Ellis looks to make six acquisitions this year and increase standing in UK
Broker Network Insurance Brokers (BNIB) is to shift the emphasis of its acquisition programme to target larger non-Broker Network members.
Announcing the Broker Network Holdings annual results, chief executive Grant Ellis said: "We are proactively seeking out larger brokers to acquire. The expectation is that slightly larger brokers, which are focused on the SME market, will want to join."
Traditionally, BNIB has looked to acquire Broker Network members as managers retired. But the shift, Ellis said, was designed to bolster BNIB so it eventually became equal to the Broker Network.
"There is more choice of acquisitions at the moment," he said. "If there are more acquisitors than sellers, then it drives down the price of acquisitions.
"We are in talks with 12 brokers and aim to make six acquisitions in 2006." The average gross written premiums of those acquisitions is expected to be £3m.
The Broker Network, which completed 16 acquisitions in the past two years, is expected to continue to grow "to give it a UK footprint".
Ellis identified an opportunity for growth in the South East where, he said, the Network was "less strong".
Profits improved significantly across the board, with the holding company reporting an 84% increase in profit before tax amortisation to £1.65m at the six months ending 31 October 2005.
The Broker Network more than doubled operating profit before tax from £749,000 to £1.6m. In the same period, BNIB improved operating profit before tax to £172,000 from £11,000.