Interim Results

RNS Number : 7472C

B.P. Marsh & Partners PLC

20 October 2015

 

Date:	20 October 2015
On behalf of:	B.P. Marsh & Partners Plc ("B.P. Marsh", "the Company" or "the Group")
Embargoed until:	0700hrs

B.P. Marsh & Partners Plc

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

Interim Results

Interim Results Announcement for the period to 31^st July 2015

B.P. Marsh & Partners Plc, the niche venture capital provider to high growth businesses, announces its unaudited Group interim results for the six months to 31^st July 2015 (the "Period").

The financial highlights of the results are:

·     Net Asset Value ("NAV") up 9.5% to £65.5m (31^st July 2014: £59.8m)

·     Increase in the Equity value of the Portfolio of 9.3% in the Period (and an increase of 19.8% since 31^st July 2014)

·     Profit after tax (unaudited) up 100% to £3.4m (31^st July 2014: £1.7m)

·     Final Dividend for the year ended 31^st January 2015 of 2.75p per share paid in July 2015

·     NAV per share up 9.75% to 225p (31^st July 2014: 205p)

·     Average NAV annual compound growth rate of 11.2% achieved since 1990

·     5.3% Total Shareholder Return for Period

·     Current uncommitted cash balance of £3.2m

Chairman's Statement

I am pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the six month period to 31^st July 2015.

The six months have been productive and overall our investments have done well, resulting in an increase of 9.3% in the Equity value of the Portfolio.

The Group has increased its NAV to £65.5m (225p per share), with an average annual compound NAV growth rate of 11.2% achieved since 1990. During the Period, the Group generated an unaudited profit after tax of £3.4m.

In June we subscribed for a further 5% of the share capital of Nexus Underwriting Management Ltd ("Nexus"), taking our total holding to 9.8%. It had always been our intention to acquire more of this business, which we consider to have very good growth potential and to be in an exciting development phase, as demonstrated by its acquisition in August of EBA Insurance Services Ltd.

We have continued to invest in South Africa and in June acquired a 20% stake in Property and Liability Underwriting Management (PTY) Ltd, a Managing General Agent based in Johannesburg.

Besso Insurance Group Ltd ("Besso") continues its strong performance and has achieved excellent results in the first half of the current year. It has continued its international expansion plans with the establishment of a Reinsurance Broker and MGA in Dubai.

In recognition of the Group's consistent growth and future prospects, we were pleased to reward shareholders during the Period with the payment on 25^th July 2015 of a final dividend of 2.75p per share. In addition, the Board has agreed an increase in the dividend to 3.42p for the current year, to be paid in July 2016, with the aspiration that we will continue to pay a final dividend of at least the same amount in the following year also.

The Board is not content that our share price continues to trade at a significant discount to Net Asset Value and we have instituted a number of measures over the past three years to try to counter this. We have established a dividend policy, to reward loyal shareholders from the proceeds of realisations. We have undertaken modest buy-backs totalling 63,000 shares during the past year and we have undertaken to raise our profile by releasing more news and updates to the market and engaging more with the media and the retail investor community to ensure that our story is more widely appreciated and understood.

On turning to the effect of these measures, on 25^th September 2012, our share price stood at 86p with a 48% discount to NAV, whereas at the time of writing it stands at 145.5p and a 35% discount.

This is a pleasing improvement, however we always strive to do better and all of the above measures are subject to ongoing discussion and review by the Board. We are subject of course to competing demands from our shareholders, some of whom ask for more income, some recommend further buy-backs and some are only interested in capital growth. We must therefore find a middle ground to occupy, whilst maintaining sufficient cash to develop our current portfolio businesses and invest in new opportunities, which means that we will continue to manage our resources prudently.

Business Update

Summary of Developments in the Portfolio

New Investments

Property and Liability Underwriting Managers (PTY) Ltd ("PLUM")

On 26^th June 2015 the Group acquired a 20% Cumulative Preferred Ordinary shareholding in PLUM, a Managing General Agent based in Johannesburg, South Africa. This investment represents a joint venture alongside the Group's existing partners in South Africa.

The Group acquired this stake in PLUM from existing shareholders for an initial consideration of £0.3m. The total consideration could increase to £0.6m subject to PLUM achieving EBITDA of ZAR8.3m (c. £0.4m) over the first year of the Group's investment.

PLUM specialises in large corporate property insurance risks in South Africa. The underwriting team within PLUM has over 40 years' experience in the insurance sector in South Africa, with the lead underwriter having held senior positions in the reinsurance and insurance sector there over a 20 year period.

PLUM is supported by both domestic South African insurance capacity and A-rated international reinsurance capacity.

Additional Investments

Nexus Underwriting Management Ltd ("Nexus")

On 17^th June 2015 the Group subscribed for a further investment in Nexus for a total cash consideration of £1.55m. B.P. Marsh acquired new Preferred Ordinary shares representing 5% of the enlarged share capital of Nexus, and the acquisition took the Company's holding in Nexus to 9.8%, for an aggregate consideration of £3.1m.

The Group acquired an initial shareholding in Nexus of 5% in August 2014 with the intention to increase this shareholding over time to support the growth aspirations of Nexus. On 10^th August 2015 Nexus announced that it had completed the acquisition of EBA Insurance Services Limited ("EBA"), utilising the funds provided by B.P. Marsh.

EBA, founded in 1999, is a Managing General Agency ("MGA") with offices in the UK, France and Italy offering clients a wide range of insurance products, including Architects & Engineers Professional Indemnity, Fine Art & Specie and Event Cancellation Insurance. 

This transaction cements Nexus as one of the largest independent specialty MGAs in the London Market with a forecast Annualised Premium Income of c. £85m (c. $135m), operating across all the major insurance sectors.

Portfolio news

Besso Insurance Group Ltd ("Besso")

Besso, the independent top 20 Lloyd's broker in which the Group has now had a 20 year investment, has continued to perform well in the current market place. The forecast position to 31^st December 2015 is revenues of £37m and EBITDA of £4.8m. This represents a significant uplift over the year ended 31^st December 2014, which achieved revenues of £31.3m and EBITDA of £3.7m, equating to an increase of 18.9% and 29.7% respectively. 

In May 2015 Besso announced that it was in the process of obtaining permissions to establish a Reinsurance Broker and Managing General Agency in Dubai, as it continues to expand its international footprint, with offices in Turkey, Brazil and Hong Kong.

As part of a Board restructure in July, Rob Dowman and Russ Nichols became Joint Chief Executives of Besso Limited, with Colin Bird stepping down as Chairman of Besso Limited but remaining Chairman and Chief Executive of Besso.

Previously, Rob Dowman was Managing Director of Global Casualty and Russ Nichols was Managing Director of Global Property; which are amongst the largest divisions of the Besso group. Both Messrs Dowman and Nichols have been with Besso for more than 10 years and have each played a key role in the company's growth.

