Nexus and LEBC are key here with both doing very well ( they made up 50% of net assets July 2017) - also like Nexus "a potential shareholder liquidity event." Not entirely sure what that is but sounds a bit like a listing ?
NAV certainly much improved from the 304 last posted
wow - these were great results.
they have made good disposals,
have good CASH,
are very confident in the deal pipeline
and unusually large divi increase.
i've not gone through the investments in detail
but LEBC where they upped to c.60% 6 months ago
is performing significantly ahead of budget.
why would they go outside criteria to buy up to 60%
well id have thought cuase it was a bargin!!
LEBC recently bgt 500m of FUM for 5m - that biz probably worth 2% of FUM = 10m
so a great purchase !
NEXUS is very fast growth and continues with acquisitions
the bonus was that new rules menas they don't need the deferred tax provision of 5m
that adds 8% to NAV in itself!!
i think NAV will be at least 350p
given their increasingly good track record i record discount should be 15%,
20% if the market takes a tumbke
so that is a range of 280p to 300p with growth of 10% a year
the initial rise of 14p is large for BPM but i reckon this good news has not been fully digested yet. they will be covered by Simon T in the IC next week
at these levels it is a great long term asset back investment
ALL IMHO, DYOR + BoL
BPM is in my portfolio (5 years)
They have bought 17% more of LEBC at an implied total value of £40m for the business.
It is current in the books at an implied total valuation of £30m!!
I have every confidence in the BPM team not to have over paid so can only conclude that a TEV of c.£40m is the current market value. This is no surprise given the increasing valuations with quoted competitors of LEBC.
BPM now owns 60% of LEBC so in effect this adds £6m to BPM's NAV - thats 20p.
So with huge improvements at NEXUS and SUMMA as well. It takes little imagination to see an NAV of 300p for BPM within 12 mths.
well its interesting that they had to pre-announce last week on leakage of this deal and the fact that the deal is seen as so positive as to bring in significant buyers over the last couple of weeks.
to me what seems most significant , is not that, BPM is investing 6m USD in a group of top experienced professionals into a fragmented market which will no doubt make money and the mgt team have significant ambition. To me, the most pertinent fact is that BPM are there at all! Such a top mgt team hardly need BPM's money so BPM must be at the table because they are either bringing expertise, introductions, or connections. These are much more an indicator of BPM potential over the medium term that the direct merits of this deal alone.
the article in the ic today was positive as expected but there were a couple of very nice extra bits of information not covered in the RNS
1 - CEO said that they had recevied several offers for LEBC which were way above current NAV
2 - ST cites recent industry valuations that are at much higher multiples than valuations of investee companies in BPM balance sheet
3 - there are a couple of exciting "events" due to happen in the next couple of weeks. i thought the use of the word "event" was very interesting as it would have been the assumption, and most obvious, to use the word acquisitions, or investments. So I would deduce that the word "event" means either there will also be a disposal or capital reduction or special dividend etc...
time will tell.
also surprising that 90k traded today and no share price movement - who could possibly be selling and who is wanting to buy such a large volume when the free float is soo small.
long term record of 12% p.a. returns and now sitting on 30m CASH, 7m of loans and 7m of Treasury investments as they say they have momentum and a good pipeline of opportunties.
they have 3 big investments which seem rudently valued. indeed Summa seems very lowly valued at a P/E of c.5t when recent trasnactions are at 10t. so that is some NAV uplift kept for a rainy day.....
i also like the deferred tax provision.
if they do have a bad investment the loss will be offset by reducing the deferred tax liability.
so it seems like a double discount which is a double bonus when the track record is so good for so long.
RNS just out ....
following the disposal of Besso and CASH rec'd
- the group now has something like £25m in CASH (90p per share).
They see a good pipleine of opportunities but also committed to reducing the discount to NAV.
NAV is currently at least 270p so at 190p the discount is 30%.
A price of 202p is needed to get the discount to 25%.
So there will be a strong buyer in the market up to 202p,
and this price can be expected to increase when next results announced,
and NAV increases.
Its not going to set any portfolio alight,
but seems certain 10% upside from here,
a secure divi of just over 2%,
and very well backed by CASH + assets,
run by a conservative mgt team with a great track record,
in a market segment that seems to have growth potential.
Note the recent placing from RQIH and their comments
that BREXIT actually created more opportunities for them
no doubt ST in ic will cover the share buy back which will make more investors aware of BPM
"Insurance sector investor LSE:BPM:BP Marsh trades at a big discount to net asset value (NAV). We said so last year and believed it was "unfair". That discount has narrowed since, and investors have made big profits, but there's a clear argument ..."
"B.P. Marsh has released a trading update for the 6 months to 31 July 2016. It provides details of a new investment (ARB), disposals (Broucour, Randall & Quilter and final stake in Hyperion) and an increased shareholding (LEBC). It has a strong pipeline of investment opportunities together with £6.6m net cash available. Shareholders will welcome the 3.76p/share (+10%) dividend announced for the FY ending 31 Jan 2017 and the comment that it is the intention to at least maintain that level of dividend in FY 2018/19. The interim results will be announced on 18 October..."
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