B.p Marsh Regulatory News (BPM)

Date: 17 October 2017

On behalf of: B.P. Marsh & Partners Plc

Embargoed until: 0700hrs

B.P. Marsh & Partners Plc

("B.P. Marsh", the "Company" or the "Group")

Interim Results

B.P. Marsh & Partners Plc, the niche venture capital provider to high growth businesses, announces its unaudited Group interim results for the six months to 31 July 2017 (the "Period").

The financial highlights for the Period are:

· Net Asset Value ("NAV") at 31 July 2017 of £88.8m (31 July 2016: £73.8m)

· Increased NAV per share of 304p (31 Jan 2017: 273p, 31 July 2016: 253p)

· Increase in the equity value of the portfolio of 24.6% in the Period

· 12.8% total shareholder return (31 July 2016: 5.8%)

· Significant rise in profit after tax (unaudited) of £10.2m (31 July 2016: £4m)

· Final dividend of 3.76p per share declared and paid in July 2017

· Dividend of 3.76p per share intended for year to 31 January 2018

· Cash and treasury funds balance of £22m, of which £13.2m uncommitted

· Current uncommitted cash of £8.6m available for investment

· Increase to the top limit of funding to £5m from £3m

The portfolio highlights for the Period are:

· New investments in CBC UK Ltd ("CBC") and XPT Group LLC ("XPT")

· Disposals of Besso Insurance Group Limited ("Besso") and Trireme Insurance Group Limited ("Trireme") delivering combined proceeds of £32.0m before tax

· Additional investment in LEBC Holdings Limited ("LEBC")

· Follow-on funding to Nexus Underwriting Management Limited ("Nexus")

· New investment post-period end in Mark Edward Partners LLC ("MEP")

Brian Marsh, B.P. Marsh Chairman, commented, "This solid set of results demonstrates substantial growth in our Investment Portfolio in line with our strategy to deliver value to shareholders."

For further information:

B.P. Marsh & Partners Plc www.bpmarsh.co.uk

Brian Marsh OBE / Camilla Kenyon +44 (0)20 7233 3112

Nominated Adviser & Broker

Panmure Gordon

Atholl Tweedie / Charles Leigh-Pemberton / Adam James +44 (0)20 7886 2500

Financial PR

Redleaf Communications

Emma Kane / Elisabeth Cowell +44 (0)20 7382 4732

Chairman's Statement

I am pleased to present the unaudited Consolidated Financial Statements of B.P. Marsh & Partners Plc for the six month period to 31 July 2017.

The Net Asset Value has increased to £88.8m from £73.8m as at 31 July 2016, representing an NAV per share of 304p (31 July 2016: 253p), and unaudited profit after tax in the Period was £10.2m, compared to £4m in the six months to 31 July 2016.

The disposals of Besso and Trireme during the Period provided the Company with combined proceeds of £32.0m before tax and we will deploy this into new investments and our existing investee companies.

We have for some time been following North America as an opportunity base and we are pleased to have made two new investments in US insurance intermediary businesses founded by industry veterans: XPT in June and Mark Edward Partners after the period end.

Meanwhile in London we made a new Lloyd's broking investment in CBC, a typical B.P. Marsh venture in a small business with big ambitions and a capable team to fulfil them.

Within the portfolio we took the opportunity to make an additional investment into LEBC, the national UK financial advisory business. LEBC has grown strongly in recent years and continues to do so by developing its traditional advice model to incorporate the best in technology advancement and steadily growing its corporate project work.

In addition, we provided additional financial support to Nexus by means of a £4m loan facility to enable Nexus to continue its M&A activity, with three new acquisitions made in 2017 to date.

We have a strong pipeline of new opportunities to consider and a healthy cash balance and our decision to increase our top limit for new investments from £3m to £5m in February has proved fruitful, opening new investment avenues for us to explore. The portfolio now has a healthy geographic spread, reflecting our overseas investment strategy to only invest in territories with a well-developed regulatory and compliance framework and where there are good opportunities for growth in partnership with a London-based investor. Our portfolio businesses in Australia, Canada, Singapore, and South Africa, whilst currently small scale, provide a solid footprint for development.

The Board is pleased to note the continued narrowing of the share price discount to NAV per share, continuing the progress we have made over the past five years. We value all our shareholders, large and small, and are pleased to record a 12.8% shareholder return in the period. We paid a dividend of 3.76p per share in July 2017, with this intended to be repeated in the coming two years. In addition, we have a stated Buy-Back policy that enables us to buy back shares should the NAV discount threshold reach 25% or more.

On a wider note, the 2017 Atlantic hurricane season is expected to rank among the costliest in recent years after a decade or so without major losses to the insurance industry. None of our investee companies are exposed to underwriting risk and, indeed, they should benefit from any tightening of rates following these events. However, the full effects will not become clear for some time.

