atholl Tweedie / Stephen Jones / Amrit Mahbubani	[phone]
Financial PR & Investor Relations
Tavistock	[e-mail]
Simon Hudson / Tim Pearson / Katie Hopkins	[phone]

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 more than ten years.

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