Additionally, Howard Green and Roddy Caxton-Spencer were appointed as Chairman and deputy Chairman of Besso Limited respectively.

On 1^st October 2015 the Group completed the purchase of an additional 7% stake in Besso for £1.58m from a departing Founder Shareholder. It has been agreed between the Group and Besso Management that these shares will be kept available for Besso to repurchase and utilise by way of a non-dilutive Management Incentive Scheme at any point in the next 12 months; an objective the Board of B.P. Marsh believes is in the best interests of both companies.

LEBC Holdings Ltd ("LEBC")

The independent financial advisory firm opened a new office in Maidstone in June, its first office in the South East and bringing their total number of branches across the UK to 15.

LEBC has performed very well in the last two years, benefiting from auto-enrolment and the recent retirement reforms. Its trading subsidiary LEBC Group Limited continues to perform ahead of Budget in 2015, being significantly ahead of 2014. The financial year to 30^th September 2014 showed a 43% increase in pre-tax profits from £770,000 to £1.1m and a 9% increase in turnover in the year, from £11.2m to £12.3m and 2015 results will be significantly ahead again.

In the last six months LEBC has worked successfully with organisations such as Smith & Nephew, Philips, Taylor Wimpy and the Go Ahead Group. 

In June 2015, LEBC won Best Retirement Adviser at the Money Marketing Awards. This award has now been won by LEBC for three consecutive years, as well as winning the award in 2011.   

Nexus Underwriting Management Ltd ("Nexus")

In April 2015 Nexus appointed Stuart Rouse as Chief Operating Officer and Chief Financial Officer. Stuart Rouse has previously worked at Fusion Insurance, Towergate Underwriting, Towergate Financial, Aspen and HW Wood.

In September 2015, Nexus announced that current Chief Executive Officer, Colin Thompson, was assuming the new position of Executive Chairman with immediate effect. Concurrently, Nexus announced that it had appointed Tim Coles as Chief Executive Officer, with these management changes being introduced to boost Nexus' growth plans.

Tim Coles was previously CEO of Howden Broking Group, which expanded and developed from a niche Lloyd's Broker to an international trading company over his tenure. Prior to Howden, he spent 13 years in the British Army, serving with the Parachute Regiment and Special Forces.

In regard to these changes, Colin Thompson stated "it is important that Nexus continue to look to the future and to build a management structure that will enable us to continue to grow and develop.

Going forward, the vision shared by myself and the rest of the Board is that, within 36 months, we can build Nexus into an MGA underwriting in excess of US$250 million of profitable specialty business. This will be achieved partly by organic growth and the recruitment of new teams but also via the acquisition of other MGAs". 

In October 2015 Jeremy Adams was appointed to Nexus' board as an independent Non-executive Director. Jeremy Adams had previously been CEO of Novae Group's Lloyd's managing agency, where he was responsible for the running off of their syndicates 1007 and 1241, at that time the largest run-offs in Lloyd's.

Dividend

When the Group successfully sold the majority of its shareholding in Hyperion Insurance Group Limited to General Atlantic in July 2013 the Group declared a dividend of 2.75p per share (£0.8m) payable in July 2014, alongside an intention to pay additional dividends of 2.75p per share (£0.8m) for the following two years.

The Group met this aim in the second year of the policy and a 2.75p per share dividend received shareholder approval at the Group's Annual General Meeting held on 22^nd July 2015 and was paid on 24^th July 2015 to Shareholders registered at the close of business on 26^th June 2015.

B.P. Marsh is pleased to announce that for the financial year ended 31^st January 2016 the Board has now recommended increasing the proposed dividend to 3.42 pence per share (£1.0m). Additionally, it is the Board's intention to maintain at least this level of dividend for the financial year ended 31^st January 2017, subject to ongoing review and approval by the Board and the Shareholders.

Share Buy-Back

The Board continues to monitor and review the Group's buyback policy and considers that this strategy is worthwhile when the share price represents a significant discount to Net Asset Value.

Business Strategy

The Group typically invests amounts of up to £3m and only takes minority equity positions, normally acquiring between 15% and 45% of an investee company's total equity. Based on our current portfolio, the average investment has been held for approximately 8 years.

The Group usually requires its investee companies to adopt certain minority shareholder protections and appoint a director to its board.

Since 1990 the Group has generated an average NAV annual compound growth rate of 11.3%. Its successful track record can be attributed to a number of factors that include a robust investment process, management's considerable sector experience and a flexible approach to exit.

Cash Balance

At the period-end, the Group had £6.0m cash available before commitments. The Group had set aside £2.8m for follow-on investment in the existing portfolio (of which £1.6m has been invested post period-end). Currently the Group has an uncommitted cash balance of £3.2m available for new investment opportunities. The Group also anticipates receiving £7.3m in cash in July 2016 from the sale of the Group's remaining shareholding in Hyperion Insurance Group Limited.

Outlook and New Business Opportunities

The Group's investment strategy remains unchanged; to take minority positions in profitable businesses with strong management teams and good growth potential. We continue to see a number of investment opportunities with good management and business plans that would fit with our tried and tested business strategy and the Directors consider that the Group remains unique in its investment sector.

2014 saw the insurance sector have its busiest year for M&A activity since 2007, as a combination of high capital reserves and a lack of organic growth provided fertile conditions for M&A, and this has continued into 2015.

Operating as we do at the smaller end of the market, we continue to observe fall-out from the large transactions that deliver opportunities to us and to our portfolio businesses, whilst retaining independence becomes increasingly attractive to the mid-size market.

We have also observed with interest the exponential growth in the alternative finance market over the past two years and, as this sector and the businesses within it establish themselves and become more mainstream, the numerous opportunities we see from here are of increasing interest.

Brian Marsh OBE

19^th October 2015

Investments

As at 31^st July 2015 the Group's equity interests were as follows:

Bastion Reinsurance Brokerage (PTY) Limited

(www.bastionre.co.za)

In December 2014 the Group invested in Bastion Reinsurance Brokerage (PTY) Limited ("Bastion"), a start-up Reinsurance Broker based in South Africa. Established in May 2013 by its CEO and Chairman, Bastion specialises in the provision of reinsurance solutions over a number of complex issues, engaged by various insurance companies and managing general agents.

Date of investment: December 2014

Equity stake: 35%

31st July 2015 valuation: £100,000

Besso Insurance Group Limited

(www.besso.co.uk)

In February 1995 the Group assisted a specialist team departing from insurance broker Jardine Lloyd Thompson Group in establishing Besso Holdings Limited. The company specialises in insurance broking for the North American wholesale market and changed its name to Besso Insurance Group Limited in June 2011.

Date of investment: February 1995

Equity stake: 37.94%

31st July 2015 valuation: £13,896,000

The Broucour Group Limited

(www.turnerbutler.co.uk)

In March 2008 the Group assisted in establishing a business sales platform that provides valuation and negotiation services for the sale of SME businesses in the sub £3m sector. In July 2012 Broucour was formed as a new holding company, and the Group financed the acquisition of Turner Butler.

