TIDMBPM
B.P. Marsh & Partners PLC
09 January 2023
9 January 2023
B.P. Marsh & Partners Plc
("B.P. Marsh", "the Company" or "the Group")
Investee Company Updates - Kentro Capital Limited, ATC Insurance
Solutions PTY Limited, XPT Group LLC & Lilley Plummer Risks
Limited
B.P. Marsh & Partners Plc ("B.P. Marsh"), the specialist
investor in early-stage financial services businesses, is pleased
to announce updates on four of its investments, Kentro Capital
Limited, ATC Insurance Solutions PTY Limited, XPT Group LLC and
Lilley Plummer Risks Limited.
Kentro Capital Limited ("Kentro") - London
i. Linda Scott Associates Limited ("Linda Scott")
On 5(th) December 2022 Kentro agreed the conditional acquisition
of Linda Scott, an independent Trade Credit broker based in
Glasgow.
This acquisition was undertaken via Kentro's broking arm, Xenia
Broking Group, now one of the largest specialist Trade Credit
brokers in the UK. This is Xenia's tenth acquisition in three
years.
Established in 1991 by Linda Scott, the team are well respected
and highly regarded in the industry and now manage a portfolio of
40 clients.
Linda Scott's product offering and client base complements
Xenia's existing business, whilst the hire of an experienced Trade
Credit team in Glasgow will help to support new business generation
in Scotland.
ii. Kentro - Trading Performance
Driven by performance across both Nexus Underwriting, Kentro's
MGA business, and Xenia, Kentro has continued to produce strong
growth in its financial year to 31(st) December 2022.
In its 2021 financial year, Kentro produced Gross Written
Premium of GBP367m, a year on year increase of 19%, and generated
revenue of GBP53m, a year on year increase of 21%. EBITDA increased
by 14% over the course of 2021 to GBP16m. This impressive growth
continued, with Kentro guiding to Gross Written Premium of c.
GBP440m in 2022.
Commenting on the acquisition of Linda Scott and Kentro's
overall performance, Colin Thompson, Founder and Group Chief
Executive Officer of Kentro, said:-
"Linda Scott represents Kentro's 24(th) acquisition since
inception and is another example of Xenia's tried and tested
strategy to acquire complementary "bolt-on" portfolios. Xenia has a
unique ability to integrate trade credit books into its existing
infrastructure at very high margins, as demonstrated by its
previous acquisitions to date.
"Turning to Kentro's overall performance, I remain optimistic on
the future performance of the business. Since inception in 2008,
Kentro now manages Gross Written Premium of over $600m, which has
been delivered via strong organic growth and a successful
acquisition strategy. I see no reason why such performance will not
continue over the coming years and beyond."
B.P. Marsh first invested in Nexus Underwriting Management
Limited ("Nexus") in August 2014, investing GBP1.6m for a 5%
shareholding.
Since then, B.P. Marsh has invested a further GBP13.6m and has
increased its holding to 19.05%. As at 31(st) July 2022, B.P. Marsh
valued this shareholding at GBP51.5m, representing an Internal Rate
of Return of 27.90%.
In February 2022, Nexus rebranded to Kentro, the 100% owner of
the subsidiaries Nexus Underwriting and Xenia.
Kentro now employs over 300 staff, with 250+ employee
shareholders, with offices in nine countries across the world.
XPT Group LLC (" XPT") - New York
In June 2017, B.P. Marsh invested $6m (c. GBP4.7m) for a 35%
shareholding in the U.S. based specialty lines insurance
distribution company, XPT.
Since this time, follow on funding has been provided to XPT,
with GBP11.6m being provided in total. B.P. Marsh currently has a
shareholding of 29.15%.
XPT's performance since inception has been impressive, with the
business on track to produce Gross Written Premium of over US$500m
in its financial year which ended on 31(st) December 2022 (2021:
US$400m).
This growth has emanated from XPT's acquisition strategy, with
their 12(th) acquisition completing this year, alongside strong
organic growth.
Thomas Ruggieri, Founding Partner & CEO of XPT
commented:-
"It's been great to see our strategy and tactics driving our
+40% organic GWP growth in 2022. We have benefitted in recent years
from the hardening insurance market and, although we have seen some
plateauing of rates heading into 2023, rates remain at productive
levels and expertise in specialty segments like hospitality,
trucking, energy and agriculture is still keenly sought after by
retailers.
