Annual Report 2024
We are farmers,
not hunters
Group Profile
B.P. Marsh & Partners Plc is a specialist
investor in early stage and growing
financial services intermediary businesses.
Whilst it is open to proposals to invest in
all facets of the non-risk bearing financial
services market, the Group considers its
focus to be on insurance intermediaries,
an area in which it has a great deal of
experience. The Group will consider
opportunities globally, and currently has
a significant presence in North America
and Australia.
The Group’s aim is to be the capital
provider of choice for the early-stage and
growing financial services intermediary
sector and to deliver to its investors long-
term capital growth alongside a
sustainable distribution policy.
The Group considers this to be achievable
through partnering with strong
management teams to back credible
business opportunities to which the Group
can provide strategic and financial
assistance. The Group therefore considers
the people element of its business as vital
to its success.
The Group invests amounts of up to £5m
in the first round financings and takes a
flexible approach to investment structures,
reviewing companies ranging from start-
ups to those that have developed to the
next stage of growth. The Group initially
only takes minority equity positions and
does not seek to impose exit pressures,
preferring to be able to take a long-term
view where required and work alongside
management to a mutually beneficial exit
route that maximises value.
B.P. Marsh has invested in over 50
businesses since it was founded in 1990
and its management team has a wealth of
experience and a well-developed network
within the Financial Services sector.
B.P. Marsh • 2024 Annual Report
1
2
Operating and Financial Highlights
4
Statement by the Chairman
7
Chief Investment Officer’s Statement
15
Finance Director’s Statement
20
Current investments: United Kingdom
22
Current investments: Rest of the world
24
Directors and Company Secretary
25
Directors’ Report & Strategic Report & Consolidated Financial Statements
26
Directors’ and Group Company Secretary biographies
28
Corporate Governance
33
Report of the Remuneration Committee
38
Report of the Audit Committee
40
Group Report of the Directors
45
Group Strategic Report
58
Independent Auditor’s Report
68
Consolidated Statement of Comprehensive Income
69
Consolidated and Parent Company Statements of Financial Position
70
Consolidated Statement of Cash Flows
71
Parent Company Statement of Cash Flows
71
Consolidated and Parent Company Statements of Changes in Equity
72
Notes to the consolidated financial statements
Contents
B.P. Marsh • 2024 Annual Report • Operating and Financial Highlights
2
Operating
and Financial
Highlights
Group Net Asset Value
Year ended
Six months ended
0
20
40
60
80
100
120
140
160
180
200
220
240
31.01.23
31.07.22
31.01.22
31.07.21
31.01.21
31.01.20
31.01.19
31.01.18
31.01.17
31.01.16
31.01.15
31.01.10
31.01.07
31.01.05
22.1
40.6
44.2
63.0
70.8
79.7
98.9
126.2
136.9
166.6
179.8
189.5
31.01.24
31.07.23
203.5 229.2
155.0
149.9
£millions
35.9%
Increase in equity
value of the portfolio
over the year
£229.2m
Net Asset Value,
a 20.9% increase,
net of Dividend
629.0p
Net Asset Value
increase to 629.0p
per share
(31 January 2023:
526.2p)
22.0%
Total return to
Shareholders in
the year
B.P. Marsh & Partners Plc
(AIM: BPM), the specialist
investor in early stage
financial services
businesses, announces
its audited Group Final
Results for the year to
31 January 2024
B.P. Marsh • 2024 Annual Report • Operating and Financial Highlights
3
Historic dividend and share price performance
£millions
BPM share price
FTSE AIM all share, rebased
BPM level of dividends paid
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
JAN 23
JAN 24
JAN 22
JAN 21
JAN 20
JAN 19
JAN 18
JAN 17
JAN 16
JAN 15
JAN 14
JAN 13
JAN 12
JAN 11
0.3M
0.3M
0.4M
0.8M
0.8M
1.0M
1.1M
1.7M
0.8M
1.0M
2.0M
1.0M
0.9M
1.7M
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
£4.50
£5.00
£0.92
£0.92
£0.74
£0.95
£0.72
£1.24
£0.84
£1.35
£0.68
£1.39
£0.68
£1.47
£0.87
£2.06
£1.05
£2.53
£0.90
£2.86
£0.93
£2.61
£1.14
£2.70
£1.07
£3.55
£0.85
£3.32
£0.74
£4.25
12.1%
£81.2m
Available cash
Average Net Asset
Value annual
compound growth
rate since 1990
5.36p
Final Dividend of 5.36p
per share declared. Interim
dividend of 2.68p paid
February 2024 and a
special dividend of 2.68p
paid May 2024 following
the realisation of Paladin
(31 January 2023: 2.78p)
4
Statement by the Chairman
“From inception over 30 years ago our
investment philosophy has been consistent
and continues to deliver strong returns. This
latest increase in NAV is testament to our
strategy, enabling the Company to continue
to invest in high quality management teams
as well as rewarding shareholders.
Looking across our portfolio and the new
opportunities we see, I am confident that
B.P. Marsh remains the partner of choice for
exciting start-up insurance intermediaries,
which will drive further growth in the future.”
£165.4m
The value of the
investment portfolio
12.1%
Compound annual
growth in Net Asset
Value since 1990
22.0%
Total shareholder
return for the year
Brian Marsh OBE,
Chairman
B.P. Marsh • 2024 Annual Report • Statement by the Chairman
5
Results
In the past year, the Group has seen
significant growth in its Net Asset Value
(“NAV”) (net of dividends), rising by 20.9%
from £189.5m to £229.2m. There has been
a £43.6m increase in the equity value of
our portfolio, increasing from an adjusted
value of £121.8m (taking out acquisition
costs and disposals) to £165.4m.
This translates to an undiluted Net Asset
Value per share of 629.0p (up from 526.2p
in 2023), or 626.9p on a fully diluted basis
after factoring in the vesting of shares in
the Group’s Joint Share Ownership Plan
(compared to 516.8p in 2023).
As at 31 January 2024, the Group’s cash
and treasury balance was £40.5m,
marking a £28.4m increase from the
previous year. As of the date of this
announcement, this balance has risen to
£81.2m due to the completion of the sale
of Paladin Holdings Limited (“Paladin”)
to Specialist Risk Group Limited and the
completion of the sale of Aspira
Corporate Solutions Limited to Titan
Wealth Holdings Limited.
Dividend
During the Financial Year under review the
Group paid £2.0m in dividends by way of
an Interim Dividend of £0.5m in February
2023, a Final Dividend of £0.5m in July
2023 and then a Special Dividend following
the receipt of the funds from the sale of
Kentro Capital Limited (“Kentro”) of £1.0m.
Dividend and share
buy-back policy
Following the sales of Kentro and Paladin,
the Group announced its Dividend Policy
for the Financial Years ending 31 January
2024, 2025 and 2026. This being that
each year an aggregate dividend of
£4.0m would be paid by way of a £2.0m
Interim Dividend and then a £2.0m Final
Dividend (subject to shareholder consent
at each Annual General Meeting).
Since the year end, the Company paid
a dividend of £1.0m in March 2024 whilst
awaiting final receipt of the proceeds of
sale from Paladin, and when received
paid a further dividend in May 2024
of £1.0m. The Group is recommending
a final dividend of 5.36p per share
(£2.0m) to be paid on 26 July 2024 to all
shareholders on the register on 28 June
2024, with the ex-dividend date being
27 June 2024. This final dividend will be
subject to Shareholder Approval at the
Group’s Annual General Meeting to be
held on 23 July 2024.
During the Year under Review, the
Company undertook 85 individual Share
Buy-Back transactions, purchasing a
total of 283,480 shares from the market
for a total cost of £1.05m, or a weighted
average of 371 pence per share.
On 24 November 2023, the Company
cancelled 178,000 Shares it held in
treasury. The total Issued Share Capital is
now 37,288,000. The Company currently
has 55,170 Shares in treasury and
therefore total number of shares with
voting rights amount to 37,232,830.
The Group remains committed to its
Share Buy-Back Policy of being able to
purchase shares when able to. Following
the strong Share Price Performance the
Group has agreed to amend its Share
Buy-Back Policy to reduce the discount
to Net Asset Value threshold from 20%
to 15% and has allocated up to £1m in
the aggregate for this purpose.
Disposals
In October 2023 the Group announced
that it had completed the sale of its
18.38% stake in Kentro to Brown & Brown,
Inc for £51.5m.
Furthermore in November 2023, it was
announced that LEBC Holdings Limited
had agreed to sell its wholly owned
subsidiary, Aspira Corporate Solutions
Limited, to Titan Wealth Holdings Limited.
In December 2023, the Company
announced the conditional sale of its
shareholding in Paladin, the parent
company of CBC UK Limited (“CBC”).
More information on the above is
included in the Chief Investment
Officer’s Statement.
Portfolio
New Investments
During the Year, the Group’s Portfolio has
welcomed three new Investments as
previously announced: Verve Risk Services
Limited (“Verve”), Pantheon Specialty
Group Limited (“Pantheon Specialty”)
and Ai Marine Risk Limited (“Ai Marine”).
We are pleased to present the audited Consolidated
Financial Statements of B.P. Marsh & Partners Plc
for the year ended 31 January 2024
B.P. Marsh • 2024 Annual Report • Statement by the Chairman
6
Verve is a Managing General Agency
specialising in the Professional and
Management Liability business
established by Scott Simmons and Alan
Lambert. The Group invested in April 2023.
Pantheon Specialty is a newly established
Insurance Broker specialising in complex
international placements, founded
in June 2023 by Robert Dowman,
a long-time associate of the Company.
Ai Marine is a start-up marine hull
Managing General Agency founded
by Tom Fulford-Smith and Charles
D’Alton. The Group invested in December
2023 by way of a newly established
Holding Company.
Follow on Investment and funding
The Group has also acquired further
holdings in XPT Group LLC by way of
subscription for $3.5m of new Preferred
Shares in October 2023 in addition to the
further $4.0m of net Loan Funding
provided in February 2023.
The Company also provided a £4.5m
Loan Facility to Pantheon Specialty which
was drawn down in full.
Other highlights
Stewart Specialty Risk Underwriting Ltd
(“SSRU”), the Toronto-based Managing
General Agency secured additional
capacity for its Property and Residential
Realty programme.
Lilley Plummer Risks Limited (“LPR”) the
Lloyd’s Broker continued to diversify its
product offering by making strategic
hires, opening up the North American
Property and Accident & Health space.
More detailed updates on the Company’s
Portfolio is included in the Chief
Investment Officer’s Statement.
Post year-end disposal
On 7 December 2023, the Company
announced the conditional sale of its
shareholding in Paladin, the parent
company of CBC, to Specialist Risk
Group Limited. Following the end of the
Financial Year under review, on 22 March
2024, all conditions were met and the sale
of the Group’s holding in Paladin
completed, with the Group receiving
upfront consideration of £42.1m.
There is also the possibility of further
deferred consideration being paid subject
to the future performance of CBC and
further updates on this will be announced
at the time.
Post year-end activity
On 27 March 2024, the Group
announced that it had subscribed for
a 30% stake in Devonshire UW Limited
(“Devonshire”), a newly established
Underwriting Agency specialising in
transactional risks. The investment was
through a mix of equity subscription and
provision of loan funding and conducted
through a newly established holding
company. Devonshire’s founders, Natasha
Attray, James Dodd, James Fletcher
and Charles Turnham are experienced
industry practitioners with a collective
30 years of experience.
On 9 May 2024 the Company acquired
a further 7% stake in Pantheon Specialty
for £7.3m with the ability to acquire a
further 5% for nil consideration subject
to certain performance criteria of
Pantheon Specialty over their 2024 and
2025 Financial Years. More information
is provided in the Chief Investment
Officer’s Statement.
Outlook
The Group’s Year under review
demonstrates the effective strategy of
partnering with strong entrepreneurial
management teams to grow successful
businesses. The realisations made are
testament to how the Group can add
value and aid in growth and the new
investments made highlight the Group’s
tried and tested ability to find interesting
and well placed new opportunities.
The Group continues to support its partners
with additional funding required to deliver
on each individual Portfolio Company’s
goals and provides strategic assistance
where possible to maximise growth.
The Group has an exciting pipeline of new
business it is exploring, both domestically
in the UK and internationally. Bolstered
by its strong cash balance, the Group
can and will invest in high quality
opportunities that it sees, but will
continue its rigorous selective approach
that has served it so well over the past
three decades. A balanced approach is
being taken between carefully
considering new opportunities and
utilising its cash balance.
The Group looks forward to the
upcoming year and building on its
current growth trajectory.
Brian Marsh, OBE
Chairman
11 June 2024
Statement by the Chairman
continued
7
Chief Investment
Officer’s Statement
“The Group has delivered an excellent
performance for the year to 31 January
2024, with continued strong growth from
the underlying portfolio alongside two
substantial realisations.
Over the financial year to 31 January 2024,
the valuation of the Group’s equity portfolio
has increased by 35.9%, adjusting for
realisations, with NAV increasing by 20.9%.
We believe, the above performance
demonstrates the success of the Group’s
unique approach, which continues to
produce significant long-term growth.”
Daniel Topping,
Chief Investment Officer
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
8
Chief Investment
Officer’s Statement
continued
Portfolio Update
and Outlook
The Group’s performance in its financial
year to 31 January 2024, is the strongest
since the business floated on the AIM
Market in 2006.
Over the financial year to 31 January
2024, the valuation of the Group’s
equity portfolio has increased by 35.9%
(year ending 31 January 2023: 19.1%),
adjusting for realisations, with NAV
increasing by 20.9% (year ending
31 January 2023: 13.8%).
These results demonstrate two key
components of B.P. Marsh’s long term
success, being to:
• identify, invest and nurture businesses
over an extended period of time; and
• assist in Management led sale
processes which produce considerable
returns for all stakeholders.
Since 1 February 2023, B.P. Marsh
completed three realisations:
• Kentro Capital Limited – sold to Brown
and Brown;
• CBC UK Limited – sold to Specialist Risk
Group Limited; and
• Aspira Corporate Solutions Limited –
sold to Titan Wealth Holdings Limited.
These realisations have further
strengthened B.P. Marsh’s liquidity,
with current cash of £81.2m.
This strong liquidity has allowed
B.P. Marsh to undertake three new
investments in the financial year to
31 January 2024, being:
• Verve Risk Services Limited –
A Managing General Agency,
which specialises in Professional
and Management Liability business
for the insurance industry;
• Pantheon Specialty Group Limited –
A new insurance broker led by Robert
Dowman, a recognised leading London
Market broker, specialising in complex
placements worldwide; and
• Ai Marine Risk Limited – A start-up
Managing General Agency, which
specialises in Marine Hull insurance
and will underwrite a global portfolio
of business.
Post year end, the Group invested in
Devonshire UW Limited, a Managing
General Agency specialising in
transactional risks insurance.
These new investments demonstrate that
the Group’s long term strategic goals
remain unaltered, irrespective of recent
realisations, being to:
• Invest in early-stage businesses with
strong management teams and
significant growth potential;
• Assist our investments, deploying
capital to support continued strong
growth; and
• Undertake the above alongside an
increasing dividend policy. The Group
have agreed to pay an annual
dividend of £4m in each year for three
years. This policy commenced in the
Group’s current financial year, from
1 February 2024.
These strategic goals produce returns
for our shareholders, via a blend of
ongoing equity growth of the portfolio
and regular returns of capital to
shareholders. For the year ended
31 January 2024, the Group produced
shareholder returns of £41.7m / 22%.
The Group remains focussed on sourcing
new business. B.P. Marsh continues to
be approached by entrepreneurial
individuals and teams and has an active
pipeline of new business opportunities.
The Group continues to see a high
number of potential new business
opportunities, having received 71
new business enquiries in the year to
31 January 2024, increasing from 51
received enquiries in the preceding year.
The Group currently has 6 potential
opportunities under review to consider
during the next quarter of 2024, all of
which are in the insurance heartland
upon which we focus.
Disposals
Paladin Holdings Limited
(“Paladin”) / CBC UK
Limited (“CBC”)
In December 2023, the Group agreed
to sell its shareholding in Paladin, the
parent company of CBC, the London-
based Insurance Broker, to Specialist Risk
Group Limited, a PE backed insurance
broker consolidator.
This transaction completed on 22 March
2024, and delivered £42.1m in cash (net
of transaction costs). The Group also
received £0.8m in August 2023 on the
exercise of an option with CBC and in
total this represented a 42% uplift on the
Group’s latest valuation of the investment
as at 31 July 2023.
Additionally, the Group received
repayment in full of its £5.9m loans to
CBC, resulting in an aggregate cash
receipt of £48.8m since July 2023.
The sale represents an Internal Rate of
Return of 44% at completion, based on
the initial consideration received.
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
9
There is also a potential for £17.8m of
further cash consideration if CBC
achieves defined performance hurdles.
LEBC Holdings Limited
(“LEBC”) / Aspira Corporate
Solutions Limited (“Aspira”)
In November 2023, LEBC, in which the
Group has a 59.3% shareholding, agreed
to sell its wholly owned subsidiary Aspira
to Titan Wealth Holdings Limited, subject
to regulatory approval.
This transaction completed on 16 April
2024 and has allowed LEBC to meet all its
obligations as agreed with the Financial
Conduct Authority regarding historical
defined benefit pension transfer advice.
Upon completion the Group received full
repayment of its £3.3m loans to LEBC.
Further proceeds of the sale will be
received over a three year earn-out
period. Due to the number of variables
involved, the Group have taken a
conservative approach to potential
proceeds, which has been factored into its
valuation of LEBC at 31 January 2024.
Kentro Capital Limited
(“Kentro”)
In October 2023, the Group confirmed
that the sale of its 18.38% stake in Kentro
to Brown & Brown, Inc had completed,
delivering sale proceeds of £51.5m.
This disposal produced an Internal Rate of
Return of 23.66% (inclusive of all income
and fees) over a 9 year period.
New Investments
During the Group’s financial year to
31 January 2024, three new investments
were completed
The Group is confident that the these
new investments will deliver on their
goals, producing long term growth for
B.P. Marsh and its shareholders.
Ai Marine Risk Limited
(“Ai Marine”) – London –
December 2023
A start-up Managing General Agency,
which specialises in Marine Hull insurance
and will underwrite a global portfolio
of business.
The business was established by its
co-founders, Tom Fulford-Smith and
Charles D’Alton, who are experienced
marine insurance specialists with a track
record of delivering growth.
B.P. Marsh subscribed for a 30%
shareholding, providing £1.6m of funding
via a mixture of equity and a loan facility.
Since inception, Ai Marine has performed
in line with the Group’s expectations,
writing business from day one and having
secured Lloyd’s coverholder status and
additional capacity from Ascot Syndicate.
Date of initial investment: December 2023
Equity stake: 30%
Cost of Equity: £30,000
31 January 2024 valuation: £30,000
Pantheon Specialty Limited
(“Pantheon”) – London –
June 2023
+ 39.6 pence NAV per share uplift in year
A start-up insurance broker, led by Rob
Dowman, a recognised leading London
Market broker, specialising in complex
placements worldwide, in which the
Group subscribed for a 25% stake.
Since investment, Pantheon has
performed strongly, reflected in the
increase to our valuation of Pantheon.
In the year to 31 January 2024, the
Group provided Pantheon with a loan
facility of £4.5m, which was fully drawn
down. The provision of this loan,
alongside cash generated from
Pantheon’s strong performance to date,
allowed the business to make a number of
key hires, continuing Pantheon’s strategy
to build a market leading independent
specialist broker across multiple markets.
Post year end, Pantheon announced
that it will be appointing Howard Green,
the former Chairman of Besso Insurance
Group Limited (“Besso”), to the Board,
subject to regulatory approval.
Howard will also assume the role of
Group Chairman.
Howard was one of Besso’s founding
members and architects and has
considerable experience in building and
leading international broking businesses.
Additionally, post year end, in May 2024,
the Group acquired from Pantheon’s
founders a further 7% shareholding in
Pantheon for an upfront consideration
paid of £7.3m.
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
10
Chief Investment
Officer’s Statement
continued
In Pantheon’s current financial year to
31 December 2024, the business is forecast
to produce revenue of more than £18m
and EBITDA of more than £10m.
Date of initial investment: June 2023
Equity stake: 25%
Cost of Equity: £25 (£7.3m post year end
further investment in May 2024)
31 January 2024 valuation: £14.8m
Verve Risk Services Limited
(“Verve”) – London – UK
+ 0.6 pence NAV per share uplift in year
A Managing General Agency, which
specialises in Professional and
Management Liability business for the
insurance industry in the USA, Canada,
Bermuda, Cayman Islands and Barbados.
Verve was established in 2016 by its
founders Scott Simmons and Alan
Lambert, both of whom have over
20 years’ experience underwriting
U.S. Professional and Management
liability insurance.
B.P. Marsh subscribed for a 35%
shareholding through the provision of
£1.0m of funding via a mixture of equity
and a loan facility, which was drawn
down in full upon completion as part of
a management buy-out.
Since investment, Verve has performed
well, exceeding their budget for 2023,
and showing strong year on year growth
into 2024.
Date of initial investment: April 2023
Equity stake: 35%
Cost of Equity: £430,791
31 January 2024 valuation: £643,000
New Investments –
Post Year End Event
Devonshire UW Limited
(“Devonshire”) – London –
March 2024
A Managing General Agency specialising
in transactional risks insurance, including
Warranty & Indemnity, Specific Tax, and
Legal Contingency Insurance.
B.P. Marsh subscribed for a 30%
shareholding through the provision of
£1.9m of funding via a mixture of equity
and a loan facility.
The business has been founded by four
experienced industry practitioners,
Natasha Attray, James Dodd, James
Fletcher and Charles Turnham, who have
a collective 30 years of transactional
liability underwriting experience.
Devonshire is backed by Lloyd’s capacity
with support from a strong panel of
A-rated insurance capacity providers.
The business will provide risk solutions
for large M&A transactions for brokers,
corporates, private equity firms,
professional advisers and other
specialist investors.
Devonshire is London-based and has
the ability to underwrite transactions
in the UK, Europe, Middle East, Africa,
Asia, South America, Central America
and Australasia.
Date of initial investment: March 2024
Equity stake: 30%
Cost of Equity: £300,000
31 January 2024 valuation: N/A
Follow-on Investments
and Funding
XPT Group Limited
(“XPT”) – USA
+ 3.9 pence NAV per share uplift in year
The Group’s investment in XPT, the
specialty lines insurance distribution
company, continues to perform well, with
the business on track to produce Gross
Written Premium of close to US$900m in
its financial year to 31 December 2024
(31 December 2023: US$675m).
The Group expects XPT to continue its
strong growth, both via its acquisition
strategy, individual and team hires and
underlying organic growth.
In October 2023, the Group provided a
further US$3.5m (£2.9m) of funding to
XPT, subscribing to a new issue of
Preferred shares. The Group also provided
a US$6m Term Loan in February 2023 of
which US$2m has been repaid.
This further funding, alongside continued
support from bank financing, has allowed
XPT to continue to grow, both organically
and via acquisitions.
As has been previously reported, XPT has
made 16 business acquisitions since the
Group invested in 2017. XPT now has
offices in 22 locations across 13 States,
acting for insureds across the USA.
XPT’s most recent acquisition was in Flood
Risk Solutions, a Managing General
Agency specialising in insurance solutions
for flood risks, based in Florida. Flood Risk
provides insurance for a number of flood
risks, including primary Flood insurance,
Excess Flood insurance, parametric
solutions and custom flood risk
transfer products.
This transaction brings a number of
synergies that can benefit both Flood
Risk and the wider XPT business,
including carrier relationships, access
to new programs and products and
distribution opportunities.
This is the third acquisition made by XPT
in over a year, the other two being Cal
Inspection Bureau, a premier underwriting
survey and audit business, and Craig and
Leicht, a Texas-based wholesale agency.
Both businesses have integrated
successfully into XPT and have performed
well since their acquisition.
Over the year, XPT have also made a
number of individual and team hires,
which are contributing to XPT’s current
strong performance. This includes an
experienced binding & brokerage team
based out of Philadelphia, and a number
of new property and casualty brokers,
to bring about substantial growth across
these business lines, including (but not
limited to), commercial property,
contractors, workers compensation, farm
& ranches and the hospitality industry.
Date of initial investment: June 2017
Equity stake: 29.10%
Cost of Equity: £13,042,085
31 January 2024 valuation: £39,572,000
XPT
17.27%
Ai Marine
0.01%
Pantheon
6.45%
Verve
0.28%
Sage
0.74%
SSRU
5.18%
Sterling
1.44%
CBC
21.62%
Cash and Other Assets
27.82%
Fiducia
2.14%
LPR
5.87%
LEBC
1.74%
Ag Guard
1.47%
ATC
7.97%
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
11
Portfolio Update & Activity
NAV breakdown by portfolio company
The composition of B. P. Marsh’s underlying portfolio companies is shown
on the chart below.
MGA
£562m
Brokers
£707m
44%
56%
Total
£1.27bn
The Group’s current investments are in the Insurance Intermediary sector.
Our current insurance investments are budgeting to produce in aggregate over
£1.27bn of insurance premium during 2024, and a breakdown between brokers
and MGAs is shown below.
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
12
Chief Investment
Officer’s Statement
continued
Brokers
Date of
Investment
Jurisdiction
Equity % at
31 January
2024
Cost of
Investment
Valuation at
31 January
2024
% of NAV
31 Jan 2024
Internal rate
of return1 to
31 January
2024
Multiple on
Invested
Capital
XPT Group LLC
June 2017
USA
29.10%
£13,042,085
£39,572,000
17.3%
29.74%
3.03x
CBC UK Limited
February 2017
UK
43.75%
£3,500
£49,549,000
21.6%
48.22%
(N/A – over
1000x)
Lilley Plummer Risks Limited
October 2019
UK
30.00%
£308,242
£13,446,000
5.9%
92.29%
43.62x
Pantheon Specialty Limited
June 2023
UK
25.00%
£25
£14,775,000
6.4%
(N/A – over
1000x)
(N/A – over
1000x)
Asia Reinsurance Brokers
(Pte) Limited
April 2016
Singapore
25.00%
£1,551,084
£0
0%
-20.71%
0x
IFA
Date of
Investment
Jurisdiction
Equity % at
31 January
2024
Cost of
Investment
Valuation at
31 January
2024
% of NAV at
31 January
2024
Internal rate
of return1 to
31 January
2024
Multiple on
Invested
Capital
LEBC Holdings Limited
April 2007
UK
59.34%
£12,373,657
£3,987,000
1.74%
-2.79%
0.32x
MGAs
Date of
Investment
Jurisdiction
Equity % at
31 January
2024
Cost of
Investment
Valuation at
31 January
2024
% of NAV at
31 January
2024
Internal rate
of return1 to
31 January
2024
Multiple on
Invested
Capital
ATC Insurance Solutions PTY Limited
July 2018
Australia
25.56%
£3,345,229
£18,261,000
8.0%
35.04%
5.46x
Stewart Specialty Risk
Underwriting Limited January 2017
Canada
30.00%
£19
£11,870,000
5.2%
94.10%
(N/A – over )
Ag Guard PTY Limited July 2019 Australia
41.00%
£1,465,071
£3,361,000
1.5%
26.34%
2.29x
The Fiducia MGA
Company Limited
November 2016
UK
35.18%
£227,909
£4,902,000
2.1%
23.87%
21.51x
Sterling Insurance PTY Limited
June 2013
Australia
19.70%
£1,945,411
£3,297,000
1.4%
9.10%
1.69x
Sage Program Underwriters, Inc
June 2020
USA
30.00%
£202,758
£1,689,000
0.7%
84.23%
8.33x
Verve Risk Services Limited
April 2023
UK
35.00%
£430,791
£643,000
0.3%
44.24%
1.49x
Ai Marine Risk Limited
December 2023 UK
30.00%
£30,000
£30,000
0.01%
285.18%
1.00x
Devonshire UW Limited
March 2024
UK
N/A
£300,000
N/A
N/A
N/A
N/A
Insurance Brokers
Underwriting Agencies/Managing General Agents (“MGAs”)
IFA Investment
1 Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2024
1 Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2024
1 Inclusive of fees, loan interest and dividend income, and based on valuation at 31 January 2024
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
13
Insurance Brokers
The Group’s Broking investments are
budgeting to place over £707m of GWP,
producing over £73m of brokerage income
in 2024, accessing specialty markets
around the world.
Underwriting Agencies /
Managing General Agents
(“MGAs”)
The Group’s MGAs are budgeting to place
over £562m of GWP, producing over
£55m of commission income in 2024,
across many specialist product areas,
on behalf of more than 50 insurers.
Other Portfolio
Company Highlights
Lilley Plummer Risks Limited
(“LPR”) – London
+ 17.3 pence NAV per share uplift in year
LPR continues to perform well, due to the
growth of its underlying marine portfolio
and diversification into different classes
of business.
Throughout the Group’s financial year,
LPR made several strategic hires to
support growth. These hires have
allowed LPR to enter the North American
property and Accident & Health space,
while also bolstering its existing marine
broking operations.
Aligned with this vision, LPR actively
explores new opportunities in the market
through team hires and acquisitions as
part of its commitment to achieving
accelerated growth. This expansion is not
confined to its core marine offerings but
extends into new diverse sectors of the
insurance industry.
In LPR’s current financial year to
31 December 2024, the business is
forecast to produce revenue of c.£ 10m
and EBITDA of approaching £5m. As at
this stage of the year, LPR are on course
to achieve this budget.
Date of initial investment: October 2019
Equity stake: 30%
Cost of Equity: £308,242
31 January 2024 valuation: £13,446,000
ATC Insurance Solutions PTY
Limited (“ATC”) – Australia
+ 3.2 pence NAV per share uplift in year
ATC continues to perform strongly across
its many product offerings in accident
& health, motor and sports insurance,
amongst others.
In their year ending 30 June 2023, ATC
produced EBITDA of AU$11m, an increase
of AU$1.8m over their 2022 year. In their
current financial year to 30 June 2024,
ATC are on track to outperform their
budget, which already showed strong
year on year growth.
ATC is run by a longstanding and
experienced management team led by
Chairman and Founder, Chris Anderson,
alongside co-founder and Chief
Commercial Officer Shane Sheppard.
Date of initial investment: July 2018
Equity stake: 25.6%
Cost of Equity: £6,476,595
31 January 2024 valuation: £18,261,000
Stewart Specialty Risk
Underwriting Ltd
(“SSRU”) – Canada
+ 2.3 pence NAV per share uplift in year
SSRU continues to deliver specialist
insurance products to a wide array of
clients in the Construction, Manufacturing,
Onshore Energy, Public Entity and
Transportation sectors.