The global political situation remains uncertain and we continue to keep a watchful eye on events. Meanwhile, with the Company making solid progress, we remain measured, diligent and energetic in pursuing our objectives.

Business Update

Summary of Developments in the Portfolio

New Investments

Investment in CBC UK Ltd

On 17 February 2017, the Group acquired, through a newly established company Paladin NewCo Limited ("Paladin") (now called Paladin Holdings Limited), an effective 35% shareholding in CBC.

CBC is a Retail and Wholesale Lloyd's Insurance Broker, offering a wide range of services to commercial and personal clients as well as broking solutions to intermediaries. For the year ending 31 December 2017, CBC has a forecast Revenue of £5.55m with a forecast EBITDA of £0.63m.

As part of the transaction, the Group partnered with CBC's management team and Andrew Wallas, who joined the Board as Non-Executive Chairman, delivering a 50% and 15% shareholding to both parties, respectively.

This transaction was made through Paladin to which the Group provided £4m of funding. This was provided via the subscription for a 35% shareholding in Paladin for nominal value and a Loan Facility of £4.0m which was fully drawn down on completion.

Having exited investments in two Lloyd's brokers, Besso and Trireme, during the Period, the Group was pleased to establish this new position in the Lloyd's broking sector, one of its traditional markets.

Investment in XPT Group LLC

On 13 June 2017, the Group invested US$6m into XPT, a New York based specialty lines insurance distribution company, subscribing for a 35% stake.

XPT is a newly established operation which is in active discussions with a number of parties over potential minority and majority investments into established entities in the US wholesale insurance arena. XPT plans to make one or two US-based acquisitions before the end of its first year.

The management team at XPT is a line-up of industry veterans, including Tom Ruggieri, formerly of Marsh, Advisen and Swett & Crawford; Mark Smith, former president and CEO of Stewart Smith; Jeff Heath, the founder of Heath Group; and Mason Power, former COO and Chief Marketing Officer at Swett & Crawford.

The investment in XPT is a return to the North American market for the Group, following on from the Company's recent investment in Canada, Stewart Specialty Risk Underwriting Ltd.

Investment in Mark Edward Partners LLC (post Period end)

On 12 October 2017, the Group invested into MEP taking a 30% equity stake and providing a US$2m loan facility available for future growth.

MEP is a specialty insurance broker offering a wide range of risk management services to both commercial and private clients. MEP is a national U.S. firm with licenses to operate in all 50 states and has offices in New York, Palm Beach and Los Angeles.

By investing in MEP, B.P. Marsh is entering into partnership with Mark Freitas, who has over 30 years of experience in the insurance industry. Having begun his career at American International Group ("AIG"), Mark joined Crystal & Company, where he subsequently became President and Chief Operating Officer, and saw the business increase its revenues significantly. He then left Crystal & Company in 2009 to establish MEP.

Increased Holdings

LEBC Holdings Ltd

The Group purchased a further 17.84% stake in LEBC for aggregate consideration of £7.14m on 26 July 2017.

The shares were purchased for cash from several sellers, including retiring employee shareholders, members of Management via LEBC's Employee Benefit Trust and Joint Share Ownership Plan and the Founder and CEO, Jack McVitie. As part of the transaction, the Joint Share Ownership Plan repaid the outstanding loan facility of £1m in full.

Following the purchase, the Company has an aggregate shareholding of 60.88% in LEBC, while the balance continues to be held by Founder and CEO, Jack McVitie and LEBC Management. The Group's usual strategy is to take minority equity positions. However in this instance the opportunity to make an additional investment proved compelling. The increase to a majority position will not result in any changes as the existing management will continue to run the business day to day. However, the Group has appointed Oliver Bogue as an additional director of LEBC alongside Camilla Kenyon, subject to regulatory approval.

Follow-on Funding

Nexus Underwriting Management Ltd

On 10 July 2017, the Group provided Nexus, in which it holds an 18.14% shareholding, with a £4m Loan Facility secured as part of a wider debt fundraising exercise, to undertake M&A activity.

Nexus secured £30m in loan facilities in total, with the balance of £26m provided by funds managed by HPS Investment Partners, LLC ("HPS"), the global investment firm.

To date, Nexus has drawn down £18m of this £30m facility, including £2m from the Group, using it alongside existing cash resources to acquire Vectura Underwriting ("Vectura"), Equinox Global Limited ("Equinox") and Zon Re Accident Reinsurance ("Zon Re") with further M&A activity planned for the remainder of 2017.

