A fortnight ago BP Marsh surprised investors by selling 15 per cent of its holding in fast growing worldwide insurance broker Hyperion for £4.5m. The timing is odd because Hyperion is expected to float in 2013. The cash more than covers all of BP Marsh's investment in Hyperion and pays off directors’ loans and finances a dividend. It also means that the remaining 16.2 per cent stake, valued at £26.5m, is worth more than BP Marsh’s market capitalisation.
An uplift in the value of the Hyperion accounted for a £4.5m rise in unrealised gains on investments in the year to January and lifted operating income from £4.9m to £6.3m. Tighter criteria for analysing new investments kept operating expenses under control. That’s important because Marsh receives details of more than 100 investment opportunities a year and invests in perhaps one of them.
The sale of part of the Hyperion stake will give a big boost to current year results - so the average 12 per cent compound annual growth in net asset value (NAV) since 1990 is not in danger. Following the sale and disbursements, the company has £3.5m cash and can call on a £4.3m directors’ loan facility.
B.P. MARSH & PARTNERS (BPM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 88p | MARKET VALUE: | £ 25.8m | |
| TOUCH: | 86-90p | 12-MONTH HIGH: | 98.5p | LOW: 81.5p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 171p | NET DEBT: | 1% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 7.45 | 4.85 | 16.5 | nil |
| 2009 | -1.93 | -2.71 | -5.9 | nil |
| 2010 | 1.18 | 0.06 | 1.6 | 1.00 |
| 2011 | 4.89 | 3.01 | 8.9 | nil |
| 2012 | 6.35 | 4.38 | 12.4 | 1.00 |
| % change | +30 | +46 | +39 | - |
Ex-div:04 Jul Payment:30 Jul Aim: Asset management | ||||