Date of investment: March 2008

Equity stake: 49.0%

31st July 2015 valuation: £341,000

Bulwark Investment Holdings (PTY) Limited

In April 2015 the Group, alongside its existing South African Partners, established a new venture, Bulwark Investment Holdings (PTY) Limited ("Bulwark"), a South African based holding company which establishes Managing General Agents in South Africa. To date Bulwark has established two new Managing General Agents: Preferred Liability Underwriting Managers (PTY) Limited and Mid-Market Risk Acceptances (PTY) Limited.

Date of investment: April 2015

Equity stake: 35%

31st July 2015 valuation: N/A

Hyperion Insurance Group Limited

(www.hyperiongrp.com)

The Group first invested in Hyperion in 1994. Hyperion owns, amongst other things, an insurance broker specialising in directors' and officers' ("D&O") and professional indemnity ("PI") insurance. In 1998 Hyperion set up DUAL International, an insurance managing general agency specialising in developing D&O and PI business in Europe. In July 2012 Hyperion acquired Windsor and in July 2013 the Group sold 80% of its holding to General Atlantic in July 2013, with the remaining holding being valued at the agreed option price. In April 2015 Hyperion completed a merger with R K Harrison Holdings Limited. Following this merger Hyperion has become the world's largest employee-owned insurance and reinsurance intermediary group and the Group's shareholding is now, post year-end, 1.61%.

Date of investment: November 1994

Equity: 1.61%

31st July 2015 valuation: £7,310,000

LEBC Holdings Limited

(www.lebc-group.com)

In April 2007 the Group invested in LEBC, an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.

Date of investment: April 2007

Equity stake: 34.91%

31st July 2015 valuation: £8,449,000

MB Prestige Holdings PTY Limited

(www.mbinsurance.com.au)

In December 2013 the Group invested in MB Prestige Holdings PTY Ltd, the parent Company of MB Insurance Group PTY a Managing General Agent, headquartered in Sydney, Australia. MB Group is recognised as a market leader in respect of prestige motor vehicle insurance in all mainland states of Australia.

Date of investment: December 2013

Equity stake: 40.0%

31st July 2015 valuation: £1,235,000

Nexus Underwriting Management Limited

(www.nexusunderwriting.com)

In August 2014 the Group invested in Nexus Underwriting Management Limited ("Nexus"), an independent specialty Managing General Agency, founded in 2008. Through its two operating subsidiaries, Nexus Underwriting Limited and Nexus CIFS Limited, Nexus specialises in Directors & Officers, Professional Indemnity, Financial Institutions, Accident & Health and Trade Credit Insurance.

Date of investment: August 2014

Equity stake: 9.78%

31st July 2015 valuation: £3,589,000

Property & Liability Underwriting Managers (PTY) Limited

In June 2015 the Group completed an investment in Property And Liability Underwriting Managers (PTY) Limited ("PLUM"), a Managing General Agent based in Johannesburg, South Africa. PLUM specialises in large corporate property insurance risks in South Africa and is supported by both domestic South African insurance capacity and A-rated international reinsurance capacity.

Date of investment: June 2015

Equity stake: 20.0%

31st July 2015 valuation: £307,000

Randall & Quilter Investment Holdings Limited

(www.rqih.com)

Randall & Quilter Investment Holdings is an AIM listed run-off management service provider and acquirer of solvent insurance companies in run-off. The Group invested in Randall & Quilter in January 2010, the result of a share exchange with the Group's shareholding in JMD Specialist Insurance Services Group Limited, which Randall & Quilter wholly acquired.

Date of investment: January 2010

Equity stake: 1.32%

31st July 2015 valuation: £1,120,000

Sterling Insurance PTY Limited

(www.sterlinginsurance.com.au)

In June 2013, in a joint venture enterprise alongside Besso, the Group invested in Sterling Insurance PTY Limited, an Australian specialist underwriting agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition.

Date of investment: June 2013

Equity stake: 19.70%

31st July 2015 valuation: £1,880,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Madrid-based Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain. Through acquisition Summa is able to achieve synergistic savings, economies of scale and greater collective bargaining thereby increasing overall value.

Date of investment: January 2005

Equity stake: 77.25%

31st July 2015 valuation: £3,782,000

Trireme Insurance Group Limited

(www.oxfordinsurancebrokers.co.uk)

(www.jhinternational.co.uk)

In July 2010 the Group completed an investment in Trireme Insurance Group Limited (formerly known as US Risk (UK) Ltd), the parent company of Oxford Insurance Brokers Ltd and James Hampden International Insurance Brokers Ltd, London-based Lloyd's specialist international reinsurance and insurance intermediaries. Trireme Insurance Group Limited is also the parent company of Abraxas Insurance AG, a Swiss-based underwriting agency specialising in Directors & Officers Liability Insurance, Professional Liability Insurance, Insurance for Financial Institutions, Medical malpractice Insurance, Property Insurance and Event Insurance.

Date of investment: July 2010

Equity stake: 30.56%

31st July 2015 valuation: £1,976,000

Walsingham Motor Insurance Limited

(www.walsinghamunderwriting.com)

In December 2013 the Group invested in Walsingham Motor Insurance Limited ("WMIL"), a niche UK Motor Managing General Agency. WMIL was established in August 2012 and commenced trading in July 2013 having secured primary capacity from Calpe. In February 2015 the Group acquired a further 10.5% equity, taking the current shareholding to 40.5%, and subsequently WMIL launched a £15m fleet facility with capacity from New India.

Date of investment: December 2013

Equity stake: 40.5%

31st July 2015 valuation: £600,000

These investments have been valued in accordance with the accounting policies on Investments set out in note 1 of the Consolidated Financial Statements.

Interim Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31ST JULY 2015

Notes Unaudited Unaudited Audited 6 months to 6 months to Year to 31st July 2015 31st July 2014 31st January 2015 £'000 £'000 £'000 £'000 £'000 £'000 GAINS ON INVESTMENT Unrealised gains on equity investment revaluation 4 3,778 1,528 5,109 INCOME Dividends 273 189 432 Income from loans and receivables 821 892 1,789 Fees receivable 266 283 575 1,360 1,364 2,796 INCOME NET OF GAINS ON EQUITY INVESTMENT 5,138 2,892 7,905 Operating expenses (947) (929) (2,160) OPERATING PROFIT 4,191 1,963 5,745 Financial income 189 233 450 Financial expenses 5 (20) (27) (51) Exchange movements (219) (59) (244) (50) 147 155 PROFIT ON ORDINARY ACTIVITIES BEFORE SHARE BASED PROVISION 4,141 2,110 5,900 Share based payment provision 9 (1) - (1) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4,140 2,110 5,899 Income tax expense 8 (782) (389) (964) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION ATTRIBUTABLE TO EQUITY HOLDERS 6 £3,358 £1,721 £4,935 Earnings per share  - basic and diluted (pence) 3 11.5p 5.9p 16.9p The result for the period is wholly attributable to continuing activities.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST JULY 2015