Vectura was established in 2007 and is a Managing General Agency based in London and offering clients a wide range of insurance products in the Marine Cargo space, in particular international cargo and freight liability insurance.

Equinox, founded in 2009, is a Trade Credit Managing General Agent with Lloyd's Coverholder approval with offices in London, New York, Paris, Hamburg and Amsterdam.

Zon Re is a management-owned Reinsurance Underwriting Manager based in New Jersey and founded in 2003 which offers domestic and international reinsurance capacity in the accident reinsurance space, specifically for primary life, property & casualty and accident & health.

By way of background, since the Company's investment in 2014, Nexus has grown its Gross Written Premium income from £56m in 2014 to a forecast £157m in 2017, an increase of 180%. In the same period, commission income has increased from £12.3m to a forecast £31m, an increase of 152%, and EBITDA has increased from £2.6m to a forecast £11m, an increase of 323%. The 2017 forecast figures include the three acquisitions noted above on a full year basis.

Disposals

Besso Insurance Group Ltd

The Group announced on 4 January 2017 that it had reached an agreement to sell its entire 37.94% shareholding in Besso for cash to BGC Partners Inc ("BGC"). Completion was announced on 28 February 2017, with the Group receiving £21.6m in cash (net of transaction costs and pre-tax) following BGC's 100% acquisition of Besso for an enterprise valuation of approximately £70.5m. Various adjustments were then made by reference to completion accounts, resulting in additional £0.4m consideration proceeds (net of transaction costs and pre-tax) being payable to the Group.

The Group's final proceeds from this sale represent an increase of £0.7m on the valuation at 31 January 2017 and an IRR of 21.9% since 1995, when the Company originally invested. It also represents an increase of 58% on its last published valuation of the same stake in Besso of £13.9m at 31 July 2015, being the last valuation prior to the commencement of the sale process.

Trireme Insurance Group Ltd

On 3 April 2017, the Group announced its intention to dispose of its 29.94% shareholding in Trireme for £2.96m cash, to its fellow shareholder US Risk Midco, LLC ("US Risk"). Due to the aggregate quantum of disposals and loan repayments within the portfolio over the previous 12 months, this required the approval of the Company's shareholders at a General Meeting. Such authority was given on 19 April 2017 and accordingly the sale completed shortly thereafter.

This disposal represents an uplift of 15% over the Group's valuation at 31 July 2016 and an IRR (including fees) of 15.6% since 2010, the date of investment.

As part of the disposal, Trireme repaid in full the outstanding £2.16m drawn down under its £2.42m loan facility with the Group, plus fees and accrued interest. As such, the total pre-tax proceeds received by the Group amounted to £5.19m.

Portfolio news

The Group's portfolio businesses have continued to develop as anticipated during the Period. Specific instances or developments are noted below:

The Fiducia MGA Company Ltd ("Fiducia")

Fiducia, the UK Marine Cargo Underwriting Agency, has opened a new office in Birmingham and launched a comprehensive marine trades facility for the UK regional marine market.

The office will be headed by underwriter Marc Watts, with assistant underwriter Gemma Ballard and with Bob Watts leading development. The team had previously worked together, both at Groves John and Westrup and at Northern Marine Underwriting.

CEO Gerry Sheehy commented "Fiducia officially launched in November 2016 with ambitions to recruit experienced specialists with the aim of broadening the firm's product base. Further expansion is planned over the next year and we are also seeing interest in our product set and capabilities from Europe."

LEBC Holdings Ltd

LEBC became directly authorised by the FCA on 1 August 2017. The business, which was previously an authorised representative of Tenet, has a compliance framework in place that has enabled the authorisation process.

Jack McVitie, Chief Executive, commented "Direct authorisation ensures we will be able to continue to put our clients at the heart of everything we do and will provide them with unequalled service across our 16 offices nationally. Given the pace of change we have seen in the business and the industry at large over the last few years, now is clearly the right time to make this change."

LEBC continues to be at the forefront of technological change within the wealth management sector and to look at ways to drive additional business and revenue using technology, in combination with its traditional face-to-face advice model. On 3 October 2017 LEBC announced that its "bionic" advice service had passed £1bn of new clients' assets invested, an increase of 100% in only nine months and with more than 37,000 clients using the service.

The corporate projects work undertaken by LEBC The Retirement Adviser continues to grow. The 2017 Moneyfacts Awards announced in September saw LEBC The Retirement Adviser winning the Retirement Adviser of the Year Award.

Sterling Insurance (PTY) Ltd ("Sterling")

MB Prestige Holdings (PTY) Ltd ("MB")

The Group's two investments in Australia; Sterling and MB, continue to perform in line with or above the Group's expectations at the current time.

