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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Broker Network | BNH | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 595.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 595.00 | 595.00 |
| Top Posts |
|---|
Posted at 01/1/2008 14:16 by lomax99 I am still mulling over where to place some of my BNH funds, one company which looks potentially quite interesting is CVSG, a the largest consolidator in the veterinary field - they own 128 practices, out of an estimated 4,000. Admittedly the shares are not particularly cheap, with a current PE in excess of 60, falling to around 20 by June 2009. They are coy about giving out details of the average PE cost of acquired practises, however I would imagine that the average mutliple should be fairly low and returns should get a further boost by the time they have centralised as many back-office functions/purchasing Here's to a, hopefully prosperous, 2008! |
Posted at 23/12/2007 10:31 by dreggspicker To be frank Geo I have in the past few weeks sold more to purchase oil E&P's Afren, Soco, Granby, & Nautical: Which I already have holdings in and are all on the cusp of hopefully great things. They have done alright, with the exception of Nautical which seems to be going through a bear phase despite having a good oil find, but then a dry hole; The market seems to be dwelling on the duff one at the moment. I can't see oil going back down to $40 any time soon, and I am more & more fearful of a slump in the U.K. which will devalue the £ making oil in $ better for oil. Also the $ seems to have found a happy level. Of course small exploration firms do live life on the edge, they have to get funds to develop any finds they have, or sell the rights to them, but if the financial sector won't lead money for development there is no hope for any one. You were quite right on NARS, they seem plumbing depths, glad I didn't have a tickle. Please air any future BNH type suggestions of course!! Merry Xmas to all, dreggs |
Posted at 11/12/2007 08:46 by wharfedale I didn't want BNH to be taken over but I will use the proceeds to continue my retreat from the UK economy. I will top up a few of my miners perhaps AGU, EMED, KYS and MCR. In about 3 years I think that they will have shown a decent return even if metal prices are lower. An exception to my retreat is that I have already topped-up my TAN shares which have done very well over the last year and which I expect to do as well in the future even though the P/E is high. There are, as yet, no dividends for any of these companies.DYOR etc. |
Posted at 10/12/2007 22:10 by geovest Dreggs, I don't like Avon Rubber because they have an inconsistent trading history with up and down sales and profit over the last 10 years and margins below 5%. Selling gas masks to the military can vary substantially from year to year.I don't really know NARS but I am always concerned when a company is highly dependent on o small number of customers and insurers have a habit of squeezing suppliers hard and they have to survive on tiny margins. I haven't yet decided where to put my BNH proceeds as I am still catching up from the holiday, but will probably top up on a few holdings such as: - Agrekko (AGK) - Temporary power - CBG Group (CBG) - Insurance broker - OMG (OMG) - Image products to the entertainment, life science, defence and infrastructure industries - Rathbones (RAT) - Wealth Management Still looking for the next BNH! Regards, Geo |
Posted at 29/11/2007 20:57 by bigman ramu have a look at CBG same sector similar model but not a network, i have invested ina portfolio of insurance sector it is doing great, cbg,jelf,BNH, THB,highway,cobra,th |
Posted at 01/11/2007 14:08 by lomax99 I note that that well know basket case Erinaceous (ERG) has just lost another 20 staff, this time on the Insurance side with the staff grabbing a life raft offered by Towergate. Towergate were rumoured to be the party interested in BNH, I doubt that the extra 20 staff will provide enough of a distraction - however if they do come back with an improved offer for BNH it needs to be at least 40%+ higher than they existing share price, hopfully they will have lost interest..... |
Posted at 16/10/2007 10:44 by geovest Galwebay, yes the BNH share price went down after float, but the profitability continued to rise throughout, which is the big difference in my view. I continue to keep an eye on Cobra as a competitor to BNH and to see how they develop, but the recent results were very disappointing. Cobra added quite a lot of cost in the run-up to listing and I don't expect full year results to be good either. |
Posted at 16/10/2007 10:15 by galweybay Agree with gogoalex on October 14th about these brokers powering on. Has anyone looked at new-comer in July this year - Cobra holdings. Similar set-up to BNH and price not moved much despite what has happened to BNH. |