		Unaudited			Unaudited			Audited
	Notes	31st July 2015			31st July 2014			31st January 2015
		£'000	£'000		£'000	£'000		£'000	£'000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		15			21			18
Investments - equity portfolio	4	44,585			32,351			38,647
Investments - treasury portfolio	5	3,545			8,558			6,319
Loans and receivables		13,634			16,875			14,717
			61,779			57,805			59,701
CURRENT ASSETS
Trade and other receivables		6,085			3,762			5,908
Cash and cash equivalents		2,421			3,835			1,531
			8,506			7,597			7,439
LIABILITIES
NON-CURRENT LIABILITIES
Corporation tax provision		(60)			(6)			-
Deferred tax liabilities	8	(4,384)			(3,140)			(3,661)
			(4,444)			(3,146)			(3,661)
CURRENT LIABILITIES
Trade and other payables		(252)			(299)			(446)
Corporation tax provision		(62)			(2,116)			(62)
			(314)			(2,415)			(508)
NET ASSETS			£65,527			£59,841			£62,971
CAPITAL AND RESERVES -
EQUITY
Called up share capital			2,923			2,923			2,923
Share premium account			9,370			9,370			9,370
Fair value reserve			17,112			10,723			13,992
Reverse acquisition reserve			393			393			393
Capital redemption reserve			6			6			6
Capital contribution reserve			2			-			1
Retained earnings			35,721			36,426			36,286
SHAREHOLDERS' FUNDS - EQUITY	6		£65,527			£59,841			£62,971

The Interim Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 19th October 2015

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31ST JULY 2015

Unaudited Unaudited Audited 31st July 2015 31st July 2014 31st January  2015 £'000 £'000 £'000 Cash from / (used by) operating activities Income from loans to investees 821 892 1,789 Dividends 273 189 432 Fees received from investment activity 266 283 575 Operating expenses (947) (929) (2,160) Increase in receivables (37) (226) (302) Decrease in payables (193) (259) (111) Depreciation 3 4 7 Net cash from / (used by) operating activities 186 (46) 230 Net cash from / (used by) investing activities Purchase of property, plant and equipment (1) (6) (7) Purchase of equity investments (Note 4) (2,160) (351) (3,066) Purchase of treasury investments (Note 5) (1,004) (1,039) (2,763) Net proceeds from sale of equity investments - 1,041 1,041 Corporation tax repaid / (paid) on equity investment disposal 201 (1,900) (4,216) Net repayments / (advances) of loans from / (to) investee companies 535 (534) (424) Net proceeds from sale of treasury investments (Note 5) 3,943 1,942 6,088 Net cash from / (used by) investing activities 1,514 (847) (3,347) Net cash used by financing activities Financial income1 4 33 44 Financial expenses2 - - - Dividends paid (802) (803) (804) Payments made to repurchase company shares - - (83) Net cash used by financing activities (798) (770) (843) Change in cash and cash equivalents 902 (1,663) (3,960) Cash and cash equivalents at beginning of the period 1,531 5,502 5,502 Exchange movement3 (12) (4) (11) Cash and cash equivalents at end of period £2,421 £3,835 £1,531

¹The financial income as noted in the Consolidated Statement of Comprehensive Income is £189k (6 months to 31st July 2014: £233k & 12 months to 31st January 2015: £450k).  The financial income in the Consolidated Statement of Cash Flows excludes realised income (which was reinvested) and unrealised income of £185k (6 months to 31st July 2014: £200k & 12 months to 31st January 2015: £406k) arising from the Group's treasury investments as this is a non-cash movement. 

²The financial expenses as noted in the Consolidated Statement of Comprehensive Income are £20k (6 months to 31st July 2014: £27k & 12 months to 31st January 2015: £51k).  The financial expenses in the Consolidated Statement of Cash Flows excludes treasury management costs of £20k (6 months to 31st July 2014: £27k & 12 months to 31st January 2015: £51k) as this is a non-cash movement.

³The exchange movement as noted in the Consolidated Statement of Comprehensive Income is a loss of £(219)k (6 months to 31st July 2014: loss of £(59)k & 12 months to 31st January 2015: loss of £(244)k.  The exchange movement in the Consolidated Statement of Cash Flows excludes an exchange loss of £(207)k (6 months to 31st July 2014: loss of £(55)k & 12 months to 31st January 2015: loss of £(233)k) relating to the revaluation of loans denominated in Euros and Australian Dollars as this is a non-cash movement.

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31ST JULY 2015

		Unaudited	Unaudited	Audited
		6 months to	6 months to	Year to
		31st July 2015	31st July 2014	31st January 2015
		£'000	£'000	£'000
Opening total equity		62,971	58,923	58,923
Profit for the period		3,358	1,721	4,935
Dividends paid		(802)	(803)	(804)
Repurchase of company shares		-		(83)
Total equity		£65,527	£59,841	£62,971

Refer to Note 6 for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31ST JULY 2015

1.      ACCOUNTING POLICIES

Basis of preparation of financial statements

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union ("IFRS"), and in accordance with the Companies Act 2006. 

The consolidated financial statements are presented in sterling, the functional currency of the Group, rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements:

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10: Consolidated Financial Statements ("IFRS 10") are required to account for their investments in controlled entities, as well as investments in associates at fair value through profit or loss.  Subsidiaries that provide investment related services or engage in permitted investment related activities with investees that relate to the parent investment entity's investment activities continue to be consolidated in the Group results.  The criteria which define an investment entity are currently as follows:

a)   an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

b)   an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

c)   an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Group's annual and interim consolidated financial statements clearly state its objective of investing directly into portfolio investments and providing investment management services to investors for the purpose of generating returns in the form of investment income and capital appreciation.  The Group has always reported its investment in portfolio investments at fair value. It also produces reports for investors of the funds it manages and its internal management report on a fair value basis.  The exit strategy for all investments held by the Group is assessed, initially, at the time of the first investment and this is documented in the investment paper submitted to the Board for approval.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties.  The Board has concluded that B.P. Marsh & Partners Plc and its two subsidiaries, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, which provide investment related services on behalf of B.P. Marsh & Partners Plc, all meet the definition of an investment entity.  These conclusions will be reassessed on an annual basis for changes to any of these criteria or characteristics.

Application and significant judgments

When it is established that a parent company is an investment entity, its subsidiaries are measured at fair value through profit or loss.  However if an investment entity has subsidiaries that provide services that relate to the investment entity's investment activities, exception to the Amendment of IFRS 10 is not applicable as in this case, the parent investment entity still consolidates the results of its subsidiaries. Therefore the results of B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited continued to be consolidated into its Group financial statements for the year.

