Source www.trendwatch.co.uk 1 September 2004

January 14 2005 is a date that will soon be engraved on the hearts of anyone managing or owning any insurance company, large or small. On that day, almost all general insurance companies, including insurance brokers, will be regulated by the FSA.

Trendwatch publications is, of course, also regulated by the FSA. As a media business, compliance with the massive FSA rule book is considerably less onerous than it is for business that hold client money for investment or insurance purposes. Even so, grappling with the FSA can be like mud wrestling a multi-headed hydra.

To give one small examplee, we recently found out that, to add letters Ltd after ourname )no other changes to the business whatsoever) requires the completion of between 50 and 60 pages of forms and the preparation of much other supporting documentation. The FSA will not even deign to look at it unless it is accompanied by a cheque for 1,500. If everything then seems to be in order, the FSA undertakes to deal with the matter within 6 months.

If, in our infinte naivete, we had failed to realise this palava was a legal requirement, the MOther of All Parliaments has decreed that we would be committing a criminal offence, and liable to be detained at Her Majesty's pleasure at a house of correction and her learned judge's choosing.

This is what the FSA regards as'light touch' regulation which minimises disruption and cost ot businesses.

Now imagine how tricky things can get if you attempt something really complicated such as taking on a member of staff.

The FSA estimates that it already has about 10,000 in the mortgage and general insurance field by the short and curlies. It estimates that at least another 10,000 business will be dragged kicking and screaming into the brave new world of 'light touch' regulation. Around 2,500 insurance brokers will be lightly touched by the FSA on January 14.

But, as everything in life, one mans Kafkaesque nightmare is another man's business opportunity. Which brings us to Broker Network Holdings (BNH)

BNH floated on AIM as recently as May this year (raising 2m in the process), so most investors will know little about it, if indeed they've heard of it atall. We're recommending it because we feel that burgeoning profitability will soon make it a lot better known.

As the name suggests, BNH exists to build a network of independent insurance brokers, all operating within the BNH framework. This follows a path wellbeaten by IFA's, accountants and dentists. BNH is the longest established player in its field and believes that it has a stronghead-start, and a great deal more credibility than other 'me too' imitators.

The system works like this: as an independent insurance broker, you undertake to pay 95 a month to BNH. You also undertake to pass all your insurance business premiums through BNH. BNH places the insurance business with the giants such as AXA, Norwich Union, Royal and Sun Alliance and Cornhill. The members receive enhanced commission from the insurance companies because of the preferential status granted to BNH. Since BNH deals with the placing of the insurance, this greatly reduces the credit risk of the individual members.

BNH takes 1.5% of the premiums from its members and, in return, provides members with a number of valuable support services, including access to Lloyds of London, centralised back-office IT support, marketing assistance, access to e-commerce, staff training and development, business management and monitoring... and FSA compleance support.

BNH is also prepared to purchase broking firms outright where the opportunity presents itself. There are believed to be a large number of small owner-managed brokers where the owner is approaching retirement. For many of them selling theri business to BNH, typically for around 0.3m, rather than grappling with the FSA, is probably an attractive option. So far BNH has acquired 9 such brokers.

Since it was founded in 1994, it has absorbed 133 brokers into its network and plans to acquire about 90 more over the next 5 years. Out of the estimated 19bn paid in insurance premiums in the UK every year, an est 80% is handled by insurance brokers. Most of this goes to through the big brokers, but about 3bn a year (typically commercial rather than personal business) is processed by the 2,500 small so-called 'community brokers' that form the BNH network.

hat represents the extent of BNH's market pond.

At time of floatation, BNH est that no more than 12% of its target broker had aligned itself with any particular network. Clearly there's plenty of scope for growth.

The company is already profitable. Its last full year results were published in July and showed a profit for the principle trading subsidiary - the PLC holding company had not yet been created - of a record 0.77m up rom 0.70m. 27 new members were taken on.

Brewin Dolphin reckons it will make 1.77m this year, rocketing to nearly 3m in 2005-06. If these estimates are correct, it puts BNH on a forward p/e of 6, which is extremely low for the sector, especiallyfor a company whose profits are growing at such a rapid rate

BUY

Legend,

The 5k was mine and it was a BUY! More to come.

Ramu

Good work young man.

Jamesgkenny tried to pick up some on another board ;-) and had difficulty. Trust me when I say this, his broker knows exactly what he is doing. I found out indirectly when I bought asc (asos) at 7.75p that he was buying as many as he could at 6p before me. 6 months later they were 85p!!! This wasn't the first company this has happened to either that he bought.

He thinks these are worth 1.70 and has absolutely boat loads of them!!!!!

The management is good, the right people are in em, they have cash, generating cash, potential for growth is massive. Sit back, relax and enjoy.

I think in total i have bought 5 lots: 24k shares at 61p, 10k at 75p 2k at 1.10 and 1500 at 1.30!!! - The one at 1.30 I tried to be smart and trade off the results as the price was flying!! I didn't want to sell at a loss so i kept em!!!! In the scheme of things, my average price si very low.

What else you got again ramu??

And up they go again....

Can't see why anyone would want to sell these!!

Much more to come imho.

And up they go again....

Can't see why anyone would want to sell these!!

Much more to come imho.