Since its inception in 2017, SSRU has
demonstrated robust growth and
anticipates surpassing CA$100m in
Gross Written Premium in 2024.
This performance has been brought
about by continuous organic growth
across SSRU’s highly profitable business
lines. Growth has been further driven by
expanded line sizes made possible
through strengthened relationships with
both existing and new capacity partners.
Recently, SSRU entered into two new
carrier partnerships, being:
• Sompo Japan Insurance (Canada
Branch), introducing increased
capacity within their Commercial
Property and Residential Realty
product offerings.
• Millennium Insurance Corporation,
introducing increased capacity
within their Commercial Property for
risks in the Energy, Mining and
Manufacturing sectors.
Securing this new capacity will enable
SSRU to continue on its impressive growth
trajectory seen since original investment.
Date of initial investment: January 2017
Equity stake: 30%
Cost of Equity: £19
31 January 2024 valuation: £11,870,000
B.P. Marsh • 2024 Annual Report • Chief Investment Officer’s Statement
14
Chief Investment
Officer’s Statement
continued
Sage Program Underwriters,
Inc (“SAGE”) – USA
+ 0.2 pence NAV per share uplift in year
SAGE continues to build traction in its
space of expertise, being Worker’s
Compensation insurance to the ground
delivery and field sport sectors.
SAGE’s performance is strong in 2024,
with substantial year on year growth in
terms of Gross Written Premium, Revenue
and EBITDA.
This growth has been brought about
organically, but SAGE is also actively
exploring hiring new individuals to expand
its product lines into new affiliated
product lines.
Accordingly, SAGE has recently secured
the ability to write General Liability
insurance for the scaffolding and crane
industries, amongst other specialty
contractor sectors. This programme
will focus on the medium sized section
of the market.
As part of this new product offering,
SAGE has hired an industry veteran with
decades of experience in this sector.
The Group look forward to working with
SAGE as it continues to grow and expand
its product offering.
Date of initial investment: June 2020
Equity stake: 30%
Cost of Equity: £202,758
31 January 2024 valuation: £1,689,000
Market Commentary
The ongoing consolidation trends in the
Insurance Market show no indication of
abating in 2024. This activity remains a
catalyst for substantial prospects for the
Group, both in terms of new investments
and activity within our core portfolio.
Both the Group and its portfolio
companies continue to be approached
by entrepreneurial individuals and teams
who do not wish to be part of this
consolidation process.
The Group continues to monitor trends in
the insurance market, specifically when it
comes to premium rates.
The global property and casualty market
rates continue to increase, although the
pace is slowing. Global property
insurance rates increased 3% (6% in Q4
2023) with global casualty rates increased
by 3% (3% in Q4 2023). Global
commercial insurance rates rose 1%,
compared to a 2% increase in the prior
quarter. This is the 26th consecutive
quarter of rate increases, however, down
from the peak of 22% in the fourth quarter
of 2020.
Generally, the slowing of rate increases is
due to overall market capacity increasing,
via new market entrants and existing
carriers increasing their exposure. Whilst
rate increases remained highest across
property lines, business with assets in CAT
(catastrophe) zones, have begun to see
lower increases in rates.
Overall, whilst the market is softening, the
Group does not see the market returning
to the pricing of the last soft market in the
short to medium term. Given the portfolio
predominantly operates in specialist risk
areas, rates tend to be less volatile and
therefore we remain confident that our
portfolio is suitably prepared to weather
a softening market.
Notwithstanding the current market
trends, the Group and its portfolio are well
positioned to take advantage of the
opportunities this environment presents,
with strong liquidity and a positive track
record, to help support our portfolio and
attract new talent.
Daniel Topping
Chief Investment Officer
11 June 2024
Finance Director’s Statement
“The Group had a strong year, delivering an
increase in the NAV of £39.7m (2023: £22.9m),
or +20.9% (2023: +13.8%). At 31 January 2024
the NAV of the Group was £229.2m which
equates to 629.0p per share undiluted
(2023: £189.5m, or 526.2p per share).
On a diluted basis this equates to 626.9p
per share (2023: 516.8p per share).”
Jonathan Newman,
Group Finance Director
15
B.P. Marsh • 2024 Annual Report • Finance Director’s Statement
16
Finance Director’s Statement
continued
Financial Performance Summary
The table below summarises the Group’s financial results and key performance indicators for the year to 31 January 2024:
Year to/as at Year to/as at
31 January 2024 31 January 2023
Net asset value £229.2m £189.5m
Net asset value per share – undiluted 629.0p 526.2p
Net asset value per share – diluted 626.9p 516.8p
Profit on ordinary activities before tax £43.6m £27.6m
Dividend per share paid 5.56p 2.78p
Total shareholder return (including dividends) £41.7m £23.9m
Total shareholder return on opening shareholders’ funds 22.0% 14.4%
Net cash (used by) / from operating activities (net of equity investments, realisations and loans) £(1.2)m £0.5m
Equity cash investment for the year £3.4m £2.9m
Realisations (net of disposal costs) £53.1m £8.2m
Loans issued in the year £20.3m £3.0m
Loans repaid by investee companies in the year £2.7m £2.0m
Cash and treasury funds at end of year £40.5m £12.1m
Borrowing / Gearing £Nil £Nil
B.P. Marsh • 2024 Annual Report • Finance Director’s Statement
17
The NAV of £229.2m at 31 January 2024
represents a total increase in NAV of
£200.0m since the Group was originally
formed in 1990 having adjusted for the
original capital investment of £2.5m,
the £10.1m net proceeds raised on AIM
in 2006 and the £16.6m of net proceeds
raised through the Share Placing and
Open Offer in July 2018. The Directors
note that the Group has delivered an
annual compound growth rate of 9.4%
in Group NAV after running costs,
realisations, losses, distributions and
corporation tax since flotation and
12.1% since 1990.
This equates to an increase in the
portfolio valuation of 35.9% (2023: 19.1%).
The Group made realisations totalling
£53.1m, including £51.5m from the sale of
Kentro, £0.8m from Paladin on the
exercise of an option and £0.7m on the
redemption of preference shares in Lilley
Plummer Holdings Limited (“LPH”).
The Group invested a total of £3.4m in
equity in the portfolio during the year
(2023: £2.9m):
• £2.9m in XPT to fund further
acquisitions; and
• £0.5m into three new investments:
Pantheon, Verve and Ai Marine.
Liquidity and loan portfolio
The Group’s loan portfolio balance
increased from £11.5m as at 31 January
2023 to £28.9m (+£17.4m) at 31 January
2024. The key movements were:
• £13.8m was provided to the investment
portfolio, including £4.9m to XPT, £4.5m
to Pantheon, and £2.8m to Paladin;
• £6.0m was provided to Alchemy
Underwriting Limited in connection
with the Group’s agreed sale of its
investment in Paladin;
• £0.5m was provided to Brown & Brown
(Europe) Holdco Limited as part of
the Group’s sale of its investment in
Kentro; and
• £2.7m of loans were repaid during the
year, including £1.6m from XPT, £0.7m
from Fiducia and £0.3m from LPH.
Cash and treasury funds at 31 January
2024 were £40.5m (2023: £12.1m).
Since the year-end the Group completed
the sale of Paladin and received £42.1m
from equity disposal and £5.9m in
loan repayments.
The Group has also invested a further
£9.2m in follow-on funding into the
portfolio including £7.3m in Pantheon
and £0.8m in XPT, plus £0.3m in equity
in Devonshire, a new investment.
Other significant cash movements
include receipt of £5.0m in further loan
repayments, including £3.3m from LEBC
who have now repaid their loans in full,
and £1.5m from Pantheon and £1.0m
in new loans granted to the existing
portfolio. The loan portolio balance is
currently £19.0m.
Investment performance
The Group’s equity portfolio movement during the year was as follows:
31 January 2023 Acquisitions Disposal Adjusted 31 January 31 January
valuation at cost proceeds 2023 valuation 2024 valuation
£171.5m £3.4m £(53.1)m £121.8m £165.4m
B.P. Marsh • 2024 Annual Report • Finance Director’s Statement
18
Finance Director’s Statement
continued
In addition, £2.0m has been distributed in
dividends. The current cash and treasury
balance is £81.2m and the Group is debt
free. Treasury funds are all in one month
or less deposit accounts.
Operating income
Net gains from investments were £43.7m
(2023: £27.5m), a 58.9% increase over
the previous year, which all related to the
revaluation of the investment portfolio at
31 January 2024 (2023: £27.3m related
to revaluation of the investment portfolio).
The Kentro sale resulted in a £36.4m
realised gain on disposal, which has
been reflected within a movement from
the fair value reserve to retained earnings
within the consolidated statement of
financial position.
Overall, income from investments
increased by £2.6m, or 53% to £7.5m
(2023: £4.9m). The increase was primarily
due to receiving significantly greater loan
interest income from the enlarged loan
portfolio, along with increased fees re-
charged in relation to professional fees
for new investments.
Operating expenses
Operating expenses increased by £3.0m,
or 61% during the year to £7.9m (2023:
£4.9m) predominantly as a result of
professional fees incurred for new
investment activity, general cost inflation
and one-off bonuses in respect of the
successful sale of Kentro.
Profit on ordinary activities
The consolidated profit on ordinary
activities before taxation increased by
£16.0m, or 58% to £43.6m (2023: up
£8.2m to £27.6m). The consolidated profit
on ordinary activities after taxation
increased by £18.7m, or 78.6% to £42.5m
(2023: up £6.4m to £23.8m).
The Group’s strategy is to cover expenses
from the portfolio yield. On an underlying
basis, including treasury returns and
realised gains in cash, but excluding
unrealised investment activity (unrealised
gains on equity and provision against
loans receivable from investee
companies), this was achieved with
a pre-tax profit of £0.1m for the year
(2023: £0.3m).
Undiluted / diluted NAV
per share
The NAV per share at 31 January 2024
is 629.0p (2023: 526.2p). Previously,
1,461,302 shares being held within an
Employee Benefit Trust as part of a long-
term share incentive plan for certain
directors and employees of the Group
were excluded as they did not have voting
or dividend rights. However, in October
2023 voting and dividend rights for
1,206,888 shares were granted. These
shares are now included within the
undiluted NAV per share calculation,
along with £3.4m of loan due to be repaid
by the Trust in respect of the original
transfer of shares that cannot currently
be consolidated within the accounts, but
is repayable should these shares be sold.
The diluted NAV per share at 31 January
2024 is 626.9p (2023: 516.8p). This
includes the full 1,443,147 shares within
the Employee Benefit Trust, but also
includes £4.1m of loan repayable if the
shares, including 236,259 currently
unallocated, are sold.
The diluted NAV per share excludes the
1,682,500 options over ordinary shares
granted to certain Directors and
employees of the Group in November
2023 as the performance criteria for NAV
growth has not yet been met. This is
forecast to be 1.1% dilutive from NAV of
643p/share and 4.5% dilutive from NAV
of 649p/share.
Jonathan Newman
Group Finance Director
11 June 2024
B.P. Marsh • 2024 Annual Report • Finance Director’s Statement
19
The Group had a
strong year, delivering
an increase in the
NAV of £39.7m
B.P. Marsh • 2024 Annual Report • Current investments
20
Current investments
United Kingdom
These investments have been valued in accordance with the accounting policies on Investments set out in
Note 1 of the Consolidated Financial Statements.
CBC UK Limited
(www.cbcinsurance.co.uk)
CBC is a Retail and Wholesale Lloyd’s Insurance Broker, offering a
wide range of services to commercial and personal clients as well as
broking solutions to intermediaries. The Group holds its investment in
CBC through CBC’s parent company, Paladin Holdings Limited.
Date of investment: February 2017
Equity stake: 43.8%
31 January 2024 valuation: £49,549,000
Lilley Plummer Risks Limited
(www.lprisks.co.uk)
Lilley Plummer Risks is a specialist marine Lloyd’s broker that provides
products across the marine insurance market. The Group holds its
investment in Lilley Plummer Risks through its holding company Lilley
Plummer Holdings Limited.
Date of investment: October 2019
Equity stake: 30.0%
31 January 2024 valuation: £13,446,000
Ai Marine Risk Limited
(www.aimarinerisk.com)
Ai Marine is a start-up MGA with a focus on marine hull insurance
and with a strong focus on the UK & Europe, Middle East and
Asia Pacific regions.
Date of investment: December 2023
Equity stake: 30.0%
31 January 2024 valuation: £30,000
Pantheon Specialty Group Limited
(www.pantheonspecialty.com)
Pantheon is a holding company established in partnership with
Robert Dowman. Pantheon acquired 100% of the share capital of
the Lloyd’s broker Denison and Partners Limited. With the support of
B.P Marsh, Robert Dowman is looking to build a market leading
independent specialist broker, across multiple markets.
Date of investment: June 2023
Equity stake: 25.0%
31 January 2024 valuation: £14,775,000
LEBC Holdings Limited
LEBC is 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: 59.3%
31 January 2024 valuation: £3,987,000
B.P. Marsh • 2024 Annual Report • Current investments
21
The Fiducia MGA Company Limited
(www.fiduciamga.co.uk)
Fiducia is a UK marine cargo Underwriting Agency and Lloyd’s
Coverholder which specialises in the provision of insurance solutions
across a number of marine risks including, cargo, transit liability,
engineering and terrorism Insurance.
Date of investment: November 2016
Equity stake: 35.2%
31 January 2024 valuation: £4,902,000
Verve
(www.ververisk.com)
Verve is a London based Managing General Agency specialising in
Professional and Management Liability for the insurance industry.
Verve operates in the USA, Canada, Bermuda, Cayman Islands
and Barbados.
Date of investment: April 2023
Equity stake: 35.0%
31 January 2024 valuation: £643,000
B.P. Marsh • 2024 Annual Report • Current investments
22
XPT Group LLC
(www.xptspecialty.com)
XPT is a wholesale insurance broking and Underwriting Agency
platform across the U.S. Specialty Insurance Sector operating from
many locations in the United States of America.
Date of investment: June 2017
Equity stake: 29.1%
31 January 2024 valuation: £39,572,000
Stewart Specialty Risk Underwriting Ltd
(www.ssru.ca)
SSRU is a Managing General Agency, providing insurance solutions to a
wide array of clients in the construction, manufacturing, onshore energy,
public entity and transportation sectors based in Toronto, Canada.
Date of investment: January 2017
Equity stake: 30.0%
31 January 2024 valuation: £11,870,000
Sage Program Underwriters, Inc.
(www.sageuw.com)
Sage provides specialist insurance products to niche industries, initially
in the inland delivery and field sport sectors based in Bend, Oregon.
Date of investment: June 2020
Equity stake: 30.0%
31 January 2024 valuation: £1,689,000
Current investments
Rest of the world
B
C
A
A
B
C
These investments have been valued in accordance with the accounting policies on Investments set out in
Note 1 of the Consolidated Financial Statements.
B.P. Marsh • 2024 Annual Report • Current investments
23
Sterling Insurance PTY Limited
(www.sterlinginsurance.com.au)
Sterling is a specialist Underwriting Agency offering a range of
insurance solutions within the Liability sector, specialising in niche
markets including mining, construction and demolition based in Sydney
Australia. The Group holds its investment in Sterling via a joint venture
with Besso Insurance Group Limited, Neutral Bay Investments Limited.
Date of investment: June 2013
Equity stake: 19.7%
31 January 2024 valuation: £3,297,000
Criterion Underwriting (Pte) Limited
Criterion was established to provide specialist insurance products to
a variety of clients in the cyber, financial lines and marine sectors in
Far East Asia, based in Singapore.
Date of investment: July 2018
Equity stake: 29.4%
31 January 2024 valuation: £0
ATC Insurance Solutions PTY Limited
(www.atcis.com.au)
ATC is a Managing General Agency and Lloyd’s Coverholder, specialising
in accident & health, construction & engineering, trade pack, motor
and sports insurance headquartered in Melbourne, Australia.
Date of investment: July 2018
Equity stake: 25.6%
31 January 2024 valuation: £18,261,000
Ag Guard PTY Limited
(www.agguard.com.au)
Ag Guard is a Managing General Agency, which provides insurance
to the agricultural sector, based in Sydney, Australia. The Group
holds its investment through Ag Guard’s Parent Company, Agri
Services Company PTY Limited.
Date of investment: July 2019
Equity stake: 41.0%
31 January 2024 valuation: £3,361,000
Asia Reinsurance Brokers (Pte) Limited
(www.arbrokers.asia)
ARB is an independent specialist reinsurance and insurance risk
solutions provider headquartered in Singapore.
Date of investment: April 2016
Equity stake: 25.0%
31 January 2024 valuation: £0
E
F
D
D
E
E
F
D
B.P. Marsh • 2024 Annual Report • Directors and Company Secretary
24
Directors and
Company Secretary
Brian Marsh OBE
Executive Chairman
Jonathan Newman ACMA,
CGMA, MCSI
Group Finance Director
Daniel Topping MCSI, FCG
Chief Investment Officer
Pankaj Lakhani FCCA
Non-executive
Alice Foulk BA (Hons)
Managing Director
Nicholas Carter
Non-executive
Sinead O’Haire
LLB (Hons), FCG
Chief Legal Officer &
Group Company Secretary
B.P. Marsh • 2024 Annual Report • Directors’ Report & Strategic Report & Consolidated Financial Statements
25
References throughout the Reports and Consolidated Financial Statements to the
“Company” or “B.P. Marsh” refer to the Parent Company, B.P. Marsh & Partners Plc,
and references to the “Group” refer to the consolidated group, being the Parent
Company and its subsidiary undertakings.
Directors’ Report &
Strategic Report &
Consolidated Financial
Statements
for the year ended 31 January 2024
B.P. Marsh • 2024 Annual Report • Directors’ and Group Company Secretary biographies
26
Directors’ and
Group Company
Secretary biographies
Brian Marsh OBE
Executive Chairman, aged 83
(R) (I) (V) (N)
Brian started his career in insurance
broking and underwriting in Lloyd’s and
the London and overseas market over
60 years ago and was, from 1979 to
1990, chairman of Nelson Hurst & Marsh
(Holdings) Ltd, before founding the
Group. Brian has over 40 years’
experience in building, buying and
selling financial services businesses
particularly in the insurance sector.
Brian’s considerable experience being
Chairman of numerous companies
in Financial Services means he is well
suited as the Executive Chairman of
B.P. Marsh. Brian is a member of the
Remuneration, Investment, Valuation,
and Nomination Committees. Brian is
a significant shareholder in B.P. Marsh
with a direct beneficial interest in 38.1%
of the Company.
Alice Foulk BA (Hons)
Managing Director, aged 37
(I) (V) (N) (D)
Alice joined B.P. Marsh in September 2011
having started her career at a leading
Life Assurance company. In February
2015 Alice was appointed as a director
of B.P. Marsh and in January 2016 was
appointed Managing Director where she
is responsible for the overall performance
of the Company and monitoring the
Company’s overall progress towards
achieving its objectives and goals, as set
by the Board. Alice is a member of the
Investment, Valuation, Nomination and
Disclosure Committees.
Alice has a direct beneficial interest in
23,428 ordinary shares in B.P. Marsh,
together with a beneficial interest (as
joint owner) in 117,614 ordinary shares in
B.P. Marsh held as part of the Company’s
Joint Share Ownership Plan and 25,809
ordinary shares in B.P. Marsh which
are held in the Company’s SIP Trust.
Furthermore, Alice has options over
260,000 ordinary shares as part of
the Company’s Share Option Plan
announced on 15 November 2023.
Daniel Topping MCSI, FCG
Chief Investment Officer, aged 40
(I) (V) (N) (D) (E)
Daniel was appointed as a director of
B.P. Marsh in March 2011 having joined
the Group in February 2007, following
two years at an independent London
accountancy practice. Daniel graduated
from the University of Durham in 2005
and is a member of the Securities and
Investment Institute and the Chartered
Governance Institute UK & Ireland.
In January 2016 Daniel was appointed as
Chief Investment Officer of the Group and
is a member of the Investment, Valuation,
Nomination and Disclosure Committees
and Chairman of the Environmental,
Social and Governance (“ESG”)
Committee. Daniel is the Senior Executive
with overall responsibility for the portfolio
and alongside the Board and Investment
Directors is instrumental in identifying
ways to find, structure, develop, support
and monitor the portfolio. Daniel currently
has multiple nominee appointments
across the investment portfolio.
Daniel has a direct beneficial interest in
126,568 ordinary shares in B.P. Marsh,
together with a beneficial interest (as
joint owner) in 167,465 ordinary shares in
B.P. Marsh held as part of the Company’s
Joint Share Ownership Plan and 26,396
ordinary shares in B.P. Marsh which are
held in the Company’s SIP Trust. Daniel
has an indirect beneficial interest
in 13,192 ordinary shares, 11,434 held by
is wife, Claire Cronin and 1,758 held
by his daughter, Felicity Topping.
Furthermore, Daniel has options over
220,000 ordinary shares as part of the
Company’s Share Option Plan announced
on 15 November 2023.
B.P. Marsh • 2024 Annual Report • Directors’ and Group Company Secretary biographies
27
Jonathan Newman ACMA, CGMA, MCSI
Group Finance Director, aged 49
(I) (V) (D)
Jonathan is a Chartered Management
Accountant with over 25 years’ experience
in the financial services industry. He joined
the Group in November 1999, having
started his career at Euler Trade Indemnity,
and was appointed a director of B.P. Marsh
in September 2001 and Group Finance
Director in December 2003. Jonathan
is responsible for the Group’s finance
function, provides strategic financial
advice to the Group’s portfolio, evaluates
new investment opportunities and is
a member of the Investment, Valuation
and Disclosure Committees.
Jonathan has a direct beneficial interest
in 19,645 ordinary shares in B.P. Marsh,
together with a beneficial interest (as
joint owner) in 117,614 ordinary shares in
B.P. Marsh held as part of the Company’s
Joint Share Ownership Plan and 34,516
ordinary shares in B.P. Marsh which
are held in the Company’s SIP Trust.
Furthermore, Jonathan has options
over 200,000 ordinary shares as part
of the Company’s Share Option Plan
announced on 15 November 2023.
Pankaj Lakhani FCCA
Non-executive, aged 70
(R) (A) (V) (N)
Pankaj is a certified accountant and
joined B.P. Marsh in May 2015 and has
over 40 years’ experience within the global
insurance sector, having worked at Marsh
McLennan Group, Nelson Hurst & Marsh
Group, Admiral Underwriting and Victor
O. Schinnerer. Pankaj is Chairman of both
the Remuneration and Audit Committees
and is also a member of the Valuation and
Nomination Committees. Pankaj owns
36,912 ordinary shares in B.P. Marsh.
Nicholas Carter
Non-executive, aged 81
(R) (A) (E)
Nicholas was appointed to the Board
of B.P. Marsh in May 2019 and has over
50 years’ experience in the Lloyd’s
Insurance Market, having held a variety
of positions within Nelson Hurst & Marsh
Limited, Citicorp Insurance Brokers and
Nelson Hurst Plc. Upon joining the Group
Nicholas was appointed a member of the
Remuneration and Audit Committees
and is also a founding member of the
ESG Committee.
Nicholas owns 29,000 ordinary shares
in B.P. Marsh and also has an indirect
beneficial interest in 6,383 ordinary
shares held by his wife, Fiona Carter.
Sinead O’Haire, LLB (Hons), FCG
Chief Legal Officer & Group
Company Secretary, aged 39
(N) (D) (E)
Sinead joined B.P. Marsh in 2009 and was
appointed Group Company Secretary in
June 2011. Sinead attends all Board and
Committee meetings and works closely
with the Chairman’s Office and Board in
all matters of governance and to oversee
the effective functioning and leadership
of the Company, as well as ensuring
compliance with the stock market
regulations. Sinead is responsible for
negotiating and finalising the legal
aspects of new investments, any follow-on
funding and eventually the exit process.
Sinead is a founder member of the
ESG Committee and also sits on the
Nomination Committee.
Sinead has a direct beneficial interest in
24,695 ordinary shares in B.P. Marsh,
together with a beneficial interest (as
joint owner) in 117,614 ordinary shares in
B.P. Marsh held as part of the Company’s
Joint Share Ownership Plan and 34,516
ordinary shares in B.P. Marsh which are
held in the Company’s SIP Trust.
Furthermore, Sinead has options over
200,000 ordinary shares as part of
the Company’s Share Option Plan
announced on 15 November 2023.
(R) Member of the Remuneration
Committee during the year
(A) Member of the Audit Committee
during the year
(I) Member of the Investment
Committee during the year
(V) Member of the Valuation
Committee during the year
(N) Member of the Nomination
Committee during the year
(D) Member of the Disclosure
Committee during the year
(E) Member of the Environmental,
Social and Governance (“ESG”)
Committee during the year
Key
Corporate Governance
The Board of B.P. Marsh (“the Board”) is responsible
for the Group’s corporate governance policies and
recognises the importance of high standards of
integrity, and consistently seeks to apply the
principles set out in the ‘Corporate Governance
Code’ published by the Quoted Company Alliance
to the extent that they are appropriate for, and
applicable to, a company of B.P. Marsh’s size quoted
on the Alternative Investment Market (“AIM”). The
Company has identified three core stakeholders
within its business model; its Shareholders, Investee
Companies and Employees.
Strategy & Business Model
Since its inception in 1990, the Company has focused
on acquiring minority stakes in Financial Service
Intermediary Businesses with no restrictions on their
global location, assisting where possible its Investee
Companies and selling that stake, in partnership with
management, to the benefit of the Shareholders.
As time has gone by, whilst this model has remained
unchanged, the size of the potential initial
investment has risen to up to £5m as the Company’s
assets have grown and its business has become
better known. In addition, the Company can provide
follow-on funding to further enhance growth.
We have been able to maintain an average
compound annual increase in the Net Asset Value
since inception of over 12%.
We have every reason to believe that the Company’s
business will continue to grow in size, particularly as
a result of the ability to make larger initial
investments into larger businesses.
The B.P. Marsh & Partners Plc Board consists of four
executive and two non-executive directors and has
ultimate oversight over the business of B.P. Marsh &
Partners Plc. The Board is responsible for the making
and eventual disposal of investments and the
continued monitoring of their performance.
Corporate Structure
The Company operates via five main departments
reporting to the Board of B.P. Marsh & Partners Plc.
Chairman’s Office
Comprised of the Executive Chairman and
Managing Director, the Chairman’s Office has
oversight of the day to day management of the
Company’s business.
Investment Department
Headed up by the Chief Investment Officer, the
Investment Department is responsible for overseeing
the Company’s Investment Portfolio. With
appointments made to each of the Investee
Companies’ Boards, the Investment Department
monitors the performance of the Investee
Companies and reports to the Chairman’s Office
and ultimately the Board.
Finance Department
Led by the Group Finance Director, the Finance
Department is responsible for the internal finance
function of the Company, monitoring the financial
performance of the Investee Companies and
providing strategic financial support and advice.
Investor Relations Department
The Investor Relations Department, led by the
Chairman and Managing Director, is a collaborative
effort of each department. The Investor Relations
Department is responsible for communication
between the Company and the financial markets.
This communication enables the investment
community to make an informed judgement about
the fair value of the Company’s shares and
provides the Company with essential feedback
from investors and the market on company
performance and strategy.
B.P. Marsh • 2024 Annual Report • Corporate Governance
28
Company Secretarial Department
Led by the Chief Legal Officer & Group Company
Secretary, the Company Secretarial Department
ensures that the Group remains compliant with its
legal and regulatory obligations. It also acts as the
point of contact for the legal departments of the
Investee Companies where assistance is required.
Directors
Details of the appointment and resignation dates of
directors are shown in the Group Report of the
Directors. Historically, all directors were subject to
re-election within a three-year period. From the
AGM in July 2024, all directors will be subject to
re-election annually.
It is expected that all directors dedicate as much time
as is required during the year to successfully
discharge their duties. The Group requires each
director to prepare adequately for the four scheduled
Board Meetings held each year as well as any time
required to provide informed approval for any other
matters that arise between Board Meetings.
All the directors have access to the advice and
services of the Company Secretary and may, in
furtherance of their duties, take independent legal
and financial advice at the Company’s expense.
They also have access to the minutes of the Board
meetings, in which any concerns expressed by
them regarding matters pertaining to the Group
are recorded.
A review of the performance and effectiveness of
each director, including the non-executive directors,
and the Committees of the Board, takes place
annually and is assessed on an on-going basis by
the other members of the Board.
The Company believes that its two non-executive
directors are independent, however it has identified
the following factors that could give rise to an
argument against the classification as independent,
namely that Pankaj Lakhani and Nicholas Carter are
shareholders in the Company and that they both
have a previous employment history with Executive
Chairman Brian Marsh. However, the Group notes
that a decision as to the independence of its non-
executive directors rests with the Board itself, and
upon further review it remains comfortable that both
of its non-executive directors are independent as
they consistently provide independent input and
none of the aforementioned factors compromise
their independence in practice.
Board Meetings
The Board meets at least quarterly and at such other
times as required and receives regular reports on a
wide range of key issues including investment
performance, financial performance, investment
opportunities, disposals and corporate strategy.
All major decisions affecting the Group are taken at
Board level and all the directors are free to bring any
matter to the attention of the Board at any time.
Committees of the Board
The Board has established seven standing
committees – the Remuneration Committee, the
Audit Committee, the Investment Committee, the
Valuation Committee, the Nomination Committee,
the Disclosure Committee and the Environmental,
Social and Governance (“ESG”) Committee.
Remuneration Committee
The Remuneration Committee is comprised of its
Chair, Pankaj Lakhani, and members Nicholas
Carter and Brian Marsh. In accordance with its
terms of reference, the Committee determines the
level and make-up of remuneration (including
bonuses and awards) of the executive directors
and members of staff.
The Report of the Remuneration Committee to the
shareholders on how directors are remunerated,
together with details of individual directors’
remuneration packages, is to be found on pages
33 to 37.
B.P. Marsh • 2024 Annual Report • Corporate Governance
29
Corporate Governance
continued
Audit Committee
The Audit Committee is comprised of the two non-
executive directors of the Company and during the
year was chaired by Pankaj Lakhani. The external
auditor, together with the Group Finance Director
and other financial staff, are invited to attend
these meetings.
The Report of the Audit Committee, found on pages
38 to 39, details the role of the Committee and the
work carried out by the Committee throughout
the year.
