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BNH Broker Network

595.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Broker Network LSE:BNH London Ordinary Share GB00B00GD538 ORD 2P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 595.00 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Broker Network Share Discussion Threads

Showing 2626 to 2650 of 2875 messages
Chat Pages: 115  114  113  112  111  110  109  108  107  106  105  104  Older
DateSubjectAuthorDiscuss
13/9/2007
07:18
Liars, not 7 of result:

7. Earnings per share
Earnings per Earnings Weighted
share #'000 average
pence No. of shares

2007

Basic earnings per share 20.74 3,186 15,359,610
Diluted earnings per share 20.33 3,186 15,672,828

Adjusted for amortisation
Adjusted basic earnings
per share 31.92 4,903 15,359,610
Adjusted diluted earnings
per share 31.28 4,903 15,672,828


2006

Basic earnings per share 10.56 1,592 15,064,906
Diluted earnings per share 10.27 1,592 15,499,768

Adjusted for amortisation
Adjusted basic
earnings per share 16.18 2,438 15,064,906
Adjusted diluted earnings
per share 15.73 2.438 15,499,768

geovest
13/9/2007
06:59
What adjustments did you make for the 31.28p Fd EPS Geovest ?
liarspoker
13/9/2007
06:44
Stunning set of results as expected.
Fully diluted EPS 31.28p (+100% increase). At 371 it is on a historical PE of only 11.8. Far too low for a quality growth business.

geovest
11/9/2007
08:16
Famous last words, but given the size of this weeks potential non-rollover, everything seems to be holding fine.

Let's hope that any set-back occurs after a run-up following the results, so at worst we end up back where we started!

The small acquisition was good news, let's hope its the start of a bit more newsflow. I am particularly keen to hear how the increased investment in the Broker Network is progressing.

lomax99
09/9/2007
15:04
Lol, just sharing a little gloom around. :-)
diogenesj
09/9/2007
14:35
Thanks for those words of encouragement !!
rik shaw
09/9/2007
10:11
Oh dear, how I hate results. The problem is, rik, that in the current market everything goes down on results, however good. So don't expect too much on Thursday.
diogenesj
09/9/2007
07:46
In all the market turmoil there may be something to look forward to this week
From Trading Report 11 June:

"Preliminary Results, which will be announced on Thursday 13 September 2007, are
expected to exceed current market expectations."

rik shaw
03/9/2007
08:12
Good to see some acquisition activity.
geovest
17/8/2007
10:25
duh, I meant April but for some reason wrote December!

I don't suppose anyone has access to the June Cenkos note and would be willing to email a copy per chance?

lomax99
17/8/2007
09:57
Lomax,
I fully agree with your summary (except that the forecast is for the year end April 08, so we'll get there even quicker). Buying this share is a no-brainer at this price and very low risk.

geovest
17/8/2007
09:26
Bought a few more yesterday, hopefully not too far from the bottom.....

Cenkos issued a target price of £5.23 in June. Based on the current price of £3.40 we are only on a prospective PE of 10 for year end December 2008 (eps of 33.9, I believe).

Assuming current market turmoil settles this should have a good run up to/around the September results announcement. They have beefed up internal resource and set a target for the network of 500 by 2010, given the margins involved this extra investment should start to pay dividends, and will be a major spur for growth over the next few years. The TL acquisition was a good one, however most are quite small and are not nearly as lucrative as the geared effect resulting from adding additional network members.

Any views?

lomax99
13/8/2007
21:02
Hmm, well, good luck, D77 - but I hope you don't take advice from that Ben Stein. :-)
diogenesj
07/8/2007
08:33
The choice was closing spreadbets over £90,000 of shares or selling £20,000 of shares to cover possible margin calls. I reckon that shares are likely to rise on average, so I chose to sell the shares. I am out of trouble providing share prices don't fall more than 50%.

See

david77
06/8/2007
13:30
So let me see if I understand this correctly. You over traded on spreadbets, not allowing for any drop in share price. You are now facing margin calls and instead of reducing your risk by selling the sh*t thats causing losses, you sell the shares that actually makes profits. Man, you should be an Economist ;=)
geovest
06/8/2007
12:46
Blame me for today's drop. I had been buying AIM listed shares to get the lower CGT rate after a year or two. I had loads of IFL International Ferro Metals - but they have said that they will be moving to the main market soon - so I opened a spread-bet a/c to hold IFL - effectively. You bet on the IFL share price instead of buying the shares - a nonsense but don't blame me.