"We also see great strength in construction both from rebuilding
post catastrophic events and from the US infrastructure bill.
"XPT Specialty's small and medium insured business strategy
continues to fulfil a top priority for our retail agent customers,
while our Platinum programs supporting the wholesale distribution
channel provide differentiation in the MGU space. "
ATC Insurance Solutions Limited ("ATC") - Melbourne
BP Marsh first invested in ATC in July 2018, investing AU$5.1m
(c. GBP2.9m) for a 20% shareholding.
ATC is a Managing General Agency and Lloyd's Coverholder,
specialising in, among other things, accident & health, motor
and sports insurance headquartered in Melbourne, Australia. ATC is
run by a longstanding and experienced management team led by CEO
and Founder, Chris Anderson, alongside co-founder and director
Shane Sheppard.
i. Acquisition of MB Prestige Limited ("MB")
The acquisition of MB in August 2021 resulted in ATC becoming
one of the largest independently owned underwriting agencies in
Australia.
From an operational and administrative perspective, MB has
successfully integrated into ATC, which has created a number of
cost and efficiency synergies. Additionally, by joining ATC, MB has
been able to access numerous capacity providers (including Lloyd's
of London) which has enabled MB to secure additional capacity for
new products that complement the high value motor line, such as
high value home and contents.
As at 31(st) July 2022, BP Marsh valued its 25.5% shareholding
in ATC at AU$30.0m (C. GBP17.2m). This represents an Internal Rate
of Return of 50.48%, including loans.
Chris Anderson, Chief Executive Officer of ATC commented:-
"We are delighted with the performance of MB since acquisition
and how the business has integrated into ATC.
"High value motor was a completely new line of business for ATC,
which meant there was no conflict with our existing clients. It has
helped to diversify ATC's overall product offering and has opened
up new opportunities for growth."
Lilley Plummer Risks Limited (" Lilley Plummer") - London
In October 2019, B.P. Marsh took a 30% equity stake in Lilley
Plummer for a total cash consideration of GBP1m, in a mixture of
Redeemable and Non-Redeemable Preference shares.
Since formation, Lilley Plummer has continued to expand its
product offering beyond its core Marine business into a number of
niche and diverse areas, for example Political Violence, Terrorism
and North American P&C insurance.
Lilley Plummer has grown substantially and is on track to
deliver considerable year on year growth in respect of revenue and
EBITDA. This positive performance is due to Lilley Plummer growing
its client base, winning new business and continuing to respond to
the demand for coverage in war-stricken locations.
i. Outlook
Lilley Plummer continues to diversify into different classes of
business and will continue to expand into new areas in 2023.
Lilley Plummer has reaped the benefits of being able to offer
multi-product solutions to its growing client base and sees further
opportunity to develop new classes of business.
Stuart Lilley and Dan Plummer, Chief Executive Officer and
Managing Director, respectively, of Lilley Plummer commented:-
"We are delighted with the continued success of Lilley Plummer
since its inception in late 2019. Since Lilley Plummer was
established, the business has grown its underlying marine
portfolio, and has also expanded into new product lines in new
geographic locations, taking advantage of market conditions.
"With regard to Lilley Plummer's core business, the Marine
market has seen some relatively flat pricing over the last six
months. Despite this, increases in reinsurance costs are expected,
which many predict will lead to pricing increases in 2023.
"The conflict in Ukraine has resulted in increased premiums,
with vessels paying to regularly operate in both Ukraine and
Russia. Whilst Lilley Plummer does not foresee this continuing
long-term, the same situation is expected to continue in the first
half of 2023.
"In addition, the Marine market has seen a large amount of
consolidation with many small and medium sized brokers being
acquired by the larger brokers. The subsequent fallout has provided
a number of opportunities to secure new business, which perhaps
were not possible without such consolidation."
For further information:
B.P. Marsh & Partners Plc www.bpmarsh.co.uk
Brian Marsh OBE +44 (0)20 7233 3112
Nominated Adviser & Broker
Panmure Gordon
Atholl Tweedie / Charles Leigh-Pemberton
/ Ailsa MacMaster +44 (0)20 7886 2500
Financial PR & Investor Relations
Tavistock bpmarsh@tavistock.co.uk
Simon Hudson / Tim Pearson +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.
- Ends -
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