Investment Committee
The Investment Committee is comprised of all the
executive directors of the Company and the
directors of the Company’s operating subsidiary,
B.P. Marsh & Company Limited, and meets whenever
significant investment matters arise which are not
dealt with in the normal course of Board business.
During the year the Board of B.P. Marsh & Company
Limited, whose constituent membership is exactly
the same as the Investment Committee, took
responsibility for all matters relating to ongoing
portfolio management, with the Investment
Committee reserved solely for considering
advanced stage new business opportunities.
Valuation Committee
During the year the Valuation Committee was
composed of Brian Marsh, Alice Foulk, Jonathan
Newman, Daniel Topping and Pankaj Lakhani and, in
accordance with its terms of reference, is responsible
for preparing investment valuations and reviewing
the suitability of the Company’s investee company
valuation policy.
Nomination Committee
The Nomination Committee is composed of at least
three directors (including at least one non-executive
director) and during the year was composed of Brian
Marsh, Alice Foulk, Daniel Topping, Pankaj Lakhani
and the Group’s Company Secretary, Sinead
O’Haire. In accordance with its terms of reference
the Committee is responsible for reviewing the
structure, size and composition of the Board and
senior staff and for identifying and nominating for
approval of the Board, candidates for Board
positions and other senior staff vacancies as and
when they arise. The Committee is also responsible
for reviewing the leadership of the Group, including
the consideration of succession planning with a view
to ensuring the continued ability of the Group to
compete effectively in the marketplace.
Disclosure Committee
The Disclosure Committee (regarding Market Abuse
Regulation Disclosure) is composed of Alice Foulk,
Jonathan Newman, Daniel Topping and the Group’s
Company Secretary, Sinead O’Haire. In accordance
with its terms of reference the Committee is
responsible for overseeing the Company’s
compliance with its obligations (as laid down by the
AIM Rules, Disclosure and Transparency Rules and
the Market Abuse Regulation) in respect of the
disclosure and control of inside information directly
concerning the Company.
Environmental, Social and
Governance (“ESG”) Committee
The ESG Committee is composed of Daniel Topping,
Nicholas Carter and the Group’s Company
Secretary, Sinead O’Haire. In accordance with its
terms of reference the Committee is responsible for
developing and reviewing the strategies, policies and
performance of the Company in relation to
environmental, social and governance matters and
suggesting ways to drive improvement in these
areas. The Committee is also responsible for
ensuring the Company has an appropriate ESG
strategy that is integrated with the core business
strategy and ensuring the strategy is embedded
across the Group, continues to evolve and is aligned
to the culture and values of the Company.
B.P. Marsh • 2024 Annual Report • Corporate Governance
30
Directors’ Attendance Record
Board Audit Remuneration Valuation ESG Nomination Disclosure
Meeting Committee Committee Committee Committee Committee Committee
Brian Marsh 14/14 N/A 8/8 2/2 N/A 1/1 N/A
Alice Foulk 13/14 N/A N/A 2/2 N/A 1/1 108/119
Daniel Topping 14/14 N/A N/A 2/2 2/2 1/1 101/119
Jonathan Newman 13/14 N/A N/A 2/2 N/A N/A 105/119
Pankaj Lakhani 14/14 2/2 8/8 2/2 N/A 1/1 N/A
Nicholas Carter 14/14 2/2 8/8 N/A 2/2 N/A N/A
Engagement of External Advisers
The Company engages external advisers as and
when it feels it necessary, for example when there is
a skills gap internally, or it is agreed that the matter
is important enough that the prudent approach is
to ensure that professional advisers have opined
on the matter.
Advice is sought from selected lawyers and
accountants as and when required, including on
financial, tax, acquisition and disposal matters, and
is limited to the particular matter which they have
been engaged to advise on.
Each Committee of the Board has, contained within
its Terms of Reference, the ability to seek external
third-party advice on any issue contained within
their remit at the expense of the Company.
Each director is able to engage external advisers at
the expense of the Company in order to discharge
their duties.
Board Evaluation
An annual evaluation is conducted to review the
performance and effectiveness of the Board. This
evaluation is conducted through a questionnaire
which is identical for both executive and non-
executive directors covering the performance of the
Chairman, the Board and its Committees. It is
conducted in an interview format, which is felt a more
effective way of obtaining more detailed feedback.
The results of all the interviews were analysed and
communicated through a written report compiled
by the Company Secretarial Department, with
recommendations made where relevant.
Corporate Culture
Ever since the Company was founded, and hence its
name, the Group has advocated and emphasised
that it makes its decisions based on the nature,
needs and aspirations of the people it employs, or
those with whom it goes into Partnership; sinking or
swimming together, alongside one another.
As a consequence of the above, the Company pays
careful attention to the ‘people dimension’,
regardless of the size of the investee company.
In addition, and one of the main differentials
between the Company and its peers, is the fact that
it often offers flexibility to its Partners where
necessary to allow them to develop at their own
pace, for example, not requiring personal
guarantees to accompany loans, and subordinating
its loans behind bank debt.
Likewise, this progressive approach is also
demonstrated internally, whereby the executive
team is continuingly challenged to develop its skills
and responsibilities within the Company, resulting in
a motivated management team committed to
developing a principled yet sustainable entity, that
achieves the best results for all its stakeholders.
B.P. Marsh • 2024 Annual Report • Corporate Governance
31
Corporate Governance
continued
Relations with Shareholders
As a company listed on the Alternative Investment
Market, B.P. Marsh is responsible for ensuring that
it is aware of shareholder needs and expectations.
B.P. Marsh attaches great importance to
maintaining good relationships with all of its
shareholders and interested parties and seeks to
ensure that they have access to correct and
adequate information at all times.
The Company is aware that as stakeholders, its
shareholders play a vital role in the fabric of the
Company and therefore regularly engages in
dialogue with its shareholders and offers
meetings with institutional and major shareholders
following the release of B.P. Marsh’s Annual
and Interim Results.
Much of the Company’s shareholder base is
comprised of small retail shareholders holding shares
through nominee accounts and therefore the
identities of the underlying shareholders are not
always available to B.P. Marsh. The Company
welcomes these, and all shareholders to make
contact with the Company and provide any
feedback or comments that they may have.
The Company’s Annual General Meeting is also
open to retail investors who hold their shares in
nominee accounts.
Internal Controls and Risk Management
The Board is responsible for ensuring the Group has
effective internal controls in place throughout the
year, as well as procedures necessary for reviewing
the Group’s system of internal controls and assessing
the nature and extent of the risks facing the Group.
The task of reporting on the internal controls and risk
management has been delegated to the Audit
Committee, the report of which can be read on
pages 38 to 39.
The Board believes that its Annual Report and these
consolidated financial statements play an important
part in presenting all shareholders with an
assessment of the Group’s position and prospects.
The Chairman’s Statement included within the
Annual Report contains a detailed consideration of
the Group’s current position and outlook.
A statement of the directors’ responsibilities in
respect of the consolidated financial statements is
set out on page 40.
By order of the Board.
S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2024
B.P. Marsh • 2024 Annual Report • Corporate Governance
32
Report of the
Remuneration Committee
The Remuneration Committee of the Board (the
“Committee”) during the year was composed of the
non-executive directors of the Company, Pankaj
Lakhani and Nicholas Carter, as well as the
Chairman of the Group, Brian Marsh.
The Committee is responsible for setting the
remuneration of the executive directors and other
members of staff, as detailed in the Remuneration
policy below.
Remuneration Policy
The Committee reviews remuneration levels annually
and seeks to ensure that they are set at a level which
is in line with comparable companies in the industry,
are capable of attracting, retaining and motivating
directors and staff of appropriate calibre, are
consistent with the performance of the Company
and at the same time are aligned with the best
interests of the shareholders.
The Committee’s terms of reference allow that for as
long as the Chairman and the Managing Director of
the Company are executive, they can attend either
as members or observers and be invited to express
their views on remuneration levels for other
executives and staff, but should not be present when
their own salaries are decided or when decisions
are taken on performance targets for incentive
arrangements in which they participate.
The Board has delegated the review and setting of
non-executive director remuneration to a sub-
committee of the Board consisting of Brian Marsh,
Alice Foulk and Sinead O’Haire.
The Committee receives advice from external
remuneration advisers where appropriate.
Directors’ Service Agreements
The executive directors entered into service agreements with the Company on the following dates:
Director Date of service agreement Term Notice period
B.P. Marsh 30 January 2006 Continuous 6 months
J.S. Newman 30 January 2006 Continuous 6 months
D.J. Topping 1 March 2011 Continuous 6 months
A.H.D. Foulk 16 February 2015 Continuous 6 months
The non-executive directors do not have service agreements, but their letters of appointment provide that their
tenure of office is for an initial period of 12 months and shall continue until either terminated by the non-
executive director or the Company, on giving to the other, 3 months prior written notice.
Director Date of Office tenure Initial period Notice period
P.B. Lakhani 21 May 2015 12 months 3 months
N.H. Carter 1 May 2019 12 months 3 months
B.P. Marsh • 2024 Annual Report • Report of the Remuneration Committee
33
Report of the
Remuneration Committee
continued
Joint Share Ownership Plan (“JSOP”)
During the year to 31 January 2019, B.P. Marsh &
Partners Plc entered into joint share ownership
agreements (“JSOAs”) with certain employees,
directors and JTC Employer Solutions Trustee
Limited, as trustee of the B.P. Marsh Employees’
Share Trust (“the Employee Benefit Trust”), subject
to certain conditions being met.
Since 12 June 2021, following the performance
criteria being met, the following directors of the
Company each own, jointly with the trustee of the
Employee Benefit Trust, and subject to the terms of
JSOAs, a beneficial interest (as joint owner) in the
number of shares respectively shown opposite the
name of each such director:
Number of % of total
jointly-owned jointly-owned
Director shares shares
A.H.D. Foulk 167,465 11.5%
J.S. Newman 167,465 11.5%
D.J. Topping 167,465 11.5%
Total 502,395 34.5%
Under the terms of the JSOAs, the employees and
directors are entitled to any gain on sale of the shares
in excess of 312.6 pence per share. Alternatively, the
participant and the Trustee may exchange their
respective interests in the jointly-owned shares such
that each becomes the sole owner of a number of
ordinary shares of equal value to their joint interests.
On 26 October 2023 following the removal of a
dividend waiver and block on voting rights on the
1,206,888 allocated ordinary shares held by the
Employee Benefit Trust, these ordinary shares
became eligible for dividend and voting rights and
therefore became fully dilutive for the Group.
Since 31 January 2024, 362,882 of the shares held
within the Employee Benefit Trust have been sold,
including 99,700 shares jointly-owned by 2 executive
directors of the Company, leaving 1,080,265 shares
remaining within the Employee Benefit Trust, of
which 236,259 are unallocated.
Further details are given in Note 24 to the financial
statements.
Share Incentive Plan (“SIP”)
During the year to 31 January 2017 the Group
established an HMRC approved Share Incentive
Plan (“SIP”).
During the year a total of 32,780 ordinary shares in
the Company, of which 4,850 were held in Treasury
as at 31 January 2023 and 27,930 were from shares
bought back into Treasury during the current year
(2023: 9,542 ordinary shares in the Company, which
were held in Treasury as at 31 January 2022) were
transferred to the B.P. Marsh SIP Trust (“SIP Trust”).
As a result, a total of 32,780 ordinary shares in the
Company were available for allocation to the
participants of the SIP (2023: 31,801 ordinary shares
were available for allocation, including 4,104
unallocated ordinary shares already held within
the SIP Trust as at 31 January 2022 and 18,155
unallocated ordinary shares transferred from the
Employee Benefit Trust to the SIP Trust in April 2022).
On 14 April 2023, a total of 11 eligible employees
(including 3 executive directors of the Company)
applied for the 23-24 SIP and were each granted 1,192
ordinary shares (“23-24 Free Shares”), representing
approximately £3,600 at the price of issue.
Additionally, on the same date, all eligible
employees were also invited to take up the
opportunity to acquire up to £1,800 worth of
ordinary shares (“Partnership Shares”). For every
Partnership Share that an employee acquired, the
SIP Trust offered two ordinary shares in the
Company (“Matching Shares”) up to a total of
£3,600 worth of shares. All 11 eligible employees
(including 3 executive directors of the Company)
took up the offer and acquired the full £1,800 worth
of Partnership Shares (596 ordinary shares) and
were therefore awarded 1,192 Matching Shares.
B.P. Marsh • 2024 Annual Report • Report of the Remuneration Committee
34
The 23-24 Free and Matching Shares are subject to
a 1 year forfeiture period.
A total of 32,780 (2023: 31,801) Free, Matching and
Partnership Shares were granted to the 11 (2023: 11)
eligible employees during the year, including 8,940
(2023: 8,673) granted to 3 (2023: 3) executive
directors of the Company.
No ordinary shares were withdrawn from the SIP
Trust during the year (2023: no withdrawals).
£77,492 of the IFRS 2 charges (2023: £84,714)
associated with the award of the SIP shares to 11
(2023: 11) eligible directors and employees of the
Company has been recognised in the Statement of
Comprehensive Income as employment expenses.
As at 31 January 2024, and after adjusting for a
total of 19,951 ordinary shares withdrawn from the
SIP Trust by employees on departure and 6,842
ordinary shares forfeited on departure (since
inception), a total of 295,609 Free, Matching and
Partnership Shares had been granted to 11 eligible
employees under the SIP, including 96,192 granted
to 3 executive directors of the Company.
The results of the SIP Trust have been fully
consolidated within these financial statements on
the basis that the SIP Trust is effectively controlled
by the Company.
Share Option Plan (“SOP”)
On 6 September 2023 the Group established a
new employee Share Option Plan (“SOP”).
On 17 October 2023 Share Options (“Options”)
over 1,682,500 ordinary shares of 10p each in the
Company, in aggregate, were granted to 12
employees, including 3 executive directors of
the Company.
The total number of Options available for allocation
amounted to 1,685,970, which represented 4.5% of
the Company’s total ordinary shares in issue at the
time the SOP was adopted. 3,470 Options remain
unallocated as at 31 January 2024.
Each of the Options will vest, on a ratchet basis,
subject to certain Net Asset Value growth targets
being achieved for the three consecutive financial
years ending 31 January 2024, 31 January 2025
and 31 January 2026 (the “Performance Period”).
The first exercise date is 6 September 2026 whereby
50% of vested Options will be exercisable at 10p per
share, with the remaining 50% exercisable
at 10p per share from 6 September 2027.
The number of Options which vest will vary
depending on the level of Net Asset Value growth
achieved, subject to the growth performance criteria
as set out below, alongside the percentage of
Options that will vest at each value:
Compounded annual growth of Net Asset % vesting
Value over the Performance Period of Options
Less than 8.5% 0%
Between 8.5% and less than 9.25% 25%
Between 9.25% and less than 10% 50%
10% or above 100%
For these purposes, Net Asset Value is defined as
“audited Total Assets less Total Liabilities for the
consolidated Group plus any dividends or other
form of shareholder return that are paid in the
relevant Financial Year”.
Therefore, for all Options to vest, the Net Asset Value
(as defined above) would need to exceed £252.2m,
adjusted for any shareholder distributions.
B.P. Marsh • 2024 Annual Report • Report of the Remuneration Committee
35
Report of the
Remuneration Committee
continued
Of the total 1,682,500 Options granted, the following directors of the Company were each awarded, subject
to the terms of the SOP, a beneficial interest in the number of Options respectively shown opposite the name
of each such director:
Number of % of total
Director Options granted Options granted
A.H.D. Foulk 260,000 15.4%
D.J. Topping 220,000 13.1%
J.S. Newman 200,000 11.9%
Total 680,000 40.4%
£89,437 of the IFRS 2 charges (2023: N/A) associated with the grant of the SOP options to 12 (2023: N/A)
eligible directors and employees of the Company has been recognised in the Statement of Comprehensive
Income as employment expenses.
Further details are given in Note 24 to the financial statements.
Following the awards made under the various share schemes, as at 31 January 2024 3 executive directors
had a beneficial interest in the ordinary shares of the Company (specifically held within or granted under its
share plans) as follows:
Ordinary shares Ordinary shares Share Options
Director held under JSOP held under SIP granted under SOP
A.H.D. Foulk 167,465 23,944 260,000
D.J. Topping 167,465 24,531 220,000
J.S. Newman 167,465 32,651 200,000
Total 502,395 81,126 680,000
The directors’ interests in other shares of the Company are detailed in the Group Report of the Directors.
Aggregate Directors’ Remuneration
2024 2023
£ £
Emoluments 2,932,885 1,600,686
Fees 29,700 25,200
Pension contributions 67,370 71,250
B.P. Marsh • 2024 Annual Report • Report of the Remuneration Committee
36
Aggregate Directors’ Emoluments
2024
Emoluments
Bonuses and excluding
Salaries other one-off pension
and fees Benefits remuneration contributions
£ £ £ £
B.P. Marsh 283,021 – – 283,021
A.H.D. Foulk 251,865 6,155 286,750 544,770
J.S. Newman 306,950 7,256 236,750 550,956
D.J. Topping 355,913 7,975 1,086,750 1,450,638
P.B. Lakhani 76,700 – – 76,700
N.H. Carter 56,500 – – 56,500
The bonuses and other one-off remuneration include special bonuses paid to the executive directors of the
Company amounting to £1,000,000 relating to the sale of the Group’s investment in Kentro Capital Limited
(“Kentro”) during the year, of which £900,000 was paid to Daniel Topping and £50,000 each to Jonathan
Newman and Alice Foulk. The sale of the Group’s holding in Kentro delivered a gain on disposal of
£36,395,446 (Note 12).
Directors’ Pensions
The executive directors received the following pension contributions during the year:
2024
£
B.P. Marsh –
A.H.D. Foulk 29,208
J.S. Newman 30,875
D.J. Topping 7,287
Audit
The tables in this report (including the Notes thereto) have been audited by Rawlinson & Hunter Audit LLP.
This report has been approved by the Remuneration Committee and the Board as a whole and has been
signed on behalf of the Chairman of the Remuneration Committee, Pankaj Lakhani, on 10 June 2024.
By order of the Board
S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2024
B.P. Marsh • 2024 Annual Report • Report of the Remuneration Committee
37
Report of the
Audit Committee
The Audit Committee’s role is to provide effective
governance over the Group’s financial reporting,
including the disclosures made in the financial
statements, the performance of the external auditors
and oversight of the Group’s internal financial
control function and to report to the Board on
these matters. The Company’s external auditors
are Rawlinson & Hunter Audit LLP (“Rawlinson
& Hunter”).
The Audit Committee members during the year were
Pankaj Lakhani (Chairman) and Nicholas Carter,
both Non-Executive Directors of the Company.
The Audit Committee formally met twice in the
financial year to 31 January 2024, and remained in
frequent contact throughout the period. The external
auditors are invited to each meeting, together with
the relevant members of the Finance Department
as appropriate.
The full responsibilities of the Audit Committee are
set out in its Terms of Reference that are available
on the Company’s Website.
The Audit Committee has reviewed, with both
management and the external auditors, the interim
and final financial statements, focusing on:
• Changes in accounting policies and practices
• Major judgemental areas
• Significant adjustments resulting from the audit
• The going concern assumption
• Compliance with Accounting Standards
• Compliance with applicable regulatory and
legal requirements
• Compliance with best practice in the area of
Corporate Governance
The Company adopted the QCA Governance Code
(“QCA Code”) issued by the Quoted Companies
Alliance in September 2018. The QCA Code is a
practical, outcome-oriented approach to corporate
governance that is tailored for small and mid-size
quoted companies in the UK.
The Audit Committee has agreed that the selection
of appropriate accounting policies and practices has
not materially changed since the previous year.
The Audit Committee has considered the material
risks and exposures faced by the Company, most
notably in the current climate being inflation and
the wider economic issues arising from various
geopolitical conflicts. However, the Committee is in
agreement that there are no further risks that remain
unidentified in the Financial Statements. It was also
agreed that there were no material uncertainties
related to events and conditions that may cast
significant doubt on the Group’s ability to continue
as a going concern.
As Chairman of the Audit Committee, I am pleased
to report that we work and communicate well with
Rawlinson & Hunter throughout the year and most
importantly during the Group’s external audit
process, which runs smoothly and effectively.
During the year, fees of £27,576 (2023: £23,890)
were paid to the external auditors for non-audit
work, including tax compliance. This non-audit work
was undertaken by independent teams within
Rawlinson & Hunter.
B.P. Marsh • 2024 Annual Report • Report of the Audit Committee
38
Rawlinson & Hunter was appointed as B.P. Marsh’s
external auditor for the year ended 31 January
2024. There are currently no plans to retender. The
Rawlinson & Hunter partner (“Engagement Partner”)
responsible for the B.P. Marsh audit is Kulwarn
Nagra, and HAT Group, an independent audit,
accountancy and ICAEW compliance training
organisation is the Engagement Quality Reviewer.
Due to extenuating circumstances affecting the
planned rotation of the Engagement Partner, and as
permitted by Section 3.15 of the Financial Reporting
Council’s Ethical Standards 2019, the Audit
Committee gave consideration to Kulwarn Nagra’s
continuation as Engagement Partner beyond the
prescribed term of 5 years. The Audit Committee
determined that given the circumstances this was
the most favourable course of action in order to
safeguard the quality of the audit engagement.
For the upcoming AGM (23 July 2024), the
Committee has recommended to the Board that
Rawlinson & Hunter be reappointed, and the Board
will propose their reappointment.
The Committee will continue to keep its activities
under review to ensure that it complies with any
changes in the regulatory environment.
Pankaj Lakhani
Audit Committee Chairman
10 June 2024
B.P. Marsh • 2024 Annual Report • Report of the Audit Committee
39
Group Report
of the Directors
Directors
• B.P. Marsh OBE (Chairman)
• A.H.D. Foulk BA (Hons)
• J.S. Newman ACMA, CGMA, MCSI
• D.J. Topping MCSI, FCG
• P.B. Lakhani FCCA (non-executive)
• N.H. Carter (non-executive)
The directors submit their report and the audited
financial statements of the Company and the Group
(namely B.P. Marsh & Partners Plc, B.P. Marsh &
Company Limited, Marsh Insurance Holdings
Limited, B.P. Marsh Asset Management Limited,
B.P. Marsh (North America) Limited, RHS Midco I LLC,
B.P. Marsh US LLC, B.P. Marsh & Co. Trustee
Company Limited, Marsh Development Capital
Limited, XPT London Limited, the B.P. Marsh SIP
Trust and the B.P. Marsh Employees’ Share Trust)
for the year ended 31 January 2024.
Statement of Directors’
Responsibilities
The directors are responsible for preparing the
annual report (including the Group Report of the
Directors and the Group Strategic Report) and the
financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare
Group and Company financial statements for each
financial year. The directors are required by the AIM
Rules of the London Stock Exchange to prepare
Group financial statements in accordance with
UK-adopted international accounting standards
and have elected to prepare the Company financial
statements on the same basis. Under company
law the directors must not approve the financial
statements unless they are satisfied that they give
a true and fair view of the state of affairs of the
Group and Company and the Group’s profit or
loss for that year.
In preparing financial statements the directors are
required to:
• select suitable accounting policies and then apply
them consistently;
• make judgments and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with UK-adopted international
accounting standards subject to any material
departures disclosed and explained in the
financial statements; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and the Company will
continue in business.
The directors confirm that they have complied with
the above requirements in preparing the financial
statements.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose
with reasonable accuracy at any time the financial
position of the Group and Company and enable
them to ensure the financial statements comply with
the Companies Act 2006. They are also responsible
for safeguarding the assets of the Group and the
Company and hence for taking reasonable steps for
the prevention and detection of fraud and other
irregularities.
The directors are responsible for ensuring the annual
report and the financial statements are made
available on a website. Financial statements are
published on the Company’s website in accordance
with legislation in the United Kingdom governing the
preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s
website is the responsibility of the directors. The
directors’ responsibility also extends to the on-going
integrity of the financial statements contained therein.
B.P. Marsh • 2024 Annual Report • Group Report of the Directors
40
Disclosure of Information
to the Auditors
Each of the persons who are directors at the time
when the Group Report of the Directors is approved
has confirmed that:
• so far as that director is aware, there is no relevant
audit information of which the Company’s
auditors are unaware; and
• that director has taken all steps that ought to have
been taken as a director in order to be aware of
any information needed by the Company and
Group’s auditors in connection with preparing
their report and to establish that the auditors are
aware of that information.
This information is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
Principal Activity
The principal activity of the Group during the year
was the provision of consultancy services to, as well
as making and trading investments in, financial
services businesses.
Country of Incorporation
and Registration
B.P. Marsh & Partners Plc was incorporated and is
registered in England and Wales.
Results of the Business
The results for the year are set out on page 68.
The directors consider the current state of affairs
of the Group to be satisfactory.
Dividends
The Company paid three dividends to shareholders
during the year: a dividend of 1.39p per share
(£500,672) was paid on 28 February 2023, a
dividend of 1.39p per share (£499,166) was paid on
31 July 2023 (29 July 2022: £1,001,435 or 2.78p
per share) and following the completion of the
sale of the Group’s investment in Kentro Capital
Limited on 9 October 2023 a special dividend
of 2.78p (£1,028,368) per share was paid on
24 November 2023.
In line with the Group’s announcements to the
market on 23 January 2024 and 25 March 2024, in
which it confirmed its intention to increase its annual
dividend allocation from £2,000,000 to £4,000,000
for the next three financial years commencing
1 February 2024, a dividend of 2.68p per share
(£990,908) was paid on 18 March 2024 followed by
a dividend of 2.68p per share (£990,908) paid on
3 May 2024. The directors have recommended a
final dividend of 5.36p per share which will be paid,
subject to Shareholder approval, on 26 July 2024 to
Shareholders registered at the close of business on
28 June 2024. Based upon the current number of
shares in issue, and excluding the shares held within
the Joint Share Ownership Plan and in Treasury,
this would total £1,983,016.
B.P. Marsh • 2024 Annual Report • Group Report of the Directors
41
Group Report
of the Directors
continued
Significant Interests
As at 24 May 2024 the directors have been made aware that the following shareholders held disclosable
interests of 3% or more of the issued share capital of the Company:
No. of Ordinary shares % of issued
of 10p each held Share capital
Mr B.P. Marsh 14,184,419 38.1%
PSC UK Pty Limited 7,385,504 19.8%
Mr M. MacLeish 1,869,936 5.0%
Hargreaves Lansdown Asset Management 1,653,145 4.4%
Interactive Investor 1,445,245 3.9%
JTC Employer Solutions Trustee Limited 1,316,524 3.5%
Mr C. Thompson 1,294,753 3.5%
James Sharp & Co 1,256,903 3.4%
Directors
The names of the directors who served at any time during the year are stated at the head of this report.
The directors’ interests in the shares of the Company were:
31 January 2024 31 January 2023
Ordinary shares of Ordinary shares of
10p each 10p each
Mr B.P. Marsh1 15,110,079 15,110,079
Mr D.J. Topping2 314,423 309,169
Mr J.S. Newman3 219,761 216,781
Ms A.H.D. Foulk4 214,837 211,857
Mr P.B. Lakhani 36,912 36,912
Mr N.H. Carter 27,526 25,000
1
Total interest includes 925,660 ordinary shares held by the Marsh Christian Trust of which Mr B.P. Marsh is Trustee and Settlor (31 January
2023: Total interest included 925,660 ordinary shares held by the Marsh Christian Trust).
2 Total interest includes 24,531 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with JTC Employer
Solutions Trustee Limited (“JTC”) under a Joint Share Ownership Agreement between Mr D.J. Topping, JTC and the Company and 122,427
ordinary shares directly owned by Mr D.J. Topping (31 January 2023: Total interest included 21,551 ordinary shares held within the
Company’s SIP Trust, 167,465 ordinary shares co-owned with JTC under a Joint Share Ownership Agreement between Mr D.J. Topping,
JTC and the Company and 120,153 ordinary shares directly owned by Mr D.J. Topping).
3 Total interest includes 32,651 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with JTC under a
Joint Share Ownership Agreement between Mr J.S. Newman, JTC and the Company and 19,645 ordinary shares directly owned by
Mr J.S. Newman (31 January 2023: Total interest included 29,671 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary
shares co-owned with JTC under a Joint Share Ownership Agreement between Mr J.S. Newman, JTC and the Company and 19,645
ordinary shares directly owned by Mr J.S. Newman).
4 Total interest includes 23,944 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with JTC under
a Joint Share Ownership Agreement between Ms A.H.D. Foulk, JTC and the Company and 23,428 ordinary shares directly owned by
Ms A.H.D. Foulk (31 January 2023: Total interest included 20,964 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary
shares co-owned with JTC under a Joint Share Ownership Agreement between Ms A.H.D. Foulk, JTC and the Company and 23,428
ordinary shares directly owned by Ms A.H.D. Foulk).
B.P. Marsh • 2024 Annual Report • Group Report of the Directors
42
Share Capital
Information relating to the Company’s ordinary
share capital (including share repurchases and
cancellation) is shown in Note 19 to the financial
statements.
Events after the Reporting Date
Group
On 22 March 2024 the Group completed the
disposal of its entire 38.63% holding in Paladin
Holdings Limited (“Paladin”) to Specialist Risk Group
Limited (“SRG”), following receipt of regulatory
approval. On completion, the Group received
£42,075,838 in initial cash consideration, net of
transaction costs, plus repayment in full of its
£5,900,500 loans to Paladin. The initial cash
proceeds received represented an overall gain of
£42,072,338 above the net cost of investment. As well
as the initial consideration, the Group will also be
entitled to receive its proportion of any net working
capital adjustment, expected to be finalised within
three months of completion. The Group will then be
entitled to receive deferred consideration of up to
£17,800,000 in cash, based upon 20% EBITDA
growth targets above Paladin’s actual adjusted
EBITDA for 2023, in FY24 and FY25, payable in 2025
and 2026. There is also the possibility for the Group
to receive further consideration in FY25 should
Paladin outperform these growth targets.
On 27 March 2024 the Group acquired a 30%
cumulative preferred ordinary equity stake in
Devonshire UW Limited (“Devonshire”) via a holding
company, Devonshire UW Topco Limited, for
consideration of £300,000. Devonshire is a London-
based Underwriting Agency specialising in
transactional risks, including Warranty & Indemnity,
Specific Tax and Legal Contingency Insurance,
with the ability to underwrite transactions in the
UK, Europe, Middle East, Africa, Asia, South
America, Central America and Australasia.
