Venture capital provider B.P. Marsh & Partners Plc has reported consolidated profit after tax of £13.7 million for the year ended 31st January, 2021, compared with £12.5 million for the prior year period.
For the year, B.P Marsh has reported a 9.5% rise in Net Asset Value (NAV) to £149.9 million and an increase in the equity value of the portfolio of almost £13 million to £131 million.
The firm explains that its current investments are in the insurance intermediary space, with the exception of the independent financial advisor, LEBC.
B.P. Marsh’s insurance intermediary investments are split between insurance brokers and underwriting agencies / MGAs. Combined, its insurance investments produce almost £1.4 billion of insurance premium.
According to B.P. Marsh, while a number of its investee companies experienced reductions in income as a direct consequence of the Covid-19 pandemic, in contrast a number of investments performed above budget for the year despite local and national lockdowns.
Turning to the investment performance, and the company has announced a year-on-year increase in the portfolio valuation of 10.9% to the aforementioned £131 million.
During the year, B.P. Marsh invested £2.4 million in equity in the portfolio, of which £0.2 million was in a new investment, Sage Program Underwriters, and £2.2 million in follow-on equity funding into four of its existing firms.
Overall, net gains from investments totalled £12.9 million for the year, compared with £11.5 million for the prior year period.
“As Shareholders will understand, the year under review, ending 31 January 2021, was dominated by the Coronavirus Pandemic which struck all the territories in which we operate,” said Brian Marsh, Chairman and Alice Foulk, Managing Director.
“We and our Investee Companies faced rapid and total change in all our working environments. Management and Staff rose to the occasion and, as can be seen, have succeeded in delivering the Group’s objectives.
“Not only is this a testament to our hardworking team who have all demonstrated the flexibility and commitment required to see the Group through this difficult time, but we feel it also lies in our simple business model of investing in good quality businesses. These are themselves led by entrepreneurial and committed management teams. Additionally, we have deliberately created a diverse portfolio, and one which has so far been able to weather this particular storm,” added the pair.
Commenting on the market, Chief Investment Officer, Daniel Topping, said: “As previously reported, overall, the Group’s insurance investments have continued to see pricing increases across the sectors in which they operate.
“Covid-19 has intensified these premium pricing increases but has also led to many insurers reducing their risk appetite for new business and seeking to mitigate their existing exposures, presenting opportunities for our portfolio companies to fill the gaps this may create.
“This has continued into 2021 and the Group does not see any change on the horizon as the year progresses.
“The Group does not have any exposure to balance sheet risk via its investment portfolio and is therefore unaffected directly by insurance losses. However, our MGA investments do in effect borrow the balance sheets of their insurance partners to provide insurance coverage. As such, they are extremely conscious of the importance of protecting and growing their partners’ balance sheets.
“The ongoing consolidation activity within the Insurance Market continues to provide opportunities for the Group, both in terms of new investments and also as activity within our underlying portfolio. Whilst we have been cautious in respect of new investments over the past year, we believe that we are well positioned to make new investments over our current financial year.
“The Group’s appetite for investment remains the same, being from financing start-ups to a maximum of £5m as an initial investment amount.”
