But we’re not using the money to get hold of Jelf, says broker

Brightside is to raise £20m through a share placing, but has ruled out using the money to fund a bid for Jelf.

The West Country-based broker said the funds would be used to boost growth in the broking, medical reporting and premium financing parts of its business. A chunk would also be ploughed into developing its online presence.

Insurance director Arron Banks said Brightside would “almost certainly” not go ahead with the Jelf acquisition.

The company had talks with Jelf earlier this year, but there were no formal sale negotiations.

Banks added: “We have never made an acquisition. There are still assets that we are interested in. But the future [of Jelf] is still very uncertain.”

However, the Jelf chapter would not affect Brightside’s appetite for investing in other businesses, he said.

“There are a couple of other [Brightside] businesses that we are going to invest in, including general insurance broking.”

Brightside is considering other ways of fundraising as it looks to become a dominant player in its chosen fields.

Banks said: “This is very much a first step along the way, in terms of fundraising. [We have] plans to do more share placings in the future to raise even more cash.”

Chief executive Paul Chase-Gardener said: “The fundraising represents a very significant step forward for our group. The capital raised will allow us to exploit the earnings-enhancing opportunities we currently possess and significantly accelerate our growth.”

In September, Brightside posted strong results, with profit before tax up 28% to £3.2m for the first half of the year. The group has no structural debt.

Brightside’s companies include Group Direct, Commercial Vehicle Direct and Panacea Finance.

It will hold its annual general meeting next Friday.

Brightside’s last major acquisition was through its subsidiary E Insurance Ltd, which snapped up the policy book and renewal rights of the eVan insurance brand from Southern Rock Insurance.

eVan is an online brand selling insurance for vans owned by individuals and small businesses.