Run rate EBITDA of operating entities £61m, 22% up on previous year
Run rate income grows by 17% to £163m
Run rate GWP approaching £900m
18 acquisitions in 2020
Global Risk Partners has shrugged off the impact of the Covid-19 pandemic to post a 22% increase in run rate EBITDA of £61m (2019: £50m).
In an end of year trading update, Mike Bruce, GRP’s Group CEO, said the results underlined the strength of GRP’s hub and spoke retail broking model and excellent performance in its underwriting and specialty divisions.
“These are tremendous results after a hugely challenging year for broking and the wider economy. I want to pay tribute to the resilience and commitment of our people across GRP and the determination they have shown to continue to serve and support our clients through the year. We are in excellent shape to accelerate our growth as the economy emerges from the pandemic in 2021.”
Mr Bruce said that in completing 18 acquisitions (2019: 16) GRP had continued to lead the industry in the number of deals completed. “After the investment from Searchlight Capital Partners in June, we had a clear mandate to continue our buy and build strategy, not only in retail commercial brokers, but in building out the portfolio into new lines and regions, including digital broking (Insync), healthcare insurance (Premier Choice) and the Irish Republic (Crotty).”
Mr Bruce said that the Insync deal in December capped a productive year for the Group’s M&A team, and illustrated that GRP’s acquisition model remains “highly appealing, and noted in particular the role played by GRP’s hubs in “identifying, negotiating and bringing 13 acquisitions over the line out of the 18 in total for the year.”
He said “We take a long-term view of our investments, especially for businesses where the vendors are young and ambitious, and this focus on the value of long-term growth feeds through to the acquisition strategies of our senior management teams across GRP’s portfolio.”
“Our acquisition pipeline remains very strong; we anticipate adding new hubs to our UK footprint shortly, and to completing further deals as vendors see the advantages of being part of a bigger group, especially during the current economic uncertainty, and broking businesses continue to hold attractive valuations.”
Turning to trading, Mr Bruce said run-rate income grew by 17% to £163m, while deal activity pushed overall GWP to nearly £900m, up from £800m on the previous year. 18 acquisitions during 2020 bring the total since GRP started trading to 71.
Looking ahead, Mr Bruce said that GRP was well-placed to manage clients through the hardening market in commercial. “Our significant investment in data analytics and our own bespoke data warehouse has given us added resilience and ability to flex our product and service propositions for the benefit of clients.”
“The additional advantages provided by our community focus gives us a high level of trust among clients that we are doing the right thing by them.”
He noted: “The latest feedback from a survey of 80,000 GRP clients also illustrates the great job our people have done over the year. Our 2020 customer survey gave a Net Promoter Score of +60, a 5.0% improvement on 2019, with 50% of our clients giving us a 10/10 score for recommending GRP businesses to their clients.”
Mr Bruce said that, notwithstanding the pandemic, 2020 was a momentous year for GRP, following the majority investment into the business by Searchlight Capital Partners. “Searchlight have been strongly supportive of our business and our strategic direction since coming on board in June, and like me they are excited by the opportunities ahead for GRP in what is still a fragmented market.”
“Notwithstanding Brexit and further Covid-related challenges, our 2020 performance, built on the professionalism of our people and the fruits of our increasing focus on digital capability and data analytics, gives us added confidence that GRP will further accelerate its growth trajectory next year.”