The Group also provided Devonshire with a loan
facility of £1,600,000, of which £390,125 was drawn
down on completion, a further £300,000 on 29 May
2024, with a remaining undrawn facility of £909,875
at the date of this report.
As at 31 January 2024 the Group had provided
loans of £500,000 from a total loan facility of
£1,570,000 to Ai Marine Risk Limited, via its holding
company Dempsey Group Limited. On 10 April 2024
a further £250,000 was drawn down. Total loans
stand at £750,000, with a remaining undrawn
facility of £820,000 at the date of this report.
On 16 April 2024, further to the agreement entered
into on 10 November 2023 and receipt of regulatory
approval, LEBC Holdings Limited (“LEBC”)
completed the sale of 100% of Aspira Corporate
Solutions Limited (“Aspira”), a wholly-owned
subsidiary of LEBC, to Titan Wealth Holdings Limited
(“Titan Wealth”). On the same date, the Group
received full repayment of its £3,300,000 loans that
were outstanding as at 31 January 2024.
On 17 April 2024, the Group acquired a further
2.52% ordinary equity holding in LEBC for
consideration of £1,100,000. On completion the
ordinary shares were immediately converted into
preferred shares. The transaction increased the
Group’s holding in LEBC from 59.34% as at
31 January 2024 to 61.86% at the date of this report.
On 2 May 2024 Pantheon Specialty Group Limited
(“Pantheon”) repaid £1,000,000 of its outstanding
loan balance to the Group. A further repayment of
£536,000 was received on 21 May 2024. As at
31 January 2024 £4,536,000 of loans were
outstanding and following the aforementioned
repayments total loans stand at £3,000,000 at
the date of this report.
B.P. Marsh • 2024 Annual Report • Group Report of the Directors
43
Group Report
of the Directors
continued
On 9 May 2024 the Group acquired a further 7%
cumulative preferred ordinary equity stake in
Pantheon for consideration of £7,300,000 increasing
its equity holding from 25% as at 31 January 2024
to 32% as at the date of this report. There is a
potential for the Group’s equity holding to increase
by a further 5% if certain EBITDA targets are not
achieved by 2025.
On 13 May 2024 the Group acquired, through its
wholly-owned subsidiary company B.P. Marsh (North
America) Limited, a further 0.95% equity stake in XPT
Group LLC (“XPT”) for USD 1,000,787 (£800,073) as
part of a pre-emption share offer. Following this
investment, and the uptake of other shareholder’s
pre-emptive rights, the Group’s fully diluted
shareholding in XPT reduced from 29.10% as at
31 January 2024 to 28.91% at the date of this report.
Company
On 2 May 2024 the Company received a repayment
of £1,157,000 in respect of a loan made to an
Employee Benefit Trust relating to shares held under
joint ownership (Note 24). As at 31 January 2024
the total loan balance outstanding to the Company
from the Employee Benefit Trust amounted to
£4,106,259 and following the aforementioned
repayment, £2,949,259 was outstanding at the
date of this report.
Directors’ and Officers’
Liability Insurance
The Company has purchased insurance to cover
directors’ and officers’ liability, as permitted by
Section 233 of the Companies Act 2006. This
insurance was in force throughout the year ended
31 January 2024 and remains in force at the
date of this report.
Financial Risk Management
The directors’ assessment of the principal risks and
uncertainties is set out in the Group Strategic Report.
Appointment of Auditor
In accordance with section 489 of the Companies Act
2006, a resolution proposing the reappointment of
Rawlinson & Hunter Audit LLP as the Group’s Auditor
will be put to members at the forthcoming AGM.
Registered Office:
5th Floor
4 Matthew Parker Street
London
SW1H 9NP
By order of the Board
S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2024
B.P. Marsh • 2024 Annual Report • Group Report of the Directors
44
Group Strategic Report
Business Review
During the year the major activities of the Group
were as follows:
On 2 February 2023 the Group entered into a new
loan agreement to provide a further USD 6,000,000
(£4,925,231) of funding to XPT Group LLC (“XPT”) in
the form of a short term USD 2,000,000 Revolving
Loan Facility and a USD 4,000,000 Term Loan.
These facilities were drawn down in full on
completion and were utilised by XPT to acquire
Cal Inspection Bureau Inc. and are in addition to
an existing loan facility of USD 2,000,000 provided
by the Group previously. On 1 June 2023 USD
1,000,000 of the Revolving Loan Facility was repaid
by XPT and on 31 October 2023 the remaining
USD 1,000,000 of this facility was repaid. As at
31 January 2024 total loans outstanding amounted
to USD 6,000,000 (£4,683,644).
On 15 February 2023 the Group entered into a new
loan agreement to provide a further £2,000,000 of
funding to Paladin Holdings Limited (“Paladin”) for
the purposes of funding an investment and was in
addition to an existing loan facility of £3,096,500
provided by the Group previously. £500,000 of the
new facility was drawn down by Paladin on
completion with the remaining £1,500,000 drawn
down on 14 July 2023, bringing total loans
outstanding to £5,096,500 at that time. The loan
facility was further increased on 11 August 2023
by £804,000 in order for Paladin to exercise a
Call Option arrangement (noted below). As at
31 January 2024 total loans outstanding amounted
to £5,900,500.
On 23 March 2023 Denison and Partners Limited
(“Denison and Partners”) drew down the remaining
£170,000 from its loan facility agreed by the Group
at the time of initial investment in March 2022.
As at 31 January 2023 £500,000 of loans were
outstanding and following the aforementioned
drawdown total loans outstanding amounted to
£670,000 as at 31 January 2024.
On 28 April 2023 the Group acquired a 35%
cumulative preferred ordinary equity stake in Verve
Risk Services Limited (“Verve”) for consideration of
£430,791 (Note 12). Verve is a London-based
Managing General Agency which specialises in
Professional and Management Liability business for
the insurance industry in the USA, Canada
Bermuda, Cayman Islands and Barbados. The
Group also provided Verve with a loan facility of
£569,209 which was drawn down in full on
completion and remained outstanding as at
31 January 2024. The aggregate funding of
£1,000,000 was utilised as part of a management
buy-out of Verve Risk Partners LLP, an underwriting
cell within Castel Underwriting Agencies Limited.
On 19 June 2023 the Group received £700,000
following the redemption of 700,000 redeemable
preferred shares it held in Lilley Plummer Holdings
Limited (“Lilley Plummer”), as part of a capital
restructure (Note 12). As at 31 January 2024 the
Group’s equity holding in Lilley Plummer was
30%, which remained unchanged following
this redemption.
On 21 June 2023 the Group acquired a 25%
cumulative preferred ordinary equity stake in
Pantheon Specialty Limited (“Pantheon”) for
consideration of £25 (Note 12). Pantheon is a new
holding company, established in Partnership with
Robert Dowman, a leading London Market
Casualty broker specialising in the larger, more
complex liability placements across the world.
On 9 September 2023 Pantheon formally
changed its company name to Pantheon
Specialty Group Limited.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
45
Group Strategic Report
continued
On 21 June 2023, and upon the establishment of
Pantheon noted above, Pantheon acquired a 100%
shareholding in the existing Lloyd’s Broker, Denison
and Partners, including the Group’s entire 40% equity
holding. No cash consideration was received by the
Group for the disposal, which represented a net loss
of £132,000 (Note 14) based upon the Group’s
carrying value of the investment of £132,000 as at
31 January 2023 (Note 12). However, as part of the
transaction, the Group received a 40% equity
holding in New Denison Limited (“New Denison”).
New Denison was incorporated on 20 June 2023
and is currently a dormant company until such time
that it receives its own regulatory approvals. On
9 September 2023 Denison and Partners formally
changed its company name to Pantheon
Specialty Limited.
On 21 June 2023 the Group provided Pantheon with
a loan facility of £500,000 to assist with its working
capital requirements and which was drawn down in
full on completion. On 12 September 2023 the Group
agreed to provide Pantheon with an additional loan
facility of £3,000,000 which was drawn down in full.
This loan facility was increased by a further
£1,036,000, also drawn down in full, on 27 November
2023. As at 31 January 2024 total loans outstanding
amounted to £4,536,000.
On 31 July 2023 Lilley Plummer repaid the remaining
£300,000 of its loan outstanding as at 31 January
2023. No loan amounts were outstanding as at
31 January 2024.
On 9 August 2023 the Group agreed to provide
LEBC Holdings Limited (“LEBC”) with a further loan
facility of £600,000 in addition to the existing loans
outstanding of £3,000,000 at 31 January 2023.
£300,000 of the loan facility was drawn down on
completion and as at 31 January 2024 total loans
outstanding amounted to £3,300,000, leaving a
remaining undrawn facility of £300,000 (Note 22).
On 9 August 2023 Aspira Corporate Solutions
Limited (“Aspira”), a wholly-owned subsidiary of
LEBC, acquired the trading assets and personnel of
LEBC Group Limited. On 10 November 2023 LEBC
agreed to sell 100% of Aspira to Titan Wealth
Holdings Limited (“Titan Wealth”), subject to
regulatory approval. Refer to Note 26 for further
details relating to the subsequent completion of
this transaction since 31 January 2024.
On 11 August 2023 Paladin exercised a Call Option
arrangement with the Group over 5.88% of shares in
Paladin which the Group held. The Group received
£804,000, which was in line with the carrying value
of the shares included within the fair value of the
Group’s investment of Paladin as at 31 January
2023 and represented an overall gain of £4,000
above the original cost of the shares of £800,000
(Note 12 and Note 14). Pursuant to the share
transfer, Paladin cancelled the shares and as a
consequence of the transaction the Group’s
shareholding in Paladin reduced from 47.06% to
43.75%. The transaction was funded through the
Group lending Paladin a further £804,000 (as noted
above). As at 31 January 2024, the Group’s diluted
equity holding in Paladin, adjusted for options
expected to vest, was 38.63%.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
46
On 9 October 2023 the Group completed the
disposal of its entire 18.7% shareholding in Kentro
Capital Limited (“Kentro”), pursuant to an
agreement dated 22 May 2023 by which Brown
& Brown, Inc. (“Brown & Brown”), one of the largest
US-based insurance intermediaries, agreed to
acquire the entire issued share capital of Kentro.
On completion, the Group received proceeds of
£51,522,000 (net of all transaction costs) which was
in line with the carrying value of the Group’s
investment in Kentro as at 31 January 2023 and
represented an overall gain of £36,395,446 above
the cost of investment (Note 12). As part of the
agreement, on completion the Group provided a
loan facility of £524,253 to Brown & Brown (Europe)
Holdco Limited, alongside other major selling
shareholders, in respect of certain identified
indemnities under the Sale and Purchase Agreement.
Whilst the loan capital could reduce due to
potential claims, at this time the Group expects
full repayment.
On 30 October 2023 the Group acquired, through its
wholly-owned subsidiary company B.P. Marsh (North
America) Limited, a further 2.63% equity stake in XPT
Group LLC (“XPT”) for USD 3,500,000 (£2,903,459)
(Note 12). As at 31 January 2023 the Group’s equity
investment was 28.54% and at the time of investment
the Group’s equity investment in XPT had reduced
due to dilution to 27.30%. On completion the
Group’s equity investment increased to 29.93%. As at
31 January 2024 the Group’s shareholding in XPT
was 29.71% (29.10% on a fully diluted basis).
On 7 December 2023 the Group agreed to sell its
entire equity holding in Paladin to Specialist Risk
Group Limited (“SRG”), subject to regulatory
approval. Further details are set out in the Events
After The Reporting Date and in Note 26 in relation
to the subsequent completion of this transaction
since 31 January 2024.
On 21 December 2023 the Group acquired a 30%
cumulative preferred ordinary equity stake in Ai
Marine Risk Limited (“Ai Marine”) for consideration of
£30,000. The Group’s investment was made directly
into Ai Marine’s holding company, Dempsey Group
Limited, which owns 100% of Ai Marine. Ai Marine is
a London-based Managing General Agency
specialising in Marine Hull insurance with a strong
focus on the UK & Europe, Middle-East and Asia-
Pacific regions. The Group also provided Ai Marine
with a loan facility of £1,570,000, of which £500,000
was drawn down on completion. As at 31 January
2024 total loans outstanding amounted to
£500,000, with a remaining undrawn facility of
£1,070,000 (Note 22).
On 30 January 2024 the Group provided a two year
loan facility of £6,000,000 to Alchemy Holdco
Limited (“Alchemy”) which is the holding company of
Alchemy Underwriting Limited, an entity that was
22.5% owned by Paladin. The loan was provided to
Alchemy to assist its management team with a
Management Buy Out as part of the overall sale of
Paladin to SRG and was drawn down in full on
completion. As at 31 January 2024 total loans
outstanding remained at £6,000,000.
During the year The Fiducia MGA Company Limited
(“Fiducia”) made total loan repayments of £743,500,
reducing their outstanding loan from £2,224,500
as at 31 January 2023 to £1,481,000 as at
31 January 2024.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
47
Group Strategic Report
continued
Financial performance summary
The table below summarises the Group’s financial results and key performance indicators for the year to
31 January 2024:
Year to/as at Year to/as at
31 January 2024 31 January 2023
Net asset value £229.2m £189.5m
Net asset value per share – undiluted 629.0p 526.2p
Net asset value per share – diluted 626.9p 516.8p
Profit on ordinary activities before tax £43.6m £27.6m
Dividend per share paid 5.56p 2.78p
Total shareholder return (including dividends) £41.7m £23.9m
Total shareholder return on opening shareholders’ funds 22.0% 14.4%
Net cash (used by) / from operating activities
(net of equity investments, realisations and loans) £(1.2)m £0.5m
Equity cash investment for the year £3.4m £2.9m
Realisations (net of disposal costs) £53.1m £8.2m
Loans issued in the year £20.3m £3.0m
Loans repaid by investee companies in the year £2.7m £2.0m
Cash and treasury funds at end of year £40.5m £12.1m
Borrowing / Gearing £Nil £Nil
The Group had a strong year, delivering an increase in the NAV of £39.7m (2023: £22.9m), or +20.9% (2023: +13.8%).
At 31 January 2024 the NAV of the Group was £229.2m which equates to 629.0p per share undiluted (2023:
£189.5m, or 526.2p per share). On a diluted basis this equates to 626.9p per share (2023: 516.8p per share).
The NAV of £229.2m at 31 January 2024 represents a total increase in NAV of £200.0m since the Group was
originally formed in 1990 having adjusted for the original capital investment of £2.5m, the £10.1m net proceeds
raised on AIM in 2006 and the £16.6m of net proceeds raised through the Share Placing and Open Offer in July
2018. The directors note that the Group has delivered an annual compound growth rate of 9.4% in Group NAV
after running costs, realisations, losses, distributions and corporation tax since flotation and 12.1% since 1990.
Investment performance
The Group’s equity portfolio movement during the year was as follows:
Adjusted
Acquisitions Disposal 31 January 2023 31 January 2024
31 January 2023 valuation at cost proceeds valuation valuation
£171.5m £3.4m £(53.1)m £121.8m £165.4m
This equates to an increase in the portfolio valuation of 35.9% (2023: 19.1%).
B.P. Marsh • 2024 Annual Report • Group Strategic Report
48
The Group made realisations totalling £53.1m,
including £51.5m from the sale of Kentro Capital
Limited (“Kentro”), £0.8m from Paladin Holdings
Limited (“Paladin”) on the exercise of an option and
£0.7m on the redemption of preference shares in
Lilley Plummer Holdings Limited (“Lilley Plummer”).
The Group invested a total of £3.4m in equity in the
portfolio during the year (2023: £2.9m):
• £2.9m in XPT Group LLC (“XPT”) to fund further
acquisitions
• £0.5m into three new investments: Pantheon
Specialty Group Limited (“Pantheon”), Verve Risk
Services Limited and Dempsey Group Limited
(Ai Marine Risk Limited)
Liquidity and Loan Portfolio
The Group’s loan portfolio balance increased from
£11.5m as at 31 January 2023 to £28.9m (+£17.4m) at
31 January 2024. The key movements were:
• £13.8m was provided to the investment portfolio,
including £4.9m to XPT, £4.5m to Pantheon, and
£2.8m to Paladin
• £6.0m was provided to Alchemy Underwriting
Limited in connection with the Group’s agreed
sale of its investment in Paladin
• £0.5m was provided to Brown & Brown (Europe)
Holdco Limited as part of the Group’s sale of
its investment in Kentro
• £2.7m of loans were repaid during the year,
including £1.6m from XPT, £0.7m from The
Fiducia MGA Company Limited and £0.3m
from Lilley Plummer
Cash and treasury funds at 31 January 2024
were £40.5m (2023: £12.1m).
Since the year-end the Group completed the sale of
Paladin and received £42.1m from equity disposal
and £5.9m in loan repayments.
The Group has also invested a further £9.2m in
follow-on funding into the portfolio including £7.3m
in Pantheon and £0.8m in XPT, plus £0.3m in equity
in Devonshire UW Limited, a new investment.
Other significant cash movements include receipt of
£5.0m in further loan repayments, including £3.3m
from LEBC Holdings Limited who have now repaid
their loans in full, and £1.5m from Pantheon and
£1.0m in new loans granted to the existing portfolio.
The loan portfolio balance is currently £19.0m.
In addition, £2.0m has been distributed in dividends.
The current cash and treasury balance is £81.2m
and the Group is debt free. Treasury funds are all in
one month or less deposit accounts.
Operating income
Net gains from investments were £43.7m (2023:
£27.5m), a 58.9% increase over the previous year,
which all related to the revaluation of the investment
portfolio at 31 January 2024 (2023: £27.3m related
to revaluation of the investment portfolio). The Kentro
sale resulted in a £36.4m realised gain on disposal,
which has been reflected within a movement from
the fair value reserve to retained earnings within the
consolidated statement of financial position.
Overall, income from investments increased by
£2.6m, or 53% to £7.5m (2023: £4.9m). The increase
was primarily due to receiving significantly greater
loan interest income from the enlarged loan
portfolio, along with increased fees re-charged in
relation to professional fees for new investments.
Operating expenses
Operating expenses increased by £3.0m, or
61% during the year to £7.9m (2023: £4.9m)
predominantly as a result of professional fees
incurred for new investment activity, general cost
inflation and one-off bonuses in respect of the
successful sale of Kentro.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
49
Group Strategic Report
continued
Profit on ordinary activities
The consolidated profit on ordinary activities before
taxation increased by £16.0m, or 58% to £43.6m
(2023: up £8.2m to £27.6m). The consolidated profit on
ordinary activities after taxation increased by £18.7m,
or 78.6% to £42.5m (2023: up £6.4m to £23.8m).
The Group’s strategy is to cover expenses from the
portfolio yield. On an underlying basis, including
treasury returns and realised gains in cash, but
excluding unrealised investment activity (unrealised
gains on equity and provision against loans receivable
from investee companies), this was achieved with a
pre-tax profit of £0.1m for the year (2023: £0.3m).
Undiluted / Diluted NAV per share
The NAV per share at 31 January 2024 is 629.0p
(2023: 526.2p). Previously, 1,461,302 shares being
held within an Employee Benefit Trust as part of a
long-term share incentive plan for certain directors
and employees of the Group were excluded as they
did not have voting or dividend rights. However, in
October 2023 voting and dividend rights for
1,206,888 shares were granted. These shares are
now included within the undiluted NAV per share
calculation, along with £3.4m of loan due to be
repaid by the Trust in respect of the original transfer
of shares that cannot currently be consolidated
within the accounts, but is repayable should these
shares be sold.
The diluted NAV per share at 31 January 2024 is
626.9p (2023: 516.8p). This includes the full 1,443,147
shares within the Employee Benefit Trust, but also
includes £4.1m of loan repayable if the shares,
including 236,259 currently unallocated, are sold.
The diluted NAV per share excludes the 1,682,500
options over ordinary shares granted to certain
directors and employees of the Group in November
2023 as the performance criteria for NAV growth has
not yet been met. This is forecast to be 1.1% dilutive
from NAV of 643 pence per share and 4.5% dilutive
from NAV of 649 pence per share.
Financial Risk Management
Effective risk management is integral to the Group’s
ability to deliver its strategy of achieving returns for
its shareholders.
As an investor, the Group is in the business of taking
risk and its operations therefore expose the Group
to a variety of financial risks. The Group’s risk
management framework is essential in ensuring that
it monitors, manages and mitigates those risks, and
acts accordingly, to limit the adverse effects on the
financial performance of the Group.
As at 31 January 2024 the Group was debt free
(31 January 2023: debt free).
Approach to risk governance
The Board is responsible for risk assessment, the risk
management process and for the protection of the
Group’s reputation and integrity and all employees
are expected to meet the Group’s high standard of
conduct and support effective risk management
through a strong control culture.
Risk governance structure
Board
The Board governs and approves the Group’s risk
appetite and strategy and is responsible for ensuring
an effective risk management and oversight process.
It is assisted by seven standing committees of the
Board (outlined on pages 29 to 30 and discussed
further below), each with specific responsibility for
key risk management areas, ensuring that standards
of integrity, financial performance, risk management
and internal control are upheld.
Audit Committee
The primary responsibility of this committee is for
managing financial reporting risk and internal
controls, as well as the relationship with the
external auditor.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
50
Valuation Committee
The primary responsibility of the Valuation
Committee is for determining the valuation of the
Group’s unquoted equity investment portfolio,
comprising 72% of net assets at 31 January 2024
(2023: 90%). The Valuation Committee also provides
oversight and challenge of the underlying
assumptions and valuation policy which formulate
the valuations and directly engages with the Group’s
external auditor at each reporting period to confirm
that the basis of its valuations is reasonable and
appropriate based upon the information available
to the Group at that time.
Investment Committee
The Investment Committee is the principal committee
for managing the Group’s investment portfolio and is
primarily responsible for considering and approving
all significant investment and divestment decisions
for recommendation to the Board.
Nomination Committee
The Nomination Committee is responsible for ensuring
that the Board has the necessary skills, experience
and knowledge to deliver its strategic objectives.
Disclosure Committee
The Disclosure Committee is responsible for overseeing
the Group’s compliance with its obligations (as laid
down by the AIM Rules, Disclosure and Transparency
Rules and the Market Abuse Regulation) in respect of
the disclosure and control of inside information directly
concerning the Group.
Remuneration Committee
The Remuneration Committee determines the level
and make-up of remuneration (including bonuses
and awards) of the executive directors and
members of staff.
The activities of the Remuneration Committee and
Audit Committee are discussed further in the Report
of the Remuneration Committee on pages 33 to 37 and
Report of the Audit Committee on pages 38 to 39.
Environmental, Social and
Governance (“ESG”) Committee
The ESG Committee is responsible for developing
and reviewing the strategies, policies and
performance of the Company in relation to
environmental, social and governance matters and
suggesting ways to drive improvement in these
areas. The Committee is also responsible for
establishing an appropriate ESG strategy that is
integrated with the Company’s core business
strategy and that this strategy is embedded across
the Group, continues to evolve and is aligned to the
culture and values of the Company. The activities of
the ESG Committee are outlined on pages 54 to 55
under ‘Environmental, Social and Governance
(“ESG”) Reporting’.
In addition to the standing committees of the Board,
regular meetings between the Chairman’s Office
and the various internal departments of the
Company, including the Investment, Finance,
Company Secretarial and Investor Relations
departments are held to ensure effective
communication and transparency of information
throughout the Group.
Regular portfolio monitoring is an integral element
of the meetings held between the Investment
Department and the Chairman’s Office to continually
manage risks associated with the portfolio.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
51
Group Strategic Report
continued
The specific risks to which the Group is exposed are
outlined as follows:
Price risk
The Group is exposed to private equity securities
price risk as it invests in unquoted companies. The
Group manages the risk by ensuring that a director
of the Group is appointed to the board of each
investee company. In this capacity, the appointed
director can advise the Group’s Board of the investee
companies’ activities and prompt action can be
taken to protect the value of the investment. Monthly
management reports are required to be prepared by
investee companies for the review of the appointed
director and for reporting to the Group Board.
Credit risk
The Group is subject to credit risk on its unquoted
investments, cash and deposits. The credit quality of
unquoted investments, which are held at fair value
and include debt and equity elements, is based on
the financial performance of the individual portfolio
companies. The credit risk relating to these assets is
based on their enterprise value and is reflected
through fair value movements.
The Group is exposed to the risk of default on the
loans it has made available to investee companies.
The loans rank in preference to the equity
shareholding and the majority are secured by a
charge over the assets of the investment. The Group
manages the risk by ensuring that there is a director
of the Group appointed to the board of each of its
investee companies. In this capacity, the appointed
director can advise the Group’s Board of investee
companies’ activities and prompt action can be
taken to protect the value of the loan, such that the
directors believe the credit risk to the Group is
adequately managed. When a loan is assessed to be
likely to be in default then the Group will review the
probability of recoverability, and if necessary, make
a provision for any amount considered irrecoverable.
Liquidity risk
The Group invests in unquoted early stage
companies. The timing of the realisation of these
investments can be difficult to estimate. The
directors assess and review the Group’s liquidity
position and funding requirements on a regular basis
and this is an agenda item for its Board meetings.
A key objective is to ensure that the income from the
portfolio covers operating expenses such that funds
available for investment are not used for working
capital. The Group regularly reviews the cash flow
forecast to ensure that it has the ability to meet
commitments as they fall due and to manage its
working capital. The Board considers that the
Group has sufficient liquidity to manage
current commitments.
Interest rate risk
Interest rate risk arises from changes in the interest
receivable on cash and deposits, on loans issued to
investment companies and on certain preferred
dividend mechanisms linked to an interest rate. In
addition, the risk arises on any borrowings with a
variable interest rate. At 31 January 2024, the
Group did not have any interest bearing liabilities
but did have interest bearing assets. The majority
of loans provided by the Group are subject to a
minimum interest rate to protect the Group from a
period of low interest rates, and also a hurdle rate
linked to the UK Base Rate.
Currency risk
In terms of financial risk, the Group currently has
substantial exposure to foreign investment and
derives income outside the UK. As such some of
the Group’s income and assets are subject to
movement in foreign currencies which will affect the
Consolidated Statement of Comprehensive Income
in accordance with the Group’s accounting policy.
The Board monitors the movements and manages
the risk accordingly (see Note 27).
B.P. Marsh • 2024 Annual Report • Group Strategic Report
52
New investment risk
An inherent risk of realising an investment is the loss
of a performing asset and a potential lack of suitable
new investments to replace the lost income and
capital growth. Prior to reinvestment, returns on
cash can be significantly lower, which may reduce
underlying profitability on a short-term basis until
funds are reinvested. The Group has an active
Investment Department which continues to receive
a strong pipeline of new investment opportunities.
In addition, there is often potential for further
investment within the Group’s existing portfolio.
Concentration risk
Although the Group only invests in financial
service businesses, and specifically insurance
intermediaries, the Group has a wealth of
experience in this specific sector. It seeks to manage
concentration risk by making investments across a
variety of geographic areas, development stages
of business and classes of product.
Political risk
As a UK domiciled business with overseas
investments, the Group is exposed to the risks
associated with changes in UK foreign policy and
overseas political regimes. The Board is continually
assessing the impact of these on the Group and its
underlying investments, however the direct impact
on the Group’s investment portfolio of these has not
been material to date. It remains the Group’s
intention to continue to invest into the international
financial services market. As outlined under
‘Currency risk’ above, the Group continues to
monitor the movements in its foreign currency
denominated income and assets and manages
this risk accordingly.
Ongoing conflicts and inflation risk
The Group is exposed to the risks associated with the
ongoing overseas conflicts. The Board continually
assesses the potential impact of such conflicts and
the potential impact on the Group and its underlying
investments. Whilst the Group does not have any
direct investments in the affected regions, the
impact on the wider global economy and associated
disruption to capital markets, foreign exchange
volatility, price inflation and supply chain issues
could affect both the Group’s operations and those
of its investment portfolio, which could, in turn,
impact the future performance of the Group.
The Board is continually assessing the wider
economic impact of such conflicts on the Group and
its investment portfolio and whilst there has been
price inflation which has led to interest rate
increases, and volatility within foreign exchange
currency rates, certain investments within the
Group’s portfolio have seen premium rate increases
and thus increased commission. Therefore at the
current time the Group does not consider these
conflicts and inflation to have had a material
impact upon the Group.
Further analysis of the Group’s sensitivity to certain
risks outlined above is set out in Note 27 ‘Financial
Risk Management’.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
53
Group Strategic Report
continued
Environmental, Social and
Governance (“ESG”) Reporting
The Group is exempt from the requirements of the
Regulation 7, Part 2 – Amendments to the Large and
Medium-Sized Companies and Groups (Accounts
and Reports) Regulations 2008, to report on its
energy and carbon consumptions.
B.P. Marsh & Partners Plc (“B.P. Marsh”) remains
committed to ESG principles and integrating them
into our corporate strategy. We established an ESG
Committee in December 2021, an important step
towards embedding sustainability into our
operations. The Committee meets quarterly to
direct and monitor the agreed strategy to fulfil
our obligations to both society and the planet.
We monitor the ESG credentials of our investee
portfolio via an annual questionnaire. This allows us
to easily track improvements and identify areas
which could benefit from more focus. Prior to any
new investment there is an evaluation of a business’s
ESG credentials at the due diligence phase, although
this can be somewhat limited in respect of relatively
small scale start-up operations, which were the
primary investment types in the year under review.
In line with our commitment to governance, and the
fact that the majority of our portfolio is regulated
by the Financial Conduct Authority (“FCA”), or
equivalent in overseas jurisdictions, we ensure a
watching brief over any FCA ESG guidance to
ensure that we are implementing any updates.
Environmental
We are actively exploring avenues to mitigate the
Group’s carbon emissions. During the year under
review we have instigated a corporate policy that all
business flights are offset at the time of booking by
using the online platform created by Ecologi Action
Limited (“Ecologi”). As a ‘people’ business that
operates internationally, travel is unfortunately
fundamental to our operations. However our Board
is of the view that this should be minimised and
offset using a verified carbon offsetting platform.
Having reviewed multiple offsetting platforms, and
conscious of the potential scope for fraud in this
market, we are confident that Ecologi represents a
legitimate opportunity to offset this element of the
Group’s business into a variety of environmentally
beneficial projects. Following a full year of
participation in this programme we will disclose
the amounts involved and highlight the areas of
sustainability that we have chosen to support
through this initiative.
