BP Marsh flags strong half-year trading performance
By Josh White
Date: Tuesday 17 Sep 2024
(Sharecast News) - Financial services investor BP Marsh announced a strong trading performance for the six months ended 31 July in an update on Tuesday.
The AIM-traded company highlighted the successful disposal of CBC UK, significant growth in its investment portfolio, and an enhanced dividend policy.
It completed the sale of Paladin Holdings, the parent company of insurance broker CBC UK, to Specialist Risk Group on 22 March.
The total upfront payment reached £44m, following an additional £1.94m received in September after completion adjustments.
That marked a substantial return on BP Marsh's initial equity investment of £3,500.
Further deferred payments could still be realised, contingent on CBC UK's future performance.
BP Marsh also reported a new investment in Devonshire UW, a London-based underwriting agency specialising in transactional risks.
The company expressed confidence in Devonshire's potential for long-term growth.
Additionally, BP Marsh said it was evaluating 19 potential investments within the insurance sector, with several deals expected to conclude before the financial year ends on 31 January 2025.
The firm's portfolio companies demonstrated strong performance.
Notably, XPT Group in the US was on track to achieve gross written premiums of around $900m and an EBITDA of $20m by the end of 2024.
In the UK, Pantheon Specialty was forecast to exceed £16m in EBITDA for the same period.
Other portfolio companies like Lilley Plummer Risks, Stewart Specialty Risk Underwriting in Canada, ATC Insurance Solutions in Australia, and the Fiducia MGA Company in the UK also saw significant growth with optimistic forecasts.
Following the successes, BP Marsh said it was enhancing its dividend policy, proposing a £4m dividend for the year ending 31 January, equivalent to 10.72p per share, and planning a similar distribution for the following year.
That would bring the total dividends paid and proposed since its flotation to £24.8m.
The company also renewed its £1m share buyback programme, purchasing 63,132 shares during the period.
Financially, the group remained robust, with funds totaling £80.2m as of 31 July - a significant increase from £4.3m a year earlier, while it maintained a debt-free position.
The company invested £9.5m in follow-on funding for existing portfolio companies, and provided £1.4m in loans to support organic growth.
In board developments, Francesca Chappell was appointed chief finance officer and joined the Board on 16 September, succeeding Jonathan Newman, who departed after 25 years with the company.
BP Marsh was optimistic about future opportunities amid ongoing consolidation in the insurance market, which it said continued to present new investment prospects.
The company planned to release its half-year results on 23 October.
At 1215 BST, shares in BP Marsh & Partners were up 2.48% at 538p.
Reporting by Josh White for Sharecast.com.
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