The upsides are that there is no CGT on gains and the margin requirement is just 25% - they let you spend 75% of your cash meaning that you can buy three times as many shares.

The downsides are that you cannot offset spreadbet loses against gains on shares and when the market takes a wobble, you must have cash to meet falls in the underlying share prices.

I have been guilty of over-trading - buying all that I can afford and not keeping a cash pot to cover losses. I have held BNH shares over a year so suffer a lower CGT bill on this share compared with most of my holdings - so I have been selling BNH to build a cash pot to cover potential losses on spreadbets. I hope that I don't need to spend the cash pot - but I now know that I can meet any margin calls if I have to.

So nothing wrong with BNH - except that I might need the cash.

david77
30/7/2007
09:08
Probably more a reflection of current market jitters.


Actually happy to see this retracing at present - I am considering an additional investment (although the phrase 'eggs and baskets' keeps coming to mind)

A few more RNS's wouldn't go amiss, it's been pretty quiet on that front this year - although obviously only after I have topped up!

lomax99
30/7/2007
07:08
Hmm - tipped in SCSW and actually starts off down - turn up for the books..
stegrego
28/7/2007
04:29
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.

lomax99
20/7/2007
19:44
No worries Stegrego. I made the wrong choice to get out when I did, but I still did well from BNH, and I'm pleased for you guys that it's continued to make good gains. One decent treeshake and I'll be back in again :-)

Have a good weekend

spangle93
20/7/2007
19:16
Cheers Spangle
stegrego
20/7/2007
17:05
I haven't forgotten you guys:

Buy Broker Network at 375.5p

Says the AIM & PLUS Newsletter

The AIM & PLUS Newsletter tipped Broker Network in March 2007 at 278.5p and in only four months the shares have delivered a fantastic return of 35%. With significant upside still to come we continue to rate the shares as a buy.

Broker Network is a group of over 170 independent community insurance brokers, known as Members. These Members, which retain their own trading brand, are contractually obliged to place all general insurance business with Broker Network. In turn, it provides support services including IT, training, human resources, marketing and regulatory compliance. The service provided by Broker Network makes it possible for community brokers to compete on equal terms with other larger brokers for customers, which are predominantly small to medium-sized enterprises. It also gives Members greater access to a range of insurers allowing them to negotiate better remuneration terms than they could otherwise obtain independently. Likewise, Broker Network also providers insurers with a channel to obtain business from community brokers.

The company delivered an excellent set of results for the six months to 31st October 2006. Revenues surged by 79% to £10.48 million, or by 28% excluding the benefit of certain key acquisitions. At the EBITA level, after a rise in central costs reflecting the expansion, the growth figures were 86% and 34%, respectively. Pre-tax profits soared by 71% to £1.94 million, pushing earnings per share up by 74% to 8.1p. The success was a direct result of expansion of the network and acquisition of broker businesses. Despite difficult market conditions, the company demonstrated that its diverse model allows it to prosper at all points of the insurance cycle.

On the balance sheet, the company recorded net debt of £13.9 million, which is repayable over five years. This grew from £1.1 million just one year previously, as a result of the acquisition of Towry law Insurance Brokers for £13.2 million. All five offices of the new business have been integrated into the retail Insurance Broking division and have met targets to date. However, it should be noted that the recent soft insurance market has created a more competitive environment for new customers, making it difficult to achieve consistent growth across all sectors of the business. The division has made 19 acquisitions since the start of 2004. The Network itself accounted for 35% of total revenues.

In the last year, the size of the sales team has doubled, giving Broker Network the capacity to reach its increased target of 500 network Members within 6-7 years. To accommodate this expected growth, it has placed an internal team capable of processing an extra 60 new Members a year - once again doubling its capacity. There is a good reason for this increase. The target audience is more receptive than ever before to the concept of the network model. This is due to the ongoing consolidation which dominates the insurance broking sector and brokers' growing acceptance of the need to be a part of a larger organisation in an increasingly tough and competitive trading environment.

When the FSA commenced its statutory regulation of insurance brokers, some 5,000 broking firms obtained a licence to trade. However, there are now an increasing number of brokers seeking to grow their business, or who are looking at business sale and retirement. As a result, the pipeline of new Members and potential acquisitions is expanding all the time, bearing out our view that a large part of the market will ultimately consolidate. Broker Network has a much wider appeal than many of its peers.