Posted at 28/7/2007 05:29 by lomax99 Tipped in this months SCSW.Broker Network Holdings (BNH; 377p) is enjoying a strong run helped by a trading statement from the company which said that results for the current year are running ahead of expectations. The nature of the business - offering a range of corporate services such as commercial insurance services and a network for insurance brokers - might not be immediately obvious as a growth share investment, however since its flotation in May '06, Broker Network has seen its shares rise steadily. The crown jewel in the group's business is its support services arm which operates a network of insurance brokers, all operating within the BNH framework. As chief executive Grant Ellis points out, most of the network members are small insurance brokers typically in the provinces and will place mostly commercial lines, such as arranging insurance cover for commercial premises and fleets of vehicles. These, unlike personal insurance, are not heavily commoditised and are increasingly traded electronically over the web which increases their margins. There are four such networks in the UK and BNH is one of the longer established. Ellis says the system works like this: as an independent insurance broker, you undertake to pay £95 a month to BNH. You also pass all your insurance business premiums through BNH. BNH places the insurance business with the giants such as Allianz, AXA, NIG, Norwich Union, Royal & Sun Alliance and Zurich. The members receive enhanced commission from the insurance companies because BNH's larger size enables it to obtain preferential rates. On average a broker will typically be generating an average commission of 13% of the insurance premiums but Ellis says that by becoming part of his network they can increase this more or less immediately to 15%. Also, since BNH deals with the placing of the insurance, this greatly reduces the credit risk of the individual members. In 2006, BNH deducted 1.4% of the premiums from its members and, in return, provided members with a number of valuable support services, including centralised back-office IT support, marketing assistance, training and compliance support. In addition to receiving money from its members, BNH also received 1.1% of the premium directly from the insurer. That might not sound too startling but last year, BNH had a total gross written premium through the group of almost £355m. In addition, the cost of running the network is largely fixed whilst insurance premiums tend to "repeat" every year, so unsurprisingly operating margins on this side of its business are c.50%. There are two factors in particular that have had an electrifying effect on group profitability recently; Ellis says the first part is that BNH has recently negotiated improved commission earnings from the insurers which have risen from 1.1% to 1.5%. The second element is that more brokers are joining the system. BNH has already grown its network to 165 members and has been adding at a rate of around 24 a year. Last year, the new members added an average of £90,000 revenue at only a marginal cost. Ellis has recently doubled the sales team to six individuals and allowing for a 6-9 month lead time whilst these new individuals are trained, hopes to rachet up the new membership rate. This comes at a time when BNH is already sufficiently large that it can offer a material advantage over those retail brokers who are not members creating a "virtuous circle." The target is to reach 500 members. Alongside operating its network, BNH has also been buying broking firms outright where the opportunity presents itself. There are believed to be somewhere between 4,000 and 5,000 small owner-managed brokers in the UK and Ellis believes that around 2,500 fit his acquisition criteria in terms of size and profile. BNH presently owns 17 insurance brokers with a placing capability of c.£85m. It has historically been buying commercial insurance brokers on around 4 or 5x prospective earnings although prices have hardened recently as other consolidators have entered the space. In spite of this, Ellis is on the lookout for further acquisitions on this side of the business; with debts of £12.4m and strong cashflow, there is headroom to spend a further £10m. That said, nothing large is planned and BNH has historically been buying small brokers where often only 50% of the consideration is paid upfront with the remainder on a two year earnout. Broker Cenkos is looking at eps of 26.7p for the year ended on 30 April with 34.9p for the current year underway. That assumes two small acquisitions this year but leaves the shares looking reasonably priced on a PE of 10.8. Results on 13 September; buy. |
