Given that there were really no negatives I see the TU as providing mainly reinforcement to previous releases. Mainly along the line of we said we would and now we have.
1 – As previously reported the company has reduced the holding of Mr Brian Marsh from above 50% to 44%. Partially this has been done through Mr Marsh not subscribing to the recent, heavily oversubscribed, offer. Partly through Mr Marsh’s ongoing share sales in particular as part of the offer to PSC Insurance. But mainly through PSC taking up new shares to facilitate them becoming a 19.6% shareholder. Whilst this does reduce for shareholders the likelihood that Mr Marsh would sell the business, it does also reduce the likelihood of any sale at a discount to current pricing. PSC is larger than BPM and provides an anchor shareholder that I expect will be positive for most of the senior staff as it removes the control and timescales of Mr Marsh from principal consideration. They are not going to wake up and find he or his descendants have sold the business.
2 – The Offer provided £17m of cash to fund further investments. Without this additional funding BPM would have been tied to the growth rate in its current investments and realisations. Not only is this positive for growth, but also for keeping staff interested.
3 – In the report a number of the investments were covered in a generally positive way. There was no mention of some of the weaker investments which I take to mean that the situation has not materially worsened. Overall the message is good news.
4- Most interesting for me were the new Director appointments in the operating subsidiary. As I have mentioned in previous articles a substantial part of the success of the company and its value is in my opinion down to Dan Topping the CIO and Jonathan Newman the FD. The promotion of Oliver Bogue and Abigail Barker from Mr Topping’s team and Francesca Lowery from Mr Newman’s team is I feel demonstration that they are developing and bringing on colleagues that they have assessed. Not only should this help manage future growth but it will I hope reduce the reliance on the 3 key individuals. (I would include Mr Marsh as one of the 3). In many respects I see these promotions as possibly the most important positive from this RNS for the medium term.
NAV is at 321p with the company saying that it will buy back shares if they fall to a 20% discount to NAV. SP at the time of writing is 296p. I don’t think a discount is in fact justified for a company with such a history of delivering on its strategy. I continue to hold and may add further.
here to edit.