The most significant estimates relate to the fair valuation of the equity investment portfolio. The valuation methodology for the investment portfolio is detailed below.  The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

These interim consolidated financial statements were approved by the Board on 19th October 2015.  They have not been audited nor reviewed by the Group's Auditors, as is the case with the comparatives to 31st July 2014, and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st January 2015.  Those accounts, upon which the Group's Auditors issued an unqualified opinion, have been filed with the Registrar of Companies and do not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group.  Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.  Specifically, the Group controls an investee if and only if the Group has:

a)   power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

b)   exposure, or rights, to variable returns from its involvement with the investee; and

c)   the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a)   rights arising from other contractual arrangements; and

b)   the Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

B.P. Marsh & Partners Plc ("the Company"), an investment entity, has two subsidiary investment entities, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, that provide services that relate to the Company's investment activities.  The results of these two subsidiaries are consolidated into the Group consolidated financial statements.  Summa Insurance Brokerage, S.L. ("Summa") became a subsidiary of B.P. Marsh & Company Limited following a further acquisition of a 28.625% equity stake in the year to 31st January 2015.  The Group has taken advantage of the Amendment to IFRS 10 not to consolidate the results of Summa. Instead the investments in Summa are valued at fair value through profit or loss.

Business Combinations

The results of subsidiary undertakings are included in the consolidated financial statements from the date that control commences until the date that control ceases.  Control exists where the Group has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.  Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. 

All business combinations are accounted for by using the acquisition accounting method. This involves recognising identifiable assets and liabilities of the acquired business at fair value. Goodwill represents the excess of the fair value of the purchase consideration for the interests in subsidiary undertakings over the fair value to the Group of the net assets and any contingent liabilities acquired. 

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Investments that are held as part of the Group's investment portfolio are carried in the Consolidated Statement of Financial Position at fair value even though the Group may have significant influence over those companies.  This treatment is permitted by IAS 28: Investment in Associates ("IAS 28"), which requires investments held by venture capital organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39: Financial Instruments ("IAS 39"), with changes in fair value recognised in the profit or loss in the period of the change. The Group has no interests in associates through which it carries on its business.

Employee services settled in equity instruments

The Group issued cash settled share-based awards to certain employees.  A fair value for the cash settled share awards is measured at the date of grant.  The Group measured the fair value using the Black-Scholes method which was considered to be the most appropriate valuation technique to value the awards.

The fair value of the award is recognised as an expense over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will eventually vest.  The level of vesting is reviewed annually and the charge is adjusted to reflect actual or estimated levels of vesting with the corresponding entry to capital contribution.

Investments - equity portfolio

All equity portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration.  They are measured at subsequent reporting dates at fair value.

The Board conducts the valuations of equity portfolio investments. In valuing equity portfolio investments the Board applies guidelines issued by the International Private Equity and Venture Capital Valuation ("IPEVCV") Committee. The following valuation methodologies have been used in reaching fair value of equity portfolio 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 cash flow from the investment where a realisation or flotation is imminent.

Both realised and unrealised gains and losses arising from changes in fair value are taken to the Consolidated Statement of Comprehensive Income for the period.  In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within a "fair value reserve" separate from retained earnings.  Transaction costs on acquisition or disposal of equity portfolio investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from equity portfolio investments

Income from equity portfolio investments comprises:

a)   gross interest from loans, which is taken to the Consolidated Statement of Comprehensive Income on an accruals basis;

b)   dividends from equity investments are recognised in the Consolidated Statement of Comprehensive Income when the shareholders rights to receive payment have been established; and

c)   advisory fees from management services provided to investee companies, which are recognised on an accruals basis in accordance with the substance of the relevant investment advisory agreement.

Investments - treasury portfolio

All treasury portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration.  They are measured at subsequent reporting dates at fair market value as determined from the valuation reports provided by the fund investment manager.

Both realised and unrealised gains and losses arising from changes in fair market value are taken to the Consolidated Statement of Comprehensive Income for the period.  In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within the retained earnings reserve as these investments are deemed as being easily convertible into cash.  Costs associated with the management of these investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from treasury portfolio investments

Income from treasury portfolio investments comprises of dividends receivable which are either directly reinvested into the funds or received as cash. 

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation.  Depreciation is provided at rates calculated to write off the property, plant and equipment cost, less their estimated residual value, over their expected useful lives on the following bases:

     Furniture & equipment - 5 years

     Leasehold fixtures and fittings - over the life of the lease

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies at the reporting period are translated at the exchange rate ruling at the reporting period.

Transactions in foreign currencies are translated into sterling at the rate ruling at the date of the transaction.

Exchange gains and losses are recognised in the Consolidated Statement of Comprehensive Income.

Taxation

The tax expense represents the sum of the tax currently payable and any deferred tax. The tax currently payable is based on the estimated taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Consolidated Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and of liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and it is accounted for using the liability method.  Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.  Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each date of the Consolidated Statement of Financial Position and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised.  Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis.

Bonus provision

Other than the incentive payment made in May 2015 (Note 8), there is no contractual obligation on the Group to pay bonuses to employees and as such no provision has been made in the operating expenses within the Consolidated Statement of Comprehensive Income for the period to 31st July 2015 (as was also the case with the interims to 31st July 2014). However, the Consolidated Statement of Comprehensive Income to 31st January 2015 does include such a provision where discretionary awards were made for the year-end.

2.       SEGMENTAL REPORTING

The Group operates in one business segment, provision of consultancy services to as well as making and trading investments in financial services businesses.

The Group identifies its reportable operating segments based on the geographical location in which each of its investments is incorporated and primarily operates.  For management purposes, the Group is organised and reports its performance by two geographic segments: UK and Non-UK.  The UK segment includes the Channel Islands.

If material to the Group overall (where the segment revenues, reported profit or loss or combined assets exceed the quantitative thresholds prescribed by IFRS 8: Operating Segments ("IFRS 8")), the segment information is reported separately. 

The Group allocates revenues, expenses, assets and liabilities to the operating segment where directly attributable to that segment.  All indirect items are apportioned based on the percentage proportion of revenue that the operating segment contributes to the total Group revenue (excluding any unrealised gains and losses on the Group's non-current investments).

Each reportable segment derives its revenues from three main sources from equity portfolio investments as described in further detail in Note 1 under 'Income from equity portfolio investments' and also from treasury portfolio investments as described in Note 1 under 'Income from treasury portfolio investments'.

All reportable segments derive their revenues entirely from external clients and there are no inter-segment sales.

