Statutory pre-tax loss of £20m for GRP

Global Risk Partners (GRP) achieved organic growth of 4% for the year ending March 2018.

This is according to a statement posted by GRP ahead of its results being published on Companies House.

Mike Bruce, CEO broking, spoke to Insurance Age about the statement and noted that GWP went up 27% to £700m. The business also completed 12 acquisitions in the year.

“A big chunk is through acquisitions and organic growth was 4% which we are pleased with but not complacent about.”

He added: “We look to buy organisations that have good new business in their DNA and focus on investing in growth businesses.”

Statutory results
In the GRP statement about the numbers it was revealed that its statutory results, which are due to be published on Companies House this week, will show a pre-tax loss of £20.0m.

Bruce said this was not a concern and that it was down to accounting procedures around GRPs financing costs, amortisation of goodwill, and central finance and M&A costs relating to the Group’s acquisitions.

“We are a cash positive business and have a high conversion of Ebitda to cash,” he pointed out.

The consolidator also explained that the Companies House document will show that turnover hit £75.9m (2017: £41.2m) with the business generating an operating profit of £10.2m, up from £2.0m the previous year.

Turning to deals, Bruce noted that its regional hub structure was well established and hubs were now making bolt-on buys.

“I would be disappointed if we did not do more than 12 in 2019.

“The hub structure is getting there and we’re not just buying to fill gaps.”

He also praised progress with GRP’s MGA division which was created following its buy of Camberford Law.

“It is very much around niche and specialism. We don’t want to buy a general MGA but we do have a couple of niche MGAs in due diligence,” Bruce commented.

Pipeline
Looking to the future, Bruce is hoping the business exceeds the 12 deals completed in 2017/18 and said hubs such as County Group, which most recently bought Douglas Insurance Brokers, had further acquisitions in the pipeline. As a Group the business is looking at a “double digit” number of companies. 

Chairman, Peter Cullum, said he was pleased with the progress the consolidator had made.

He commented: “The execution of our strategy by our experienced management team has driven strong, sustainable year on year growth – both organic and acquisitive, making GRP one of the top three independent brokers in the UK.

“Looking ahead, I am optimistic about our prospects for 2019. Our partnership with Ares continues to provide GRP with access to significant new capital to support our ambitious growth strategy, and, as a result, we plan to accelerate our growth, further enhancing the value we deliver to our customers, staff, insurer partners and investors.”

Chief executive David Margrett explained that the focus in 2017/18 was on accelerating regional broking, strengthening its M&A business and growing its Lloyd’s offering.

He added: “Under Mike Bruce’s leadership, our retail business has made significant progress with income increasing by 64% to £74m, driven by both organic and acquisitive growth.  

“The business has now developed a national footprint with an integrated approach to clients and insurer partners.” 

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