Broker Network operates in the Insurance sector, as a network organisation for independent community insurance brokers. Company have gone from strength to strength in last 2 years. Today they have just released excellent Interim figures which I will post below, even before these results forward EPS to 2007 was only 10.77 and 2008 = 9.72. Should be a new Broker Forecast out soon, but if you check the Interims you will notice how cheap these shares still are, even after recent increases. Fundamentals all look very stong, with very stong balance sheet and margins are very healthy and improving.

Because of new and tighter FSA rules Broker Network have and will continue to benefit because of the Thousands of small partner firms in this sector who struggle with the tighter regulation. They are coming under the Broker Network umbrella, who then take care of the FSA rules for them ( For a fee of course )

Interim Results for the six month period to 31 October 2006

Operational Highlights

* Acquisition of Towry Law Insurance Brokers Limited for 12.5m
* 1 further acquisition completed making total number of brokers acquired 19
* Pipeline for acquisitions remains healthy
* Number of Network Members increased to 162 from 155
* Strong pipeline of new Network Members
* Progress across the Group continues in line with plans


Financial Highlights

* Turnover increased by 79% to 10.48m (2005: 5.85m)
* Turnover from continuing operations increased by 44% to 7.51m (2005:
5.22m)
* Operating profit before amortisation up 87% to 2.80m (2005: 1.50m)
* Operating profit up 108% at 2.04m (2005: 0.98m)
* Group operating margin before amortisation 26.7% (2005: 25.6%)
* Profit before tax increased by 71% to 1.94m (2005: 1.13m)
* Profit before tax and goodwill amortisation up 64% at 2.70m (2005:
1.65m)
* Fully diluted earnings per ordinary share up 74% at 8.10p (2005: 4.66p)

Commenting on these results, Chairman Faisal Rahmatallah said:

'Our strategy of expanding our network and acquiring broker businesses continues
to deliver value - the trading outlook remains favourable for the Group into
2007 and beyond.'


Grant Ellis, Chief Executive, said:

'These results show, once again, our ability to achieve continued growth across
the Group. Despite difficult market conditions we have demonstrated that our
diverse model allows us to prosper at all points of the insurance cycle. I am
very excited by the opportunities that this will offer the Group in the future.'

Consolidation and Competition

The pace of broker consolidation continues to increase; in addition there are
recent examples of insurers acquiring brokers, particularly in niche areas.
However, we remain confident that our approach to integration gives us an edge
over competitors and will continue to allow us to secure acquisitions in the
face of consolidators with increasingly deep pockets.


Conclusion

These are another set of excellent results for our business and provide further
evidence of the very good work that has been completed over recent years. We
are demonstrating that our strategies of delivering increasing value to Members
and insurer partners in our network business, coupled with participation in
retail broking through acquisition, are both sound and complementary. I am
confident that the trading outlook for the Group remains favourable into 2007
and beyond.


Faisal Rahmatallah
Chairman
Broker Network Holdings plc

After 13.5p increase it will be interesting today to see press comments.

Hopefully another increase. 10p would be nice.

Broker Forecasts 2007 2008 - Teather & Greenwood - 24-10-06 = Buy

2007 - Pre Tax = 5.06m - EPS = 24.69 - DPS = 1.50
2008 - Pre Tax = 5.72m - EPS = 27.35 - DPS = 2.10

2007 - PE Prospective = 10.77
2008 - PE Prospective = 9.73

Should be a updated Forecast soon.

They updated Forecast after I posted last message.

Teather & Greenwood - 12/01/07 = Buy

2007 - Pre Tax = 5.20m - EPS = 24.60 - DPS = 1.20
2008 - Pre Tax = 6.00m - EPS = 28.10 - DPS = 1.50

2007 - PE Prospective = 10.81
2008 - PE Prospective = 9.46

up 18p to 2.88 I will try and find out why.

up again 5p to 2.93 today, this stock has now increased over 30p
since I Started thread on 11th Jan.

Still a good buy imho.

BNH appears in this weeks SHARES mag with a target price of 321p, so may not be long before we see a dip on profit taking.
But, it also says "Shares are cheap & with plenty of growth potential, the shares remain very attractive".
So looks like they covered every option!!!