Posted at 26/6/2007 15:20 by geovest My views on Cobra. Please note that these are my views and opinions only and the information should not be viewed as advice or relied apon. Please do your own research. I've tried to be as accurate as possible, but no guarantees.I worked my way through the prospectus and even though it said 'Final version' it wasn't as it still didn't tell me how many shares were to be placed and at what price and what is the resulting Director's shareholding will be. It did tell me that the directors will sell some 5.387m shares in the process. The press said that they intend to raise £10m, probably including Directors sales. The prospectus states they will use £2.73m to repay loan notes relating to previous acquisition (from directors by the looks of it), £1.2m to repay debt and the rest for working capital and acquisitions. The group consists of: Cobra Network Established in 2003, now around 100 members with combined premium income generated of £350m. Cobra Insurance Brokers Directly owned brokers generating commission income. Truman Lincoln, BKG Ins Brokers, BKG Corporate risks (all network founding members) Cobra Corporate Solutions Handles complex risk placements for the network Cobra London Market Wholesale insurance broker Cobra Underwriting Agency Underwrites risks for the network. Expects to underwrite £8m in 07 and £18m in 08 Cobra Financial Services Independent Financial Adviser Cobra Insurance Management Admin services to the group Financials: (The group was incorporated from 06. Figures for 04&05 are aggregated results of all companies in the group) 2004 2005 2006 Revenue (£m) 5.755 8.625 8.956 Operating Profit 0.948 2.087 0.612 Profit before tax 0.625 2.087 0.612 Profit 0.385 1.413 (0.01) EPS 1.1p 4.2p 0.0p Cash generated from operations 518 873 (289) Shares in issue before placement & listing: 36.15m The results for 06 were unimpressive to say the least. Management blames it on increased cost to support and grow the network (even though this is not reflected in income growth!) and exceptional integration cost bringing the group together. Cash flow was poor in both 05 and 06. Comparison with Broker Network Holdings The two compete directly for Network members and direct acquisition of Brokers and both operate nationally, but the core base of Cobra is Southern and that of BNH is Northern. There are however some very distinct differences in the operating models of the two groups on the Network side. Please note that I have gathered the following information from various sources and it may not be totally accurate, but it gives an idea of how they operate. Network Revenue: Cobra BNH Monthly Membership fee No £95 pm Share of Base Commission No +- 10% Over-riding Commission Yes Yes Profit share commission Yes Yes Bonus target over-rider Yes ? Marketing Allowance Yes ? Shortfall Fees (Member penalties) Yes No The big difference is that BNH takes a share of the underlying commission which explains why BNH in 2006 generated network revenue of £7.3m from 155 members compared to Cobra £2.7m from 100 members. The Network business is FAR more profitable than the direct broking business and explains why BNH if more profitably by a considerable margin. Cobra network on the other hand generates revenue from over-riders, target bonuses and profit shares. The problem is that if you set aggressive growth targets and penalties for not achieving targets, it normally results in pressurised members writing poor quality business, which erodes profitability, impacting on profit share commission. Both underlying broker businesses have been operating for many years. BNH was established in 1994 and have a long history of strong organic growth, increasing substantially over the last 3 years since listing. Cobra Network was formed in 2003 and has grown very aggressively since then, but they have grown expenditure much faster than revenue and profitability suffered. In Nov 2005 Cobra had 86 Members and said it would grow this to 125 and Premiums to £500m by end of 2006. We are now halfway through 2007 and they have only grown to 100 members and £350m Premiums. It may therefore be argued that Cobra management over-promise and under-deliver, compared to BNH management that under-promise and over-deliver. Cobra's stated acquisition objectives are to finance acquisitions mostly with share issues (this dilutes the equity of current holder) and use deferred consideration extensively (this can be good, but generally makes acquisition cost more and result in more dilution for existing shareholders). BNH on the other hand tend to buy outright using cash generated from the operation and moderate debt, with no dilution to shareholders. Conclusion: Cobra may be more aggressive in its business strategy, but in my opinion, BNH have the better operating model, producing higher profit margins and better cash flow. They also have a better track record of profitability and delivering on forecasts. I will keep an eye on Cobra to see how it develops, but will not invest for now. My money stays with BNH. |
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