Summa Insurance Brokerage, S.L. ("Summa")

For the year ended 31 December 2016 Summa met its budget, reporting Revenue of €6.1m and recurring EBITDA of €1.4m.

Despite some consolidation following the global financial crisis, the Spanish insurance intermediary market remains fragmented, with a high number of small regional players. Summa is one of the largest consolidators of regional insurance brokers in Spain, with an extensive network of offices and agents throughout the country. As such, the Group believes that Summa is well positioned to take advantage of growth opportunities moving forward.

This has been demonstrated by Summa's recent acquisition of the Mikel Lasa Correduria de Seguros, a regional insurance broker based in Mondragon, the capital of the Basque Country.

Additionally, the Group continues to work with Summa to develop their interaction with the Lloyd's and London Insurance Market.

The Board of both B.P. Marsh and Summa are aware of the ongoing independence movement in Catalonia and are monitoring the situation closely.

Walsingham Motor Insurance Ltd ("Walsingham")

Walsingham, the specialist fleet motor insurance underwriting agency, has continued to exceed expectations this year and is forecasting to deliver revenue and profits above budget for the year.

Dividend

A final dividend of 3.76p per share declared and paid in July 2017.

The Board aims to find a balance between utilising cash to invest in the existing portfolio and new opportunities, with providing investors with a healthy but sustainable yield. It is the Board's aspiration to maintain a dividend of at least 3.76p per share for the years ending 31 January 2018 and 2019, subject to ongoing review and approval by the Board and the shareholders.

Share Buy-Back

During the period of six months to 31 July 2017 the Group undertook seven Buy-Back transactions from the Market in line with its Buy-Back policy as announced on 3 March 2017 and 24 July 2017.

The Group's Share Buy-Back Committee meets periodically to decide if Buy-Back transactions should be undertaken when the discount to Net Asset Value of the Group's share price exceeds 25%. The suitability of the 25% threshold is regularly monitored by the Board. The Buy Backs are intended as a stabilising mechanism and have been particularly useful during periods of market instability.

The Group bought back 28,646 shares in total during the Period for an aggregate price of £53,967. These shares were transferred into Treasury and formed part of the award to Management and other staff as part of the Group's Share Incentive Scheme as announced on 29 June 2017.

Business Strategy

The Group invests amounts of up to £5m in the first round of funding and takes minority equity positions in Financial Services intermediaries, normally acquiring between 20% and 40% of an investee company's total equity. During the holding period, additional investment can lead to the Group having a majority holding, as is the case currently in LEBC and Summa. In these circumstances, day to day business operation remains with management, with the Group providing input, advice and assistance, as with all of its portfolio businesses.

The Group is comfortable with taking a long-term investment horizon. Based on our current portfolio, the average investment has been held for approximately 3.4 years.

The Group requires its investee companies to adopt minority shareholder protections and appoint a director to its board.

Since 1990 the Group has generated an average NAV annual compound growth rate of 11.7%. Its successful track record can be attributed to a number of factors that include a robust investment process, management's considerable sector experience and a flexible approach to exit.

Cash Balance

The Group has a current uncommitted cash balance of £8.6m available for new investment opportunities and for developing the existing portfolio.

Board Change

The Board was pleased to announce the appointment of Nicholas Walker as a Non-Executive Director, with effect from 6 September 2017. Upon appointment, Mr Walker also joined the Company's Remuneration Committee and Audit Committee.

Mr Walker is well-known to the Group, having worked with him in his capacity as Joint Managing Partner of Socios Financieros, the Madrid-based corporate finance firm which he founded in 1991, on matters relating to Summa, the Group's Spanish investment. This involvement resulted in Mr Walker's appointment as Non-Executive Director of Summa in February 2017.

Prior to founding Socios Financieros, Mr Walker was Vice President and Country Head of the Spanish M&A team at Citicorp from 1988-1991 and was an Analyst and Vice President at Bank of America International, including a member of its European M&A Group from 1985-1988.

The Board considers that Mr Walker's long track record in European and international M&A will bring additional depth to the Group and provide an excellent resource for the Management team and look forward to his contribution.

Outlook and New Business Opportunities

During the six-month period the Group has continued to see a strong flow of new investment opportunities, both in the UK and internationally. Discussions are ongoing on a number of these.

At the present time, both the MGA and broking sub-sectors are producing good potential deal flow in quality businesses in the insurance market, both in the UK and overseas. The increase in the Group's top limit of first round investment funding from £3m to £5m, announced in February, has had a positive impact by widening the Group's sphere of opportunity.

In the insurance sector, MGA start-up opportunities are a continuing trend. Insuretech opportunities continue to make headlines, however the Group has yet to see one that fits with its investment model and is suitably compelling.