We also continue to implement measures to reduce
our office carbon footprint in smaller ways, for
example by the use of SMART lights and prioritising
recycling initiatives. We also encourage our staff to
choose greener travel options when commuting or
travelling to local meetings as part of our ongoing
efforts to minimise environmental impact.
Social
Social endeavours have not been the focus of this
year’s work; whilst there is always room for
improvement, the ESG Committee, supported by
the Board, is content that the Group’s contribution
to society, starting with staff welfare, and then
looking out to the wider world, remains positive
and satisfactory.
Governance
The Group continues to work on its own governance
and that of the portfolio entities, assisting where
possible. We provide outsourced Company
Secretarial services to an increasing number of
portfolio entities who utilise these services to create
a streamlined annual calendar that allows full board
interaction and the creation of sub-committees
where relevant and necessary. One of the value
adding elements of our investment approach is
that we can draw upon our years of experience
and expertise in this area to give tailored
recommendations to promote board effectiveness
and improved governance in all areas as these
entities grow.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
54
Internally, the Board continues to carry out Board
effectiveness evaluations annually. This year,
following additional training on conducting internal
reviews, we instigated a two stage evaluation
process. By adding a second layer of an in-person
interview, we felt this worked well at providing an
opportunity to explore additional areas of
consideration on a deeper level and ensuring all
matters relating to Board governance and
operations are fully discussed.
In summary, this year we have continued to embed
further ESG frameworks and initiatives into our
business practices, focusing on organic
improvements that can add value but also are
consistent with our Business Purpose. We remain
optimistic about the progress being made at B.P.
Marsh in this area and anticipate being able to share
more detailed updates in our upcoming annual
report for the financial year ending 31 January 2025.
Directors’ duties under Section 172
The purpose of this statement is to outline how,
during the year, the directors of the Company had
regard to the matters set out in section 172(1) (a) to
(f) of the Companies Act 2006 when performing
their duty under section 172.
Under section 172(1):
a director of a company must act in the way that he
or she considers, in good faith, would be most likely
to promote the success of the company for the
benefit of its members as a whole, and in doing so
have regard (amongst other matters) to:
a) the likely consequences of any decision in the
long term;
b) the interests of the company’s employees;
c) the need to foster the company’s business
relationships with suppliers, customers and others;
d) the impact of the company’s operations on the
community and the environment;
e) the desirability of the company maintaining a
reputation for high standards of business
conduct; and
f) the need to act fairly towards all members of
the company.
In order to fulfil their duties under section 172, and
promote the success of the Group for the benefit of
all its stakeholders, the directors need to ensure that
the Group not only acts in accordance with its legal
duties but also engages with, and has regard for, all
its stakeholders when taking decisions. The Group
has a number of key stakeholders that it is
committed to maintaining a strong relationship with.
Understanding the Group’s stakeholders and how
they and their interests will impact on the strategy
and success of the Group over the long term is a
key factor in the decisions that the Board make.
Shareholders
The promotion of the success of the Group is
ultimately for the benefit of the Company’s
shareholders who provide the Company’s
permanent capital.
As a company listed on the Alternative Investment
Market, the Company is responsible for ensuring
that it is aware of shareholder needs and
expectations. The Company attaches great
importance to maintaining good relationships with
all of its shareholders and interested parties and
seeks to ensure that they have access to correct
and adequate information in a timely fashion.
The Company is aware that as stakeholders, its
shareholders play a vital role in the fabric of the
Company and therefore regularly engages in
dialogue with the Company’s shareholders and is
available for meetings with institutional and major
shareholders following the release of the Group’s
Annual and Interim Results.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
55
Group Strategic Report
continued
Much of the Company’s shareholder base is
comprised of small retail shareholders holding shares
through nominee accounts and therefore the
identities of the underlying shareholders are not
always available to the Company. The Company
welcomes these and all shareholders to make contact
with the Company and provide any feedback or
comments that they may have and contact details
are available on the Company’s website.
The Company’s Annual General Meeting is also an
important opportunity for retail and institutional
investors to meet and engage with Directors, and ask
questions on the Company and its performance.
Employees
Our employees are key to the success of the Group
and recruiting, retaining and developing our team is
one of the Group’s most important priorities. The
Group expects a high standard of integrity and
accountability from its employees. In return, the
Group rewards and incentivises its staff on the basis
of merit, ability and performance. Employee
engagement is a key factor of this performance and
the Group encourages an open communication forum
amongst all members of staff, aided by the Group’s
small size and relatively flat hierarchical structure.
The Group is committed to promoting diversity in all
its forms together with equal opportunities and is a
supportive employer, providing training and
development where required.
The Group recognises that employee wellbeing is
also a fundamental element in maintaining the
success of the Group and employees are provided
with medical insurance and the opportunity to have
annual well person screenings.
The Group is acutely aware of the impact that current
inflationary pressures caused by the geopolitical
actions is having on households, particularly in regard
to higher energy and food costs as well as increasing
mortgage interest rates. It has taken active steps to
assist employees in this regard.
Investee Companies
Engagement with the Group’s portfolio of investee
companies is critical to delivering the Company’s
long-term strategy of delivering shareholder return.
Whilst the Group does not involve itself in the day-
to-day operations of its investee companies, it does
retain formal oversight by placing at least one
nominee director on each investee board. Informal
oversight and engagement with each investee
company is carried out on an ongoing basis by
members of the Investment Department in
conjunction with other department members.
Regulatory Bodies
Although the Company is not itself directly
regulated, it operates within a regulated environment
and therefore actively engages with various
regulatory bodies and advisory firms to ensure that
compliance standards are maintained and that the
Company continues to act with the high standards
of business conduct that have established its
reputation thus far. The Company is also a member
of the British Venture Capital Association.
Suppliers
The Company’s suppliers are integral to the day to
day operation of the Group. Relationships with
suppliers are carefully managed to ensure that the
Group is always obtaining value for money. The
Group seeks to ensure that good relationships are
maintained with suppliers through regular contact
and the prompt payment of invoices.
Other stakeholders and the wider community
The Company is committed to ensuring that none of
its activities have a detrimental impact on the wider
community and the environment. The Group actively
encourages its employees to participate in
charitable work and community projects.
B.P. Marsh • 2024 Annual Report • Group Strategic Report
56
Decision making and section 172
of the Companies Act 2006
The Group’s primary strategy is to deliver
shareholder value through the increase of its Net
Assets. The key driver of this growth is the investment
of the Group’s resources into businesses with
experienced management teams that have excellent
growth potential to which the Group can offer its
expertise and add value. This objective was achieved
through growing the Net Asset Value from £189.5m
to £229.2m over the year.
During the year, the Group continued to fund its
existing portfolio of investee companies through the
provision of both follow-on equity investment and
loan funding. Historically the Group has used funds
from past realisations and external fundraising to
fund future opportunities both within its current
portfolio and to new investments. During the year
the Group made a successful realisation and since
the year end a further successful realisation has
been made (refer to Note 26) which has provided
the Group with significant funds to finance
future investment opportunities.
Another key priority for the Group is to ensure that
shareholder expectations are being met, not only
through the growth in the Group’s Net Asset Value,
profitability and share price, but through distributions.
The Group takes a responsible approach to dividend
distribution and has ensured that its distribution
policy strikes a balance between rewarding loyal
shareholders and providing sufficient resources
for the Group to continue investing in growth
opportunities in financial services business to
continue its long-term success.
Policy on Payment of Suppliers
The Group’s policy on the payment of suppliers is to
settle transactions based upon the supplier’s agreed
terms of trade. Average supplier days were 21
(2023: 26) during the year.
Going Concern
The directors continue to adopt the going concern
basis in preparing the financial statements. This is
because the directors, after making enquiries and
specifically considering the implications of the
ongoing geopolitical conflicts and events and the
wider economic issues arising from these, and
following a review of the Group’s forecasts for 2025
and 2026 including cash flows, consider that the
Group has adequate resources to continue its
operation for the foreseeable future.
By order of the Board
S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2024
B.P. Marsh • 2024 Annual Report • Group Strategic Report
57
Independent
Auditor’s Report
to the Members of B.P. Marsh & Partners Plc
Opinion
Our opinion on the financial statements
is unmodified
We have audited the Group financial statements of
B.P. Marsh & Partners Plc (“the Parent Company” or
“the Company”) and its subsidiaries (“the Group”) for
the year ended 31 January 2024 which comprise the
Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statements
of Financial Position, the Consolidated and Parent
Company Statements of Cash Flows, the
Consolidated and Parent Company Statements
of Changes in Equity and the related notes.
The financial reporting framework that has been
applied in their preparation is applicable law and
UK-adopted international accounting standards
and, as regards the Parent Company financial
statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view
of the state of the Group’s and of the Parent
Company’s affairs as at 31 January 2024 and
of the Group’s profit for the year then ended;
• the Group financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards;
• the Parent Company financial statements have
been properly prepared in accordance with UK-
adopted international accounting standards; and
• the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities under
those standards are further described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the Parent
Company in accordance with the ethical
requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Conclusions Relating to
Going Concern
The directors have prepared the Group’s and the
Parent Company’s financial statements on the going
concern basis as they have concluded that there are
no material uncertainties that could have cast
significant doubt over the Group’s and the Parent
Company’s ability to continue as a going concern
for at least one year from the date of the approval of
the Group’s and the Parent Company’s financial
statements (“the going concern period”).
Our responsibility is to conclude on the
appropriateness of the directors’ conclusions and,
had there been a material uncertainty related to
going concern, to make reference to that in this
auditor’s report.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
58
Our evaluation of the directors’ assessment of the
Group’s and the Parent Company’s ability to
continue to adopt the going concern basis of
accounting included:
• obtaining the directors’ going concern assessment
and the forecasts they have prepared for each of
the two years to 31 January 2026 which predict
profit and positive cashflows and challenging the
rationale for assumptions used in the preparation
of these forecasts;
• considering the impact of the various geopolitical
conflicts and the wider economic issues arising
from these on the directors’ assessment to
continue to adopt the going concern basis of
accounting; and
• considering the inherent risks to the Group and
the Parent Company’s business model and how
these risks might affect the Group’s and the
Parent Company’s financial resources or ability
to continue operations over the going concern
period. We evaluated these risks and concluded
that they were not significant enough to require
us to perform additional procedures.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may
cast significant doubt on the Group’s and the Parent
Company’s ability to continue as a going concern for
a period of at least twelve months from when the
Group financial statements are authorised for issue.
In auditing the financial statements, we have
concluded that the directors’ use of the going
concern basis of accounting in the preparation of
the financial statements is appropriate.
However, because not all future events or conditions
can be predicted, this conclusion is not a guarantee
as to the Group’s and the Parent Company’s ability
to continue as a going concern.
Our responsibilities and the responsibilities of the
directors with respect to going concern are
described in the relevant sections of this report.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed
risks of material misstatement (whether or not due to
fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the
allocation of resources in the audit and directing
the efforts of the engagement team.
These matters were addressed in the context of our
audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Risk 1: Valuation of unquoted
equity investments
Refer to the significant accounting policies
(pages 72 to 79); and Notes 1 and 12 of the
financial statements.
The equity investment portfolio comprises Level 3
instruments in unquoted legal entities. In both the
Group and the Parent Company’s Statements of
Financial Position these are shown under Non-
Current Assets, unless the investments are held
for resale, in which case they are shown under
Current Assets.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
59
Independent
Auditor’s Report
continued
The Group adopts various valuation methodologies
based on the International Private Equity and Venture
Capital Valuation Guidelines – December 2022
(“IPEVCV Guidelines”), in conformity with International
Financial Reporting Standard (“IFRS”) 13 – Fair Value
Measurement. Owing to the unquoted and illiquid
nature of these investments, the assessment of fair
valuation is subjective and requires a number of
significant and complex judgments to be made by
the Valuation Committee. The exit value will be
determined by the market at the time of realisation
and therefore despite the valuation policy adopted
and judgments made by the Valuation Committee,
the final sales value on realisation may differ
materially from the valuation at the year end date.
There is the risk that inaccurate judgments made in
the assessment of fair value, particularly in respect
of earnings multiples, the application of liquidity
discounts, calculation of discount rates and the
estimation of future maintainable earnings, could
lead to the incorrect valuation of the unquoted
equity investment portfolio. In turn, this could
materially misstate the value of the investment
portfolio in the Statement of Financial Position,
the gross investment return and total return in the
Consolidated Statement of Comprehensive Income
and the net asset value per share.
There is also the risk that management and the
Valuation Committee may influence the significant
judgments and estimations in respect of unquoted
equity investment valuations in order to meet
market expectations of the overall net asset value
of the Group.
How we address the Key Audit Matters
We performed the following procedures:
We obtained an understanding of the Valuation
Committee’s processes and controls for determining
the fair valuation of unquoted equity investments by
performing walkthrough procedures. This included
discussing with management and the Valuation
Committee the valuation governance structure and
protocols around their oversight of the valuation
process and corroborating our understanding by
obtaining the detailed minutes for the Valuation
Committee meetings. We have identified key controls
in the process, assessed the design adequacy and
tested the operating effectiveness of those controls.
We compared the Valuation Committee’s valuation
methodology to IFRS and the IPEVCV Guidelines.
We sought explanations from management and the
Valuation Committee where there were judgments
applied in their application of the guidelines and
assessed their appropriateness.
Using our knowledge of private company valuation
methodologies, historical valuations and specific
research guidance from brokers where available,
we formed an independent range for the key
assumptions used in the valuation of a sample of
unquoted investments. We derived a range of fair
values using our assumptions and other qualitative
risk factors. We compared these ranges to
management’s fair values and discussed our
results with the Valuation Committee.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
60
With respect to unquoted investments, on a sample
basis, we corroborated key inputs in the valuation
models, such as earnings and net debt to source
data. We also performed the following procedures
on key judgments made by the Valuation Committee
in the calculation of fair value:
• assessed the suitability of the comparable
companies used in the calculation of the
earnings multiples;
• challenged management on the applicability of
adjustments made to earnings multiples and
obtained rationale and supporting evidence for
adjustments made;
• performed corroborative calculations to assess
the appropriateness of discount rates; and
• discussed the adjustments made to calculate
future maintainable earnings and corroborated
this to supporting documentation.
On a sample basis, we verified the valuation of
unquoted investments using market data on
acquisition multiples and other data from third party
pricing sources used by the Valuation Committee
in the calculation of fair value.
We checked the mathematical accuracy of the
valuation models on a sample basis. We reperformed
the calculation of the unrealised profits on the
revaluation of investments impacting the
Consolidated Statement of Comprehensive Income.
We discussed with the Valuation Committee the
rationale for any differences between the exit prices
of investments realised during the year and the prior
year fair value, to further assess the reasonableness
of the current year valuation assumptions and
methodology adopted by the Valuation Committee.
Key observations communicated to the
Audit Committee
The valuation of the unquoted equity investment
portfolio was determined to be within a reasonable
range of fair values. All valuations tested have been
recognised in accordance with IFRS and the IPEVCV
Guidelines. Appropriate inputs to the valuations were
used and the valuations calculated by the Valuation
Committee are within a reasonable range. Based on
our procedures and discussion of certain matters
with the Audit Committee, there were no material
outstanding matters.
Risk 2: Recognition of portfolio income and of
realised profits on disposal of investments
Refer to the significant accounting policies (pages
72 to 79); and Notes 1, 12 and 14 of the financial
statements
Portfolio income is directly attributable to the return
from investments. This includes: dividends from
investee companies which are recognised when the
Group’s rights to receive payments have been
established, gross interest income from loans which
is recognised on an accruals basis and 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.
Realised profits originate from disposals of
investments. Realised profits are calculated as the
difference between the net proceeds and the
investment’s fair value at the beginning of the year.
Market expectations and revenue-based targets
may place pressure on management to influence
the recognition of portfolio income or realised gains.
This may result in overstatement or deferral of
revenues to assist in meeting current or future
targets or expectations.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
61
Independent
Auditor’s Report
continued
How we address the Key Audit Matters
We performed the following procedures:
We obtained an understanding of management’s
processes and controls around accounting for
portfolio income and realised gains by discussing
with the management team and observations
during the audit fieldwork to substantiate the
processes and controls.
We performed detailed testing on a sample of
transactions to confirm whether they had been
appropriately recorded in the Consolidated
Statement of Comprehensive Income.
For portfolio income, on a sample basis, we:
• agreed dividends from the underlying investment
agreements and the dividend notices where
available;
• reperformed the calculation of interest income
based on the terms of the underlying agreements;
• agreed advisory fees to the relevant investment
advisory agreements; and
• agreed the receipts of the income to the bank
statements, or, if not yet received at the year end,
agreed to the debtors or accrued income and
assessed the recoverability of these debtors or
accrued income.
For any realised gains on disposals, on a sample
basis we would typically have:
• analysed the contract and terms of the sale to
determine whether the Group had met the
stipulated requirements, confirming that the net
proceeds and therefore the realised profit over
opening value could be reliably measured;
• re-performed management’s calculations to
determine mathematical accuracy and confirmed
the collection of the net proceeds by agreeing the
cash receipt to bank statements; and
• assessed the recoverability if the related income
had not been received by the due date.
For all samples selected for testing we verified that
revenue is recognised when the significant risks and
rewards of ownership have been transferred.
We performed enquiries of management and read
minutes of meetings throughout the year and
subsequent to the year end in order to address the
risk of management override of controls to defer
revenue recognition or over accrue revenue.
Key observations communicated to the
Audit Committee
Our audit procedures did not identify any material
matters regarding the recognition of portfolio
income and of realised profits on disposal of
investments. All transactions tested had been
recognised in accordance with contractual terms
and UK-adopted international accounting
standards. Based on our procedures and discussion
of certain matters with the Audit Committee, there
were no material outstanding matters.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
62
Our Application of Materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming
our audit opinion.
Materiality
Materiality is defined as the magnitude of an
omission or misstatement that, individually or in the
aggregate, could reasonably be expected to
influence the economic decisions of the users of the
financial statements. Materiality provides a basis
for determining the nature and extent of our
audit procedures.
We determined materiality for the Group and the
Parent Company to be £2,300,000 (2023:
£1,900,000) for unrealised investment related items,
which is 1% of net assets. We believe that net assets
provide us with a consistent year on year basis for
determining materiality and is the most relevant
measure to the stakeholders of the Group.
However, due to the much lower net comprehensive
income generated each year in comparison with the
level of net assets, we have set a lower materiality of
£150,000 (2023: £100,000) for the Group and for the
Parent Company for realised comprehensive income
and amortised cost balance sheet items which
represents approximately 2% of realised income.
We believe that the above basis provides us with a
consistent year on year basis for determining
materiality and is the most relevant measure to the
stakeholders of the Group and the Parent Company.
We calculated materiality during the planning stage
of the audit based on the management accounts
provided to us which exclude the investment
valuation at the year end, and then reassessed it
based on the 31 January 2024 revised management
accounts updated with the investment valuation at
the year end on the basis set out above and
adjusted our audit procedures accordingly.
Performance materiality
Performance materiality is the application of
materiality at the individual account or balance
level. It is set at an amount to reduce to an
appropriately low level the probability that the
aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with
our assessment of the Group’s overall control
environment, our judgment was that performance
materiality was 75% (2023: 75%) of our planning
materiality, namely £1,700,000 (2023: £1,425,000)
for unrealised investment related items and £110,000
(2023: £75,000) for realised comprehensive income
and amortised cost balance sheet items. This is at
the top end of the range of 50% and 75% typically
used. In arriving at the top range of 75%, we
considered the judgmental nature of the valuations
in the Consolidated Statement of Financial Position
and the relative value of transactions recorded in the
other primary statements, to ensure that total
uncorrected and undetected audit differences in all
accounts did not exceed our materiality of
£2,300,000 for unrealised investment related items
and £150,000 for comprehensive income and
amortised cost balance sheet items.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
63
Independent
Auditor’s Report
continued
Reporting threshold
Our reporting threshold is defined as an amount
below which identified misstatements are considered
as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit differences in
excess of £115,000 (2023: £95,000) for unrealised
investment related items and £7,500 (2023: £5,000)
for realised comprehensive income and amortised
cost balance sheet items, which is set at
approximately 5% of planning materiality, as well as
differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality
discussed above and in light of other relevant
qualitative considerations in forming our opinion.
An Overview of the Scope of our Audit
Our Group audit was scoped by obtaining an
understanding of the Group and its environment,
including Group-wide controls, and assessing the
risks of material misstatement at the Group level.
We performed an audit of the complete financial
information of 3 (2023: 3) full scope components.
The Group comprises 2 consolidated subsidiaries and
1 investment entity subsidiary. Monitoring and control
over the operations of these subsidiaries, including
those located overseas, is centralised in London.
The full scope components accounted for 100% of
the investment portfolio and 100% of each of profit
before tax, external revenue and of total assets
(all measures used to calculate materiality).
Whilst materiality for the Group financial statements
as a whole was set out as detailed in this report,
each component of the Group was audited to an
equal or lower level of materiality.
Audits of the components were performed at a
materiality level calculated by reference to a
proportion of Group materiality appropriate to the
relative scale of the business concerned.
Other Information
The directors are responsible for the other
information. The other information comprises the
information included in the Annual Report, other
than the financial statements and our auditor’s
report thereon. Our opinion on the financial
statements does not cover the other information
and, except to the extent otherwise explicitly stated
in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise
to a material misstatement in the financial
statements themselves. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are
required to report that fact. We have nothing to
report in this regard.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
64
Opinions on Other Matters Prescribed
by the Companies Act 2006
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the Group Strategic
Report and the Group Report of the Directors for
the financial year for which the financial
statements are prepared is consistent with the
financial statements;
• the Group Strategic Report and the Group Report
of the Directors have been prepared in accordance
with applicable legal requirements; and
• the part of the Report of the Remuneration
Committee required to be audited by us has been
properly prepared in accordance with the
Companies Act 2006.
Matters on which we are required
to Report by Exception
In the light of the knowledge and understanding of
the Group and the Parent Company and its
environment obtained in the course of the audit,
we have not identified material misstatements in
the Group Strategic Report or the Group Report
of the Directors.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept
by the Parent Company, or returns adequate for
our audit have not been received from branches
not visited by us; or
• the Parent Company financial statements and
the part of the Directors’ Remuneration Report
to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view, and for
such internal control as the directors determine is
necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of
accounting unless the directors either intend to
liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative
but to do so.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
65
Independent
Auditor’s Report
continued
Auditor’s Responsibilities for the
Audit of the Financial Statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to
which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the Group and the
industry, we identified that the principal risks of non-
compliance with laws and regulations related to
breaches of UK regulations. We considered the extent
to which non-compliance might have a material
effect on the financial statements. We also considered
those laws and regulations that have a direct impact
on the preparation of the financial statements such
as the Companies Act 2006. We evaluated
management’s incentives and opportunities for
fraudulent manipulation of the financial statements
(including the risk of override of controls), and
determined that the principal risks were related to
posting inappropriate journal entries to inflate revenue
of the Group and the Parent Company, and
management bias in accounting estimates and
judgemental areas of the financial statements, such
as investment valuations and provisions. Audit
procedures performed by us included:
• discussing with the directors and management
involved in the risk and compliance functions and
the Group and Parent Company’s company
secretary function, including consideration of
known or suspected instances of non-compliance
with laws and regulation and fraud;
• reviewing correspondence between the Group and
the investee companies, and discussions with the
management responsible for liaising with the
investee companies in relation to the investee
companies’ compliance with laws and regulations;
• reviewing board minutes as well as relevant
meeting minutes, including those of the
Valuation Committee, Audit Committee and
the Disclosure Committee;
• challenging assumptions made by management
in arriving at accounting estimates and
judgements, in particular in relation to the
valuation of unquoted equity investments and
recognition of portfolio income as described in
the related key audit matters above;
• identifying and testing journal entries, in
particular, any journal entries posted with unusual
account combinations, such as a credit to revenue
and a debit to the statement of financial position
(other than to expected accounts), which may
be indicative of the overstatement or manipulation
of revenue; and
• designing audit procedures to incorporate
unpredictability around the nature, timing or
extent of our testing.
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
66
Because of the inherent limitations of an audit
and the audit procedures described above, there
is an unavoidable risk that we will not have
detected all irregularities, including some leading
to material misstatements in the financial
statements, even though we have properly planned
and performed our audit in accordance with
auditing standards. For example, the further
removed non-compliance with laws and regulations
(irregularities) is from the events and transactions
reflected in the financial statements, the less likely
the inherently limited procedures required by
auditing standards would identify it. In addition,
as with any audit, there remains a higher risk of
non-detection of irregularities occurring due to
fraud rather than error, as fraud involves
intentional concealment, collusion, forgery,
intentional omissions, misrepresentations, or
the override of internal controls. We are not
responsible for preventing non-compliance and
cannot be expected to detect non-compliance
with all laws and regulations.
A further description of our responsibilities for the
audit of the financial statements is located on
the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Use of our Report
This report is made solely to the Company’s
members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to
the Company’s members those matters we are
required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to
anyone other than the Company and the
Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Kulwarn Nagra
(Senior Statutory Auditor)
For and on behalf of
RAWLINSON & HUNTER AUDIT LLP
Statutory Auditor
Chartered Accountants
Eighth Floor
6 New Street Square
New Fetter Lane
London
EC4A 3AQ
10 June 2024
B.P. Marsh • 2024 Annual Report • Independent Auditor’s Report
67
Consolidated Statement
of Comprehensive Income
for the year ended 31 January 2024
2024 2023
Notes £’000 £’000 £’000 £’000
Gains on investments 1
Realised (losses) / gains on disposal of
equity investments (net of costs) 14 (37) 155
Release of provision made against
equity investments and loans 16 24 30
Unrealised gains on equity investment revaluation 12 43,711 27,275
43,698 27,460
Income
Dividends 1,25 3,504 3,119
Income from loans and receivables 1,25 1,861 749
Fees receivable 1,25 2,103 1,051
7,468 4,919
Operating income 2 51,166 32,379
Operating expenses (7,881) (4,889)
2 (7,881) (4,889)
Operating profit 43,285 27,490
Financial income 2,4 721 130
Financial expenses 2,3 (55) (88)
Exchange movements 2,8 (333) 58
333 100
Profit on ordinary activities before taxation 8 43,618 27,590
Income taxes 9 (1,089) (3,747)
Profit on ordinary activities after taxation
attributable to equity holders 20 42,529 23,843
Total comprehensive income for the year 20 42,529 23,843
Earnings per share – basic (pence) 10 114.7p 66.2p
Earnings per share – diluted (pence) 10 114.0p 63.6p
The result for the year is wholly attributable to continuing activities.
The notes on pages 72 to 118 form part of these financial statements.
B.P. Marsh • 2024 Annual Report • Consolidated Statement of Comprehensive Income
68
Consolidated and Parent
Company Statements of
Financial Position
31 January 2024
Group Company
2024 2023 2024 2023
Notes £’000 £’000 £’000 £’000
Assets
Non-current assets
Property, plant and equipment 11 65 79 – –
Right-of-use asset 21 507 671 – –
Investments – equity portfolio 12 115,833 171,461 190,860 158,333
Investments – subsidiaries 12 – – 38,383 31,274
Loans and receivables 15 16,197 8,120 2,948 4,106
132,602 180,331 232,191 193,713
Current assets
Investments – assets held for sale 12 49,549 – – –
Investments – treasury portfolio 13 78 591 – –
Trade and other receivables 16 15,633 5,283 1,157 –
Cash and cash equivalents 40,435 11,564 7 8
Total current assets 105,695 17,438 1,164 8
Total assets 238,297 197,769 233,355 193,721
Liabilities
Non-current liabilities
Lease liabilities 21 (416) (596) – –
Deferred tax liabilities 17 (6,687) (5,631) – –
Total non-current liabilities (7,103) (6,227) – –
Current liabilities
Trade and other payables (1,843) (1,830) – –
Lease liabilities 21 (180) (175) – –
Total current liabilities 18 (2,023) (2,005) – –
Total liabilities (9,126) (8,232) – –
Net assets 229,171 189,537 233,355 193,721
Capital and reserves – equity
Called up share capital 19 3,729 3,747 3,729 3,747
Share premium account 20 29,345 29,350 29,345 29,350
Fair value reserve 20 112,768 106,509 188,717 156,190
Reverse acquisition reserve 20 393 393 – –
Capital redemption reserve 20 25 7 25 7
Capital contribution reserve 20 72 72 – –
Retained earnings 20 82,839 49,459 11,539 4,427
Shareholders’ funds – equity 20 229,171 189,537 233,355 193,721
Net asset value per share – undiluted (pence) 10 629.0p 526.2p 627.1p 517.1p
Net asset value per share – diluted (pence) 10 626.9p 516.8p 627.1p 517.1p
The Financial Statements were approved by the Board of Directors and authorised for issue on 10 June 2024
and signed on its behalf by:
B.P. Marsh & J.S. Newman
The notes on pages 72 to 118 form part of these financial statements.
B.P. Marsh • 2024 Annual Report • Consolidated and Parent Company Statements of Financial Position
69
Consolidated Statement
of Cash Flows
for the year ended 31 January 2024
2024 2023
Notes £’000 £’000
Cash from operating activities
Income from loans to investee companies 1,861 749
Dividends 3,504 3,119
Fees received 2,103 1,051
Operating expenses (7,881) (4,889)
Net corporation tax payable 9 (33) (14)
Purchase of equity investments 12 (3,364) (2,941)
Net proceeds from sale of equity investments 12,14 53,117 8,259
Net loan payments to investee companies (17,630) (1,039)
Adjustment for non-cash share incentive and share option plans 186 104
Exchange movement (53) (36)
Increase in receivables (1,052) (35)
Increase in payables 13 160
Depreciation and amortisation 11,21 191 193
Net cash from operating activities 30,962 4,681
Net cash from / (used by) investing activities
Purchase of property, plant and equipment 11 (13) (11)
Purchase of treasury investments net of cash and cash equivalents – (8,371)
Net proceeds from the sale of treasury investments 1,130 7,867
Net cash from / (used by) investing activities 1,117 (515)
Net cash used by financing activities
Financial income 4 87 2
Financial expenses 3 (39) (47)
Net decrease in lease liabilities 21 (175) (168)
Dividends paid 7 (2,028) (1,001)
Payments made to repurchase company shares 10 (1,053) (16)
Net cash used by financing activities (3,208) (1,230)
Change in cash and cash equivalents 28,871 2,936
Cash and cash equivalents at beginning of the year 11,564 8,628
Cash and cash equivalents at end of year 40,435 11,564
All differences between the amounts stated in the Consolidated Statement of Cash Flows and the Consolidated
Statement of Comprehensive Income are attributed to non-cash movements.
