GRP projected growth driven by more acquisitions

Global Risk Partners (GRP), a vehicle aimed at acquiring brokers and managing general agents (MGAs) trading in the UK retail and global, specialty insurance markets, has predicted a significant rise in income and earnings before interest, tax, depreciation and amortization (EBITDA) following 18 acquisitions in 2019. It said its loss of £17.9 million for y/e March 31 2019 was because a number of acquisitions were completed towards the end of the 2018-19 financial year, and as a result have only partially impacted the annual accounts.

In its report and accounts for the financial year ended March 31 2019, GRP reported a 48 percent increase in turnover to £112.1 million (2017-18: £75.9 million). Operating profit rose 173 percent to £27.8 million (2017-18: £10.2 million), driven by acquisitions and strong organic growth in GRP’s trading businesses. GRP’s loss before tax of £17.9 million was an improvement on the 2017-18 figure of £20.1 million.

At the date of filing the report and accounts for the year ended 31 March 2019, GRP had seen its run-rate income grow to £139 million (FY 2017-18: £111m), a 25 percent increase, while the equivalent EBITDA from the group’s operating entities, the industry standard measure of profitability for acquisitive businesses such as GRP, jumped to £50 million (FY 2017-18: £35.3 million). Run rate GWP was approaching £800 million.

“GRP has again enjoyed an excellent year of strong and sustainable growth,” said chairman Peter Cullum. “We are now one of the UK’s leading SME-focussed insurance intermediary groups with national scale and coverage. Our track record of outstanding growth is underpinned by a proven M&A and organic growth strategy supported by a unique data led platform and high-performance culture.”

Mike Bruce, GRP Group MD, added: “Outstanding results have been fuelled by a combination of organic and acquisitive growth, (GRP has completed 53 acquisitions since its establishment) plus benefits accruing from GRP’s major focus on integration.”

He said integration has delivered tangible benefits internally and for GRP’s insurer partners. He cited in particular GRP’s new data warehouse, which consolidates information from individual businesses’ systems alongside external data to provide valuable feedback to insurers as well as to the group’s businesses.

“We now provide our insurer partners with leading edge data analytics giving new insight into how particular books of business are performing, and identifying development opportunities for new products that benefit our clients,” he said.

Bruce said the pace of acquisitions in the retail division had risen in 2019, with a 45 percent increase in the number of deals compared to the previous year, many being sourced by GRP’s regional hubs. “Our hubs have identified and onboarded some real gems, supported by our capital, while rapid integration sets them on an immediate path to accelerate their growth,” he said.

He added that the Group’s MGA division now generates premium income in excess of £120m. Two acquisitions (Camberford and U-Sure) in 2018 have been supplemented by four further deals in 2019.

“Our MGA strategy is to selectively acquire quality specialist MGAs which focus on attractive niche markets, while delivering steady growth, via better penetration of our brokers and distribution networks and improved product and pricing,” he said.

On GRP’s specialty broking business, Bruce said the merger of Lonmar and Ropner had shown significant benefits. “Cost synergies and a consolidated leadership team has created a leaner and highly efficient business with further headroom for growth this year,” he said.

Looking to the future, he added: “We remain fully focused on growth through acquisition and integration of regional brokers, MGAs, portfolios and teams, and high-quality third-party financing remains in place to support GRP’s capital base and to invest in further expansion.”