On the wealth management side, the Group continues to be interested in businesses with ambitious and capable management teams, whether IFAs, fund managers or other intermediaries.

The impact caused by Hurricanes Harvey, Irma, Maria and Nate and the Pueblo earthquake in Mexico, is still being measured, with latest estimates of industry insured catastrophe losses for 2017 to date from $100bn - $130bn. The Group's investee insurance intermediary businesses are not exposed to primary insurance risk but may witness positive adjustments to risk pricing that typically follows such events.

During the Period the Group reviewed 38 opportunities, of which 66% were insurance-related, 5% IFA and wealth management, 10% fintech and platforms and 10% other financial services opportunities (recruitment, consultancies, etc.). By way of comparison, during the interim period to 31 July 2016 the Group reviewed 45 new opportunities.

Brian Marsh OBE, Chairman

17 October 2017

Investments

As at 31 July 2017 the Group's equity interests were as follows:

Asia Reinsurance Brokers Pte Limited

(www.arbrokers.asia)

In April 2016 the Group invested in Asia Reinsurance Brokers Pte Limited ("ARB"), the Singapore headquartered independent specialist reinsurance and insurance risk solutions provider. ARB was established in 2008, following a management buy-out of the business from AJ Gallagher, led by the CEO, Richard Austen.

Date of investment: April 2016

Equity stake: 20%

31 July 2017 valuation: £1,340,000

Bastion Reinsurance Brokerage (PTY) Limited

(www.bastionre.co.za)

In December 2014 the Group invested in Bastion Reinsurance Brokerage (PTY) Limited ("Bastion"), a start-up Reinsurance Broker based in South Africa. Established in May 2013 by its CEO and Chairman, Bastion specialises in the provision of reinsurance solutions over a number of complex issues, engaged by various insurance companies and managing general agents.

Date of investment: December 2014

Equity stake: 35%

31 July 2017 valuation: £100,000

Bulwark Investment Holdings (PTY) Limited

In April 2015 the Group, alongside its existing South African Partners, established a new venture, Bulwark Investment Holdings (PTY) Limited ("Bulwark"), a South African based holding company which establishes Managing General Agents in South Africa. To date Bulwark has established two new Managing General Agents: Preferred Liability Underwriting Managers (PTY) Limited and Mid-Market Risk Acceptances (PTY) Limited.

Date of investment: April 2015

Equity stake: 35%

31 July 2017 valuation: £0

CBC UK Limited

(www.cbcinsurance.co.uk)

Established in 1985, CBC is a Retail and Wholesale Lloyd's Insurance Broker, offering a wide range of services to commercial and personal clients as well as broking solutions to intermediaries. The Group assisted in an MBO of CBC allowing Management to buy out a major shareholder via parent company Paladin Holdings Limited.

Date of investment: February 2017

Equity stake: 35%

31 July 2017 valuation: £693,000

The Fiducia MGA Company Limited

(www.fiduciamga.co.uk)

Fiducia is a recently established UK Marine Cargo Underwriting Agency, established by its CEO Gerry Sheehy. Fiducia is a Lloyd's Coverholder which specialises in the provision of insurance solutions across a number of Marine risks including, Cargo, Transit Liability, Engineering and Terrorism Insurance.

Date of investment: November 2016

Equity stake: 25%

31 July 2017 valuation: £75,000

LEBC Holdings Limited

(www.lebc-group.com)

In April 2007 the Group invested in LEBC, an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.

Date of investment: April 2007

Equity stake: 60.88%

31 July 2017 valuation: £25,925,000

MB Prestige Holdings PTY Limited

(www.mbinsurance.com.au)

In December 2013 the Group invested in MB Prestige Holdings PTY Ltd ("MB Group"), the parent Company of MB Insurance Group PTY a Managing General Agent, headquartered in Sydney, Australia. MB Group is recognised as a market leader in respect of prestige motor vehicle insurance in all mainland states of Australia.

Date of investment: December 2013

Equity stake: 40%

31 July 2017 valuation: £1,655,000

Nexus Underwriting Management Limited

(www.nexusunderwriting.com)

In 2014 the Group invested in Nexus Underwriting Management Limited ("Nexus"), an independent specialty Managing General Agency, founded in 2008. Through its operating subsidiaries Nexus specialises in the provision of Directors & Officers, Professional Indemnity, Financial Institutions, Accident & Health, Trade Credit, Political Risks Insurance, Surety, Bond and Latent Defect Insurance, both in the UK and globally.

Date of investment: August 2014

Equity stake: 18.14%

31 July 2017 valuation: £19,381,000

Property & Liability Underwriting Managers (PTY) Limited

(www.plumsa.co.za)

In June 2015 the Group completed an investment in Property and Liability Underwriting Managers (PTY) Limited ("PLUM"), a Managing General Agent based in Johannesburg, South Africa. PLUM specialises in large corporate property insurance risks in South Africa and is supported by both domestic South African insurance capacity and A-rated international reinsurance capacity.