The notes on pages 72 to 118 form part of these financial statements.
B.P. Marsh • 2024 Annual Report • Consolidated Statement of Cash Flows
70
Parent Company
Statement of Cash Flows
for the year ended 31 January 2024
2024 2023
Notes £’000 £’000
Cash from operating activities
Dividends received from subsidiary undertakings 10,003 –
Net cash from operating activities 10,003 –
Net cash used by financing activities
(Increase) / decrease in amounts owed by group undertakings (7,109) 913
Adjustment relating to non-cash items 186 104
Dividends paid 7 (2,028) (1,001)
Payments made to repurchase company shares 10 (1,053) (16)
Net cash used by financing activities (10,004) –
Change in cash and cash equivalents (1) –
Cash and cash equivalents at beginning of the year 8 8
Cash and cash equivalents at end of year 7 8
Consolidated and Parent
Company Statements
of Changes in Equity
for the year ended 31 January 2024
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Opening total equity 189,537 166,607 193,721 170,791
Comprehensive income for the year 42,529 23,843 42,529 23,843
Dividends paid (2,028) (1,001) (2,028) (1,001)
Repurchase of company shares (1,053) (16) (1,053) (16)
Share incentive and share option plan 186 104 186 104
Total equity 229,171 189,537 233,355 193,721
Refer to Note 20 for detailed analysis of the changes in the components of equity.
The notes on pages 72 to 118 form part of these financial statements.
B.P. Marsh • 2024 Annual Report • Parent Company Statement of Cash Flows and Consolidated and Parent Company Statements of Changes in Equity
71
Notes to the Consolidated
Financial Statements
for the year ended 31 January 2024
1. Accounting policies
B.P. Marsh & Partners Plc is a public limited company incorporated in England and Wales under the Companies Act
2006 and domiciled in the United Kingdom. The address of the Company’s registered office is 5th Floor, 4 Matthew
Parker Street, London SW1H 9NP. The consolidated financial statements for the year ended 31 January 2024 comprise
the financial statements of the Parent Company and its consolidated subsidiaries (collectively “the Group”).
Basis of preparation of financial statements
These consolidated financial statements have been prepared in accordance with UK-adopted international accounting
standards, 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 UK-adopted international accounting standards requires
management to make judgments, estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable in the circumstances, the results of which form the
basis of judgements about the carrying amounts of assets and liabilities. Actual results may differ from those amounts.
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.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
72
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 trading subsidiaries, B.P. Marsh & Company Limited and B.P. Marsh (North America) 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, the 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 B.P.
Marsh (North America) Limited continue 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 as detailed in Note 12 to the
Financial Statements. 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.
New Accounting Standards
There are no new standards that have been issued, but are not yet effective for the year ended 31 January 2024,
which might have a material impact on the Group’s financial statements in future periods.
Basis of consolidation
(i) 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.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
73
Notes to the Consolidated
Financial Statements
continued
1. Accounting policies continued
Basis of consolidation continued
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 B.P. Marsh (North America) Limited, that provide services that relate to the Company’s investment
activities. The results of these two subsidiaries, together with other subsidiaries (except for LEBC Holdings Limited
(“LEBC”)), are consolidated into the Group consolidated financial statements. The Group has taken advantage of the
Amendment to IFRS 10 not to consolidate the results of LEBC. Instead, the investment in LEBC is valued at fair value
through profit or loss.
(ii) Associates
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.
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. The one exception to the use of the acquisition accounting method was in 2006
when B.P. Marsh & Partners Plc became the legal parent company of B.P. Marsh & Company Limited in a share for share
exchange transaction. This was accounted for as a reverse acquisition, such that no goodwill arose, and a merger
reserve was created reflecting the difference between the book value of the shares issued by B.P. Marsh & Partners Plc as
consideration for the acquisition of the share capital of B.P. Marsh & Company Limited. This compliance with IFRS 3:
Business Combinations (“IFRS 3”) also represented a departure from the Companies Act.
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.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
74
No Statement of Comprehensive Income is prepared for the Company, as permitted by Section 408 of the Companies
Act 2006. The Company made a profit for the year of £42,529,132, prior to a dividend distribution of £2,028,206 (2023:
profit of £23,843,539 prior to a dividend distribution of £1,001,435).
Employee services settled in equity instruments
The Group has entered into a joint share ownership plan (“JSOP”) with certain employees and directors.
On 12 June 2021 (the “vesting date”) the performance criteria was met for 1,206,888 of 1,461,302 shares held under joint
share ownership arrangements within the Employee Benefit Trust, after which the members of the scheme became joint
beneficial owners of the shares and became entitled to any gain on sale of the shares in excess of 312.6 pence per share.
On 26 October 2023 following the removal of a dividend waiver and block on voting rights on the 1,206,888 allocated
ordinary shares held by the Employee Benefit Trust, these ordinary shares became eligible for dividend and voting rights
and therefore became fully dilutive for the Group.
236,259 ordinary shares held within the Employee Benefit Trust are unallocated and do not have voting or dividend
rights. The Employee Benefit Trust remains the owner of these unallocated shares, however if these shares are sold from
the Employee Benefit Trust in the future they would then, post-sale, have voting and dividend rights attached, such that
they would become fully dilutive for the Group.
Provided that the shares are eventually sold from the Employee Benefit Trust for at least 284.5 pence per share on
average, the Group would be entitled to receive £4,106,259 in total.
The Group has established an HMRC approved Share Incentive Plan (“SIP”). Ordinary shares in the Company, previously
repurchased and held in Treasury by the Company, have been transferred to The B.P. Marsh SIP Trust (“the SIP Trust”),
an employee share trust, in order to be issued to eligible employees.
Under the rules of the SIP, eligible employees can each be granted up to £3,600 worth of ordinary shares (“Free Shares”)
by the SIP Trust in each tax year. The number of shares granted is dependent on the share price at the date of grant. In
addition, all eligible employees have been invited to take up the opportunity to acquire up to £1,800 worth of ordinary
shares (“Partnership Shares”) in each tax year and for every Partnership Share that an employee acquires, the SIP Trust
will offer two ordinary shares in the Company (“Matching Shares”) up to a total of £3,600 worth of shares. The Free and
Matching Shares are subject to a one year forfeiture period, however the awards are not subject to any vesting conditions,
hence the related expenses are recognised when the awards are made and are apportioned over the forfeiture period.
The fair value of the services received is measured by reference to the listed share price of the Parent Company’s shares
listed on the AIM on the date of award of the free and matching shares to the employee.
The Group has also established a Share Option Plan (“SOP”) for certain employees and directors. Share Options
(“Options”) over 1,682,500 ordinary shares of 10p each in the Company, in aggregate, have been granted. 3,470
Options of the total 1,685,970 available for allocation are unallocated.
Each of the Options will vest, on a ratchet basis, subject to certain Net Asset Value growth targets being achieved for the
three consecutive financial years ending 31 January 2024, 31 January 2025 and 31 January 2026 (the “Performance
Period”). The first exercise date is 6 September 2026 whereby 50% of vested Options will be exercisable at 10p per share,
with the remaining 50% exercisable at 10p per share from 6 September 2027.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
75
Notes to the Consolidated
Financial Statements
continued
1. Accounting policies continued
Employee services settled in equity instruments continued
The number of Options which vest will vary depending on the level of Net Asset Value growth achieved, subject to the
growth performance criteria as set out below, alongside the percentage of Options that will vest at each value:
Compounded annual growth of Net Asset Value over the Performance Period % vesting of Options
Less than 8.5% 0%
Between 8.5% and less than 9.25% 25%
Between 9.25% and less than 10% 50%
10% or above 100%
For these purposes, Net Asset Value is defined as “audited Total Assets less Total Liabilities for the consolidated Group
plus any dividends or other form of shareholder return that are paid in the relevant Financial Year”.
Therefore, for all Options to vest, the Net Asset Value (as defined above) would need to exceed £252.2m, adjusted for
any shareholder distributions.
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 Committee (“IPEVCV
Guidelines”). The following valuation methodologies have been used in reaching the 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 and/or premiums 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 year. 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.
Equity portfolio investments are treated as ‘Non-current Assets’ within the Consolidated Statement of Financial Position unless
the directors have committed to a plan to sell the investment and an active programme to locate a buyer and complete the
plan has been initiated. Where such a commitment exists, and if the carrying amount of the equity portfolio investment will be
recovered principally through a sale transaction rather than through continuing use, the investment is classified as an
‘Investments – Assets held for sale’ under ‘Current Assets’ within the Consolidated Statement of Financial Position.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
76
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 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 and other costs – over the life of the lease
Right-of-use asset
IFRS 16 requires lessees to recognise a lease liability, representing the present value of the obligation to make lease
payments, and a related right of use (“ROU”) asset. The lease liability is calculated based on expected future lease
payments, discounted using the relevant incremental borrowing rate. An incremental borrowing rate of 5% was used to
discount the future lease payments when measuring the lease liability on adoption of IFRS 16.
The ROU asset is recognised at cost less accumulated depreciation and impairment losses, with depreciation charged
on a straight-line basis over the life of the lease. In determining the value of the ROU asset and lease liabilities, the
Group considers whether any leases contain lease extensions or termination options that the Group is reasonably
certain to exercise.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
77
Notes to the Consolidated
Financial Statements
continued
1. Accounting policies continued
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies at the reporting period end are translated at the
exchange rate ruling at the reporting period end.
Transactions in foreign currencies are translated into sterling at the foreign exchange rate ruling at the date of the transaction.
Exchange gains and losses are recognised in the Consolidated Statement of Comprehensive Income.
Income taxes
The tax credit or expense represents the sum of the tax currently recoverable or payable and any deferred tax. The tax
currently recoverable or 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 receivable or 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.
Pension costs
The Group operates a defined contribution scheme for some of its employees. The contributions payable to the scheme
during the period are charged to the Consolidated Statement of Comprehensive Income.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
78
Financial assets and liabilities
Financial instruments are recognised in the Consolidated Statement of Financial Position when the Group becomes
party to the contractual provisions of the instrument. De-recognition occurs when rights to cash flows from a financial
asset expire, or when a liability is extinguished.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except for maturities greater than 12 months after the reporting
period which are classified as non-current assets. They are stated at their cost less impairment losses.
Loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs
associated with the borrowings. After initial recognition, these are subsequently measured at amortised cost using the
effective interest method, which is the rate that exactly discounts the estimated future cash flows through the expected
life of the liabilities. Amortised cost is calculated by taking into account any issue costs and any discount or premium
on settlement.
Trade and other receivables
Trade and other receivables in the Consolidated Statement of Financial Position are initially measured at original invoice
amount and subsequently measured after deducting any provision for impairment.
Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less. For the purposes of the Consolidated Statement of
Cash Flows, cash and cash equivalents comprise cash and short-term deposits as defined above and other short-term
highly liquid investments that are readily convertible into cash and are subject to insignificant risk of changes in value,
net of bank overdrafts.
Trade and other payables
Trade and other payables are stated based on the amounts which are considered to be payable in respect of goods or
services received up to the date of the Consolidated Statement of Financial Position.
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.
Under IFRS 8: Operating Segments (“IFRS 8”) 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.
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), the segment information is reported separately.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
79
Notes to the Consolidated
Financial Statements
continued
2. Segmental Reporting continued
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 realised and unrealised gains and losses on the Group’s
current and 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: Geographic segment 2:
UK Non-UK Group
2024 2023 2024 2023 2024 2023
£’000 £’000 £’000 £’000 £’000 £’000
Operating income 45,345 8,217 5,821 24,162 51,166 32,379
Operating expenses (4,356) (2,759) (3,525) (2,130) (7,881) (4,889)
Segment operating profit 40,989 5,458 2,296 22,032 43,285 27,490
Financial income 399 73 322 57 721 130
Financial expenses (31) (50) (24) (38) (55) (88)
Exchange movements (39) 30 (294) 28 (333) 58
Profit before tax 41,318 5,511 2,300 22,079 43,618 27,590
Income taxes – – (1,089) (3,747) (1,089) (3,747)
Profit for the year 41,318 5,511 1,211 18,332 42,529 23,843
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 and unrealised income generated by the Group during the period:
Total net operating
income attributable to
the investee company % of total realised and Reportable geographic
£’000 unrealised operating income segment
Investee Company 2024 2023 2024 2023 2024 2023
Paladin Holdings Limited 32,382 10,304 63 32 1 1
Pantheon Specialty Group Limited1 14,955 – 29 – 1 –
XPT Group LLC1 – 13,594 – 42 – 2
Lilley Plummer Holdings Limited 6,888 5,186 13 16 1 1
ATC Insurance Solutions PTY Limited1 – 4,726 – 15 – 2
Stewart Specialty Risk Underwriting
Limited1 – 3,211 – 10 – 2
1
There are no disclosures for XPT Group LLC, ATC Insurance Solutions PTY Limited and Stewart Specialty Risk Underwriting Limited in the current year
as the income derived from these investee companies did not exceed the 10% threshold prescribed by IFRS 8. There is also no disclosure shown for
Pantheon Specialty Group Limited (“Pantheon”) in the prior year as the Group did not hold an investment in Pantheon in that year.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
80
Geographic segment 1: Geographic segment 2:
UK Non-UK Group
2024 2023 2024 2023 2024 2023
£’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
Property, plant and equipment 34 45 31 34 65 79
Right-of-use asset 268 386 239 285 507 671
Investments – equity portfolio 37,783 98,704 78,050 72,757 115,833 171,461
Loans and receivables 10,775 5,712 5,422 2,408 16,197 8,120
48,860 104,847 83,742 75,484 132,602 180,331
Current assets
Investments – assets held for sale 49,549 – – – 49,549 –
Investments – treasury portfolio 78 591 – – 78 591
Trade and other receivables 14,840 4,777 793 506 15,633 5,283
Cash and cash equivalents 40,435 11,564 – – 40,435 11,564
104,902 16,932 793 506 105,695 17,438
Total assets 153,762 121,779 84,535 75,990 238,297 197,769
Non-current liabilities
Lease liabilities (220) (343) (196) (253) (416) (596)
Deferred tax liabilities – – (6,687) (5,631) (6,687) (5,631)
(220) (343) (6,883) (5,884) (7,103) (6,227)
Current liabilities
Trade and other payables (1,838) (1,733) (5) (97) (1,843) (1,830)
Lease liabilities (95) (101) (85) (74) (180) (175)
(1,933) (1,834) (90) (171) (2,023) (2,005)
Total liabilities (2,153) (2,177) (6,973) (6,055) (9,126) (8,232)
Net assets 151,609 119,602 77,562 69,935 229,171 189,537
Additions to property, plant
and equipment 7 6 6 5 13 11
Depreciation and amortisation
of property, plant and equipment (101) (111) (90) (82) (191) (193)
Release of provision against
investments and loans 24 30 – – 24 30
Cash flow arising from:
Operating activities 37,534 (1,812) (6,572) 6,493 30,962 4,681
Investing activities 1,117 (515) – – 1,117 (515)
Financing activities (3,208) (1,230) – – (3,208) (1,230)
Change in cash and
cash equivalents 35,443 (3,557) (6,572) 6,493 28,871 2,936
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
81
Notes to the Consolidated
Financial Statements
continued
2. Segmental Reporting continued
As outlined previously, under IFRS 8 the Group reports its operating segments (UK and Non-UK) and associated income,
expenses, assets and liabilities based upon the country of domicile of each of its investee companies.
In addition to the segmental analysis disclosure reported above, the Group has undertaken a further assessment of
each of its investee companies’ underlying revenues, specifically focusing on the geographical origin of this revenue.
Geographical analysis of each investee company’s 2024 and 2023 revenue budgets was carried out and, based upon
this analysis, the directors have determined that on a look-through basis, the Group’s portfolio of investee companies
can also be analysed as follows:
2024 2023
% %
UK 29 37
Non-UK 71 63
Total 100 100
3. Financial Expenses
2024 2023
£’000 £’000
Interest costs on lease liability (Note 21) 39 47
Investment management costs (Note 13) 16 41
55 88
4. Financial Income
2024 2023
£’000 £’000
Bank and similar interest 87 2
Income from treasury portfolio investments –
interest, dividend and similar income (Note 13) 467 165
Income from treasury portfolio investments –
net unrealised gains / (losses) on revaluation (Note 13) 167 (37)
721 130
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
82
5. Staff Costs
The average number of employees, including all directors (executive and non-executive), employed by the Group during
the year was 16 (2023: 16); 6 of those are in a management role (2023: 6) and 10 of those are in a support role (2023: 10).
All remuneration was paid by B.P. Marsh & Company Limited.
The related staff costs were:
2024 2023
£’000 £’000
Wages and salaries 5,145 3,051
Social security costs 746 453
Pension costs 192 162
Other employment costs (Note 24) 167 85
6,250 3,751
During the year to 31 January 2017 the Group established a Share Incentive Plan (“SIP”) under which certain eligible
directors and employees were granted Ordinary shares in the Company. These shares are being held on behalf of these
directors and employees within the B.P. Marsh SIP Trust. Refer to the Report of the Remuneration Committee on pages
34 to 35 and Note 24 for further details.
During the year to 31 January 2019, Joint Share Ownership Agreements were also entered into between certain directors
and employees and the Company. Refer to the Report of the Remuneration Committee on page 34 and Note 24 for
further details.
During the current year the Group established a Share Option Plan (“SOP”) under which certain directors and
employees were granted options over Ordinary shares in the Company. Refer to the Report of the Remuneration
Committee on pages 35 to 36 and Note 24 for further details.
Share-based charges of £77,492 (2023: £84,714) relating to the SIP and £89,437 (2023: N/A) relating to the SOP are
included within ‘Other employment costs’ above. No charges relating to the Joint Share Ownership Agreements are
included within ‘Other employment costs’ above as the scheme vested during the year to 31 January 2022.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
83
Notes to the Consolidated
Financial Statements
continued
6. Directors’ Emoluments
The aggregate emoluments of the directors were:
2024 2023
£’000 £’000
Management services – remuneration 2,933 1,601
Fees 30 25
Pension contributions – remuneration 67 71
3,030 1,697
502,395 of the 1,461,302 shares, in respect of which joint interests were granted during the year to 31 January 2019,
were issued to current directors. Refer to the Report of the Remuneration Committee on page 34 and Note 24 for
further details.
Of the total 32,780 (2023: 31,801) Free, Matching and Partnership Shares granted under the SIP during the year, 8,940
(2023: 8,673) were granted to directors of the Company.
Of the £77,492 (2023: £84,714) charge relating to the SIP and £89,437 (2023: N/A) charge relating to the SOP, as set
out in Note 5, £21,134 (2023: £23,104) and £36,147 (2023: N/A) related to the directors respectively.
Refer to the Report of the Remuneration Committee on pages 34 to 36 and Note 24 for further details.
2024 2023
£’000 £’000
Highest paid director
Emoluments 1,451 458
Pension contribution 7 27
1,458 485
The Company contributes into defined contribution pension schemes on behalf of certain employees and directors.
Contributions payable are charged to the Consolidated Statement of Comprehensive Income in the period to which
they relate.
During the year, 3 directors (2023: 3) accrued benefits under these defined contribution pension schemes.
The key management personnel comprise only the directors.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
84
7. Dividends
2024 2023
£’000 £’000
Ordinary dividends
Dividend paid:
5.56 pence each on 36,478,524* Ordinary shares
(2023: 2.78 pence each on 36,022,853 Ordinary shares) 2,028 1,001
2,028 1,001
* Due to the Company making three separate dividend payments during the current year (2023: one dividend payment made), the calculation of the
number of ordinary shares on which the dividend was paid is an average based upon the total aggregate dividend distribution made divided by the
total pence per ordinary share distributed during the year.
In the current year total dividends of £13,304 (2023: £5,969) were payable on the 247,476 (2023: 214,696) ordinary shares
held by the B.P. Marsh SIP Trust (“SIP Trust”).
On 26 October 2023, following the removal of a dividend waiver and block on voting rights on the 1,206,888 allocated
ordinary shares held by the B.P. Marsh Employees’ Share Trust (“the Employee Benefit Trust”) under the Joint Share
Ownership Plan (“JSOP”), these ordinary shares became eligible for full dividend and voting rights. In the current year
a total dividend of £33,551 was payable on the 1,206,888 allocated ordinary shares, of which £4,714 was paid to
participants of the JSOP based upon the employees’ proportionate ownership rights attached to the shares which is
determined by the Company’s share price on the record date. No dividend was payable on the 236,259 unallocated
ordinary shares held by the Employee Benefit Trust (2023: no dividend was payable on both the 1,206,888 allocated
and 236,259 unallocated ordinary shares held by the Employee Benefit Trust).
In addition, no dividend is payable on unallocated ordinary shares held in Treasury on the dividend record date.
8. Profit on Ordinary Activities Before Taxation
2024 2023
£’000 £’000
The profit for the year is arrived at after charging/(crediting):
Depreciation and amortisation of property, plant & equipment, and right-of-use asset 191 193
Auditor’s remuneration:
Audit fees for the Company 37 35
Other services:
– Audit of subsidiaries’ accounts 18 17
– Taxation 14 15
– Other advisory 14 9
Exchange loss / (gain) 333 (58)
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
85
Notes to the Consolidated
Financial Statements
continued
9. Income Tax Expense
2024 2023
£’000 £’000
Current tax:
Current tax on profits for the year 33 14
Adjustments in respect of prior years – –
Total current tax 33 14
Deferred tax (Note 17):
Origination and reversal of temporary differences 1,056 3,733
Total deferred tax 1,056 3,733
Total income taxes charged in the Consolidated Statement of Comprehensive Income 1,089 3,747
The tax assessed for the year is lower (2023: lower) than the standard rate of corporation tax in the UK. The differences
are explained below:
2024 2023
£’000 £’000
Profit before tax 43,618 27,590
Profit on ordinary activities at the standard rate of corporation tax
in the UK of 24.00% (2023: 19.00%) 10,468 5,242
Tax effects of:
Expenses not deductible for tax purposes 132 25
Withholding tax suffered at source on overseas income 33 14
Taxable/(non-taxable) capital gains on disposal of investments 31 (4)
Other effects:
Non-taxable income (dividends received) (841) (593)
Non-taxable income (unrealised gains on equity portfolio revaluation) (9,475) (1,442)
Management expenses unutilised 741 505
Total income taxes charged in the Consolidated Statement of Comprehensive Income 1,089 3,747
The UK corporation tax increased from 19% to 25% effective 1 April 2023. This change in tax rate has not had a material
impact on the Group financial statements for the year ended 31 January 2024 and is not expected to have a material
impact on future periods. Refer to Note 17 for details.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
86
10. Earnings and Net Asset Value Per Share from Continuing Operations Attributable
to the Equity Shareholders and Net Asset Value Per Share
2024 2023
£’000 £’000
Earnings
Earnings for the purpose of basic and diluted earnings per share being
total comprehensive income attributable to equity shareholders 42,529 23,843
Earnings per share – basic 114.7p 66.2p
Earnings per share – diluted 114.0p 63.6p
2024 2023
Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of
basic earnings per share 37,081,306 36,017,964
Number of dilutive shares under option 236,259 1,443,147
Weighted average number of ordinary shares for the purposes of
dilutive earnings per share 37,317,565 37,461,111
2024 2023
£’000 £’000
Net Asset Value
Basic Net Asset Value
Net Asset Value attributable to equity shareholders 229,171 189,537
Adjustment to Net Asset Value1 3,391 –
Adjusted Net Asset Value for the purposes of basic Net Asset Value
per share being total Net Asset Value attributable to equity shareholders 232,562 189,537
Diluted Net Asset Value
Net Asset Value attributable to equity shareholders 229,171 189,537
Adjustment to Net Asset Value2 4,106 4,106
Adjusted Net Asset Value for the purposes of diluted Net Asset Value per share
being total Net Asset Value attributable to equity shareholders 233,277 193,643
Net Asset Value per share – basic 629.0p 526.2p
Net Asset Value per share – diluted 626.9p 516.9p
2024 2023
Number Number
Number of shares
Number of ordinary shares for the purposes of basic Net Asset Value per share 36,974,191 36,018,003
Number of dilutive shares under option 236,259 1,443,147
Number of ordinary shares for the purposes of dilutive Net Asset Value per share 37,210,450 37,461,150
1
Adjustment to Net Asset Value represents the cash receivable by the Group when the 1,206,888 allocated ordinary shares that are held under joint
ownership arrangements within the Employee Benefit Trust, and which were considered fully dilutive as at 31 January 2024, are sold.
2 Adjustment to Net Asset Value represents the cash receivable by the Group when the total 1,443,147 allocated and unallocated ordinary shares that are
held under joint ownership arrangements within the Employee Benefit Trust, are sold.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
87
Notes to the Consolidated
Financial Statements
continued
10. Earnings and Net Asset Value Per Share from Continuing Operations Attributable
to the Equity Shareholders and Net Asset Value Per Share continued
During the year the Company paid a total of £1,052,751, including commission, in order to repurchase 283,480 ordinary
shares at an average price of 370 pence per share (2023: the Company paid a total of £16,191, including commission,
in order to repurchase 4,850 ordinary shares at an average price of 330 pence per share).
On 9 December 2023 178,000 ordinary shares in the Company were cancelled. These shares were previously held in
Treasury. Following the cancellation, the total number of ordinary shares in issue reduced from 37,466,000 as at
31 January 2023 to 37,288,000 as at 31 January 2024.
Ordinary shares held by the Company in Treasury
Movement of ordinary shares held in Treasury:
2024 2023
Number Number
Opening total ordinary shares held in Treasury at 1 February 4,850 9,542
Ordinary shares repurchased into Treasury during the year 283,480 4,850
Ordinary shares transferred to the B.P. Marsh SIP Trust during the year (32,780) (9,542)
Ordinary shares cancelled from Treasury during the year (178,000) –
Total ordinary shares held in Treasury at 31 January 77,550 4,850
The Treasury shares do not have voting or dividend rights and have therefore been excluded for the purposes of
calculating Earnings per share and Net Asset Value per share.
The repurchase of the ordinary shares is borne from the Group’s commitment to reduce share price discount to Net
Asset Value. As outlined in the Group’s Share Buy-Back Policy announcement on 16 January 2023, its policy has been
throughout the year, subject to ordinary shares in the Company being available to purchase, to be able to buy small
parcels of shares (for up to a maximum aggregate consideration of £1,000,000) at a price representing a discount of at
least 20% to the most recently announced Net Asset Value per share and place them into Treasury. Prior to 16 January
2023, and in accordance with its Share Buy-Back Policy announcement on 17 July 2019, the Group’s policy was to buy
back shares when the share price was below 15% of its published Net Asset Value.
On 14 November 2023 the Group announced a new Share Buy-Back Programme allowing it to repurchase ordinary shares
in the Company for up to a maximum aggregate consideration of £500,000 and subject to ordinary shares being available
to purchase at a price representing a discount of at least 20% to the most recently announced Net Asset Value per share.
There were 254,414 shares which remained unallocated within the Employee Benefit Trust as at 31 January 2022.
During the year to 31 January 2023, 18,155 of the 254,414 unallocated shares were transferred to the B.P. Marsh SIP
Trust (“SIP Trust”) to be used as part of the 22-23 SIP awards made in April 2022. Following this transfer and as at
31 January 2024 there were 1,443,147 shares held within the Employee Benefit Trust, of which 236,259 shares were
unallocated. The Employee Benefit Trust remains the owner of these unallocated shares.
On 26 October 2023, following the removal of a dividend waiver and block on voting rights on the 1,206,888 allocated
ordinary shares held by the Employee Benefit Trust under the Joint Share Ownership Plan (“JSOP”), these ordinary
shares became eligible for full dividend and voting rights.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
88
The weighted average number of shares used for the purposes of calculating the basic earnings per share, net asset
value and net asset value per share of the Group includes the 1,206,888 allocated ordinary shares held within the
Employee Benefit Trust as these were considered fully dilutive as at 31 January 2024 due to the dividend and voting
rights attached to them. The Group net asset value also includes an adjustment representing the economic right the
Group has to the first 281 pence per share (£3,391,355) on the 1,206,888 allocated ordinary shares held within the
Employee Benefit Trust as when the joint share ownership arrangements are eventually exercised, this would also
increase the Group’s net asset value by £3,391,355.
236,259 unallocated shares currently held within the Employee Benefit Trust have been excluded for the purposes of
calculating the basic earnings per share, net asset value and net asset value per share as these shares do not have
voting rights or dividend rights whilst they are held within this Employee Benefit Trust. The Group net asset value has also
excluded the economic right the Group has to the first 281 pence per share on the 236,259 unallocated shares issued to
the Employee Benefit Trust for the same reasons.
On this basis the current undiluted net asset value per share is 629.0 pence for the Group. When the joint share
ownership arrangements are eventually exercised in full, although this would increase the number of shares in issue
entitled to voting and dividend rights, this would also increase the Group’s net asset value by a further £714,904 (total of
£4,106,259 based upon the total 1,461,302 shares originally issued to the Employee Benefit Trust at 281 pence per share).
The diluted net asset value per share is therefore 626.9 pence.
The diluted weighted average number of ordinary shares at 31 January 2024 has been calculated by proportioning
the 236,259 vested, but unallocated, shares held under joint share ownership arrangements from the vesting date
over the period.
The diluted earnings per share and net asset value per share exclude the 1,682,500 options over ordinary shares granted
as part of the Company’s Share Option Plan (“SOP”) as these were not dilutive for the Group as at 31 January 2024
based upon the performance conditions attached to the options (Note 24).
The decrease to the weighted average number of ordinary shares between 2023 and 2024 is mainly attributable to the
283,480 ordinary shares repurchased into Treasury during the year, offset by the 32,780 ordinary shares transferred
from Treasury to the SIP Trust during the year which have been treated as re-issued for the purposes of calculating
earnings per share.
32,780 ordinary shares (comprising 32,780 ordinary shares transferred from Treasury to the SIP Trust in April 2023) were
allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan
arrangement on 14 April 2023 (Note 24).