Another nice move up so far Legend. I`m glad you brought these to my attention as i would never of known about these without your posts.
db66

No problem, of course all of the above are imho.if people choose to listen and make the decision to buy and make money, good on them.

I will let you sell when you want...i am not selling for a long time ;-)

I have to admit i probably will be a short term holder even though i believe in the long term prospects of the company.I am a novice at this game and i have to admit my portfollio is well down ,but i am learning all the the time and i have let quite a bit of profit slip through my hands .I have definately learn`t that a profit is not a profit untill it is banked.

One thing that does surprise me is the lack of interest or knowledge about this company ,oh well i`m sure it is their loss and our gain.

Many Thanks
db66

Well you were right legend you said there would be an acquisition before the results and it has been announced this morning.Onward and upward !!!
db66

RNS Number:3996O Broker Network Holdings plc 04 July 2005

4 July 2005

For immediate release



BROKER NETWORK HOLDINGS PLC

(BNH:AIM)




ACQUISITION OF FRASER TENNANT HOLDINGS LTD

Broker Network Holdings plc ("Broker Network" or "the Company"), the network of independent community insurance brokers, is today pleased to announce the acquisition of Fraser Tennant Holdings Ltd ("Fraser Tennant"), of Stirling, Scotland.

This acquisition, which is the twelfth acquisition made by Broker Network since the beginning of 2004, is in line with the company's strategy to purchase the businesses of network members whose principals are looking to exit or retire.

Fraser Tennant is the largest acquisition made by Broker Network to date, the consideration being five times that of the second largest. The maximum amount payable under the acquisition agreement is expected to be #2.85m, comprising a deposit and deferred consideration. As at the date of completion, the net assets of Fraser Tennant amounted to approximately #911,000. The consideration multiple is in line with that of previous acquisitions.

Fraser Tennant comprises the businesses of Denny Insurances Services Ltd, of Stirling; Peacock Robertson Ltd, of Glasgow; and Fraser Tennant Ltd, of Perth and Kelso. All companies will retain their separate trading identities in line with Broker Network's acquisition strategy. The businesses will also continue to operate from their existing premises and all employees will be retained. Approval has been granted by The Financial Services Authority for the change of control of Fraser Tennant

Iain Bowie, managing director of Fraser Tennant, will take on the role of Director of Scotland for Broker Network and will play a key role in developing the Broker Network business north of the border.

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

"This latest acquisition represents another major milestone for Broker Network. Although significantly larger than the other acquisitions we have made to date, in all other ways Fraser Tennant has the attributes we look for in an acquisition, with, most importantly, close and long-term relationships with their customers.

This is excellent news for us and for the Fraser Tennant Group. We are particularly pleased to have completed an acquisition of this size, which we believe is a positive indication of the opportunities available to us as a result of our strong acquisitive business model and continued growth.

Our original network model continues to prosper and its unique commitment to retaining the acquired company's local identity along with existing loyal staff makes it a safe, sensible and rewarding exit for the owner of the acquired company."

For further information, please contact:

Broker Network
Grant Ellis (CEO)/Julie Hale (FD) 01423 877833


Teather & Greenwood
Stephen Austin 020 7426 9000


Buchanan Communications
Kelly-Ann French/Eric Burns 01943 883990


Notes to editors:

Financial information relating to Fraser Tennant Holdings Ltd:

* Pre Tax Profits for the year ending 28 February 2005 totalled #156,000

* The initial payment to Fraser Tennant Holding Ltd will be #1,575,000

* The deferred consideration to be paid by Broker Network constitutes eleven

equal instalments of #115,000 with the last two payments to be paid by loan

notes and a further two annual payments of up to #50,000 each dependent upon

future revenues of Fraser Tennant

* Maximum amount payable under the acquisition agreement is #2.85m

* The net assets of Fraser Tennant amounted to #921,000 at 28 February 2005.


This information is provided by RNS
The company news service from the London Stock Exchange



END

Legend,

Re today's RNS, do you think BNH paid too much for the Scottish acqusition? The returns seem so low - about 5% pre tax. I suspect BNH are looking at increased market share and the growth potential of Fraser Tennant.

Also, one poster from another board is of the opinion the SP will level off after the results on 12 July (I think he's referring to the old adage: buy on rumour sell on news!!)

Ramu

Ramu,

Don't forget that although the profit wasn't so much probably due to the owners creaming a lot from the business.

Also, bnh will be able to benefit from economies of scale...

Please also note ramu that grant ellis says that 'the network business continues to prosper'

My eps target is 8.8, so we will see what happens on results day.

AS for the sp... well shares magazine will comment on them as they tipped them as a share for 2005 and I C will too.

Is it me or has everyone had a problem posting on here???

Ramu, bnh will have the choice of 100s of brokers so they must have chose this one for some good reason. Trust me, they aren't so stupid!!

Still hold and think prospects are fantastic for this co...

SP got plenty to go...

Can't wait to see results.

SH

Hi SH, yes totally agree.

Good luck all, lets see what the day ahead brings...

Seem good to me... going in the right direction!!!

I did think about selling before the results but have decided to hang on in there .Another acquisition and i`m sure there is plenty more to come from this share in the future
DB66

Another 2 doughboy....

The results were fantastic imho and plenty of growth to come...

Excellent set of results well done bnh...

Totally agree, I am very happy about the prospects and how bullish ceo was/is.

The new director is very well respected in the industry my sources confirm....