Market Cap £75.5m Current cash (@ 17/10/17) £22m, though some of this is committed to current investments. £13.2m uncommitted cash.
BPM invests up to £5m in the first round of funding of Financial Services Intermediaries. Normally acquiring 20-40% of the investee company. The Group takes at least one Board seat and provides input, advice and assistance. It may also provide further loan financing and in some cases may take additional equity that makes it a majority shareholder.
The Group currently holds 15 investments with majority stakes in 2 of these.
Historic PE circa 8, forward PE of around 4.5.
NAV 304p per share. Share price 259p. Up 20% from a year ago. Assets do include investments but not goodwill, though this would exist in a consolidation. (Investments are generally non-controlling so not consolidated).
Profit before tax up to £10.2m for the ½ year from £4m. (Don’t read too much into this as its largely due to sale of an investment which is not a daily occurrence).
3 new investments in the last 6 months. 2 in US, 1 in UK. The company added to its existing investments in 2 UK businesses. One of these was to take out some small shareholders the other to help finance growth at a faster rate.
The Company also sold out of two businesses at better than book valuation. In the time I have followed it the Company has invariably sold out (when it sells) at higher than book valuation. I therefore see the declared share price discount to NAV of 17% as being underreported.
The 3 key Directors are;
-the founder/Chairman and majority shareholder – Brian Mars
-the Group FD -Jonathan Newman
-the Chief Investment Officer – Dan Topping
Mr Topping is usually assigned to the Board position at each investment. Though Mr Newman has taken this post on occasion and has through the finance side some level of interaction with most businesses.
Over the period I have followed BPM other staff have been assigned some of the Board posts. I see this as training up the next level to either allow expansion or to take over in the future.
The nature of BPM – making an investment and then helping a business grow before exiting means that any 6 month period and its comparatives are of limited use. But taken in a line of results over the years, these 6 months do show me that the Company continues to deliver on its story. That the model still works and is being enacted and I for one am a happy shareholder and have decided given the ongoing trend to increase my holding.