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
89
Notes to the Consolidated
Financial Statements
continued
11. Property, Plant and Equipment
Leasehold
Fixtures and
Furniture and Fittings and
Equipment Others Total
Group £’000 £’000 £’000
Cost
At 1 February 2022 142 152 294
Additions 11 – 11
Disposals (5) – (5)
At 31 January 2023 148 152 300
At 1 February 2023 148 152 300
Additions 13 – 13
Disposals – – –
At 31 January 2024 161 152 313
Depreciation
At 1 February 2022 119 79 198
Eliminated on disposal (5) – (5)
Charge for the year 14 14 28
At 31 January 2023 128 93 221
At 1 February 2023 128 93 221
Eliminated on disposal – – –
Charge for the year 12 15 27
At 31 January 2024 140 108 248
Net book value
At 31 January 2024 21 44 65
At 31 January 2023 20 59 79
At 31 January 2022 23 73 96
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
90
12. Investments – Equity Portfolio
Shares in investee companies
Current Assets
Continuing – Investments
investments held for sale Total
£’000 £’000 £’000
At valuation
At 1 February 2022 141,245 8,104 149,349
Additions 2,941 – 2,941
Disposals – (8,104) (8,104)
Provisions – – –
Unrealised gains in this period 27,275 – 27,275
At 31 January 2023 171,461 – 171,461
At 1 February 2023 171,461 – 171,461
Transfers between categories (18,380) 18,380 –
Additions 3,364 – 3,364
Disposals (53,154) – (53,154)
Provisions – – –
Unrealised gains in this period 12,542 31,169 43,711
At 31 January 2024 115,833 49,549 165,382
At cost
At 1 February 2022 56,380 6,096 62,476
Additions 2,941 – 2,941
Disposals – (6,096) (6,096)
Provisions – – –
At 31 January 2023 59,321 – 59,321
At 1 February 2023 59,321 – 59,321
Transfers between categories (4) 4 –
Additions 3,364 – 3,364
Disposals (16,758) – (16,758)
Provisions – – –
At 31 January 2024 45,923 4 45,927
The additions relate to the following transactions in the year:
On 28 April 2023 the Group acquired a 35% cumulative preferred ordinary equity stake in Verve Risk Services Limited
(“Verve”) for consideration of £430,791. Verve is a London-based Managing General Agency which specialises in
Professional and Management Liability business for the insurance industry in the USA, Canada Bermuda, Cayman
Islands and Barbados. The Group also provided Verve with a loan facility of £569,209 which was drawn down in full on
completion. The aggregate funding of £1,000,000 was utilised as part of a management buy-out of Verve Risk Partners
LLP, an underwriting cell within Castel Underwriting Agencies Limited.
On 21 June 2023 the Group acquired a 25% cumulative preferred ordinary equity stake in Pantheon Specialty Limited
(“Pantheon”) for consideration of £25. Pantheon is a new holding company, established in Partnership with Robert
Dowman, a leading London Market Casualty broker specialising in the larger, more complex liability placements across
the world. On 9 September 2023 Pantheon formally changed its company name to Pantheon Specialty Group Limited.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
91
Notes to the Consolidated
Financial Statements
continued
12. Investments – Equity Portfolio continued
On 30 October 2023 the Group acquired, through its wholly-owned subsidiary company B.P. Marsh (North America)
Limited, a further 2.63% equity stake in XPT Group LLC (“XPT”) for USD 3,500,000 (£2,903,459). As at 31 January 2023
the Group’s equity investment was 28.54% and at the time of investment the Group’s equity investment in XPT had
reduced due to dilution to 27.30%. On completion the Group’s equity investment increased to 29.93%. As at 31 January
2024 the Group’s shareholding in XPT was 29.71% (29.10% on a fully diluted basis).
On 21 December 2023 the Group acquired a 30% cumulative preferred ordinary equity stake in Ai Marine Risk Limited
(“Ai Marine”) for consideration of £30,000. The Group’s investment was made directly into Ai Marine’s holding company,
Dempsey Group Limited, which owns 100% of Ai Marine. Ai Marine is a London-based Managing General Agency specialising
in Marine Hull insurance with a strong focus on the UK & Europe, Middle-East and Asia-Pacific regions. The Group also
provided Ai Marine with a loan facility of £1,570,000, of which £500,000 was drawn down on completion. As at 31 January
2024 total loans outstanding amounted to £500,000, with a remaining undrawn facility of £1,070,000 (Note 22).
The disposals relate to the following transactions in the year:
On 19 June 2023 the Group received £700,000 following the redemption of 700,000 redeemable preferred shares it held
in Lilley Plummer Holdings Limited (“Lilley Plummer”), as part of a capital restructure. As at 31 January 2024 the Group’s
equity holding in Lilley Plummer was 30%, which remained unchanged following this redemption.
On 21 June 2023, and upon the establishment of Pantheon noted under the additions above, Pantheon acquired a 100%
shareholding in the existing Lloyd’s Broker, Denison and Partners Limited (“Denison and Partners”), including the Group’s
entire 40% equity holding. No cash consideration was received by the Group for the disposal, which represented a net
loss of £132,000 (Note 14) based upon the Group’s carrying value of the investment of £132,000 as at 31 January 2023.
However, as part of the transaction, the Group received a 40% equity holding in New Denison Limited (“New Denison”).
New Denison was incorporated on 20 June 2023 and is currently a dormant company until such time that it receives its
own regulatory approvals. On 9 September 2023 Denison and Partners formally changed its company name to
Pantheon Specialty Limited.
On 11 August 2023 Paladin Holdings Limited (“Paladin”) exercised a Call Option arrangement with the Group over 5.88%
of shares in Paladin which the Group held. The Group received £804,000, which was in line with the carrying value of
the shares included within the fair value of the Group’s investment of Paladin as at 31 January 2023 and represented
an overall gain of £4,000 above the original cost of the shares of £800,000. Pursuant to the share transfer, Paladin
cancelled the shares and as a consequence of the transaction the Group’s shareholding in Paladin reduced from 47.06%
to 43.75%. The transaction was funded through the Group lending Paladin a further £804,000. As at 31 January 2024
total loans to Paladin amounted to £5,900,500 and the Group’s diluted equity holding in Paladin, adjusted for options
expected to vest, was 38.63%.
On 9 October 2023 the Group completed the disposal of its entire 18.7% shareholding in Kentro Capital Limited
(“Kentro”), pursuant to an agreement dated 22 May 2023 by which Brown & Brown, Inc (“Brown & Brown”), one of the
largest US-based insurance intermediaries, agreed to acquire the entire issued share capital of Kentro. On completion,
the Group received proceeds of £51,522,000 (net of all transaction costs) which was in line with the carrying value of the
Group’s investment in Kentro of £51,522,000 as at 31 January 2023 and represented an overall gain of £36,395,446
above the cost of investment. As part of the agreement, on completion the Group provided a loan facility of £524,253
to Brown & Brown (Europe) Holdco Limited, alongside other major selling shareholders, in respect of certain identified
indemnities under the Sale and Purchase Agreement. Whilst the loan capital could reduce due to potential claims,
at this time the Group expects full repayment.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
92
The unquoted investee companies, which are registered in England except for Asia Reinsurance Brokers Pte Limited
(Singapore), Stewart Specialty Risk Underwriting Ltd (Canada), XPT Group LLC (USA), ATC Insurance Solutions PTY
Limited (Australia), Criterion Underwriting Pte Limited (Singapore), Agri Services Company PTY Limited (Australia) and
Sage Program Underwriters, Inc. (USA) are as follows:
Aggregate Post tax
% holding Date capital and profit/(loss)
of share information reserves for the year
Name of company capital available to £ £ Principal activity
Agri Services Company PTY Limited 41.00 30.06.23 1,465,168 64,998 Holding company for specialist
Australian agricultural Managing
General Agency
Asia Reinsurance Brokers Pte Limited 25.00 31.05.23 2,088,147 90,564 Specialist reinsurance broker
ATC Insurance Solutions PTY Limited 25.56 30.06.23 12,991,892 3,470,843 Specialist Australian Managing
General Agency
Criterion Underwriting Pte Limited1 29.40 31.05.20 (445,842) (32,019) Specialist Singaporean Managing
General Agency
Dempsey Group Limited2 30.00 – – – Holding company for specialist
Managing General Agency
The Fiducia MGA Company Limited 35.18 31.12.22 (165,860) 772,640 Specialist UK Marine Cargo
Underwriting Agency
LEBC Holdings Limited 59.34 30.09.22 7,614,550 2,431,313 Independent financial advisor
company
Lilley Plummer Holdings Limited 30.00 31.12.22 1,518,455 1,191,783 Specialist Marine broker
Neutral Bay Investments Limited 49.90 31.03.23 4,054,833 218,553 Investment holding company
New Denison Limited3 40.00 – – – Dormant company
Paladin Holdings Limited 43.75 31.12.22 1,216,736 1,463,890 Investment holding company
Pantheon Specialty Group Limited4 25.00 – – – Holding company for specialist
insurance broker
Sage Program Underwriters Inc5 30.00 31.12.23 (12,151) 48,267 Specialist Managing General Agency
Stewart Specialty Risk Underwriting Limited 30.00 31.12.22 5,625,734 3,525,742 Specialist Canadian Casualty
Underwriting Agency
Verve Risk Services Limited6 35.00 – – – Specialist Managing General Agency
XPT Group LLC 29.10 31.12.22 (15,816,546) (13,034,338) USA Specialty lines insurance
distribution company
1
Recent statutory financial information is not available for Criterion Underwriting Pte Limited as the company is not currently trading.
2 Dempsey Group Limited is a newly incorporated company. Statutory accounts are not available as these are not yet due.
3 New Denison Limited is a newly incorporated company that is not currently trading. Statutory accounts are not available as these are not yet due.
4 Pantheon Specialty Group Limited is a newly incorporated company. Statutory accounts are not available as these are not yet due.
5 Statutory accounts are not available for Sage Program Underwriters, Inc. as these are not required to be filed in the jurisdiction in which the company
operates. The financial information included above is therefore based upon management accounts information received for the relevant accounting period.
6 Verve Risk Services Limited is a newly incorporated company. Statutory accounts are not available as these are not yet due.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
93
Notes to the Consolidated
Financial Statements
continued
12. Investments – Equity Portfolio continued
The Group’s 35% equity investment in EC3 Brokers Group Limited has not been listed above as the company went into
administration in November 2022 and remained in administration as at 31 January 2024. The Group does not expect to
recover any amounts in respect of this investment which has been provided against in full.
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.
Shares in group
undertakings
Company £’000
At valuation
At 1 February 2022 134,490
Additions –
Unrealised gains in this period 23,843
At 31 January 2023 158,333
At 1 February 2023 158,333
Additions –
Unrealised gains in this period 32,527
At 31 January 2024 190,860
At cost
At 1 February 2022 2,143
Additions –
At 31 January 2023 2,143
At 1 February 2023 2,143
Additions –
At 31 January 2024 2,143
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
94
Shares in group undertakings
All group undertakings are registered in England and Wales. The details and results of group undertakings held
throughout the year, which are extracted from the UK-adopted international accounting standards accounts of
B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited, B.P. Marsh Asset Management Limited, B.P. Marsh
(North America) Limited and the UK GAAP accounts for the other companies, are as follows:
Aggregate Profit/(loss)
capital and for the
% reserves at year to
holding 31 January 31 January
of share 2024 2024
Name of company capital £ £ Principal activity
B.P. Marsh & Company Limited 100 229,168,734 42,529,133 Consulting services and investment holding company
Marsh Insurance Holdings Limited 100 6,099,974 – Investment holding company – dormant
B.P. Marsh Asset Management Limited 100 1 – Dormant
B.P. Marsh (North America) Limited* 100 16,646,090 1,655,105 Investment holding company
B.P. Marsh & Co. Trustee Company Limited 100 1,000 – Dormant
Marsh Development Capital Limited 100 1 – Dormant
XPT London Limited 100 2 – Dormant
* At the year end B.P. Marsh (North America) Limited held a 100% economic interest in RHS Midco I LLC, a US registered entity incorporated during the
year to 31 January 2018 for the purpose of holding the Group’s equity investment in XPT Group LLC. In addition, at the year end B.P. Marsh (North
America) Limited also held a 100% economic interest in B.P. Marsh US LLC, a US registered entity, which was incorporated during the year to
31 January 2018. There were no profit or loss transactions in either of these two US registered entities during the current or prior year.
In addition, the Group also controls the B.P. Marsh SIP Trust and the B.P. Marsh Employees’ Share Trust (Note 24).
Loans to the subsidiaries of £38,382,626 (2023: £31,274,143) are treated as capital contributions.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
95
Notes to the Consolidated
Financial Statements
continued
13. Current Investments – Treasury Portfolio
2024 2023
Group £’000 £’000
At valuation
Market value at 1 February 11,337 –
Additions at cost 64,000 19,117
Disposals (48,430) (7,867)
Change in value in the year 618 87
Market value at 31 January 27,525 11,337
Disclosed as:
Cash and cash equivalents 27,447 10,746
Investments – treasury portfolio 78 591
Total 27,525 11,337
Investment fund split:
GAM London Limited 7,175 3,045
Rathbone Investment Management Limited 10,310 8,292
Rothschild & Co Wealth Management UK Limited 10,040 –
Total 27,525 11,337
The treasury portfolio comprises of investment funds managed and valued by the Group’s investment managers,
GAM London Limited, Rathbone Investment Management Limited and Rothschild & Co Wealth Management UK Limited.
All investments in securities are included at year end market value.
The initial investment into the funds was made following the realisation of the Group’s investment in Summa Insurance
Brokerage, S.L. during the prior year. Further funds have been invested following the sale of Kentro Capital Limited
during the current year.
The purpose of the funds is to hold (and grow) the Group’s surplus cash until such time that suitable investment
opportunities arise.
As at 31 January 2024, of the total £27,525,222 held within the funds (as at 31 January 2023: £11,336,879), only £78,462
(31 January 2023: £590,897) was risk bearing, with the remaining funds of £27,446,760 (31 January 2023: £10,745,982)
being non-risk interest bearing deposits.
The risk bearing fund values can increase, but also have 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 £15,569 (2023: £40,737) were charged to the Consolidated Statement of
Comprehensive Income during the period.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
96
14. Realised (Losses) / Gains on Disposal of Equity Investments
The realised (losses) / gains on disposal of investments for the year comprises of a net loss of £(36,689) (2023: £155,121
net gains on disposal of investments).
£132,000 of this net loss is in respect of the Group’s disposal of its entire 40% equity investment in Denison and Partners
Limited (“Denison and Partners”) for nil cash consideration, compared to the fair value of £132,000 at 1 February 2023 (Note
12). On 9 September 2023 Denison and Partners formally changed its company name to Pantheon Specialty Limited.
The above realised loss arising from the disposal of Denison and Partners has been offset by the following realised gains:
A £4,000 realised gain relating to the Group’s partial disposal of 250,000 ordinary shares (c.5.9% at the time of
divestment) in Paladin Holdings Limited (“Paladin”) which were held under a call option arrangement, for consideration
of £804,000, compared to the fair value of £800,000 at 1 February 2023.
A £91,311 realised gain relating to an additional capital distribution recognised during the year from the Group’s former
investment in Summa Insurance Brokerage, S.L. (“Summa”) which was sold during the year to 31 January 2022.
There were no releases of previously unrealised gains or losses to Retained Earnings from the Fair Value Reserve as a
result of the disposal of Denison and Partners and partial disposal of Paladin as the investments had been held at cost.
The amount included in realised gains on disposal of investments for the year ended 31 January 2023 comprised of
a net gain of £155,121.
£135,283 of this net gain related to an additional capital distribution received during the year from the Group’s former
investment in MB Prestige Holdings PTY Limited (“MB”) which was sold during the year to 31 January 2022.
£19,838 of this net gain was in respect of the Group’s disposal of its entire 77.25% investment in Summa Insurance
Brokerage, S.L. (“Summa”) for consideration of £8,123,838, compared to the fair value of £8,104,000 at 1 February 2022.
The disposal of Summa resulted in a net release of previously unrealised gains to Retained Earnings from the Fair Value
Reserve of £2,007,857 in that year.
Refer to Note 12 for further details relating to the above disposals.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
97
Notes to the Consolidated
Financial Statements
continued
15. Loans and Receivables – Non-Current
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Loans to investee companies (Note 25) 16,197 8,120 – –
Amounts owed by group undertakings – – 2,948 4,106
16,197 8,120 2,948 4,106
The amounts owed to the Company by group undertakings are interest free and repayable on demand.
See Note 16 for the provisions against loans to investee companies and Note 25 for terms of the loans.
16. Trade And Other Receivables – Current
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Trade receivables 1,040 319 – –
Less provision for impairment of receivables – – – –
1,040 319 – –
Loans to investee companies (Note 25) 12,706 3,409 – –
Other receivables 1 6 – –
Prepayments and accrued income 1,886 1,549 – –
Amounts owed by group undertakings – – 1,157 –
15,633 5,283 1,157 -
No provisions were made against loans to investee companies in the current or prior year. A provision of £24,000
previously made against a loan was released during the current year due to repayments being received (2023: a
provision of £30,000 previously made against a loan was released during that year due to repayments being received).
The total provision as at 31 January 2024 was £107,718 (31 January 2023: £131,718) with a potential of recovery.
Included within net trade receivables is a gross amount of £922,989 (2023: £247,475) owed by the Group’s participating
interests. No provision for bad debts has been made in either the current or prior year.
Trade receivables are provided for based on estimated irrecoverable amounts from the fees and interest charged to
investee companies, determined by the Group’s management based on prior experience and their assessment of the
current economic environment.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
98
Movement in the allowance for doubtful debts:
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Balance at 1 February – – – –
Decrease in allowance recognised in the
Statement of Comprehensive Income – – – –
Balance at 31 January – – – –
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date.
The Group’s net trade receivable balance includes debtors with a carrying amount of £1,039,891 (2023: £318,999), of
which £485,086 (2023: £146,543) of debtors are past due at the reporting date for which the Group has not made a
provision as all amounts are considered recoverable by the directors. The Group does not hold any collateral over these
balances other than over £244,160 (2023: £54,823) included within the net trade receivables balance relating to loan
interest due from investee companies which is secured on the assets of the investee company.
Ageing of past due but not impaired:
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Not past due 555 172 – –
Past due: 0 – 30 days 43 59 – –
Past due: 31 – 60 days 283 2 – –
Past due: more than 60 days 159 86 – –
1,040 319 – –
See Note 25 for terms of the loans and Note 23 for further credit risk information.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
99
Notes to the Consolidated
Financial Statements
continued
17. Deferred Tax Liabilities – Non-Current
Group Company
£’000 £’000
At 1 February 2022 1,898 –
Tax movement relating to investment revaluation for the year (Note 9) 3,733 –
At 31 January 2023 5,631 –
At 1 February 2023 5,631 –
Tax movement relating to investment revaluation for the year (Note 9) 1,056 –
At 31 January 2024 6,687 –
Finance (No.2) Act 2017 introduced significant changes to the Substantial Shareholding Exemption (“SSE”) rules in
Taxation of Chargeable Gains Act 1992 Sch. 7AC which applied to share disposals on or after 1 April 2017. In general
terms, the rule changes relaxed the conditions for the Group to qualify for SSE on a share disposal.
New tax legislation was introduced in the US in 2018 which taxes at source gains on disposal of any foreign partnership
interests in US limited liability companies (“LLCs”). As such, deferred tax needs to be assessed on any potential net gains
from the Group’s investment interests in US LLCs.
Having reviewed the Group’s current investment portfolio, the directors consider that the Group should benefit from this
reform to the SSE rules on all non-US LLC investments. As a result, the directors anticipate that on a disposal of shares in
the Group’s current non-US LLC investments, so long as the shares have been held for 12 months they should qualify for
SSE and no tax charge should arise on their disposal.
The requirement for a deferred tax provision is subject to continual assessment of each investment to test whether the
SSE conditions continue to be met based upon information that is available to the Group and that there is no change to
the accounting treatment in this regard under UK-adopted international accounting standards. It should also be noted
that, until the date of the actual disposal, it will not be possible to ascertain if all the SSE conditions are likely to have
been met and, moreover, obtaining agreement of the tax position with HM Revenue & Customs may possibly not be
forthcoming until several years after the end of a period of accounts.
Having assessed the current US portfolio, the directors anticipate that there is a requirement to provide for deferred tax
in respect of the unrealised gains on investments under the current requirements of UK-adopted international accounting
standards as the US LLC investments currently show a net gain. As such, a provision of £6,687,000 has been made as
at 31 January 2024 (2023: £5,631,000).
The deferred tax provision of £6,687,000 as at 31 January 2024 (2023: £5,631,000) has been calculated based upon
an assessment of the US tax liability arising from the valuations of the Group’s holdings within US LLCs at 31 January
2024, using the US Federal rate of 21% together with US State Tax rates prevailing in the states where the Group’s US
LLCs operate, which range between 0% and 11.5%. Adjustments were then made based upon available allowances and
taxable losses. Given the complexity, the Group utilised the services of a specialist US tax advisory firm.
The UK corporation tax increased from 19% to 25% effective 1 April 2023. This change in tax rate has not had a material
impact on the Group financial statements for the year ended 31 January 2024 and is not expected to have a material
impact on future periods as the directors do not consider there is any deferred tax due at the period end in respect of
its non-US LLC investments due to the SSE rules.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
100
18. Current Liabilities
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Trade and other payables
Trade payables 90 111 – –
Other taxation & social security costs 142 239 – –
Accruals and deferred income 1,561 1,336 – –
Amounts owed to participating interests 50 50 – –
Other payables – 94 – –
Lease liabilities (Note 21) 180 175 – –
2,023 2,005 – –
All of the above liabilities are measured at amortised cost.
19. Called Up Share Capital
2024 2023
£’000 £’000
Allotted, called up and fully paid
37,288,000 Ordinary shares of 10p each (2023: 37,466,000) 3,729 3,747
3,729 3,747
During the year the Company paid a total of £1,052,751, including commission, in order to repurchase 283,480 ordinary
shares at an average price of 370 pence per share (2023: the Company paid a total of £16,191, including commission,
in order to repurchase 4,850 ordinary shares at an average price of 330 pence per share).
Distributable reserves have been reduced by £1,052,751 (2023: £16,191) as a result.
On 9 December 2023 178,000 ordinary shares in the Company were cancelled. These shares were previously held
in Treasury. Following the cancellation, the total number of ordinary shares in issue reduced from 37,466,000 as at
31 January 2023 to 37,288,000 as at 31 January 2024.
As at 31 January 2024 a total of 77,550 ordinary shares were held by the Company in Treasury (31 January 2023: 4,850
ordinary shares were held by the Company in Treasury).
The Treasury shares do not have voting or dividend rights and have therefore been excluded for the purposes of
calculating earnings per share and Net Asset Value per share.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
101
Notes to the Consolidated
Financial Statements
continued
19. Called Up Share Capital continued
The repurchase of the ordinary shares is borne from the Group’s commitment to reduce share price discount to Net Asset
Value. As outlined in the Group’s Share Buy-Back Policy announcement on 16 January 2023, its policy has been
throughout the year, subject to ordinary shares in the Company being available to purchase, to be able to buy small
parcels of shares (for up to a maximum aggregate consideration of £1,000,000) at a price representing a discount of at
least 20% to the most recently announced Net Asset Value per share and place them into Treasury. Prior to 16 January
2023, and in accordance with its Share Buy-Back Policy announcement on 17 July 2019, the Group’s policy was to
buy back shares when the share price was below 15% of its published Net Asset Value.
On 14 November 2023 the Group announced a new Share Buy-Back Programme allowing it to repurchase ordinary shares
in the Company for up to a maximum aggregate consideration of £500,000 and subject to ordinary shares being available
to purchase at a price representing a discount of at least 20% to the most recently announced Net Asset Value per share.
20. Statement of Changes In Equity
Share Reverse Capital Capital
Share premium Fair value acquisition redemption contribution Retained
capital account reserve reserve reserve reserve earnings Total
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 February 2022 3,747 29,342 84,975 393 7 72 48,071 166,607
Comprehensive income
for the year – – 23,542 – – – 301 23,843
Net transfers on disposal
of investments (Note 14) – – (2,008) – – – 2,008 –
Dividends paid (Note 7) – – – – – – (1,001) (1,001)
Repurchase of Company
shares (Note 19) – – – – – – (16) (16)
Share based payment
arrangements – 8 – – – – 96 104
At 31 January 2023 3,747 29,350 106,509 393 7 72 49,459 189,537
At 1 February 2023 3,747 29,350 106,509 393 7 72 49,459 189,537
Comprehensive income
for the year – – 42,654 – – – (125) 42,529
Net transfers on disposal
of investments (Note 12) – – (36,395) – – – 36,395 –
Dividends paid (Note 7) – – – – – – (2,028) (2,028)
Repurchase of Company
shares (Note 19) – – – – – – (1,053) (1,053)
Cancellation of Company
shares (Note 19) (18) – – – 18 – – –
Share based payment
arrangements – (5) – – – – 191 186
At 31 January 2024 3,729 29,345 112,768 393 25 72 82,839 229,171
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
102
Share Capital Capital
Share premium Fair value redemption contribution Retained
capital account reserve reserve reserve earnings Total
Company £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 February 2022 3,747 29,342 132,347 7 – 5,348 170,791
Comprehensive income for the year – – 23,843 – – – 23,843
Dividends paid (Note 7) – – – – – (1,001) (1,001)
Repurchase of Company shares (Note 19) – – – – – (16) (16)
Share based payment arrangements – 8 – – – 96 104
At 31 January 2023 3,747 29,350 156,190 7 – 4,427 193,721
At 1 February 2023 3,747 29,350 156,190 7 – 4,427 193,721
Comprehensive income for the year – – 32,527 – – 10,002 42,529
Dividends paid (Note 7) – – – – – (2,028) (2,028)
Repurchase of Company shares (Note 19) – – – – – (1,053) (1,053)
Cancellation of Company shares (Note 19) (18) – – 18 – – –
Share based payment arrangements – (5) – – – 191 186
At 31 January 2024 3,729 29,345 188,717 25 – 11,539 233,355
21. Leases
Group
The Group has applied IFRS 16: Leases (“IFRS 16”) using the retrospective approach. The Group has one lease, that of its
main office premises. Information about this lease, for which the Group is a lessee, is presented below.
Right-of-use asset
Land and Buildings
£’000
At 1 February 2022 836
Depreciation charge (165)
At 31 January 2023 671
At 1 February 2023 671
Depreciation charge (164)
At 31 January 2024 507
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
103
Notes to the Consolidated
Financial Statements
continued
21. Leases continued
Lease liabilities
The Group was committed to making the following future aggregate minimum payments under its leases:
2024 2023
Land and Land and
Buildings Buildings
£’000 £’000
Maturity analysis – contractual undiscounted cash flows:
Earlier than one year 214 214
Between two and five years 444 658
More than five years – –
658 872
Lease liabilities included in Consolidated Statement of Financial Position at 31 January: 596 771
Maturity analysis:
Current liabilities (Note 18) 180 175
Non-current liabilities 416 596
596 771
Amounts recognised in profit or loss:
2024 2023
£’000 £’000
Interest on lease liabilities (Note 3) 39 47
Amounts recognised in the Consolidated Statement of Cash Flows:
2024 2023
£’000 £’000
Total cash outflow for leases (214) (214)
Company
There are no right-of-use assets or associated lease liabilities recognised in the Company’s Statement of Financial Position.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
104
22. Loan and Equity Commitments
On 26 June 2020 (as amended on 1 June 2023) the Group entered into an agreement to provide Sage Program
Underwriters, Inc. with a loan facility of USD 300,000. As at 31 January 2024 USD 150,000 had been drawn down,
leaving a remaining undrawn facility of USD 150,000. Any drawdown is subject to satisfying certain agreed criteria.
On 9 August 2023 the Group entered into an agreement to provide LEBC Holdings Limited with a further loan facility of
£600,000 in addition to the existing loans outstanding of £3,000,000 at 31 January 2023 (agreed in prior years).
£300,000 of the loan facility was drawn down on completion and as at 31 January 2024 total loans outstanding
amounted to £3,300,000, leaving a remaining undrawn facility of £300,000.
On 21 December 2023 the Group entered into an agreement to provide Dempsey Group Limited with a loan facility
of £1,570,000. £500,000 was drawn down on completion and was outstanding as at 31 January 2024, leaving a
remaining undrawn facility of £1,070,000.
Please refer to Note 26 for details of equity payments made together with loan facilities offered and amounts drawn
down after the year end.
23. Financial Instruments
The Group’s financial instruments comprise loans to participating interests, cash and liquid resources and various other
items, such as trade debtors, trade creditors, other debtors and creditors and loans. These arise directly from the
Group’s operations.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall
be undertaken unless there are economic reasons for doing so, as determined by the directors.
The main risks arising from the Group’s financial instruments are price risk, credit risk, liquidity risk, interest rate risk,
currency risk, new investment risk, concentration risk, geopolitical risk and conflict risk and the wider issues arising from
it. The Board reviews and agrees policies for managing each of these risks and they are summarised in the Group
Strategic Report under “Financial Risk Management”.
Interest rate profile
The Group has cash and cash equivalent balances of £40,435,000 (2023: £11,564,000), which are part of the financing
arrangements of the Group. The cash and cash equivalent balances comprise bank current accounts and deposits
placed at investment rates of interest, which ranged up to 5.25% p.a. in the period (2023: deposit rates of interest ranged
up to 2.65% p.a.). During the year all cash and cash equivalent balances were held in immediate access accounts or on
short term deposits of up to 1 month (2023: all cash balances were held in immediate access accounts or on short-term
deposits of up to 14 days).
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
105
Notes to the Consolidated
Financial Statements
continued
23. Financial Instruments continued
Currency hedging
During the year the Group engaged in two currency hedging transactions of USD 1,075,000 and AUD 600,000 (2023:
two currency hedging transactions of €11,500,000 and USD 1,075,000) to mitigate the exchange rate risk for certain
foreign currency receivables. These were settled before the year end. A net gain of £30,049 (2023: net loss of £74,547)
relating to these hedging transactions was recognised under Exchange Movements within the Consolidated Statement
of Comprehensive Income when the transactions were settled. As at the year end the Group had two currency hedging
transactions amounting to USD 3,075,000 and AUD 600,000 which were entered into on 30 January 2024. The fair
values of these hedges are not materially different to the transaction costs.
Financial liabilities
The Company had no borrowings as at 31 January 2024 (2023: no borrowings).
Fair values
The Group has adopted the amendment to IFRS 7 for financial instruments which are measured at fair value at the reporting
date. This requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
• Level 1: Quoted prices unadjusted in active markets for identical assets or liabilities;
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, observed
either directly as prices or indirectly from prices; and
• Level 3: Inputs for the asset or liability that are not based on observable market data.
