GWP exceeds £700m, a 27% increase on 2016/17
Run rate income of £111m, a 46% increase on 2016/17
Run rate EBITDA of operating entities £35.3m, a 73% increase on 2016-17
12 acquisitions completed in 2018
Peter Cullum, Chairman, Global Risk Partners:
“GRP has maintained its strong growth trajectory in 2017-18 through the delivery of our disciplined and proven buy, build and integrate strategy, with our operating entities delivering a run rate EBITDA of £35.3m, a 73% increase on 2016-17. Our business model is underpinned by our focus on growth, the provision of our growing portfolio of enhanced, specialist products to our clients, and the mutually beneficial relationships with our insurer partners. This delivers a clear, demonstrable and differentiated proposition to the vendors and clients of the businesses we acquire.”
Developments at GRP in 2017-18
Commenting on GRP’s performance during the past 12 months, David Margrett, Chief Executive, said “In the last year, GRP’s focus has been on three main areas; accelerating our regional retail broking strategy, strengthening our MGA business and the merger and further growth of our Lloyd’s broking businesses.”
“Under Mike Bruce’s (CEO Broking) leadership, our retail business has made significant progress with income increasing by 64% to £74m, driven by both organic and acquisitive growth. The business has now developed a national footprint with an integrated approach to clients and insurer partners.”
“To date in 2018, we have acquired 12 retail broking businesses, bringing the total of retail brokers acquired and integrated to 29 out of the 36 transactions completed by GRP since its formation five years ago. Stephen Ross (GRP’s COO), who leads our M&A initiatives in the marketplace, works closely with the management teams of our underlying businesses to identify and target those companies with specialty lines, which satisfy our stringent selection criteria and fit our growth strategy.”
Mr Margrett said, ”he acquisition of County Group in January 2018 was GRP’s largest to date and has proved to be a cornerstone deal, bringing a strong management team, niche products, an excellent client base and a new business culture. “County has since acquired three businesses and, like our other regional hub brokers, has a strong deal pipeline which it will be looking to complete over the next few months.”
We are also very pleased to have welcomed DCJ, Sagar Insurance Services, Guardian, County and Commercial Insurance Brokers, and Digney Grant, as well as five smaller brokers to the group. Each of these businesses are well known, client-focused retail brokers in their target markets and geographies.”
“The integration of these businesses and our business model has empowered our management teams to drive growth and further enhance the service and products offered to our clients.”
Turning to GRP’s Lloyd’s Specialty Broking businesses, Lonmar and Ropner, Mr Margrett said: ”We continue to see significant growth. Following the merger of the two businesses we are now able to offer all our clients a wider range of services and products across both marine and non-marine classes of insurance; the combined business is one of the leading independent Lloyd’s brokers, with a stronger and more diverse profile within the London insurance market.’
“Within our MGA segment we have also seen good growth. Clive Nathan joined GRP in March as CEO Underwriting, bringing his considerable management and underwriting experience to lead the MGA business.”
He continued: “In 2018, GRP acquired Camberford Law (now Camberford Underwriting) which, with its quality management team and market leading specialist product range, considerably enhances our MGA capability and offering to our broker panels and clients. As in our retail business, we are continuing to invest in technology and people to ensure that our underwriting track record is maintained.”
2017-18 accounts
GRP’s accounts to financial year-end 31 March 2018 report 84% growth in turnover to £75.9m (2017: £41.2m). The business generated an operating profit of £10.2m (2017: £2.0m)
A number of acquisitions were completed towards the end of the financial year and their impact is only partly included with the accounts as at 31 March 2018. This, together with the accounting treatment of GRP’s financing costs, amortisation of goodwill, central finance and M&A costs relating to the Group’s acquisitions, result in a pre-tax loss of £20.0m for the period (2017: £11.5m) in the statutory accounts format.
Chairman’s comment
Peter Cullum said: “I am pleased with the significant progress we have made in 2017-18 which is evidenced by our excellent results, with GRP reaching revenue in excess of £110m and GWP of over £700m.
The execution of our strategy by our experienced management team has driven strong, sustainable year on year growth – both organic and acquisitive, making GRP one of the top three independent brokers in the UK (i).
Looking ahead, I am optimistic about our prospects for 2019. Our partnership with Ares continues to provide GRP with access to significant new capital to support our ambitious growth strategy, and, as a result, we plan to accelerate our growth, further enhancing the value we deliver to our customers, staff, insurer partners and investors.”