	Geographic segment 1: UK		Geographic segment 2: Non-UK		Group
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July
	2015	2014	2015	2014	2015	2014
	£'000	£'000	£'000	£'000	£'000	£'000
Income net of losses on investment	5,821	1,960	(683)	932	5,138	2,892
Operating expenses	(701)	(720)	(246)	(209)	(947)	(929)
Segment operating profit / (loss)	5,120	1,240	(929)	723	4,191	1,963
Financial income	140	181	49	52	189	233
Financial expenses	(15)	(21)	(5)	(6)	(20)	(27)
Exchange movements	(10)	(2)	(209)	(57)	(219)	(59)
Share based payment provision	(1)		-		(1)
Profit / (loss) before tax	5,234	1,398	(1,094)	712	4,140	2,110
Income tax expense	(1,001)	(240)	219	(149)	(782)	(389)
Profit / (loss) for the period	£4,233	£1,158	£(875)	£563	£3,358	£1,721

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised income generated by the Group during the period:

	Total income attributable to the investee company (£'000)		% of total realised operating income		Reportable geographic segment
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July	6 months to 31st July
	2015	2014	2015	2014	2015	2014
Investee Company
Besso Insurance Group Limited	331	435	24	32	1	1
Hyperion Insurance Group Limited	225	225	17	16	1	1
LEBC Holdings Limited	216	142	16	10	1	1
Trireme Insurance Group Limited	204	179	15	13	1&2	1&2
Summa Insurance Brokerage, S.L*	-	130	-	10	-	2

*There are no disclosures shown for Summa Insurance Brokerage, S.L in the current period as the total realised income derived from this investee company did not exceed the 10% threshold prescribed by IFRS 8 Operating Segments.

	Geographic segment 1: UK			Geographic segment 2: Non-UK			Group
	Unaudited	Unaudited		Unaudited	Unaudited		Unaudited	Unaudited
	6 months to 31st July	6 months to 31st July		6 months to 31st July	6 months to 31st July		6 months to 31st July	6 months to 31st July
	2015	2014		2015	2014		2015	2014
	£'000	£'000		£'000	£'000		£'000	£'000
Non-current assets
Property, plant and equipment	13	17		2	4		15	21
Investments - equity portfolio	37,281	26,005		7,304	6,346		44,585	32,351
Investments - treasury portfolio	3,545	8,558		-	-		3,545	8,558
Loans and receivables	10,384	13,756		3,250	3,119		13,634	16,875
	51,223	48,336		10,556	9,469		61,779	57,805
Current assets
Trade and other receivables	5,615	3,486		470	276		6,085	3,762
Cash and cash equivalents	2,421	3,835		-	-		2,421	3,835
Deferred tax assets	-	-		207	-		207	-
	8,036	7,321		677	276		8,713	7,597
Total assets	59,259	55,657		11,233	9,745		70,492	65,402
Non-current liabilities
Corporation tax provision	(60)	(6)		-	-		(60)	(6)
Deferred tax liabilities	(4,591)	(3,009)		-	(131)		(4,591)	(3,140)
	(4,651)	(3,015)		-	(131)		(4,651)	(3,146)
Current liabilities
Trade and other payables	(252)	(299)		-	-		(252)	(299)
Corporation tax provision	(62)	(2,116)		-	-		(62)	(2,116)
	(314)	(2,415)		-	-		(314)	(2,415)
Total liabilities	(4,965)	(5,430)		-	(131)		(4,965)	(5,561)
Net assets	£54,294	£50,227		£11,233	£9,614		£65,527	£59,841
Additions to property, plant and equipment	1		5	-		1	1		6
Depreciation of property, plant and equipment	2		3	1		1	3		4
Cash flow arising from:
Operating activities	134		(92)	52		46	186		(46)
Investing activities	2,122		(847)	(608)		-	1,514		(847)
Financing activities	(798)		(770)	-		-	(798)		(770)
Change in cash and cash equivalents	1,458		(1,709)	(556)		46	902		(1,663)

2.         SEGMENTAL REPORTING (continued)

	Geographic segment 1: UK	Geographic segment 2: Non-UK	Group
	Audited	Audited	Audited
	31st January	31st January	31st January
	2015	2015	2015
	£'000	£'000	£'000
Operating income	6,056	1,849	7,905
Operating expenses	(1,670)	(490)	(2,160)
Segment operating profit / (loss)	4,386	1,359	5,745
Financial income	348	102	450
Financial expenses	(39)	(12)	(51)
Exchange movements	(6)	(238)	(244)
Share based payment provision	(1)	-	(1)
Profit / (loss) before tax	4,688	1,211	5,899
Income tax	(722)	(242)	(964)
Profit / (loss) for the year	£3,966	£969	£4,935

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised income generated by the Group during the period:

	Total income attributable to the investee company (£'000)	% of total realised operating income	Reportable geographic segment
	Audited	Audited	Audited
	31st January	31st January	31st January
	2015	2015	2015
Investee Company
Besso Insurance Group Limited	849	30	1
Hyperion Insurance Group Limited	509	18	1
Trireme Insurance Group Limited	391	14	1&2

	Geographic segment 1: UK	Geographic segment 2: Non-UK	Group
	Audited	Audited	Audited
	31st January	31st January	31st January
	2015	2015	2015
	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	14	4	18
Investments - equity portfolio	30,613	8,034	38,647
Investments - treasury portfolio	6,319	-	6,319
Loans and receivables	11,466	3,251	14,717
	48,412	11,289	59,701
Current assets
Trade and other receivables	5,588	320	5,908
Cash and cash equivalents	1,531	-	1,531
Deferred tax assets	-	-	-
	7,119	320	7,439
Total assets	55,531	11,609	67,140
Non-current liabilities
Carried interest provision	-	-	-
Deferred tax liabilities	(3,406)	(255)	(3,661)
	(3,406)	(255)	(3,661)
Current liabilities
Trade and other payables	(446)	-	(446)
Corporation tax provision	(62)	-	(62)
	(508)	-	(508)
Total liabilities	(3,914)	(255)	(4,169)
Net assets	£51,617	£11,354	£62,971

2.         SEGMENTAL REPORTING (continued)

	Geographic segment 1: UK	Geographic segment 2: Non-UK	Group
	Audited	Audited	Audited
	31st January	31st January	31st January
	2015	2015	2015
	£'000	£'000	£'000
Additions to property, plant and equipment	6	1	7
Depreciation of property, plant and equipment	6	1	7
Cash flow arising from:
Operating activities	73	157	230
Investing activities	(1,836)	(1,511)	(3,347)
Financing activities	(843)	-	(843)
Change in cash and cash equivalents	(2,606)	(1,354)	(3,960)

3.       EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS

		Unaudited		Unaudited		Audited
		31st July 2015		31st July 2014		31st January 2015
		£'000		£'000		£'000
Earnings
Earnings for the period		3,358		1,721		4,935
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity shareholders		3,358		1,721		4,935
Earnings per share - basic and diluted		11.5p		5.9p		16.9p
Number of shares		Number		Number		Number
Weighted average number of ordinary shares for the purposes of basic earnings per share		29,167,000		29,230,000		29,218,815
Number of dilutive shares under option		Nil		Nil		Nil
Weighted average number of ordinary shares for the purposes of dilutive earnings per share		29,167,000		29,230,000		29,218,815

4.       NON-CURRENT INVESTMENTS - EQUITY PORTFOLIO

Group Investments		Unaudited		Unaudited		Audited
		31st July 2015		31st July 2014		31st January 2015
		£'000		£'000		£'000
At valuation
At 1st February		38,647		31,710		31,710
Additions		2,160		351		3,066
Disposals		-		(1,238)		(1,238)
Movement in valuation		3,778		1,528		5,109
At period end		£44,585		£32,351		£38,647
At cost
At 1st February		20,816		18,453		18,453
Additions		2,160		351		3,066
Disposals		-		(703)		(703)
At period end		£22,976		£18,101		£20,816

The principal additions relate to the following transactions in the period:

On 19th February 2015 the Group acquired a further 10.5% equity stake in Walsingham Motor Insurance Limited ("Walsingham") for a total consideration of £300,002.  The acquisition increased the Group's equity stake in Walsingham from 30% as at 31st January 2015 to 40.5% as at 31st July 2015.