Unquoted equity instruments are measured in accordance with the IPEVCV Guidelines with reference to the most
appropriate information available at the time of measurement. Further information regarding the valuation of unquoted
equity instruments can be found in the section ‘Investments – equity portfolio’ under the Accounting Policies (Note 1).
The following presents the classification of the financial instruments at fair value into the valuation hierarchy at
31 January 2024:
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets
Equity portfolio investments designated as “fair value
through profit or loss” assets – – 165,382 165,382
– – 165,382 165,382
The Group’s classification of the financial instruments at fair value into the valuation hierarchy at 31 January 2023
are presented as follows:
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets
Equity portfolio investments designated as “fair value
through profit or loss” assets – – 171,461 171,461
– – 171,461 171,461
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
106
Level 3 inputs are sensitive to assumptions made when ascertaining fair value. Setting the valuation policy is the
responsibility of the Valuations Committee, which is then reviewed by the Board. The policy is to value investments within
the portfolio at fair value by applying a consistent approach and ensuring that the valuation methodology is compliant
with the IPEVCV Guidelines. Valuations of the investment portfolio of the Group are performed twice a year, and the
half-year valuations are subjected to the same level of scrutiny and approach as the audited final year accounts by
the Valuations Committee.
Of assets held at 31 January 2024 classified as Level 3, 41% by value (2023: 66%) were valued using a multiple of
earnings and 59% (2023: 34%) were valued using alternative valuation methodologies.
Valuation multiple – the valuation multiple is the main assumption applied to a multiple of earnings based valuation.
The multiple is derived from comparable listed companies or relevant market transaction multiples. Companies in the
same industry and geography and, where possible, with a similar business model and profile are selected and then
adjusted for factors including size, growth potential and relative performance. A discount is applied or a reduced
multiple used to reflect that the investment being valued is unquoted. The multiple is then applied to the earnings,
which may be adjusted to eliminate one-off revenues or costs to better reflect the ongoing position, or to adjust for any
minority interests. The resulting value is the enterprise value of the investment, after which certain adjustments are made
to calculate the equity value. These adjustments may include debt, working capital requirements, regulatory capital
requirements, deferred consideration payable, or anything that could be dilutive which is quantifiable. The Group’s
investment valuation is then derived from this based upon its shareholding.
The weighted average post discount EBITDA earnings multiple used (based on the valuations derived) when valuing the
portfolio at 31 January 2024 was 11.4x (2023: 13.8x).
If the multiple used to value each unquoted investment valued on an earnings basis as at 31 January 2024 moved by
10%, this would have an impact on the investment portfolio of £8.5m (2023: £13.8m) or 5.1% (2023: 8.1%).
Alternative valuation methodologies – there are a number of alternative investment valuation methodologies used by
the Group, for reasons for specific types of investment. These may include valuing on the basis of an imminent sale
where a price has been agreed but the transaction has not yet completed, using a discounted cash flow model, at cost,
using specific industry metrics which are common to that industry and comparable market transactions have occurred,
and a multiple of revenues where the investments are not yet profitable.
At 31 January 2024 the proportion of the investment portfolio that was valued using these techniques were: 27% using
industry metric (2023: 25%), 32% using forecast cash flow (2023: 9.3%) and 0.02% at cost (2023: 0.1%).
If the value of all the investments valued under alternative methodologies moved by 10%, this would have an impact on
the investment portfolio of £4.2m (2023: £4.1m) or 2.6% (2023: 2.4%).
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
107
Notes to the Consolidated
Financial Statements
continued
24. Share Based Payment Arrangements
Joint Share Ownership Plan
During the year to 31 January 2019, B.P. Marsh & Partners Plc entered into joint share ownership agreements (“JSOAs”)
with certain employees and directors.
On 12 June 2018 1,461,302 new 10p Ordinary shares in the Company were issued and transferred into joint
beneficial ownership for 12 employees (including 4 directors) under the terms of joint share ownership agreements.
No consideration was paid by the employees for their interests in the jointly-owned shares.
The new Ordinary shares were issued into the name of RBC cees Trustee Limited (“the Trustee”) as trustee of the
B.P. Marsh Employees’ Share Trust (“the Employee Benefit Trust”) at a subscription price of 281 pence per share, being
the mid-market closing price on 12 June 2018. Following the acquisition of the Trustee by JTC Plc on 10 December 2020,
the Trustee has since been rebranded to JTC Employer Solutions Trustee Limited.
The jointly-owned shares are beneficially owned by (i) each of the 9 currently participating employees and (ii) the trustee
of the Employee Benefit Trust upon and subject to the terms of the JSOAs entered into between the participating
employee, the Company and the Trustee.
Under the terms of the JSOAs, the employees and directors are entitled to receive on vesting the growth in value of the
shares above a threshold price of 281 pence per share (market value at the date of grant) plus an annual carrying
charge of 3.75% per annum (simple interest) to the market value at the date of grant to the date of vesting. The
Employee Benefit Trust retains the carrying cost, with 281 pence per share due back to the Company.
On 12 June 2021 (the “vesting date”) the performance criteria were met, after which the members of the scheme became
joint beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6
pence per share. Alternatively, the participant and the Trustee may exchange their respective interests in the jointly-owned
shares such that each becomes the sole owner of a number of Ordinary shares of equal value to their joint interests.
There were 254,414 shares where the performance criteria was not met on the vesting date that had been forfeited by
departing employees and which remained unallocated within the Employee Benefit Trust as at 31 January 2022.
During the year to 31 January 2023, 18,155 of the 254,414 unallocated shares within the Employee Benefit Trust were
transferred to the B.P. Marsh SIP Trust (“SIP Trust”) to be used as part of the 22-23 SIP awards made in April 2022.
Following this transfer and as at 31 January 2024 there were 1,443,147 shares held within the Employee Benefit Trust, of
which there were 236,259 shares where the performance criteria was not met on the vesting date and which remained
unallocated. The Employee Benefit Trust remains the owner of these unallocated shares and they do not have dividend
and voting rights attached.
On 26 October 2023 following the removal of a dividend waiver and block on voting rights on the 1,206,888 allocated
ordinary shares held by the Employee Benefit Trust, these ordinary shares became eligible for dividend and voting rights
and therefore became fully dilutive for the Group.
Provided that the shares are eventually sold from the Employee Benefit Trust for at least 284.5 pence per share on
average, the Group would be entitled to receive £4,106,259 in total.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
108
Since 31 January 2024, 362,882 of the shares held within the Employee Benefit Trust have been sold, leaving 1,080,265
shares remaining within the Employee Benefit Trust, of which 236,259 are unallocated. Of the £4,106,259 receivable by
the Group in total, £1,157,000 was received, leaving a balance outstanding of £2,949,259. As such, provided that the
shares are eventually sold from the Employee Benefit Trust for at least 273.0p/share on average, the Group will receive
this balance in full.
Share Incentive Plan
During the year to 31 January 2017 the Group established an HMRC approved Share Incentive Plan (“SIP”).
During the year a total of 32,780 ordinary shares in the Company, of which 4,850 were held in Treasury as at
31 January 2023 and 27,930 were from shares bought back into Treasury during the current year (2023: 9,542 ordinary
shares in the Company, which were held in Treasury as at 31 January 2022) were transferred to the B.P. Marsh SIP Trust
(“SIP Trust”). As a result, a total of 32,780 ordinary shares in the Company were available for allocation to the
participants of the SIP (2023: 31,801 ordinary shares were available for allocation, including 4,104 unallocated ordinary
shares already held within the SIP Trust as at 31 January 2022 and 18,155 unallocated ordinary shares transferred
from the Employee Benefit Trust to the SIP Trust in April 2022).
On 14 April 2023, a total of 11 eligible employees (including 3 executive directors of the Company) applied for the
23-24 SIP and were each granted 1,192 ordinary shares (“23-24 Free Shares”), representing approximately £3,600 at
the price of issue.
Additionally, on the same date, all eligible employees were also invited to take up the opportunity to acquire up to £1,800
worth of ordinary shares (“Partnership Shares”). For every Partnership Share that an employee acquired, the SIP Trust
offered two ordinary shares in the Company (“Matching Shares”) up to a total of £3,600 worth of shares. All 11 eligible
employees (including 3 executive directors of the Company) took up the offer and acquired the full £1,800 worth of
Partnership Shares (596 ordinary shares) and were therefore awarded 1,192 Matching Shares.
The 23-24 Free and Matching Shares are subject to a 1 year forfeiture period.
A total of 32,780 (2023: 31,801) Free, Matching and Partnership Shares were granted to the 11 (2023: 11) eligible
employees during the year, including 8,940 (2023: 8,673) granted to 3 (2023: 3) executive directors of the Company.
No ordinary shares were withdrawn from the SIP Trust during the year (2023: no withdrawals).
£77,492 of the IFRS 2 charges (2023: £84,714) associated with the award of the SIP shares to 11 (2023: 11) eligible directors
and employees of the Company has been recognised in the Statement of Comprehensive Income as employment
expenses (Note 5).
As at 31 January 2024, and after adjusting for a total of 19,951 ordinary shares withdrawn from the SIP Trust by
employees on departure and 6,842 ordinary shares forfeited on departure (since inception), a total of 295,609 Free,
Matching and Partnership Shares had been granted to 11 eligible employees under the SIP, including 96,192 granted to
3 executive directors of the Company.
The results of the SIP Trust have been fully consolidated within these financial statements on the basis that the SIP Trust
is effectively controlled by the Company.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
109
Notes to the Consolidated
Financial Statements
continued
24. Share Based Payment Arrangements continued
Share Option Plan
On 6 September 2023 the Group established a new employee Share Option Plan (“SOP”).
On 17 October 2023 Share Options (“Options”) over 1,682,500 ordinary shares of 10p each in the Company, in
aggregate, were granted to 12 employees, including 3 executive directors of the Company.
The total number of Options available for allocation amounted to 1,685,970, which represented 4.5% of the Company’s
total ordinary shares in issue at the time the SOP was adopted. 3,470 Options remain unallocated as at 31 January 2024.
Each of the Options will vest, on a ratchet basis, subject to certain Net Asset Value growth targets being achieved for the
three consecutive financial years ending 31 January 2024, 31 January 2025 and 31 January 2026 (“Performance
Period”). The first exercise date is 6 September 2026 whereby 50% of vested Options will be exercisable at 10p per share,
with the remaining 50% exercisable at 10p per share from 6 September 2027.
The number of Options which vest will vary depending on the level of Net Asset Value growth achieved, subject to the
growth performance criteria as set out below, alongside the percentage of Options that will vest at each value:
Compounded annual growth of Net Asset Value
over the Performance Period % vesting of Options
Less than 8.5% 0%
Between 8.5% and less than 9.25% 25%
Between 9.25% and less than 10% 50%
10% or above 100%
For these purposes, Net Asset Value is defined as “audited Total Assets less Total Liabilities for the consolidated Group
plus any dividends or other form of shareholder return that are paid in the relevant Financial Year”.
Therefore, for all Options to vest, the Net Asset Value (as defined above) would need to exceed £252.2m, adjusted for
any shareholder distributions.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
110
The details of the arrangements are described in the following table:
Nature of the arrangement
Share options
Form of option
Asian options
Type of option
Nominal-cost option
Date of grant
17 October 2023
Number of instruments granted
1,682,500
Exercise price (pence)
10.00
Share price (market value)
354.22
at grant (pence)
Vesting period (years)
3 years
Vesting conditions
The recipient must remain 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, or another company, obtaining control of the
Company either (i) as a result of a making a General Offer; (ii) pursuant to a court sanctioned
Compromise or Scheme of Arrangement; or (iii)
in consequence of a Compulsory Acquisition; or
b) a person or another company 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.
In such circumstances, an Option may be exercised at any time during the period
of six months following the date of the event. Any Option not exercised within this period shall lapse
immediately upon the expiry of the six-month period.
If a Participant ceases to be a Group Employee before the Vesting Date by reason of being a Good
Leaver, the Pro-rated Portion of their Option shall be capable of vesting on the Cessation Date.
If a Participant ceases to be a Group Employee by reason of being a Good Leaver after the Vesting
Date but before the Exercise Date the Participant shall be entitled to exercise the vested Shares of such
a vested Option at any time after the Exercise Date.
Performance period
The three consecutive financial years beginning 1 February 2023 (i.e. the three periods ending
on 31 January 2026)
Net Asset Value at which Options vest
10% compound annual growth over the Performance Period, or an Net Asset Value threshold of
£252.2m, adjusted for any shareholder distributions, with the percentage of Options vesting as follows:
Compound Annual Growth achieved:
• Less than 8.5%: 0% vest
• Between 8.5% and less than 9.25%: 25% vest
• Between 9.25% and less than 10%: 50% vest
• 10% or above: 100% vest
Exercise period
50% of the vested options may be exercised immediately after the end of the Performance Period or
6 September 2026 (whichever is the latter) with the remaining 50% being capable of exercise after
6 September 2027
Expected volatility
19% annual volatility
Risk free rate
5%
Expected annual dividends (pence)
2.78
Settlement
Cash settled on sale of shares
% expected to vest (based upon leavers)
80%
Number expected to vest
1,346,000
Valuation model
Monte Carlo techniques using the assumptions of Geometric Brownian Motion
Fair value per granted instrument (pence)
75.24
Charge for year ended 31 January 2024
£89,437
£89,437 of the IFRS 2 charges (2023: N/A) associated with the grant of the SOP options to 12 (2023: N/A) eligible directors and
employees of the Company has been recognised in the Statement of Comprehensive Income as employment expenses.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
111
Notes to the Consolidated
Financial Statements
continued
25. Related Party Disclosures
The following loans owed by the investee companies (including their subsidiaries and other related entities) of the
Company and its subsidiaries were outstanding at the year end:
2024 2023
£’000 £’000
Alchemy Underwriting Limited 6,000,000 –
Dempsey Group Limited 500,000 –
The Fiducia MGA Company Limited 1,481,000 2,224,500
LEBC Holdings Limited 3,300,000 3,000,000
Lilley Plummer Holdings Limited – 300,000
Paladin Holdings Limited 5,900,500 3,096,500
Pantheon Specialty Group Limited 4,536,000 –
Pantheon Specialty Limited (formerly Denison and Partners Limited) 670,000 500,000
Verve Risk Services Limited 569,209 –
AUD AUD
Agri Services Company PTY Limited 1,200,000 1,200,000
USD USD
XPT Group LLC 6,000,000 2,000,000
Sage Program Underwriters, Inc. 150,000 150,000
SGD SGD
Criterion Underwriting Pte Limited 120,000 120,000
The loans are typically secured on the assets of the investee companies and an appropriate interest rate is charged
based upon the risk profile of that company.
On completion of the Group’s disposal of its investment in Kentro Capital Limited on 9 October 2023, and as part of the
agreement to sell this investment, the Group provided a loan facility of £524,253 to Brown & Brown (Europe) Holdco
Limited, alongside other major selling shareholders, in respect of certain identified indemnities under the Sale and
Purchase Agreement. Whilst the loan capital could reduce due to potential claims, at this time the Group expects full
repayment (Refer to Note 12 for further details).
The loans of £425,831 to Bastion Reinsurance Brokerage (PTY) Limited (2023: £425,831), £665,000 to Bulwark Investment
Holdings (PTY) Limited (2023: £665,000) and £1,450,778 to Property and Liability Underwriting Managers (PTY) Limited
(2023: £1,450,778) have been written off as these businesses are in the process of being dissolved with no expectation
of recovery.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
112
Income receivable, consisting of consultancy fees, interest on loans and dividends recognised in the Consolidated
Statement of Comprehensive Income in respect of the investee companies (including their subsidiaries and other related
entities) of the Company and its subsidiaries for the year were as follows:
2024 2023
£’000 £’000
Agri Services Company PTY Limited 190,685 205,902
Alchemy Underwriting Limited 254,110 –
Asia Reinsurance Brokers Pte Limited 17,702 (82,535)
ATC Insurance Solutions PTY Limited 457,722 617,223
Brown & Brown (Europe) Holdco Limited 5,399 –
Dempsey Group Limited 87,505 –
EC3 Brokers Group Limited – 35,555
The Fiducia MGA Company Limited 192,946 196,366
Kentro Capital Limited 637,709 1,176,956
LEBC Holdings Limited 854,337 586,787
Lilley Plummer Holdings Limited 441,643 115,434
Neutral Bay Investments Limited 118,508 130,665
Paladin Holdings Limited 1,208,851 527,907
Pantheon Specialty Group Limited 180,292 –
Pantheon Specialty Limited (formerly Denison and Partners Limited) 85,926 93,624
Sage Program Underwriters, Inc. 51,813 47,776
Stewart Specialty Risk Underwriting Limited 674,610 356,384
Summa Insurance Brokerage, S.L. – 10,564
Verve Risk Services Limited 132,166 –
XPT Group LLC 1,828,713 856,734
In addition, the Group made management charges of £39,000 (2023: £36,000) to the Marsh Christian Trust (“the Trust”),
a grant making charitable Trust, of which Brian Marsh, the Executive Chairman and a significant shareholder of the
Company, is also the Trustee and Settlor.
The Group also made management charges of £8,000 (2023: £7,700) to Brian Marsh Enterprises Limited (“BME”). Brian
Marsh, the Chairman and a significant shareholder of the Company is also the Chairman and majority shareholder of BME.
All the above transactions were conducted on an arms-length basis.
Of the total dividend payments made during the year of £2,028,206, £857,193 was paid to the directors or parties
related to them (2023: total dividend payments of £1,001,435, of which £443,507 was paid to the directors or parties
related to them).
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
113
Notes to the Consolidated
Financial Statements
continued
26. Events After the Reporting Date
Group
On 22 March 2024 the Group completed the disposal of its entire 38.63% holding in Paladin Holdings Limited (“Paladin”)
to Specialist Risk Group Limited (“SRG”), following receipt of regulatory approval. On completion, the Group received
£42,075,838 in initial cash consideration, net of transaction costs, plus repayment in full of its £5,900,500 loans to
Paladin. The initial cash proceeds received represented an overall gain of £42,072,338 above the net cost of investment.
As well as the initial consideration, the Group will also be entitled to receive its proportion of any net working capital
adjustment, expected to be finalised within three months of completion. The Group will then be entitled to receive
deferred consideration of up to £17,800,000 in cash, based upon 20% EBITDA growth targets above Paladin’s actual
adjusted EBITDA for 2023, in FY24 and FY25, payable in 2025 and 2026. There is also the possibility for the Group to
receive further consideration in FY25 should Paladin outperform these growth targets.
On 27 March 2024 the Group acquired a 30% cumulative preferred ordinary equity stake in Devonshire UW Limited
(“Devonshire”) via a holding company, Devonshire UW Topco Limited, for consideration of £300,000. Devonshire is a
London-based Underwriting Agency specialising in transactional risks, including Warranty & Indemnity, Specific Tax and
Legal Contingency Insurance, with the ability to underwrite transactions in the UK, Europe, Middle East, Africa, Asia,
South America, Central America and Australasia. The Group also provided Devonshire with a loan facility of £1,600,000,
of which £390,125 was drawn down on completion, a further £300,000 on 29 May 2024, with a remaining undrawn
facility of £909,875 at the date of this report.
As at 31 January 2024 the Group had provided loans of £500,000 from a total loan facility of £1,570,000 to Ai Marine
Risk Limited, via its holding company Dempsey Group Limited. On 10 April 2024 a further £250,000 was drawn down.
Total loans stand at £750,000, with a remaining undrawn facility of £820,000 at the date of this report.
On 16 April 2024, further to the agreement entered into on 10 November 2023 and receipt of regulatory approval, LEBC
Holdings Limited (“LEBC”) completed the sale of 100% of Aspira Corporate Solutions Limited (“Aspira”), a wholly-owned
subsidiary of LEBC, to Titan Wealth Holdings Limited (“Titan Wealth”). On the same date, the Group received
full repayment of its £3,300,000 loans that were outstanding as at 31 January 2024.
On 17 April 2024, the Group acquired a further 2.52% ordinary equity holding in LEBC for consideration of £1,100,000.
On completion the ordinary shares were immediately converted into preferred shares. The transaction increased the
Group’s holding in LEBC from 59.34% as at 31 January 2024 to 61.86% at the date of this report.
On 2 May 2024 Pantheon Specialty Group Limited (“Pantheon”) repaid £1,000,000 of its outstanding loan balance
to the Group. A further repayment of £536,000 was received on 21 May 2024. As at 31 January 2024 £4,536,000
of loans were outstanding and following the aforementioned repayments total loans stand at £3,000,000 at the date
of this report.
On 9 May 2024 the Group acquired a further 7% cumulative preferred ordinary equity stake in Pantheon for
consideration of £7,300,000 increasing its equity holding from 25% as at 31 January 2024 to 32% as at the date of
this report. There is a potential for the Group’s equity holding to increase by a further 5% if certain EBITDA targets
are not achieved by 2025.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
114
On 13 May 2024 the Group acquired, through its wholly-owned subsidiary company B.P. Marsh (North America) Limited,
a further 0.95% equity stake in XPT Group LLC (“XPT”) for USD 1,000,787 (£800,073) as part of a pre-emption share
offer. Following this investment, and the uptake of other shareholder’s pre-emptive rights, the Group’s fully diluted
shareholding in XPT reduced from 29.10% as at 31 January 2024 to 28.91% at the date of this report.
Company
On 2 May 2024 the Company received a repayment of £1,157,000 in respect of a loan made to an Employee Benefit
Trust relating to shares held under joint ownership (Note 24). As at 31 January 2024 the total loan balance outstanding
to the Company from the Employee Benefit Trust amounted to £4,106,259 and following the aforementioned repayment,
£2,949,259 was outstanding at the date of this report.
27. Financial Risk Management
A review of the Group’s objectives, policies and processes for managing and monitoring risk is set out in the Financial
Risk Management section of the Group Strategic Report on pages 50 to 53.
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial
performance. Current year profit and loss information has been included where relevant to add further context.
The Group’s operations expose it to a variety of financial risks. The Group manages the risk to limit the adverse effects
on the financial performance of the Group by monitoring those risks and acting accordingly.
The monitoring of the financial risk management is the responsibility of the Board. The policies of the Board of directors
are implemented by the Group’s various internal departments under specific guidelines.
The Group is a selective investor and each investment is subject to an individual risk assessment through an investment
approval process. The Group’s Investment Committee is part of the overall risk management framework. The risk
management processes of the Company are aligned with those of the Group and both the Group and the Company
share the same financial risks.
Price risk
The Group is exposed to private equity securities price risk as it invests in unquoted companies. The Group manages the
risk by ensuring that a director of the Group is appointed to the board of each investee company. In this capacity, the
appointed director can advise the Group’s Board of the investee companies’ activities and prompt action can be taken
to protect the value of the investment. Monthly management reports are required to be prepared by investee companies
for the review of the appointed director and for reporting to the Group Board.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
115
Notes to the Consolidated
Financial Statements
continued
27. Financial Risk Management continued
A 10% change in the fair value of those investments would have the following direct impact on the Consolidated
Statement of Comprehensive Income:
Group Company
2024 2023 2024 2023
£’000 £’000 £’000 £’000
Fair value of investments – equity portfolio 165,382 171,461 190,860 158,333
Impact of a 10% change in fair value on
Consolidated Statement of Comprehensive Income 16,538 17,146 19,086 15,833
Credit risk
The Group is subject to credit risk on its unquoted investments, cash and deposits. The maximum exposure is the amount
stated in the Consolidated Statement of Financial Position.
The credit quality of unquoted investments, which are held at fair value and include debt and equity elements, is based
on the financial performance of the individual portfolio companies. The credit risk relating to these assets is based on
their enterprise value and is reflected through fair value movements.
The Group is exposed to the risk of default on the loans it has made available to investee companies. The loans rank in
preference to the equity shareholding and the majority are secured by a charge over the assets of the investment. The
Group manages the risk by ensuring that there is a director of the Group appointed to the board of each of its investee
companies. In this capacity, the appointed director can advise the Group’s board of investee companies’ activities and
prompt action can be taken to protect the value of the loan, such that the directors believe the credit risk to the Group is
adequately managed. When a loan is assessed to be likely to be in default then the Group will review the probability of
recoverability, and if necessary, make a provision for any amount considered irrecoverable.
The Group’s cash is held with a variety of different counterparties with 100% (2023: 100%) held with A rated institutions.
Liquidity risk
The Group invests in unquoted early stage companies. The timing of the realisation of these investments can be difficult
to estimate. The directors assess and review the Group’s liquidity position and funding requirements on a regular basis
and this is an agenda item for its Board meetings. A key objective is to ensure that the income from the portfolio covers
operating expenses such that funds available for investment are not used for working capital. The Group regularly
reviews the cash flow forecast to ensure that it has the ability to meet commitments as they fall due and to manage its
working capital. The Board considers that the Group has sufficient liquidity to manage current commitments.
As at 31 January 2024 the Group had no borrowings (31 January 2023: no borrowings).
Interest rate risk
Interest rate risk arises from changes in the interest receivable on cash and deposits, on loans issued to investment
companies and on certain preferred dividend mechanisms linked to an interest rate. In addition, the risk arises on any
borrowings with a variable interest rate. At 31 January 2024, the Group did not have any interest bearing liabilities but
did have interest bearing assets. The majority of loans provided by the Group are subject to a minimum interest rate to
protect the Group from a period of low interest rates, and also a hurdle rate linked to the UK Base Rate.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
116
An increase of 100 basis points, based upon the Group’s closing balance sheet position of its interest bearing assets,
excluding any future contractual loan repayments and loan balances provided against at the year end, over a
12-month period, would lead to an approximate increase in total comprehensive income of £281,000 for the Group
(2023: £133,000 increase).
Currency risk
The Group currently has substantial exposure to foreign investment and derives income outside the UK. As such some
of the Group’s income and assets are subject to movement in foreign currencies which will affect the Consolidated
Statement of Comprehensive Income in accordance with the Group’s accounting policy. The Board monitors the
movements and manages the risk accordingly.
At 31 January 2024, 66% of the Group’s net assets were sterling denominated (2023: 63%). The Group’s general policy
remains not to hedge its foreign currency denominated investment portfolio.
The Group’s net assets in US Dollar, Australian Dollar and all other currencies combined are shown in the table below.
The sensitivity analysis has been undertaken based upon the sensitivity of the Group’s net assets to movements in
foreign currency exchange rates, assuming a 10% movement in exchange rates against sterling. The sensitivity of the
Company to foreign exchange risk is not materially different from the Group.
Australian
Sterling dollar US dollar Other Total
As at 31 January 2024 £’000 £’000 £’000 £’000 £’000
Net assets 152,386 25,540 39,375 11,870 229,171
Sensitivity analysis
Assuming a 10% movement of exchange
rates against sterling
Impact on net assets N/A (2,294) (3,363) (1,079) (6,736)
Australian
Sterling dollar US dollar Other Total
As at 31 January 2023 £’000 £’000 £’000 £’000 £’000
Net assets 120,002 26,666 31,869 11,000 189,537
Sensitivity analysis
Assuming a 10% movement of exchange
rates against sterling
Impact on net assets N/A (2,393) (2,820) (1,000) (6,213)
New investment risk
An inherent risk of realising an investment is the loss of a performing asset and a potential lack of suitable new
investments to replace the lost income and capital growth. Prior to reinvestment, returns on cash can be significantly
lower, which may reduce underlying profitability on a short-term basis until funds are reinvested. The Group has an
active Investment Department which continues to receive a strong pipeline of new investment opportunities. In addition,
there is often potential for further investment within the Group’s existing portfolio.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
117
Notes to the Consolidated
Financial Statements
continued
27. Financial Risk Management continued
Concentration risk
Although the Group only invests in financial service businesses, and specifically insurance intermediaries, the Group has
a wealth of experience in this specific sector. It seeks to manage concentration risk by making investments across a
variety of geographic areas, development stages of business and classes of product. Quantitative data regarding the
concentration risk of the portfolio across geographies can be found in the Segmental Reporting analysis in Note 2.
Political risk
As a UK domiciled business with overseas investments, the Group is exposed to the risks associated with changes in UK
foreign policy and overseas political regimes. The Board is continually assessing the impact of these on the Group and its
underlying investments, however the direct impact on the Group’s investment portfolio of these has not been material to
date. It remains the Group’s intention to continue to invest into the international financial services market. As outlined
under ‘Currency risk’ above, the Group continues to monitor the movements in its foreign currency denominated income
and assets and manages this risk accordingly.
Ongoing conflicts and inflation risk
The Group is exposed to the risks associated with the ongoing overseas conflicts. The Board continually assesses the
potential impact of such conflicts and the potential impact on the Group and its underlying investments. Whilst the Group
does not have any direct investments in the affected regions, the impact on the wider global economy and associated
disruption to capital markets, foreign exchange volatility, price inflation and supply chain issues could affect both the
Group’s operations and those of its investment portfolio, which could, in turn, impact the future performance of the Group.
The Board is continually assessing the wider economic impact of such conflicts on the Group and its investment portfolio
and whilst there has been price inflation which has led to interest rate increases, and volatility within foreign exchange
currency rates, certain investments within the Group’s portfolio have seen premium rate increases and thus increased
commission. Therefore at the current time the Group does not consider these conflicts and inflation to have had a
material impact upon the Group.
28. Ultimate Controlling Party
The directors consider there to be no ultimate controlling party.
B.P. Marsh • 2024 Annual Report • Notes to the Consolidated Financial Statements
118
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Directors
Brian Marsh OBE (Chairman)
Alice Foulk (Managing Director)
Jonathan Newman (Group Director of Finance)
Daniel Topping (Chief Investment Officer)
Pankaj Lakhani (Non-executive)
Nicholas Carter (Non-executive)
Company Secretary
Sinead O’Haire
Company Number
05674962
Registered Office
4 Matthew Parker Street
London, SW1H 9NP
Auditors
Rawlinson & Hunter Audit LLP
8th Floor, 6 New Street Square
London, EC4A 3AQ
Broker and Nominated Adviser
Panmure Gordon (UK) Limited
40 Gracechurch Street
London, EC3V 0BT
Registrar
Equiniti Limited
Aspect House, Spencer Road, Lancing
West Sussex, BN99 6DA
Company
Information
B.P. Marsh & Partners Plc
4 Matthew Parker Street
London, SW1H 9NP
T +44 (0)20 7233 3112
E enquiries@bpmarsh.co.uk
www.bpmarsh.co.uk