23rd May 2006 07:03
B.P. Marsh & Partners PLC23 May 2006 Date: 23rd May 2006On behalf of: B.P. Marsh & Partners PlcEmbargoed until: 0700hrs B.P. Marsh & Partners Plc (B. P. Marsh or "the Company") Final Results - 23 May 2006 B.P. Marsh & Partners Plc, a niche venture capital provider to early stagefinancial services businesses, today announces the audited group results of B.P.Marsh & Company Limited for the year to 31 January 2006. B.P. Marsh & Company Limited was the holding company of the group before it wasacquired by B.P. Marsh & Partners Plc on 1 February 2006 prior to its admissionto the Alternative Investment Market. These results therefore do not include theplacing of shares on 2 February 2006 which raised £11 million before expenses. Group Financial Highlights • No new investments were made during year. • The Net Asset Value of the Group increased by 16.3% over the year (compared to an increase of 1.5% during the year ended 31st January 2005) before any contingent liabilities. Net of contingent liabilities the Net Asset Value of the Group increased by 16.4% over the year (compared to an increase of 1.1% during the year ended 31st January 2005). • Consolidated pre-tax profit for the year of £3,514 compared to a loss of £2,393,000 in 2005. • On 2nd September 2005 the Group sold its 27.37% stake in Carpenter Moore Insurance Services, Inc. to NASDAQ Insurance Agency, LLC for $4,364,000 after a net acquisition cost (after selling some shares to incentivise new management) of $322,500 - a multiple of 13.5 times the net equity cost. The Group had held this investment since July 1991. $1,376,000 of the sale proceeds were held in escrow and are repayable within 2 years subject to any potential warranty or indemnity claims. As at the date of this report $484,000 has already been released. • Underlying consolidated profit of £1.6m taking into account that £1,597,000 of profit was taken to the retained reserves from the revaluation reserve on successful completion of the sale of Carpenter Moore Insurance Services, Inc. • On 18 November 2005 a £1,500,000 loan was granted to Hyperion Insurance Group Limited which subsequently was converted into £1.43m of equity on 23rd February 2006 in a rights issue which maintained the group's equity stake at 27.9%. • On 27th January 2006 a £600,000 loan was granted to Besso Holdings Limited which subsequently was converted into redeemable cumulative preference shares on 23rd February 2006. • Since the Group's inception in 1990 the Group's Net Asset Value before contingent liabilities has risen by £28,700,000 from its original investment of £2,504,000. This equates to an increase of 17% per annum over 16 years. Including contingent liabilities this amounts to an increase of 15.7%. • As at 2nd February 2006 the Group had an effective Net Asset Value of £41.3m after the successful admission of its shares to AIM. • A dividend of £68,948 was paid in January 2006. The Directors do not recommend any further payment of dividend. Chairman's Statement Overview In the year under review, the Company sold its interest in Carpenter MooreInsurance Services, Inc, headquartered in San Francisco, to NASDAQ InsuranceAgency, LLC at a substantial profit. The remaining nine of the Company's investments all made satisfactory progressin their chosen fields of business during the year. As a consequence, the Directors' valuation of the Company including itssubsidiaries at 31st January 2006 maintained an acceptable annual growth rate of17% compound since commencement on 1st February 1990. Although many investment opportunities were presented to us, no new investmentswere completed during the year. Post Balance Sheet Event On 1st February 2006, B. P. Marsh & Partners plc aquired 100% of the issuedshare capital of B. P. Marsh & Company Limited (formerly B. P. Marsh & PartnersLimited) in a share for share exchange. References throughout the FinancialStatements to the "Company" refer to B. P. Marsh & Partners plc from 1stFebruary 2006 and prior to that to B. P. Marsh & Company Limited. Two days after the year-end, the B. P. Marsh & Partners Group became a quotedcompany on the Alternative Investment Market ("AIM") of the London StockExchange. A total of 9.3 million shares (including just under 7.9 million newshares) were placed at £1.40 per share, raising gross proceeds of £11 millionfor the Company (£10 million net of expenses). On Admission to AIM, there were atotal of 29.3 million shares in issue, resulting in an initialmarket-capitalisation of just over £41 million. The funds were raised to enable BP Marsh to continue to grow, by financingexisting investments as well as funding new opportunities. In addition, Ibelieve that the enhanced profile that being a public company gives us willgreatly help in continuing to attract high-calibre professionals as well asincentivising our current team. This is essential as I endeavour to ensure thatthe future of BP Marsh lies in a wider and deeper shareholder base. People None of this would have been possible without the care and dedication of theDirectors and