Date of investment: June 2015

Equity stake: 42.5%

31 July 2017 valuation: £510,000

Stewart Specialty Risk Underwriting Ltd

A Canadian based Managing General Agent, providing insurance solutions to a wide array of clients in the Construction, Manufacturing, Onshore Energy, Public Entity and Transportation sectors. SSRU was established by its CEO Stephen Stewart, who has over 25 years' experience in the insurance industry having had senior management roles at both Ironshore and Lombard in Canada.

Date of investment: January 2017

Equity stake: 30%

31 July 2017 valuation: £0

Sterling Insurance PTY Limited

(www.sterlinginsurance.com.au)

In June 2013, in a joint venture enterprise alongside Besso, (Neutral Bay Investments Limited) the Group invested in Sterling Insurance PTY Limited, an Australian specialist underwriting agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition.

Date of investment: June 2013

Equity stake: 19.7%

31 July 2017 valuation: £2,368,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Madrid-based Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain. Through acquisition Summa is able to achieve synergistic savings, economies of scale and greater collective bargaining thereby increasing overall value.

Date of investment: January 2005

Equity stake: 77.25%

31 July 2017 valuation: £5,972,000

Walsingham Motor Insurance Limited

(www.walsinghamunderwriting.com)

In December 2013 the Group invested in Walsingham Motor Insurance Limited, a niche UK fleet motor Managing General Agency, which commenced trading in July 2013. In 2015 the Group acquired a further 10.5% equity, taking the current shareholding to 40.5%.

Date of investment: December 2013

Equity stake: 40.5%

31 July 2017 valuation: £412,000

XPT Group LLC

(www.xptspecialty.com)

In June 2017 the Group backed the ex-Swett & Crawford CEO Tom Ruggieri and a strong management team to develop a New York-based wholesale insurance broking and underwriting agency platform across the U.S. Specialty Insurance Sector.

Date of investment: June 2017

Equity stake: 35%

31 July 2017 valuation: £4,551,000

These investments have been valued in accordance with the accounting policies on Investments set out in Note 1 of the Consolidated Financial Statements.

Investments made after the Period end:

Mark Edward Partners LLC

(www.markedwardpartners.com)

Founded in 2010 by Mark Freitas, its President & Chief Executive Officer, Mark Edward Partners LLC ("MEP") provides core insurance products in Financial & Liability, Property & Casualty, Personal Lines, Life Insurance, Cyber and Affinity Groups. MEP is a national U.S. firm with licenses to operate in all 50 states and has offices in New York, Palm Beach and Los Angeles.

Date of investment: October 2017

Equity stake: 30%

31 July 2017 valuation: N/A

Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31ST JULY 2017

The result for the period is wholly attributable to continuing activities.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31ST JULY 2017

The Interim Consolidated Financial Statements were approved by the Board of Directors and authorised for issue on 16th October 2017

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31ST JULY 2017

All differences between the amounts stated in the Consolidated Statement of Cash Flows and the Consolidated Statement of Comprehensive Income are attributed to non-cash movements.

†The above cash and cash equivalents balance excludes treasury portfolio funds which are referred to in Note 5. Including treasury portfolio balances of £15,449k, total available cash and treasury portfolio funds as at 31st July 2017 was £22,040k (as at 31st July 2016: £9,651k, including £5,114k of treasury portfolio funds and as at 31st January 2017: £12,557k, including £5,230k of treasury portfolio funds).

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31ST JULY 2017

Refer to Note 7 for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31ST JULY 2017

1. ACCOUNTING POLICIES

Basis of preparation of financial statements

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union ("IFRS"), and in accordance with the Companies Act 2006.

The consolidated financial statements are presented in sterling, the functional currency of the Group, rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances, the results of which form the basis of judgements about the carrying amounts of assets and liabilities. Actual results may differ from those amounts.

In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements:

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10: Consolidated Financial Statements ("IFRS 10") are required to account for their investments in controlled entities, as well as investments in associates at fair value through profit or loss. Subsidiaries that provide investment related services or engage in permitted investment related activities with investees that relate to the parent investment entity's investment activities continue to be consolidated in the Group results. The criteria which define an investment entity are currently as follows:

a) an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

b) an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

c) an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Group's annual and interim consolidated financial statements clearly state its objective of investing directly into portfolio investments and providing investment management services to investors for the purpose of generating returns in the form of investment income and capital appreciation. The Group has always reported its investment in portfolio investments at fair value. It also produces reports for investors of the funds it manages and its internal management report on a fair value basis. The exit strategy for all investments held by the Group is assessed, initially, at the time of the first investment and this is documented in the investment paper submitted to the Board for approval.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties. The Board has concluded that B.P. Marsh & Partners Plc and its two trading subsidiaries, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, which provide investment related services on behalf of B.P. Marsh & Partners Plc, all meet the definition of an investment entity. These conclusions will be reassessed on an annual basis for changes to any of these criteria or characteristics.

