BMS's EBITDA climbs 9% in 2011

Specialist insurance group BMS’s underlying EBITDA (earnings before interest, tax and depreciation and amortisation) climbed 9% to £7.8m during 2011 following a strong improvement in the profitability of its core business.

Excluding bonuses the profit on core business was up 16%.

BMS increased its revenue by 5% for the year ended 31 December 2011, while revenue for the first quarter of 2012 was up 28% on the same period last year.

The company also revealed it had pumped in £15m ($24m) of investment into developing the business, including strengthening its US reinsurance platform and enlarging and restructuring its wholesale team, and ensuring independence over the last 18 months.

After the restructuring charges and the planned cost of investment the group recorded a loss before tax of £2.1m.

In April 2011, BMS launched its new MGA Pioneer Underwriting, which has just written £15m in gross premiums in its first year, and has expanded its US platform with the opening of new offices in Chicago, Philadelphia and Minneapolis, resulting in $8m of new reinsurance business wins so far this year.

In 2011, BMS continued to execute its planned investment strategy, building out the four sustainable pillars to its business: reinsurance, wholesale insurance, specialist insurance and MGA platforms.

In addition, during 2011 BMS reached agreement with AHJ Holdings Ltd (AHJ) to acquire the shares owned by AHJ for £8m. During 2011 and the first quarter of 2012, BMS acquired the first tranche of the AHJ holding and this share buyback resulted in a reduction in net assets of £4.2m at the year end. BMS intends to acquire the balance of the shares next year.

BMS Group chief executive Carl Beardmore said: “BMS’s investments of 2010 and 2011 have changed our offering beyond recognition. We are now in a position where we can compete effectively and convince clients of our commitment to providing truly independent, client-centric solutions. Our massively expanded range of skill-sets and resources presents them with a compelling risk transfer partner - completely committed to providing them with the best solutions to help them advance their business ambitions.

“We have begun to reap the rewards of those investments in tangible business wins and a strong start to 2012 gives me confidence we will achieve revenue growth of at least 15% and growth in profit of more than 25%. We are very much on track.”

BMS group finance director Paul Vincent said: “We have also made significant headway in the acquisition of our entire share capital from AHJ. We are on our way to becoming a fully employee owned business, with interests of the overall business aligned with the individuals driving our growth.”