On 17th June 2015 the Group subscribed for a further equity stake in Nexus Underwriting Management Limited ("Nexus") for a total cash consideration of £1,554,000. The Group acquired new Preferred Ordinary shares representing 5% of the enlarged share capital of Nexus, and the acquisition increased the Group's holding in Nexus from 5% as at 31st January 2015 to 9.78% as at 31st July 2015.

On 26th June 2015 the Group acquired a 20% Cumulative Preferred Ordinary shareholding in Property and Liability Underwriting Managers (PTY) Limited ("PLUM"), a Managing General Agent based in Johannesburg, South Africa, for an initial consideration of £306,463.  Total consideration could increase to £600,000 subject to PLUM achieving earnings before interest, tax, depreciation and amortisation ("EBITDA") of ZAR 8,299,927 over the first year of the Group's investment.

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage, S.L. (Spain), MB Prestige Holdings PTY Limited (Australia), Bastion Reinsurance Brokerage (PTY) Limited (South Africa), Bulwark Investment Holdings (PTY) Limited (South Africa) and Property and Liability Underwriting Managers (PTY) Limited (South Africa) are as follows:

		% holding	Date	Aggregate	Post tax
		of share	information	capital and	profit/(loss)
	Name of company	capital	available to	reserves	for the year	Principal activity
				£	£
Bastion Reinsurance Brokerage (PTY) Limited		35.00	31.12.14	30,042	(49,281)	Reinsurance broker
	Besso Insurance Group Limited	37.94	31.12.14	5,251,375	(301,299)	Insurance intermediary
	Bulwark Investment Holdings (PTY) Limited	35.00	-	-	-	Holding company for South African Managing General Agents

		% holding	Date	Aggregate	Post tax
		of share	information	capital and	profit/(loss)
	Name of company	capital	available to	reserves	for the year	Principal activity
				£	£
	Hyperion Insurance    Group Limited	1.60	30.09.14	51,694,000	4,515,000	Insurance holding company
	LEBC Holdings Limited	34.91	30.09.14	212,460	761,891	Independent financial advisor company
	MB Prestige Holdings PTY Limited	40.00	31.12.14	953,172	201,360	Specialist Australian Motor Managing General Agency
	Neutral Bay Investments Limited	49.90	31.03.14	4,036,862	138,243	Investment holding company
	Nexus Underwriting Management Limited	9.78	31.12.14	4,338,453	1,829,533	Specialist Managing General Agency
	Property and Liability Underwriting Managers (PTY) Limited	20.00	-	-	-	Specialist South African Property Managing General Agency
	Summa Insurance Brokerage, S.L.	77.25	31.12.14	8,358,239	84,660	Consolidator of regional insurance brokers
	The Broucour Group  Limited	49.00	30.04.14	(710,622)	(70,687)	Business transfer agents
	Trireme Insurance Group Limited	30.56	31.12.14	448,452	(2,030,999)	Holding company for insurance intermediaries
	Walsingham Motor Insurance Limited	40.50	30.09.14	(723,184)	(645,066)	Specialist UK Motor Managing General Agency

In addition, as at 31st July 2015 the Group held 1.32% of the share capital of Randall & Quilter Investment Holdings Limited ("R&Q").  R&Q is an AIM listed company. 

Financial data for Bulwark Investment Holdings (PTY) Limited and Property and Liability Underwriting Managers (PTY) Limited is not yet available as these companies were only incorporated and commenced trading in 2015.

The aggregate capital and reserves and profit/(loss) for the year shown above are extracted from the relevant local GAAP accounts of the investee companies except for those of Hyperion Insurance Group Limited which are prepared under IFRS. 

5.       NON-CURRENT INVESTMENTS - TREASURY PORTFOLIO

Group		Unaudited		Unaudited		Audited
At valuation		31st July 2015		31st July 2014		31st January 2015
		£'000		£'000		£'000
Market value at 1st February		6,319		9,289		9,289
Additions at cost		1,004		1,039		2,763
Disposals		(3,943)		(1,942)		(6,088)
Change in value in the year		165		172		355
Market value at period end		£3,545		£8,558		£6,319
Investment fund split:
GAM London Limited		2,942		5,480		4,538
Banque Heritage SA		603		3,078		1,781
Total		£3,545		£8,558		£6,319

The treasury portfolio comprises of investment funds managed and valued by the Group's investment managers, GAM London Limited and Banque Heritage SA.  All investments in securities are included at year end market value.

The initial investment into the funds was made following the partial realisation of the Group's investment in Hyperion Insurance Group Limited in the year to 31st January 2014.

The purpose of the funds is to hold (and grow) the Group's surplus cash until such time that suitable investment opportunities arise. 

The funds are risk bearing and therefore their value not only can increase, but also has the potential to fall below the amount initially invested by the Group.  However, the performance of each fund is monitored on a regular basis and the appropriate action is taken if there is a prolonged period of poor performance.

Investment management costs of £20,190 (interim 6 months to 31st July 2014: £27,469 and full year to 31st January 2015: £51,480) were charged to the Consolidated Statement of Comprehensive Income during the period.

6.       RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

		Share		Reverse	Capital	Capital
	Share	premium	Fair value	acquisition	redemption	contribution	Retained
	capital	account	reserve	reserve	reserve	reserve	earnings	Total
	(£'000)	(£'000)	(£'000)	(£'000)	(£'000)	(£'000)	(£'000)	(£'000)
At 31st January 2015	2,923	9,370	13,992	393	6	1	36,286	62,971
Profit for the period	-	-	3,120	-	-	-	238	3,358
Dividends paid	-	-	-	-	-	-	(802)	(802)
Share based payments (Note 9)	-	-	-	-	-	1	(1)	-
At 31st July 2015	£2,923	£9,370	£17,112	£393	£6	£2	£35,721	£65,527

7.       LOAN AND EQUITY COMMITMENTS

On 22nd July 2010 (as varied on 8th August 2012, 29th May 2014 and 23rd September 2014) the Group entered into an agreement to provide a loan facility of £2,419,515 to Trireme Insurance Group Limited ("Trireme"), an investee company.  Following a repayment of £240,000 during the period, as at 31st July 2015 the total loan drawn down amounted to £2,155,113, leaving a remaining undrawn facility of £24,402.