It offers the majority of those wishing to exit the security of retaining their premises, staff and trading name, while at the same time giving the interim option of becoming an Independent Member of the network if they don't want to retire immediately. This is proving to be an increasingly attractive package that is difficult for its competitors to emulate through existing strategies. In May 2007, the group launched a Membership package for start-ups, allowing it to recruit newly-created brokers forming as a result of the fall-out from the consolidation that has already taken place.

Broker Network has also begun to secure relationships and distribution with most of its key insurer partners, including Allianz, AXA, NIG, Norwich Union, Royal & Sun Alliance and Zurich. It works hard on behalf of these partners and the long term nature of these relationships creates secure revenue streams for the foreseeable future. Meanwhile, the retail division, comprising Broker Network Insurance Brokers and TL Risk Solutions, is performing well despite challenging trading conditions. This is supported by improved commission earnings negotiated by the network, helping to improve margins overall despite pressure on top line premiums.

The insurance market remains soft - and with interest rates rising, equity markets buoyant and benign weather conditions prevailing, the near term outlook is for more of the same. The board is confident in Broker Network's acquisition proposition and the pipeline remains healthy. However, acquisitions are now fiercely fought and negotiations are taking considerably longer than in the past. Furthermore, the industry has also seen insurers purchasing mainstream commercial insurance brokers for the first time, with both AXA and Groupama acquiring commercial brokers in the last six months. Although this is unlikely to have a direct impact on the acquisition model, it will undoubtedly raise price expectations across the board.

We are revising our forecasts for the year just ended; revenues of £23 million should create adjusted pre-tax profits of around £5.8 million and earnings of 26.8p, a rise of 70% on the previous year. Even assuming a comparatively modest rise of 30% at the bottom line in the current year to April 2008, earnings of 35p put the shares on a single figure rating on a 10-month view. There is also a small dividend of 1.3p on the cards this year. The increasingly competitive nature of the M&A scene does not affect our forecasts - the numbers here do not budget for any more significant deals (although the group has made 19 acquisitions since joining AIM in May 2007). A more appropriate multiple of 15 times implies an April 2008 price target of 525p which represents a further 40% upside. We are 35% up so far and with a strong track record and good visibility, Broker Networks may sound like a dull business to invest in, but the forecast growth is far from dreary. This is a strong value growth story. BUY

spangle93
19/7/2007
22:52
Cheers Lomax, good to see positive comment.
geovest
19/7/2007
21:14
Thanks for your post lomax99. Some interesting information on BNH, I've been in these since buying around 3 years ago at an average of £1.35, wish i had bought more.
km1966
19/7/2007
20:57
Deathly quiet around here, everyone on their holidays? Growth Company Investor issued an update yesterday, hopefully we will see a resurgent upward trend shortly - with a combination of good prospective growth and a low PE my target over the next 12 months is £5+ - any other views/targets/timescales?

Article:

Broker Network (BN), whose shares have almost doubled since Growth Company Investor recommended them in October at 189.5p, is worth looking at in a different light ahead of September's results for the year to April and growing institutional support.

The last update from management revealed strong trading during the 12 months in question and new broker Cenkos, appointed in March, has upgraded its forecasts for 2007 to £22.6m revenues, £6.3m pre-tax profits and earnings of 29.9p per share.

BN recently improved terms with its insurers for the premium it buys in bulk for its network of brokers and its own 'retail' division. This means, from each £1 of premium the brokers now get 15.3p instead of 15p and BN skims 2.9p instead of 2.5p. With the insurance sector experiencing a 'soft market', chief executive Grant Ellis has secured long three-to-five-year contracts with insurers on these improved terms.

More problematic have been acquisitions of new brokers for the BN stable – there have been none since July last year. But, after a period of stalling in the market, brokers are becoming increasingly sold on the excellent terms BN offers.

Ellis's expectations are for around 'four, five or six' acquisitions a year and he is currently in discussions with 15 'interested' parties, adamant 'there is still a huge amount of consolidation to be done in the market' and pointing to recent purchases of smaller brokers by two big French insurers, AXA and Groupama.

With earnings forecast to grow steadily to over 40p by 2009, the shares continue to look good value and should become more stable in coming months as management corrals further institutional support. BlackRock and Fidelity have recently joined the register with JPMorgan and Hargreave Hale having topped up existing holdings. Now could be an opportune time to join them.

Market cap: £57.8m
PE Forecast: 12.5
Share price: 375.5p

lomax99
Chat Pages: 115  114  113  112  111  110  109  108  107  106  105  104  Older

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