I wondered why shares gained 19p today, still I'm not complaining.

spitfire43, eps of 25 for 2006/7 excludes Towry Law Law's full 12 months contribution to earnings and sector p/e of around 16 will give a conservative sp of 400p! Also, I'm not sure what the actual earnings would be if you exclude goodwill amortisation and bring in TL's full contribution. Many punters feel these share should be currently in 400-450p range. All IMHO & DYOR. Good luck.

Ramu, how are you?? Told you these looked good at 61p didn't i ;-) keep smiling.

regards

legend!!

legend, sold half my holding over the past year - needed the money for my new house. In hindsight, wished I hadn't. Anyway, can't complain.

Not doing great with TND - are you still sticking to your 25-30p target? Do you have any more gems like BNH?

SEY has come up radar - any thoughts? Call me. Thanks.

As well as a recommendation in Shares they also had a buy rating in Investors Chronicle last week. Now at 3.23, I did sell some at 2.94 but now I will let the rest run.

Hi ramu, have sold a few holdings - i have kept tnd and think tgp look ok. Peter Gyllenhammar has recently bought a holding in the co.

As you have seen with this stock - patience is virtue!!!

Glad you have done well. Full credit must go to management.

Send me an e-mail to let me know how you are getting on.

Good luck all.

Recovered today up 8.5p to 307p, very strong buying only 3 sells out of 36 trades.

Broker Network starting to power ahead now to 3.22. Last week they released a trading update, which was very positive. See Below........

The Company also announces that the financial results for the year ended 30
April 2007 are expected to exceed current market expectations. This is as a
result of strong trading across the Company's operations.

When you consider that forecast EPS for 2007 is 24.87p, then Broker Network still offer could value.

Even trades today with sp only slightly down, I wouldn't be suprised to see 2007 EPS over 26p.

legend will be pleased to know that I bought in on my daughter's account when they came back to 280p. I do accept spitfire's comment that they are well equipped for blue chippery. Towry Law acquisition indicates that they are moving into the premier league. Chart at a resistance level but should drive though this on results for year ending 30th April - when are these expected?

Eric

Blue chippery will do for me, certainly a quality company.

I believe Finals should be annouced 14th September.

Interesting sp gain yesterday up 17p to 344, and slightly down 7p today.No recent news that I can find but plenty of purchases on each day. Even with recent good run the forward pe for 2007 is only 12.5.

Good to see the resistance level broken. Even if its come back it will be easier to go north next time.

By the way, the Towry Law acquisition was in a different league. Do you see this as an acquisitive move by BNH or as a defensive step by Towry Law. It seems that the sp hasn't really added corresponding value.

Eric

I always thought the Towry Law acquisition was a acquisitive move by BNH, but it's hard to know if BNH seeked them out or Towry Law approached BNH.

Either way the current PE June 2006 was 15.9 compared to 21.82 today, so BNH are certainly rated higher by the market. I believe the market was caught out by last September 2006 results, when predicting a EPS of 14.08p against the reported 15.79p and have been re-rating BNH since then.

Lets hope they are pleasantly surprised again.

Interesting upwards movement this week, going from 330p to 355p on the back of some healthy buying. No news yet but worth keeping an eye on.

Another rise to 365p today, the reason is a positive trading update on 11th June, as follows.

Broker Network Holdings PLC said it expects results for the year to April 30 to exceed current market expectations as trading across the group has been strong, despite soft insurance market conditions.

The independent community insurance broker said a harder insurance market seems unlikely in the near future with interest rates rising, equity markets buoyant and benign weather conditions prevailing.

It added that its retail division is performing well driven by improved commission earnings negotiated by the network, helping to improve margins overall despite pressure on top line premiums.

The group said it continues to be confident in its acquisition proposition and the pipeline remains healthy.

BNH got a small positive writeup in this weeks Shares Mag.
Of course, just my luck that I sold last week at a profit, due to the drop in the sp, not expecting such a sharp rise!
Am also expecting a main market correction soon, so trying to lock in some profits at the moment.
Will try & get back in if there is a drop.

That sounds like my sort of luck. Interesting to hear your view of the market correction, which is the same as mine. I have been going to a more cash position, to take advantage of a correction which must come at some stage.

So I'm trying to hold off buying any more at the moment.

Big Broker Buy upgade on 13/06/2007 Wednesday from Teather & Greenwood.

2007 = Profit - 6.3m and EPS - 30.1P
2008 = Profit - 7.2m and EPS - 33.9p

Previous buy recommendation was in January as follows.

2007 = Profit - 5.2m and EPS - 24.6p
2008 = Profit - 6.0m and EPS - 28.1p

Thats one hell of an upgrade in anyones book.

After latest broker estimate Cenkos Security have a price target of 5.23

Price is now 3.83 so plenty of space for the sp to carry on upwards.

Results due 13/9/07 should be good.

Yes agreed, sp seems to be recovering nicely anticipating the results.

The insurance sector is taking a bit of a hit at the moment.
Why do you assume the results are good? Or do you have info to support?

See RNS trading update 11/6/07 which among other things states results expected to exceed market expectatios and trading continues to be strong.

Fair enough, but that's 3 months ago & a great deal has changed since then.
I wouldn't be surprised for them to say that trading has met expectations, rather than exceeded them. Hope you are right though.

BNH's year end is 30/4/07 I think a trading statement issued on 11/6/07 ought to reflect the actual performance of the company already achieved, dont you.

I accept that the insurance market has been weaker recently, but BNH operate in a niche area. They did say in the last trading update that acquisitions like Towry Law are harder to find now, but I would still expect them to achieve expected earnings.

The rate off growth has been exceptional in past two years, which has been reflected in the sp, that sort of growth rate will slow down. If EPS is 30.1P for pe of 11.6 then hopefully the market will over-react and we can all take some profit on the way up.

I am in for the long term . Do you remember the spectacular growth of Minet? BNH's business model is proven if anything more people will need insurance brokers as the recent flood disasters have highlighted the stupidity of not being adequately covered.

Just as I post that BNH would find suitable acquisitions harder to find, guess what they find one see below. And sp increases 9.5 to 366.5.

Broker Network Holdings PLC said it has completed the acquisition of commercial insurance brokers Sullivan Garrett Ltd for an undisclosed sum.

Sullivan Garrett will join Broker Network Insurance Brokers, the company's UK-wide retail operation, while retaining its brand identity.

The purchase is in line with Broker's acquisition strategy allowing it to increase earnings via economies of scale and by retaining a higher percentage of premium turnover, the independent community insurance broker said.

Finals posted today, see below some of the highlights.

Operational Highlights

Network Membership increased by over 10% and average size of new Member
64% higher
Members performing well, with a number growing through acquisition
Successfully completed integration of TL Risk Solutions into the Group
Customer retention across retail division is consistently high
Group wide re-brand successfully launched for each operating division
Reputation as experienced acquirer consolidated
Continued pursuit of expansion and acquisition opportunities building a
strong pipeline

Financial Highlights

Turnover increased by 86% to 23.26 million (2006: 12.54 million)
Operating profit up 147% at 5.15 million (2006: 2.09 million)
Profit before tax and goodwill amortisation up 100% at 6.53 million
(2006: 3.26 million)
Group operating margin before amortisation 29.5% (2006: 23.5%)
Fully diluted earnings per share up 98% at 20.33p (2006: 10.27p)
Dividend payment of 1.20p per share (2006: 1.00p)

Outlook for 2007-08

I am delighted to have maintained our market leading position and intend to
build on it.

There are still abundant opportunities for expansion within this fast moving
industry and we are working hard to remain at the forefront in our areas of
expertise. For example we are currently evaluating the opportunity that exists
to expand our Healthcare business following the successful acquisition and
integration of TLRS, which has a sizeable Healthcare division within it. We
remain realistic and prudent in our acquisition programme and we continue to
evaluate critically our offering to network Members and Partner Insurers to
ensure we retain our market-leading position as the UK's number one network for
independent insurance brokers.

We strongly believe that the Broker Network business model remains relevant and
robust. Whilst challenging trading conditions lay ahead we are looking forward
with confidence to another year of good performance and enhanced shareholder
value.

Adjusted Basic eps before amortisation = 31.92p

This would make more sense re Broker forecast which was 30.1p.

Excellent results onwards to 5ps. What is the PER now spitfire?

Using 3.80 sp and 31.92 EPS the PE = 11.9, and for 2008 using the last Broker forecast the PER would be 11.2.

I would think their would be another forecast arriving soon. It's good to have these solid results which should cement the recent gains.

spitfire I agree CEO's ambitious acquisition forecast out to 2015 would result in BNH managing/owning 10% of insurance brokers in UK. 2008 premiums set to rise significantly will generate greater revenue.
I hope some consideration is given to making this share more liquid as with only 15million shares issued it needs to attract more institutional investors.

1 million bought @400p?

With 1 million purchase at 4.00. this makes your comment about only 15 million shares and the need to make share more liquid even more relevant.

Nice to see a positive write up in Shares yesterday, they view BNH as a buy and have an interesting view re a takeover. Saying that with Axa and Goupama entering the same market last year, thay believe with it is only a matter of time until the other big 4 do the same, then they could be looking for a takeover target - namely Broker Network.

With this in mind and the 30% discount to its sector, I have changed my view to longer term. With no fixed sp target, just a trailing 20% stop / loss.

Hope you are right about takeover prospects my 6 month sp target is 5+. IMHO any bid would have to be north of 6 bearing in mind growth prospects and current PER.

I was reading a thead from another site where they say Cenkos Securities have given the following upgrade below.

2008 EPS = 38.3
2009 EPS = 47.7

These figures look about right, but I have been unable to confirm the information yet.

Another acquisition announced today, they are still finding them - see below.

Immediate Release 02 October 2007

Broker Network Group
('Broker Network' or 'the Group'))
ACQUISITION

Broker Network Acquires Non Member Firm in Altrincham

Broker Network, a national insurance distribution business incorporating:

a network for independent insurance brokers,

a retail insurance broker for the provision of insurance advice to
businesses and private individuals across the UK, and

a Lloyd's and London market wholesale insurance broker,

is today pleased to announce the completion of the acquisition of commercial
insurance brokers Priestley & Partners (Insurance) Brokers Ltd (PPIB)
('Priestley & Partners' or 'the Company'), the twenty-first acquisition to be
made by the Group.

Priestley & Partners is based in Altrincham, Cheshire. Although not previously a
Member of Broker Network, Priestley & Partners will benefit from Membership
immediately upon joining Broker Network Insurance Brokers ('BNIB'), the Group's
UK wide retail operation. The Company will retain its brand identity, premises
and all thirteen of it's people.

The entire issued share capital of Priestley & Partners is being purchased in
line with the Group's proven acquisition strategy, which includes the purchase
of both Member and Non Member firms.

A condition of the deal is that the purchase price parameters will remain
confidential. However, the Group confirms that this latest acquisition is
broadly in line with the other similar acquisitions made to date.

Grant Ellis, Chief Executive of Broker Network said today;

'This acquisition, our twenty-first, signals a belief in our broad acquisition
offering, which remains relevant both for our network Members and also for other
independent insurance brokers who may be looking for an organised exit from
their business.'

Also commenting on the acquisition, Nigel Law, Managing Director of BNIB said:

'The acquisition of Priestley & Partners is a reflection of the realistic and
respected acquisition offering that the Group is able to offer both inside and
outside of the network. We very much look forward to welcoming the team into
BNIB and to helping them secure growth across their business.'

The purchase of Priestley & Partners has been completed following approval by
the Financial Services Authority of the change of control of the business.

-ENDS-

Bulls very stong recently, anyone know why?? ...

A number of possible scenarios including a bid from an insurer or further acquisitions. My 5 target sp is looking conservative.

Also further to thread 48, I believe Cenkos Securities have increased their target price from 5.35 to 5.74.

As we were hoping a bid could be on the horizon, sp now nearly 5.00, see news below.

Broker Network Holdings Plc

Statement re Possible Offer


The board of Broker Network Holdings Plc (the 'Company') notes the recent rise
in the Company's share price and confirms it has received an approach which may
or may not lead to an offer being made for the Company.


There can be no certainty that an offer will be made for the Company or as to
the terms on which such an offer may be made.


Further announcements will be made as appropriate.

Taken from another BB.

Geovest - 12 Oct'07 - 10:34 - 1433 of 1444


lomax, to do a valuation you will have to look at the two sides of the business seperately.

a) Retail Broking (TL and 20 other brokers owned outright)

This produce around 85m premium income.
Some of the well publicised recent acquisitions are:
Groupama buys Lark - Premium income 75m, paid 40m
Jelf buys Lampier - Premium income 35m paid 19.5m

If we apply these sort of valuations the broker business will be worth around 45m.

b) Network business:

Last year this produced pretax of 4.7m. If we asume a very conservative (by historical standards) growth of 30%, it should produce 6.1m this year or 4.3m after tax. At a fair 17.5 forward PE, it would value this side of the business at 75m

Total:
The combined total valuation therefore comes to 120m.
Altough you may argue that you need to deduct the net debt of around 12m, you will need to add a further control premium (part a already includes that but not part b) which should (at least) offset the net debt.

Therefore a valuation of around 120m or 7.75 may seem fair. I can however see this potentially being pushed much higher if AXA, Allianz, NU and Groupama start fighting for a company that effectively controls 550m of premium income.

I still maintain that this will be worth 10.00 per share within 3 years, but we may get there a lot sooner if the big boys start fighting over the bone.

One thing is for sure, they are now in play!

* Edited to correct that it was Groupama not AXA that bought Lark

Wow what an excellent day 43p up to 517, and as the previous thread mentions they are in play now with a possible bidding battle. I was hopeful of a bid, but wasn't expecting one so soon.

Whatever happens now I will certainly hold and hopefully enjoy the ride.

A strange few days for BNH, yesterday the sp was down 29p at one point but ended just 4p down at 470. I don't really understand this sp movement after a possible bid is announced.

The preliminary approach is thought to be Towergate.

An article in shares this week suggested a 85m or 5.50 takeover price, I can't see the board of BNH being interested in selling the business at this level. When you consider the sp was heading this way beforehand, and I'm sure the returns would be far higher by remaining independent.

A 6.50 offer might be more realistic imo.

An offer of 6.50 would give an exit PE of 19.5 not demanding considering the forecast increase in earnings. I would not be happy with an offer under 7 and in fact would prefer to see BNH remain independent.

See latest press release below.

Looks like good news, the offer price must have been on the low side. Will be interesting to see what happens next.

Broker Network Holdings plc ('Broker Network' or he 'Company')

Update re Possible OfferOn 12 October 2007 Broker Network announced that it had received an approachwhich may or may not lead to an offer being made for the Company. The Board of Broker Network has held discussions with the party concerned. It has concluded that the terms and conditions of that approach are unacceptable and the Board has therefore rejected the proposal. Discussions continue and a further proposal may or may not be made. There can be no certainty that an offer will be made or as to the terms of any such offer. Further announcements will be made as appropriate.

Hargreave Hale increase their shareholding to 7.02%.

sp recovering well now up 22p today.

Up again today. Currently 532p mid price.
Possibly more rumour of takeover circulating?

up to 542.5 now, I can't see any announcements so can only conclude
as you say, thier must be bid rumours again. BNH did say when they
rejected the bid on 23 October as unacceptable, that discussions continue
which may or may not lead to a proposal.

Surprised on how quickly BNH have agreed to 6.01, shame really see below.

Towergate Partnership Limited
27 November 2007

Offer for Broker Network HOLDINGS plc

Not for release, publication or distribution, in whole or in part, in or into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction

FOR IMMEDIATE RELEASE

27 November 2007

Recommended Cash Offer

by

Towergate Partnership Limited ('Towergate')

for

Broker Network Holdings plc ('Broker Network')

Summary

The Broker Network Board and the Towergate Board are
pleased to announce that they have reached agreement on the terms of a
recommended cash offer to be made by Towergate for the entire issued and to be
issued share capital of Broker Network.

The Offer will be 605 pence in cash for each Broker Network
Share valuing the entire existing issued and to be issued share capital of
Broker Network at approximately 95 million in aggregate.

The Offer Price represents a premium of approximately:

(i) 15.8 per cent. to the Closing Price
of 522.5 pence per Broker Network Share on 26 November 2007, being the last
Business Day prior to the date of this announcement;

(ii) 27.6 per cent. to the Closing Price
of 474 pence per Broker Network Share on 11 October 2007, being the last
Business Day prior to Broker Network announcing that it had received an approach
that may or may not lead to an offer; and

(iii) 92.7 per cent. over the average
Closing Price of 314 pence per Broker Network Share for the 12 months from 12
October 2006 to 11 October 2007 being the last Business Day prior to the
commencement of the Offer Period.

Towergate has received irrevocable undertakings to accept
or procure the acceptance of the Offer in respect of a total of 8,499,420 Broker
Network Shares representing approximately 55.2 per cent. of the existing issued
share capital of Broker Network.

Towergate is the UK's largest independently owned insurance
intermediary, offering approximately 200 specialist insurance products and
employing more than 3,400 people in 100 offices. Since its foundation in 1997,
the Towergate Group has completed more than 130 acquisitions and now controls
run-rate gross written premium of 1.1 billion per annum. In the year ending 31
December 2006, Towergate achieved revenues of 238 million and EBITDA of
approximately 95 million.

Towergate believes that the acquisition of Broker Network
will provide Towergate with a large network presence in the UK and will be the
foundation upon which the Towergate Directors expect to continue to expand the
Towergate Group through additional network acquisitions. Towergate believes
that Broker Network is an attractive and well-run business that has experienced
growth in both its network and owned broker businesses and will therefore
provide the foundation on which to continue its expansion.

The Broker Network Directors, who have been so advised by
Cenkos Securities Limited, consider the terms of the Offer to be fair and
reasonable.

The Broker Network Directors unanimously recommend that
Broker Network Shareholders accept the Offer, as they have irrevocably
undertaken to do or to procure to be done in respect of their entire beneficial
shareholdings and the shareholdings of any person whose interest in relevant
securities a Broker Network Director is taken to be interested in pursuant to
Part 22 of the Companies Act 2006, comprising in aggregate 3,815,588 Broker
Network Shares, representing 24.8% per cent. of Broker Network's entire issued
share capital.

Commenting on the Offer, Peter Cullum, the Executive
Chairman of Towergate, said:

'We are delighted to announce this transaction. This is a deal that makes great
sense for employees, brokers and customers alike of Broker Network - our two
organisations complement each other perfectly. I have known Grant Ellis for
many years and I know we both share the same passion for promoting the role and
value of a broker. We also share the same enthusiasm for how Broker Network
could flourish under our ownership and continue to be run as a first class
business for its broker members. Grant Ellis's proposed position as the
Chairman of the Network Division of Towergate demonstrates our commitment to
offering the leading UK network proposition.'

Commenting on the Offer, Grant Ellis, the Chief Executive of Broker Network
said:

'The Broker Network Board feels that the offer made by Towergate is in the best
interests of the Broker Network Shareholders and indeed in the best interests of
the Broker Network business, its network members and its people too. Towergate
is a major presence in the UK insurance market and joining forces with them
presents Broker Network and its members with further opportunities to expand and
prosper, which I'm very excited about.'

Some kind of takeover/merger has been on the cards for quite a while now, hence the spikes in the sp.
I had an automatic sell on the system at 550p & it triggered at 585p, so no complaints from me. End of a good run for this company & will be interesting to see how the new venture fares. Towergate itself, although a Ltd company, doesn't seem to be listed. Any idea of it's ownership?

I only know it was founded in 1997, and is Europes largest independently owned insurance intermediary, but not sure who is behind it.

What would be nice now if one of the other large Insurance company's come in with a bid and kicks off a bidding war. You never know.......

Spitfire. I agree with you. The Board have rolled over far too quickly. The market seems to have taken it as a done deal. I have been running the profits on both BNH and ASOS against bid rumours. Both have such a strong position in their respective markets you actually feel disappointed when one is satisfied with the bird in hand. Where is Richard Branson?

Eric

Unfortunately I think it is a done deal now, at least it's more money to the pot for a market correction, when it comes. Will have to find myself another BNH, if you have a chance take a look at EDD one of the few companies I still hold. SP has increased since August, but could be another BNH in it's sector. imho.