Application and significant judgments

When it is established that a parent company is an investment entity, its subsidiaries are measured at fair value through profit or loss. However if an investment entity has subsidiaries that provide services that relate to the investment entity's investment activities, exception to the Amendment of IFRS 10 is not applicable as in this case, the parent investment entity still consolidates the results of its subsidiaries. Therefore the results of B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited continued to be consolidated into its Group financial statements for the period.

The most significant estimates relate to the fair valuation of the equity investment portfolio as detailed in Note 4 to the Financial Statements. The valuation methodology for the investment portfolio is detailed below. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

These interim consolidated financial statements were approved by the Board on 16th October 2017. They have not been audited nor reviewed by the Group's Auditors, as is the case with the comparatives to 31st July 2016, and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st January 2017. Those accounts, upon which the Group's Auditor issued an unqualified opinion, have been filed with the Registrar of Companies and do not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Basis of consolidation

Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

b) exposure, or rights, to variable returns from its involvement with the investee; and

c) the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a) rights arising from other contractual arrangements; and

b) the Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

B.P. Marsh & Partners Plc ("the Company"), an investment entity, has two subsidiary investment entities, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, that provide services that relate to the Company's investment activities. The results of these two subsidiaries, together with other subsidiaries (except for Summa Insurance Brokerage, S.L. ("Summa") and LEBC Holdings Limited ("LEBC")), are consolidated into the Group consolidated financial statements. The Group has taken advantage of the Amendment to IFRS 10 not to consolidate the results of Summa and LEBC. Instead the investments in Summa and LEBC are valued at fair value through profit or loss.

Business Combinations

The results of subsidiary undertakings are included in the consolidated financial statements from the date that control commences until the date that control ceases. Control exists where the Group has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

All business combinations are accounted for by using the acquisition accounting method. This involves recognising identifiable assets and liabilities of the acquired business at fair value. Goodwill represents the excess of the fair value of the purchase consideration for the interests in subsidiary undertakings over the fair value to the Group of the net assets and any contingent liabilities acquired.

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Investments that are held as part of the Group's investment portfolio are carried in the Consolidated Statement of Financial Position at fair value even though the Group may have significant influence over those companies. This treatment is permitted by IAS 28: Investment in Associates ("IAS 28"), which requires investments held by venture capital organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39: Financial Instruments ("IAS 39"), with changes in fair value recognised in the profit or loss in the period of the change. The Group has no interests in associates through which it carries on its business.

Employee services settled in equity instruments

The Group has issued cash settled share-based awards to certain employees. A fair value for the cash settled share awards is measured at the date of grant. The Group measured the fair value using the Black-Scholes method which was considered to be the most appropriate valuation technique to value the awards.

The fair value of the award is recognised as an expense over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will eventually vest. The level of vesting is reviewed annually and the charge is adjusted to reflect actual or estimated levels of vesting with the corresponding entry to capital contribution.

The Group has also established an HMRC sanctioned Share Incentive Plan ("SIP"). Ordinary shares in the Company (previously repurchased and held in Treasury by the Company) have been transferred to The B.P. Marsh SIP Trust ("the SIP Trust"), an employee share trust, in order to be issued to eligible employees.

Under the rules of the SIP, eligible employees can each be granted up to £3,600 worth of ordinary shares ("Free Shares") by the SIP Trust in each tax year. The number of shares granted is dependent on the share price at the date of grant. In addition, all eligible employees have been invited to take up the opportunity to acquire up to £1,800 worth of ordinary shares ("Partnership Shares") in each tax year and for every Partnership Share that an employee acquires, the SIP Trust will offer two ordinary shares in the Company ("Matching Shares") up to a total of £3,600 worth of shares. The Free and Matching Shares are subject to a one year forfeiture period, however the awards are not subject to any vesting conditions, hence the related expenses are recognised when the awards are made and are apportioned over the forfeiture period.

The fair value of the services received is measured by reference to the listed share price of the parent company's shares listed on the AIM on the date of award of the free and matching shares to the employee.

Investments - equity portfolio

All equity portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair value.