On 1st May 2013 the Group entered into an agreement to provide a loan facility of £747,000 to Besso Insurance Group Limited, an investee company.  As at 31st January 2015 £270,000 of this facility was outstanding. Following repayments made during the period on this facility amounting to £125,000 and together with £2,750,000 of 14% loan stock and other loans of £1,568,450, total loans drawn down as at 31st July 2015 amounted to £4,463,450, with a remaining undrawn facility of £414,000.

On 15th April 2015 the Group entered into an agreement to provide a loan facility of £500,000 to Bulwark Investment Holdings (PTY) Limited, an investee company.  As at 31st July 2015 £187,416 of this facility had been drawn down, leaving a remaining undrawn facility of £312,584.

8.       DEFERRED TAX AND CONTINGENT LIABILITIES

The Directors estimate that, if the Group were to dispose of all its investments at the amount stated in the Consolidated Statement of Financial Position, £4,384,000 (interim 6 months to 31st July 2014: £3,140,000 and full year to 31st January 2015: £3,661,000) of tax on capital gains would become payable by the Group at the current corporation tax rate of 20%.  This amount is fully provided for in the financial statements.

The Group has entered into a long-term incentive arrangement with an employee.  Provided they remain in employment with the Group as at specified dates in the future, the Group has agreed to pay bonuses totalling £60,000 together with the Employers' National Insurance due thereon.  The conditions for the first £30,000 due to be paid on 15th May 2015 were met during the period and the amount was paid to the employee on this date.   A further £30,000 is due to be paid on 15th May 2016, however no amount has been included in these financial statements as the performance conditions relating to this incentive had not been met at the period end. 

9.       SHARE BASED PAYMENT ARRANGEMENTS

During the year to 31st January 2015, B.P. Marsh & Partners Plc entered into joint share ownership agreements ("the Agreements") with certain employees and directors.  The details of the arrangements are described in the following table:

Nature of the arrangement	Share appreciation rights (joint beneficial ownership)
Date of grant	6th November 2014
Number of instruments granted	1,421,130
Exercise price (pence)	140.00
Share price (market value) at grant (pence)	138.00
Hurdle rate	3.5% p.a. (simple)
Vesting period (years)	3 years

Nature of the arrangement	Share appreciation rights (joint beneficial ownership)
Vesting conditions	There are no performance conditions other than the recipient remaining an employee throughout the vesting period.  The awards vest after 3 years or earlier resulting from either: a)   a change of control resulting from a person, other than a member of the Company, obtaining control of the Company either (i) as a result of a making a Takeover Offer; (ii) pursuant to a Scheme of Arrangement; or (iii) in consequence of a Compulsory Acquisition); or b)   a person becoming bound or entitled to acquire shares in the Company pursuant to sections 974 to 991 of the Companies Act 2006; or c)   a winding up. If the employee is a bad leaver the co-owner of the jointly-owned share can buy out the employee's interest for 1p
Expected volatility	20%
Risk free rate	1%
Expected dividends expressed as a dividend yield	2%
Settlement	Cash settled on sale of shares
% expected to vest (based upon leavers)	85%
Number expected to vest	1,207,960
Valuation model	Black-Scholes
Black-Scholes value (pence)	15.00
Deduction for carry charge (pence)	14.50
Fair value per granted instrument (pence)	0.50
Charge for period ended 31st July 2015	£1,007

On 6th November 2014 1,421,130 10p Ordinary shares in the Company were transferred into joint beneficial ownership for 6 employees (4 of whom are directors) under the terms of joint share ownership agreements.  No consideration was paid by the employees for their interests in the jointly-owned shares.

Under the terms of the Agreements, the employees and directors enjoy the growth in value of the shares above a threshold price of £1.40 per share plus an annual carrying charge of 3.5% per annum (simple interest) to the market value at the date of grant (£1.38 per share).

The employees and directors received an interest in jointly owned shares and a Joint Share Ownership Plan ("JSOP") is not an option, however the convention for JSOPs is to treat them as if they were options.  The value of the employee's interest for accounting purposes is calculated using option pricing theory (Black-Scholes Mathematics).

The risk free rates are based on the yield on UK Government Gilts of a term consistent with the assumed option life.

No jointly-owned shares were sold or forfeited during the period.  The number of jointly-owned shares expected to vest has therefore not been adjusted.  In accordance with IFRS 2: Share-based Payment, the fair value of the expected cost of the award (measured at the date of grant) has been spread over the three year vesting period.

Analyst Briefing

An analyst presentation, hosted by Brian Marsh OBE, Chairman, Jonathan Newman, Finance Director, and fellow Directors Camilla Kenyon and Dan Topping will be held at 10:00 a.m., on 20^th October 2015 at the Company's office: 2nd Floor, 36 Broadway, London, SW1H 0BH.

Please contact Redleaf Polhill on 020 7382 4730 or [e-mail] if you wish to attend.

- Ends -

For further information:

B.P. Marsh & Partners Plc                                                             www.bpmarsh.co.uk

Brian Marsh OBE / Camilla Kenyon                                                    [phone]

Nominated Adviser & Broker

Panmure Gordon

Fred Walsh / Charles Leigh-Pemberton / Atholl Tweedie                     [phone]

PR Adviser

Redleaf Communications                                                                [e-mail]

Emma Kane / David Ison                                                                     [phone]

Notes to Editors:

About B.P. Marsh & Partners Plc

B.P. Marsh's current portfolio contains fourteen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Since formation over 20 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 at least five years.

Prior to Brian Marsh's involvement in the Company, he spent many years in insurance broking and underwriting in Lloyd's as well as the London and overseas market. He has over 30 years' experience in building, buying and selling financial services businesses, particularly in the insurance sector.

Jonathan Newman is a Chartered Management Accountant and is the Group Director of Finance and has over 17 years' experience in the financial services industry. Jonathan advises investee companies and has a number of non-executive appointments over four investee companies and evaluates new investment opportunities.

Daniel Topping is a Member of the Chartered Institute of Securities and Investment (MCSI) and an Associate of the Institute of Chartered Secretaries and Administrators (ACIS), having graduated from the University of Durham in 2005. Dan joined B.P. Marsh in February 2007 having started his career at an accountancy firm. In 2011 he was appointed as a director of B.P. Marsh and currently has a number of non-executive appointments over seven investee companies and evaluates new investment opportunities.

Camilla Kenyon was appointed as Head of Investor Relations at B.P. Marsh in February 2009, having four years' prior experience with the Company. Camilla has a number of non-executive appointments over two investee companies, is Chair of the New Business Committee and is a Member of the Investor Relations Society.

Alice Foulk joined B.P. Marsh in September 2011 having started her career at a leading Life Assurance company. In 2014 she took over as Executive Assistant to the Chairman, running the Chairman's Office.

 

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