staff to whom I would wish again to record my gratitude. Outlook We remain optimistic about the future for the Group. There are still a largenumber of financial services minnows with great teams and exciting businessplans requiring funding which remain largely ignored by the venture capitalmarkets. This is mainly as a result of the significantly higher levels of energyand expertise required to make informed investment decisions in these businesses- something the BP Marsh team relishes. Brian Marsh OBE Chairman Investments The Group has holdings in the following companies :- Berkeley (Insurance) Holdings Limited(www.berkeleyinsurance.com)In July 2002 the Group invested in Berkeley (Insurance) Holdings, a company thatprovides its clients with independent advice on the most suitable choice ofinsurance broker in specialist as well as mainstream insurance areas.Date of investment: July 2002Equity stake: 19.9%31st January 2006 valuation: £90,000 Besso Holdings Limited(www.besso.co.uk)In February 1995 the Group assisted a specialist team departing from insurancebroker Jardine Lloyd Thompson Group in establishing Besso Holdings. The companyspecialises in insurance broking for the North American wholesale market.Date of investment: February 1995Equity stake: 24.7%31st January 2006 valuation: £6,752,000 HQB Partners Limited(www.hqbpartners.com )In January 2005 the Group made an investment in HQB Partners, a company whichprovides strategic transaction advice, proxy solicitation services, votinganalysis and investor relations services.Date of investment: January 2005Equity stake: 28.0%31st January 2006 valuation: £116,000 Hyperion Insurance Group Limited(www.hyperiongrp.com)The Group first invested in Hyperion Insurance Group in 1994. The HyperionInsurance Group owns, amongst other things, an insurance broker specializing indirectors' and officers' ("D&O") and professional indemnity ("PI") insurance. Asubsidiary of Hyperion became a registered Lloyd's insurance broker. In 1998Hyperion set up an insurance managing general agency specialising in developingD&O and PI business in Europe.Date of investment: November 1994Equity: 27.9%31st January 2006 valuation: £9,353,000 Paterson Martin Limited(www.patersonmartin.com)Paterson Martin was founded by a group of professionals from the actuarial,capital markets and reinsurance advisory sectors in conjunction with the Group.The company uses sophisticated modeling techniques to assess risk, with a viewto providing counter-party risk transaction advice.Date of investment: April 2004Equity stake: 22.5%31st January 2006 valuation: £530,000 Portfolio Design Group International Limited(www.surrendalink.co.uk)In March 1994 the Group invested in the Portfolio Design Group, a company whichsells with-profits life endowment policies to large financial institutions. In2002 the company diversified into investment management.Date of investment: March 1994Equity stake: 20.0%31st January 2006 valuation: £3,439,000 Principal Investment Holdings Limited(www.principalinvestment.co.uk)In December 1999 the Group invested in Principal, a predominantly discretionaryfund manager with both retail and institutional clients.Date of investment: December 1999Equity stake: 19.7%31st January 2006 valuation: £6,850,000 Public Risk Management Limited(www.publicriskmanagement.co.uk)In September 2003 the Group assisted in establishing Public Risk Management, acompany which specialises in the development and provision of risk managementservices, including processes and procedures, to the public sector.Date of investment: September 2003Equity stake: 35.0%31st January 2006 valuation: £206,000 Summa Insurance Brokerage, S. L.(www.grupo-summa.com)In January 2005 the Group provided finance to a Spanish management team with theobjective of acquiring and consolidating regional insurance brokers in Spain.Date of investment: January 2005Equity stake: 35.0%31st January 2006 valuation: £364,000 Financial Statements B.P. MARSH & COMPANY LIMITED (formerly B.P. Marsh & Partners Limited) CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST JANUARY 2006 Notes 2006 2005 ----- £ ---- £ £ ---- £ TURNOVER 1 940,606 641,668 Staff costs 2 1,506,799 1,175,142Depreciation 6 5,697 8,749Other operating 708,384 1,177,291charges ------------ ------------Operating costs (2,220,880) (2,361,182) Income from 701,599 598,590participatinginterestsIncome from other 285,359 743,258fixed asset investments ------------ ------------Other operating 986,958 1,341,848income ------------ ------------OPERATING LOSS (293,316) (377,666) Provision against (232,023) (2,330,875)investments and loansProfit on disposal 7 574,316 315,109of fixed asset investmentsInterest 32,551 36,715receivable andsimilar incomeInterest payable (78,014) (35,803)and similar charges ------------ ------------ 296,830 (2,014,854) ------------ ------------ PROFIT / (LOSS) ON 3 3,514 (2,392,520)ORDINARY ACTIVITIES BEFORE TAXATION Taxation 4 - 416,251 ------------ ------------ PROFIT / (LOSS) ON 3,514 (1,976,269)ORDINARY ACTIVITIES AFTER TAXATION Dividends 5, 11 (68,948) - ------------ ------------LOSS FOR £ (65,434) £(1,976,269)THE PERIOD ============ ============ The result for the year is wholly attributable to continuing activities. BALANCE SHEET 31ST JANUARY 2006 Group Company ----- ------- Restated Restated -------- -------- Notes 2006 2005 2006 2005 ----- ---- ---- ---- ---- £ £ £ £FIXED ASSETS Tangible assets 6 8,136 10,063 8,136 10,063Investments 7 27,700,000 25,068,504 33,257,805 28,206,864 ------------ ------------ ------------ ------------ 27,708,136 25,078,567 33,265,941 28,216,927 ------------ ------------ ------------ ------------ DEBTORS: due 8 3,230,955 2,945,000 2,805,000 2,945,000after more than one year ------------ ------------ ------------ ------------CURRENT ASSETS Debtors 8 3,413,415 700,618 3,141,506 700,618Cash at bank 1,083,896 591,839 1,083,896 591,839and in hand ------------ ------------ ------------ ------------ 4,497,311 1,292,457 4,225,402 1,292,457 CREDITORS - 9 (1,733,034) (1,494,966) (1,304,982) (1,066,913)amounts fallingdue within one year ------------ ------------ ------------ ------------NET CURRENT ASSETS 2,764,277 (202,509) 2,920,420 225,544 ------------ ------------ ------------ ------------ TOTAL ASSETS 33,703,368 27,821,058 38,991,361 31,387,471LESS CURRENTLIABILITIES CREDITORS - 9 (2,500,000) (1,000,000) (7,787,993) (4,566,413)amounts fallingdue after morethan one year ------------ ------------ ------------ ------------ £31,203,368 £26,821,058 £31,203,368 £26,821,058 ============ ============ ============ ============CAPITAL ANDRESERVES Called up 10 2,519,553 2,507,319 2,519,553 2,507,319share capitalShare premium 11 16,584 16,584 16,584 16,584account Revaluation 11 19,209,299 16,358,075 20,870,576 16,342,862reserve Capital 11 10 10 10 10redemptionreserve Profit and 11 9,457,922 7,939,070 7,796,645 7,954,283loss account ------------ ------------ ------------ ------------SHAREHOLDERS' £31,203,368 £26,821,058 £31,203,368 £26,821,058FUNDS (including non-equity interests) ============ ============ ============ ============ Approved by the Board on 18 May 2006 for release on 23 May 2006and signed on its behalf by B.P. Marsh and J.S. Newman. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST JANUARY 2006 Notes 2006 2005 ----- ---- ---- £ £ Cash outflow from operating activities 12 (329,651) (275,715) Returns on investment and 13 (45,463) 912servicing of finance Taxation - 494,994 Capital expenditure and financial 14 (563,881) (3,290,746)investment Equity dividends (68,948) - ------------ ------------Cash outflow before financing (1,007,943) (3,070,555) Financing 15 1,500,000 500,000 ------------ ------------Increase / (decrease) in cash in the year 16 £ 492,057 £ (2,570,555) ============ ============ Reconciliation of net cash flowto movement in net debt Increase / (decrease) in cash in the 16 492,057 (2,570,555)period Cash outflow from change in debt (1,500,000) (1,000,000)Exchange movement in debt - (3,456) ------------ ------------Movement in net debt in the period (1,007,943) (3,574,011) Opening net debt (740,475) 2,833,536 ------------ ------------Closing net debt 16 £ (1,748,418) £ (740,475) ============ ============ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST JANUARY 2006 1. ACCOUNTING POLICIES Basis of preparation of financial statements The financial statements have been prepared under the historical cost conventionmodified to include the revaluation of investments and in accordance withapplicable accounting standards. Basis of consolidation The group financial statements consolidate the results and net assets of thecompany and all of its subsidiary undertakings. No profit and loss account is prepared for the company, as permitted by Section230 of the Companies Act 1985. The company incurred a loss for the period of£76,456 (2005 - £2,097,609). Change of accounting policy Investments held as fixed assets were previously stated at cost less provisionfor any permanent diminution in value. Fixed asset investments that had beensubject to a reorganisation were held at their revalued amount. The board ofdirectors considered that this method of accounting did not show a fair value ofthese investments and therefore the investments are now stated at fair valueaccording to the policy as set out below. The effect of this change inaccounting policy has been to increase group investment valuation, hence, groupshareholders' funds at 1st February 2004 by £13,460,642 and at 1st February 2005by £16,333,192 and to increase the company's shareholders' funds at 1st February2004 by £13,348,971 and at 1st February 2005 by £16,342,862. Turnover Turnover represents the amounts receivable, excluding value added tax, inrespect of the provision of consultancy services. All turnover is derived fromthe UK. Investments Investments are stated at fair value. The valuations of investments are conducted by the Board. In valuing investmentsthe Board applies guidelines issued by the British Venture Capital Association(BVCA). The following valuation methodologies have been used in reaching fairvalue of 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 of the investee company; or d) by reference to expected future cashflows from the investment where a realisation or flotation is imminent. Realised surpluses or deficits on the disposal of investments are taken to theProfit & Loss account, unless they have already been taken to the RevaluationReserve. Unrealised surpluses on the revaluation of investments are taken to theRevaluation Reserve. Permanent impairments in the value of investments are takento the Profit & Loss account, except to the extent that they represent reversalsof prior revaluations. All investments in portfolio companies are held as a means to benefit fromincreases in their marketable value and not as a medium through which thebusiness of the company is carried out. Therefore in accordance with FinancialReporting Standard 9 'Associates and Joint Ventures', they are not accounted foras associates. Income from investments Income from investments comprises: a) gross interest from loan stock, which is taken to the profit and loss account on an accruals basis b) dividends from shares, which are taken to the profit and loss account when received, except for fixed yield dividends, which are accounted for on an accruals basis provided that the investee company has sufficient distributable reserves and is able to make such distributions. Depreciation Provision for depreciation of tangible assets is made on the straight line basisat rates calculated to write off the cost of the assets, less their estimatedresidual values, over their expected working lives, which are considered to be: Furniture & equipment - 5 years Foreign currencies Assets and liabilities denominated in foreign currencies are translated at therate of exchange ruling at the balance sheet date. Transactions denominated inforeign currencies are converted at the rate of exchange ruling on the date ofthe transaction. All translation differences are taken to the profit and lossaccount as they arise. Deferred taxation Provision is made in full for all taxation deferred in respect of timingdifferences that have originated but not reversed by the balance sheet date,except for gains on revaluation of fixed assets. No provision is made fortaxation on permanent differences. Deferred tax assets are recognised to the extent that it is more likely than notthat they will be reversed. Pension costs The company operates a defined contribution scheme for some of its employees.The contributions payable to the scheme during the period are charged to theprofit and loss account. Operating leases Rentals payable under operating leases are charged on a straight-line basis overthe term of the lease. 2. STAFF COSTS The average number of employees, including directors, employed by the groupduring the period was 22 (2005: 22). All remuneration was paid by B. P. Marsh &Company Limited. The related staff costs were: 2006 2005 ---- ---- £ £ Wages and salaries 1,271,889 981,652Social security costs 153,669 118,615Pension costs 81,241 74,875 ------------ ------------ £1,506,799 £1,175,142 ============ ============ 3. PROFIT/ (LOSS) ON ORDINARY ACTIVITIES BEFORE 2006 2005 ---- ----TAXATION £ £ The profit/ (loss) for the period is arrived at after charging: Depreciation of owned tangible fixed assets: 5,697 8,749Auditors remuneration :-Audit fees (Company £26,500 (2005 £8,250)) 32,650 15,950Other services (Company £21,057 (2005 £75,040)) 23,507 80,440Operating lease rentals of land and buildings 117,975 118,139 ============ ============ 4. TAXATION 2006 2005 ---- ---- £ £The charge for tax comprises: UK corporation tax for the year £ - £ 416,251 ============ ============ Factors affecting the charge for the yearProfit / (loss) on ordinary activitiesbefore tax £ 3,514 £(2,392,520) ============ ============ Tax at 30% on profit / (loss) on ordinaryactivities 1,054 (717,756)Effects of:Expenses not deductible for tax purposes 49,404 23,352Non taxable income (65, 274) -Impairment provision not deductible fortax purposes - 699,263Depreciation in excess of capitalallowances (8) 464Other effects:Unutilised tax losses carried forward 39,567 362,118Utilisation of tax losses during theperiod (472,374) -Net chargeable gains 550,995 -Provisions against investments notallowable for tax 46,800 -Taxable capital loss in excess ofaccounting loss - (86,068)Non-taxable income (dividends received) (150,164) (281,373)Over provision in relation to prior year - 416,251 ------------ ------------Tax charge for the year £ - £ 416,251 ============ ============ 5. DIVIDENDS 2006 2005 ---- ---- £ £Ordinary dividends Interim dividend paid on: "A" Ordinary shares 68,948 - ------------ ------------ £ 68,948 £ - ============ ============ 6. TANGIBLE FIXED ASSETS Furniture & Equipment -----------Group and Company £ CostAt 1st February 2005 94,155Additions 3,770 -----------At 31st January 2006 97,925 -----------DepreciationAt 1st February 2005 84,092Charge for the year 5,697 -----------At 31st January 2006 89,789 -----------Net book valueAt 31st January 2006 £ 8,136 ============At 31st January 2005 £ 10,063 ============ 7. FIXED ASSET INVESTMENTS Other InvestmentsGroup investments : Participating other than--------------------- interests Loans Total ----------- ------- ------ £ £ £At valuationAt 1st February 2005 (restated) 21,615,504 3,453,000 25,068,504Additions 271,378 - 271,378Disposals (792,358) - (792,358)Impairment (provision)/reversal (16,000) 292,369 276,369Valuation released to Profit &Loss account on disposal (1,597,000) - (1,597,000)Movement in valuation 1,368,476 3,104,631 4,473,107 ------------ ------------ ------------At 31st January 2006 £20,850,000 £ 6,850,000 27,700,000 ============ ============ ============At costAt 1st February 2005 6,375,725 2,359,587 8,735,312Additions 271,378 - 271,378Disposals (792,358) - (792,358)Impairment (provision)/reversal (16,000) 292,369 276,369 ------------ ------------ ------------At 31st January 2006 £ 5,838,745 £ 2,651,956 £ 8,490,701 ============ ============ ============ Included within the group's profit and loss account are profits on disposal offixed asset investments of £574,316 (2005: £315,109). Of this £390,970 (2005:£315,109) relates to income received from investments written off in prior yearsand the reversal of an impairment provision. £183,346 relates to a profit ondisposal of Carpenter Moore Insurance Services, Inc. in excess of the £2,297,000valuation as at 31st January 2005. Shares in InvestmentsCompany investments : Group Participating other than----------------------- Undertakings interests Loans Total -------------- ----------- ------- ------- £ £ £ £At valuationAt 1st February2005 (restated) 16,017,114 8,736,750 3,453,000 28,206,864Additions 480 271,378 - 271,858Disposals - (25,000) - (25,000)Impairment(provision)/reversal - (16,000) 292,369 276,369Movement in valuation (268,789) 1,691,872 3,104,631 4,527,714 ------------ ------------ ------------ ------------At 31st January 2006 £15,748,805 £10,659,000 £ 6,850,000 £33,257,805 ============ ============ ============ ============At costAt 1st February 2005 6,523,845 2,980,308 2,359,849 11,864,002Additions 480 271,378 - 271,858Disposals - (25,000) - (25,000)Impairment(provision)/reversal - (16,000) 292,369 276,369 ------------ ------------ ------------ ------------At 31st January 2006 £ 6,524,325 £ 3,210,686 £ 2,652,218 £12,387,229 ============ ============ ============ ============ Included within the company's profit and loss account are profits on disposal offixed asset investments of £356,735 (2005: £315,109). This relates to incomereceived from investments written off in prior years and the reversal of animpairment provision. Shares in group undertakings The results of group undertakings, which are registered in England and Wales areas follows: Profit/ Aggregate (loss) % capital and for the Holding reserves at year to of share 31st January 31st JanuaryName of company Capital 2006 2006 Principal activity----------------- --------- ------ ------ -------------------- £ £Marsh Insurance 100 15,747,805 79,970 InvestmentHoldings Limited holding company B.P. Marsh & Co. Trustee 100 1,000 - DormantCompany Limited Marsh Development 100 1 - DormantCapital Limited Participating interests The participating interests (holdings of at least 20%), all of which areregistered in England and are as follows:- % holding Date Aggregate Post Tax Of share information capital and Profit/(loss)Name of capital Available to Reserves for the year Principal activitycompany --------- -------------- ---------- -------------- -------------------- £ £ Hyperion 27.89 30.09.05 5,574,000 2,464,000 Insurance holding companyInsurance Group Limited Public Risk 35.00 31.12.05 (282,550) (36,778) Public sector riskManagement management consultantsLimited Besso Holdings 24.69 31.12.04 7,575,271 1,525,409 Investment holdingLimited company Paterson Martin 22.50 31.12.05 494,097 112,402 Actuarial insurance/Limited reinsurance consultants Portfolio 20.00 31.12.05 4,406,424 592,711 Fund managers ofDesign Group traded endowment policiesInternational Limited * Morex Commercial 20.00 31.07.05 (1,282,807) (20,567) Trading inLtd * secondary life policies Preferred Asset* 20.00 30.09.04 (1,218) (43,222) Fund management companyManagement Ltd Surrenda-Link 20.00 31.12.04 654 Nil Investment holding companyNominees Ltd * Under FRS 25 the Paterson Martin Limited accounts have included the company's22.5% interest as a long-term creditor. As this is in reality an equityinvestment the aggregate capital and reserves shown have therefore been adjustedto include this as equity and therefore part of the total shareholders' funds. The company has a 35% interest in shares of Summa Insurance Brokerage, S.L. asat 31st January 2006. The company was incorporated in Spain on 23rd December2004. Their first period of accounts will be to 31st December 2005 and there areno statutory figures available as yet. The company has a 28% interest in the shares of HQB Partners Limited as at 31stJanuary 2006. The company was incorporated on 14th September 2004 and theirfirst period of accounts will be to 31st December 2005. There are no statutoryfigures available as yet. On 2nd September 2005 the company entered into a sale and purchase agreement tosell its 27.37% holding in Carpenter Moore Insurance Services, Inc whichcompleted on 30th September 2005. On 4th August 2005 Jump Group Limited, in which the company has a 22.5%interest, was placed into administration. Full provision has been made againstthis investment. * The valuation of these four investments have been consolidated under thevaluation of Portfolio Design Group International Limited and for the purposesof these financial statements have been treated as a single investment. 8. DEBTORS Group Company ------- --------- 2006 2005 2006 2005 ---- ---- ---- ---- £ £ £ £Due within one yearTrade debtors 245,092 182,342 245,092 182,342Loans toparticipatinginterests 2,510,000 357,143 2,510,000 357,143Other debtors 302,388 24,758 30,479 24,758Prepayments andaccrued income 355,935 136,375 355,935 136,375 ------------ ------------ ------------ ------------ £ 3,413,415 £ 700,618 £ 3,141,506 £ 700,618 ============ ============ ============ ============Due after one yearLoans toparticipatinginterests 2,805,000 2,945,000 2,805,000 2,945,000Other debtors 425,955 - - - ------------ ------------ ------------ ------------ £ 3,230,955 £ 2,945,000 £ 2,805,000 £ 2,945,000 ============ ============ ============ ============ On 23rd February 2006 £1,429,661 of the £1,500,000 loan owed within one year byHyperion Insurance Group Limited was converted into 5,277 Ordinary shares of £1each and 4,662 preferred cumulative shares of £1 each in Hyperion InsuranceGroup Limited. The remainder of the balance was repaid to the company. On 21st March 2006 the £600,000 loan owed within one year by Besso HoldingsLimited was converted into 600,000 redeemable preference shares of £1 each. 9. CREDITORS Group Company ------- --------- 2006 2005 2006 2005 ---- ---- ---- ---- £ £ £ £Due within one yearTrade creditors 40,388 7,620 40,388 7,620Amounts owed to group - - 1,000 1,000undertakings Corporation Tax 429,040 429,040 - -Other taxation & social 58,639 34,060 58,639 34,060security costs Other loans 332,314 332,314 332,314 332,314Other creditors 12 13 - -Accruals and 872,641 691,919 872,641 691,919deferred income ------------ ------------ ------------ ------------ £ 1,733,034 £ 1,494,966 £ 1,304,982 £ 1,066,913 ============ ============ ============ ============ Group Company ------- --------- 2006 2005 2006 2005 ---- ---- ---- ---- £ £ £ £Due after one yearAmounts owed to group - - 5,287,993 3,566,413undertakings Other loans 2,500,000 1,000,000 2,500,000 1,000,000 ------------ ------------ ------------ ------------ £ 2,500,000 £ 1,000,000 £ 7,787,993 £ 4,566,413 ============ ============ ============ ============ The other loan due after one year relates to amounts lent to the company by MrB.P. Marsh as part of a £3,000,000 facility, and is secured on the assets of thecompany. The loan accrues interest at a rate of 2% above the UK base rate, andis repayable in full by June 2009. Interest is payable on a quarterly basis. On8th February 2006 the £2,500,000 loan drawn down to date was repaid in fullfollowing the Group's admission to AIM and this loan was replaced with a new£3,000,000 facility with B.P. Marsh & Partners Plc. This new facility is on thesame interest and repayment terms but also has a charge of 1% p.a. on anyundrawn amount. 10. CALLED UP SHARE CAPITAL 2006 2005 ---- ---- £ £Authorised152,007,829 "A" Ordinary shares of 1p each(2005: 153,179,452) 1,520,078 1,531,7952,502,509 deferred shares of £1 each (2005:2,502,509) 2,502,509 2,502,509668,648 "B" shares of 1p each (2005: 47,648) 6,687 476600,623 "C" shares of 1p each (2005: 49,623) 6,006 49650,000 "D" shares of 1p each 500 500No undesignated shares of 1p each (2005: 377) - 4 ------------ ------------ £ 4,035,780 £ 4,035,780 ============ ============Allotted, called up and fully paid489,655 "A" Ordinary shares of 1p each (2005: 435,250) 4,897 4,3522,502,509 deferred shares of £1 each (2005:2,502,509) 2,502,509 2,502,509662,336 "B" shares of 1p each (2005: 23,568) 6,623 236551,378 "C" shares of 1p each (2005: 21,223) 5,514 2121,000 "D" shares of 1p each (2005: 1,000) 10 10 ------------ ------------ £ 2,519,553 £ 2,507,319 ============ ============ POST BALANCE SHEET REORGANISATION OF SHARE CAPITAL On 1st February 2006 a special resolution was passed to convert all shares intoone class of ordinary shares of 1p each. On 2nd February 2006 the holders of theordinary shares exchanged them for shares in B.P. Marsh & Partners Plc and fromthat date the company became a single member company. 11. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Group Share Capital Profit------- Share premium Revaluation Redemption and loss capital account reserve reserve account Total --------- --------- --------- --------- --------- ------- £ £ £ £ £ £ At 1st 2,507,319 16,584 16,358,075 10 7,939,070 26,821,058February 2005 Profit for - - - - 3,514 3,514the year Dividends paid - - - - (68,948) (68,948) Bonus issue 6,442 - - - (6,442) -of "B" shares Bonus issue 5,792 - - - (5,792) -of "C" shares Acquisition - - - - (480) (480)of subsidiaryUndertaking Realised - - (24,883) - - (24,883)revaluationdeficit on sale ofinvestments Valuation - - (1,597,000) - 1,597,000 -released toProfit & Loss account ondisposal Surplus on - - 4,473,107 - - 4,473,107revaluationof investments ----------- ---------- ------------ ---------- ----------- ------------At 31st £2,519,553 £ 16,584 £19,209,299 £10 £9,457,922 £31,203,368January 2006 =========== ========== ============ ========== =========== ============ Company Share Capital Profit--------- Share premium Revaluation Redemption and loss capital account reserve reserve account Total --------- --------- --------- --------- --------- ------- £ £ £ £ £ £ At 1st 2,507,319 16,584 16,342,862 10 7,954,283 26,821,058February 2005 Loss for - - - - (76,456) (76,456)the year Dividends paid - - - - (68,948) (68,948) Bonus issue 6,442 - - - (6,442) -of "B" shares Bonus issue 5,792 - - - (5,792) -of "C" shares Surplus on - - 4,527,714 - - 4,527,714revaluationof investments ----------- ---------- ------------ ---------- ----------- ------------At 31st £2,519,553 £ 16,584 £20,870,576 £10 £7,796,645 £31,203,368January 2006 =========== ========== ============ ========== =========== ============ 12. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2006 2005 ---- ---- £ £ Operating loss (293,316) (377,666)Depreciation charges 5,697 8,749(Increase) / decrease in trade debtors,prepayments and other debtors (288,031) 9,847(Decrease) in creditors 238,069 83,355Foreign exchange loss provision on profit onsale of investments 7,930 - ----------- -----------Net cash outflow from operating activities £ (329,651) £ (275,715) =========== =========== 13. RETURNS ON INVESTMENT AND SERVICING OF FINANCE 2006 2005 ---- ---- £ £ Interest received 32,551 36,715Interest paid (78,014) (35,803) ----------- ----------- £ (45,463) £ 912 =========== =========== 14. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 2006 2005 ---- ---- £ £ Purchase of fixed assets (3,770) (3,901)Purchase of investments (271,378) (591,597)Proceeds on sale of tangible fixed assets 1,864,603 358,752(Payment)/Repayment of loans (to)/from investeecompanies (2,153,336) (3,054,000) ----------- ----------- £ (563,881) £(3,290,746) =========== =========== 15. FINANCING 2006 2005 ---- ---- £ £ Loan advances received in the period 1,500,000 1,000,000Shares redeemed during the period - (500,000) ----------- ----------- £ 1,500,000 £ 500,000 =========== =========== 16. ANALYSIS OF CHANGES IN NET DEBT At 1st Cash At 31st February 2005 Flows January 2006 --------------- ------- -------------- £ £ £ Cash at bank and in hand 591,839 492,057 1,083,896 ------------ ------------ ------------ Debt due within one year (332,314) - (332,314) Debt due after one year (1,000,000) (1,500,000) (2,500,000) ------------ ------------ ------------ £ (740,475) £(1,007,943) £(1,748,418) ============ ============ ============ 17. LOAN COMMITMENTS On 31st January 2005 the company entered into an agreement to provide aparticipative-subordinated loan of €1,368,615 (£939,994) and a loan facility of€1,500,000 (£1,024,870) to Summa Insurance Brokerage S.L, an associated companyand a company incorporated in Spain. €368,615 (£254,217) of theparticipative-subordinated loan was paid on 7th February 2005 with the remaining€1,000,000 (£685,777) paid on 3rd March 2006. As at 31st January 2006 the loanfacility had not been drawn on. On 15th April 2004 the company entered into an agreement to provide a loanfacility of £300,000 to Paterson Martin Limited, an associated company. At 31stJanuary 2006 this loan had not been drawn on. 18. CONTINGENT LIABILITIES The directors estimate that, if the group were to dispose of all its investmentsat the amount stated in the Balance Sheet, £5,490,909 (2005: £4,725,806) of taxon capital gains would become payable by the group. Of this the directorsestimate that the company's liability is £2,918,161 (2005: £1,536,146). 19. RELATED PARTY DISCLOSURES The following loans owed by the associated companies of the Company and itssubsidiaries were outstanding at the year end: 2006 2005 ---- ---- £ £ Besso Holdings Limited 600,000 - HQB Partners Limited 80,000 - Hyperion Insurance Group Limited 3,850,000 2,350,000 Public Risk Management Ltd 375,000 345,000 Portfolio Design Group International Limited - 357,143 Jump Group Limited 1,400,000 1,350,000 The company made a provision of £50,000 in 2006 (£1,350,000 in 2005) against theloans made to Jump Group Limited. Income receivable, consisting of consultancy fees and interest on loans creditedto the profit and loss account in respect of the associated companies of theCompany and its subsidiaries for the year were as follows: 2006 2005 ---- ---- £ £ Besso Holdings Limited 134,990 53,254 Carpenter Moore Group 329,810 199,131 Hyperion Insurance Group Limited 504,259 336,707 Jump Group Limited - 95,038 Marine Reinsurance International Limited - 58,999 Marsh Christian Trust 46,000 45,000 Portfolio Design Group International Limited 41,952 60,812 Public Risk Management Ltd 55,355 48,350 Paterson Martin Limited 43,614 27,257 HQB Partners Limited 25,443 - Summa Insurance Brokerage S.L 54,777 - As at 31st January 2006 the company owed £2,500,000 (2005: £1,000,000) to MrB.P. Marsh, who is the Chairman and majority shareholder of the company.Interest paid to him during the period amounted to £78,014 (2005: £21,803). All the above transactions were conducted on an arms length basis. 20. DIRECTOR'S INTEREST IN CONTRACTS S.S. Clarke is entitled to a maximum of 20% of any gain, after deductingexpenses and following the repayment of all loans, the redemption of allpreference shares, loan stock and equivalent finance provided by the company, onthe sale of certain agreed investments of the company and its subsidiaries. Accordingly, S.S. Clarke was paid £12,676 on 21st February 2005, in relation toJump Group Limited. The valuations of these certain agreed investments of the company and itssubsidiaries have been reduced by the respective entitlements to S.S. Clarke. 21. POST BALANCE SHEET EVENTS a) As disclosed in Note 9, the loan of £2,500,000 from Mr B. P. Marsh was repaid in full after the year end following the Group's admission to AIM which generated the cash necessary for this repayment. At the year end, it was uncertain as to whether the loan would be repaid as it depended upon whether the Group's admission to AIM would be successful. Therefore the loan is shown as being due for repayment after one year according to its terms. b) On 1st February 2006 B.P. Marsh & Partners Plc acquired all of the share capital of the company in a share for share exchange. References throughout the Annual Report and Financial Statements to the "company" refer to B.P. Marsh & Company Limited (formerly B.P. Marsh & Partners Limited) prior to 1 February 2006 and B.P. Marsh & Partners Plc from that date. On 2nd February 2006 B.P. Marsh & Partners Plc was admitted to AIM and raised£11million before expenses. Notice The financial information set out above does not constitute B.P. Marsh & CompanyLimited's statutory accounts for the year to 31 January 2006 but is derived fromthose accounts. The statutory accounts for the year to 31 January 2006 have notyet been delivered to the Registrar of Companies. The auditors have reported onthose accounts and have given the following opinion :- •the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the affairs of the company and the group as at 31st January 2006 and the profit and cash flows of the group for the year then ended; and •the financial statements have been properly prepared in accordance with the Companies Act 1985. Approval The financial statements were approved by the Board of Directors on 18 May 2006for release on 23 May 2006. Analyst Briefing An analyst briefing given by Brian Marsh OBE, Executive Chairman, Francis deZulueta, Development Director and Jonathan Newman, Finance Director, will beheld at 09:30 am on Tuesday 23 May 2006 at Redleaf Communications Ltd, 9-13 StAndrew Street, London EC4A 3AF. - ends - For further information: B.P. Marsh & Partners Plc www.bpmarsh.co.ukBrian Marsh OBE +44 (0)20 7730 2626 Redleaf Communications (PR to BP Marsh)Emma Kane +44 (0)20 7955 1410Janakie Mallawa-Arachi +44 (0)20 7955 1410 Nabarro Wells & Co. LimitedDavid Nabarro +44 (0)20 7710 7400Marc Cramsie +44 (0)20 7710 7400 Notes to Editors: Additional information about BP Marsh and its management: BP Marsh's current portfolio contains nine companies. More detailed descriptionsof the portfolio can be found at www.bpmarsh.co.uk. Over the past 16 years, the Company has assembled a management team withconsiderable experience both in the financial services sector and in managingprivate equity investments. Many of the directors have worked with each other inprevious roles, and all have worked with each other for at least three and ahalf years. Prior to Brian Marsh's involvement in the Company, he spent many years ininsurance broking and underwriting in Lloyd's as well as the London and overseasmarket. He has over 30 years' experience in building, buying and sellingfinancial services businesses, particularly in the insurance sector. Managing Director, Natasha Dunbar, has over 10 years' experience in thefinancial services industry. Having joined the Company in 1994 she was mademanaging director in March 2002. Natasha is responsible for the day to dayrunning of all operational aspects of the business and works closely with BrianMarsh in defining the strategic development of the Company. Investment Director Stephen Crowther joined the Company in 1998. He has over 27years' experience in the London insurance market, in both broking andunderwriting. He researches potential investments, advises investee businessesand monitors their progress. Francis de Zulueta is the Company's Development Director. With a wide-rangingknowledge of the financial services market, he seeks out, researches andevaluates potential new investments for BP Marsh. Following a 23-year brokingcareer with Willis Faber and Aon, among others, he took an active interest inthe mergers, acquisitions and venture capital business of Marsh McLennan. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
B.p Marsh