The Board conducts the valuations of equity portfolio investments. In valuing equity portfolio investments the Board applies guidelines issued by the International Private Equity and Venture Capital Valuation ("IPEVCV") Committee. The following valuation methodologies have been used in reaching fair value of equity portfolio investments, some of which are in early stage companies:

a) at cost, unless there has been a significant round of new equity finance in which case the investment is valued at the price paid by an independent third party. Where subsequent events or changes to circumstances indicate that an impairment may have occurred, the carrying value is reduced to reflect the estimated extent of impairment;

b) by reference to underlying funds under management;

c) by applying appropriate multiples to the earnings and revenues and/or premiums of the investee company; or

d) by reference to expected future cash flow from the investment where a realisation or flotation is imminent.

Both realised and unrealised gains and losses arising from changes in fair value are taken to the Consolidated Statement of Comprehensive Income for the period. In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within a "fair value reserve" separate from retained earnings. Transaction costs on acquisition or disposal of equity portfolio investments are expensed in the Consolidated Statement of Comprehensive Income.

Equity portfolio investments are treated as 'Non-current Assets' within the Consolidated Statement of Financial Position unless the directors have committed to a plan to sell the investment and an active programme to locate a buyer and complete the plan has been initiated. Where such a commitment exists, and if the carrying amount of the equity portfolio investment will be recovered principally through a sale transaction rather than through continuing use, the investment is classified as a 'Non-current asset as held for sale' under 'Current Assets' within the Consolidated Statement of Financial Position.

Income from equity portfolio investments

Income from equity portfolio investments comprises:

a) gross interest from loans, which is taken to the Consolidated Statement of Comprehensive Income on an accruals basis;

b) dividends from equity investments are recognised in the Consolidated Statement of Comprehensive Income when the shareholders rights to receive payment have been established; and

c) advisory fees from management services provided to investee companies, which are recognised on an accruals basis in accordance with the substance of the relevant investment advisory agreement.

Investments - treasury portfolio

All treasury portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair market value as determined from the valuation reports provided by the fund investment manager.

Both realised and unrealised gains and losses arising from changes in fair market value are taken to the Consolidated Statement of Comprehensive Income for the period. In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within the retained earnings reserve as these investments are deemed as being easily convertible into cash. Costs associated with the management of these investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from treasury portfolio investments

Income from treasury portfolio investments comprises of dividends receivable which are either directly reinvested into the funds or received as cash.

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the property, plant and equipment cost, less their estimated residual value, over their expected useful lives on the following bases:

Furniture & equipment - 5 years

Leasehold fixtures and fittings - over the life of the lease

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies at the reporting period are translated at the exchange rate ruling at the reporting period.

Transactions in foreign currencies are translated into sterling at the rate ruling at the date of the transaction.

Exchange gains and losses are recognised in the Consolidated Statement of Comprehensive Income.

Income taxes

The tax expense represents the sum of the tax currently payable and any deferred tax. The tax currently payable is based on the estimated taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Consolidated Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and of liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and it is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each date of the Consolidated Statement of Financial Position and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis.

2. SEGMENTAL REPORTING

The Group operates in one business segment; the provision of consultancy services to as well as making and trading investments in financial services businesses.

The Group identifies its reportable operating segments based on the geographical location in which each of its investments is incorporated and primarily operates. For management purposes, the Group is organised and reports its performance by two geographic segments: UK and Non-UK. The UK segment includes the Channel Islands.

If material to the Group overall (where the segment revenues, reported profit or loss or combined assets exceed the quantitative thresholds prescribed by IFRS 8: Operating Segments ("IFRS 8")), the segment information is reported separately.

The Group allocates revenues, expenses, assets and liabilities to the operating segment where directly attributable to that segment. All indirect items are apportioned based on the percentage proportion of revenue that the operating segment contributes to the total Group revenue (excluding any unrealised gains and losses on the Group's non-current investments).

Each reportable segment derives its revenues from three main sources from equity portfolio investments as described in further detail in Note 1 under 'Income from equity portfolio investments' and also from treasury portfolio investments as described in Note 1 under 'Income from treasury portfolio investments'.

All reportable segments derive their revenues entirely from external clients and there are no inter-segment sales.

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised income generated by the Group during the period:

1There are no disclosures shown for Besso Insurance Group Limited, Hyperion Insurance Group Limited and Trireme Insurance Group Limited in the current period as the Group had disposed of these investments as at 31st July 2017. This resulted in a reduced level of income and consequently the income derived from these investee companies did not exceed the 10% threshold prescribed by IFRS 8.

2There are no disclosures shown for Paladin Holdings Limited in the prior period as the Group did not hold this investment at this time. There is also no prior period comparative for Nexus Underwriting Management Limited as the total realised income derived from this investee company did not exceed the 10% threshold prescribed by IFRS 8.

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised income generated by the Group during the period:

3. EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS