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, I bought into this on your recommendation at 75p after your recommendation on TES & am very happy with what I've seen so far. It's broken through the 1.00 barrier on the bid price for the first time this morning & still people continue to buy. I'm looking to get out at around the 140 mark & wondered if you had any idea when it might reach there?

Any idea whether they are going to pay a dividend?

Thanks for your tips & postings which are very valuable to me, you really are a legend!

I have to say tanks to LEGEND AFTER YOUR RECOMMENDATION,,,appreciate any other reccomendation your are the best LEGEND TANK YOU

Thanks guys for support. I said in a previous posting that if these weren't a pound by christmas I would show my backside to Leeds Town Hall steps, so I am more relieved than anything. LOL

I agree with sandrew64, plenty more upside from these IMHO as well. Even if results are not outstanding, BNH are still undervalued, but I can't see how the results will be bad. I think people will really start buying in after results.

Yorkshire T, why not sell at 1.50??!! I think now, there is no reason why the company shouldn't be 1.50. So just watch over the next month and see what happens.

back up where we belong!!!

Broker Network Holdings plc
30 November 2004

30 November 2004
FOR IMMEDIATE RELEASE


Broker Network Holdings Plc
(AIM:BNH)

Interim Results for the eight months to 31 October 2004
68% increase in profit before taxation
9 acquisitions completed

Broker Network Holdings plc ('Broker Network' or 'the Company'), the network
organisation for independent community insurance brokers, today announces its
interim results for the eight months to 31 October 2004.

Financial highlights

*Six months ended Six months ended % Increase
31 October 2004 31 October 2003
'000 '000

Turnover 3,747 2,140 +75
Operating profit before goodwill 764 337 +127
amortisation
Operating profit 573 337 +70
Profit before tax 709 422 +68
EPS - fully diluted 3.41p 1.88p +81

Operational highlights

9 acquisitions completed from within the Network
number of Network Members increased 4% to 138
good market conditions for new Members and further acquisitions
Gross Written Premium approaching 300m per annum
strong operating cash flow
strong margin improvement
overall performance in line with plans

* The interim results for the eight months ended 31 October 2004 are presented
in full below. In addition, the results for the six months ended 31 October
2004 are presented to aid comparison with previous and future periods.

Commenting on these results:

Faisal Rahmatallah, Chairman, said:

'I am delighted with the strong performance of the Group in its first period of
trading on AIM. The network continues to expand, margins are growing and the
acquisition of Members' businesses whose principals wish to exit the industry is
well under way.'

Grant Ellis, Chief Executive, said:

'The record performance in the period reflects the continued success of our
network model. Our focus now is to build a solid platform through improved IT
and management on which the acquired businesses can grow.'

Broker Network 01423 877833
Grant Ellis, Chief Executive
Julie Hale, Group Finance Director

Brewin Dolphin Securities
Mark Brady 0113 2410130

Buchanan Communications 020 7466 5000
Kelly-Ann French 07958 972164



FULL STATEMENT BELOW

CHAIRMAN'S STATEMENT

Introduction

We are very pleased to present our first interim results following our
successful flotation on AIM on 10 May 2004. Overall performance has matched
expectations, with an increase in turnover of 75%, an increase in operating
profit (before goodwill amortisation) of 127% and an increase in profit after
taxation of 81%. We have completed a further five acquisitions of brokers from
within our Network Membership, taking the total number of owned brokers to nine.

The interims presented here are for the eights months ended 31 October 2004.
However, to aid comparison with previous and future periods, we present also the
results for the six months ended 31 October 2004.

Turnover has increased as a result of organic growth and acquisition of brokers
to 3.75 million, representing an increase of 75%. Operating profit has also
increased significantly to 0.77 million (before goodwill amortisation),
representing an increase of 127%. Operating margins have increased from 15.8%
to 20.4% (20.9% in the eight months ended 31 October 2004). This is the result
of a 31% increase in Network income compared with a 21% increase in expenses
along with the improvement in operating performance of Broker Network London
Markets (the subsidiary which places Members' insurance with the Lloyd's and
London markets).

Profit after taxation and minority interests has increased by 81% to 0.53
million (0.69 million for the eights months) from 0.29 million. The minority
interests relate to a 24% stake in one of the acquired brokers which is still
held by the former principal.

Cash inflow from operating activities was 1.17 million and overall cash inflow
for the 6 month period was 2.85 million after the receipt of net proceeds from
flotation of 2.17 million and spending 0.43 million on acquisitions.

The Broker Network

Network turnover increased by 31% to 2.73 million and operating profits
increased by 71% to 0.75 million.

Member numbers have increased in line with our plans and stood at 138 at the
period end. We have recruited a net five new Members in the period; thirteen
joiners, five Members who merged with other Members and three leavers. The rate
of enquiry in 2004 compared to previous periods has been low but the conversion
rate has improved. There are currently six firms contracted to join before
February 2005 and a further six at an advanced stage of discussion.

Since recommending the Acturis ASP system as our preferred IT platform for
Members, we are pleased to report that 28 Members have already chosen and
installed the new system with a further 19 scheduled to do so by April 2005.
The benefits of moving our Members to a common IT platform with the
functionality of the Acturis ASP system are significant in the long run with the
opportunity for centralising a number of back office functions and the
extraction of consolidated management information.

Consolidating our position in the market

Our track record, Member acquisitions and AIM listing have all enhanced our
profile with insurer suppliers and set us apart from others attempting to
imitate our success. As the market leader and longest established network we
have been able to improve our terms of trade with many suppliers, thereby
improving our revenue, and we expect this to continue into 2005.

Regulation

Statutory regulation for the general insurance intermediary sector by the
Financial Services Authority comes into force on January 14th 2005. I am proud
to report that with the support of our strong Compliance team each Broker
Network subsidiary and every Member has already received their 'licence' from
the FSA.

Broker Network Insurance Brokers

The average gross written premium of the nine brokers acquired to date was 2.1
million . The total acquisition consideration was 3.0 million of which 1.8
million represents expected deferred consideration payments. These figures are
in line with expectations. Turnover of the acquired brokers in the period was
0.92 million. A managing director of these profit centres has been appointed
and the focus is to build a solid platform for growth in all the branches by
installing the Acturis ASP IT platform and instilling appropriate management
disciplines.

Insurance Market Conditions

If 2002 and 2003 were the years of insurance premium inflation, then 2004 has
been the year when premium rates have stagnated. Indeed, there are some sectors
of the market now showing signs of premiums falling slightly. Whether this
continues into 2005 remains to be seen. Many insurance companies renew their
reinsurance treaties at this time of year and the costs of hurricane damage will
likely mean that reinsurers are in no mood to reduce their rates. In addition,
claims inflation continues to rise faster than general inflation (Retail Price
Index (RPI) inflation). However, new capital has been flowing into the UK
insurance market attracted by recent high returns which has undoubtedly dampened
down the opportunity for premium increases. As a result, it is difficult to
predict what the final outcome for rates will be in 2005, however, dramatic
movements in rates are unlikely.

Recent publicity surrounding the Spitzer enquiry in the US has caused all in the
industry to take stock. We have not, and will not, sanction, promote or enter
into any arrangement which is against the best interests of our clients.

Network Development

New Member recruitment for the coming year is still on target, despite a quieter
than usual period in the run up to FSA regulation. We expect to see an increase
in demand in 2005 as firms seek practical support to help them remain FSA
compliant. Our excellent compliance service will, I am sure, be a very
attractive option for many.

In addition, insurers are increasingly reluctant to engage with individual small
brokers due to the higher cost of distribution but are looking to the larger
firms, including networks, to grow their business. The result of this is that
we have access to markets and levels of service which are not available to
individual community brokers which will therefore drive them to consider the
option of network membership.

Broker Network Underwriting (BNU) provides insurance products that are branded
exclusively for Members. We successfully completed the installation of an
Acturis ASP IT system across the whole of BNU earlier this year and operational
efficiencies are now filtering through. We have started a programme of
introducing additional exclusive insurance products for Members and hope to
launch the first of these early in 2005.

Broker Network London Markets places business in the Lloyd's and London markets
on behalf of Members, sharing the commission with Members that otherwise would
be ceded to a third party Lloyd's broker. We recently strengthened our team
with the addition of an experienced London Market broker and this will allow us
to challenge our break-even aspirations as we move towards the year end.

Both Broker Network Underwriting and Broker Network London Markets are
relatively minor parts of our business at present. However, we believe they
offer opportunities to improve services for both Members and insurers which are
capable of growing into important revenue streams for the Company.

Consolidation

The imminent arrival of statutory regulation has fuelled a slight increase in
broker consolidation, but many pundits have been surprised by the number of
firms who have decided to continue within a regulated environment. There is
still little evidence that smaller brokers are exiting the industry in large
numbers. We would therefore expect that, as the reality of regulation starts to
bite, some will look for an exit, but others will look for help, and we're well
placed to provide for both.

Acquisition of Members' businesses

We have now completed nine acquisitions of Member businesses in this calendar
year, and are still on track to achieve our target of twelve before the end of
the current financial year. We have agreed terms in principal with another two
firms, and have a healthy pipeline of enquiries to progress. The recently
appointed managing director is focusing on instilling the disciplines needed to
generate the required growth and margin improvement.

We have installed the Acturis ASP IT system in six sites so far and are
scheduled to complete the remainder by January next year. We are also
introducing a more disciplined approach to running each business than had
existed under their previous ownership - changing the culture from cottage
industry to corporate in the process. The benefits of adopting this positive and
pro-active approach to managing change will become apparent in due course.

Conclusion

The Board wishes to extend its sincere thanks to all the Group's employees and
to its Members. The flotation was an extremely important step in the Company's
development. We believe we have the right strategy in place and are pleased
with the progress made to date. We look forward to the remainder of the
financial year and to the future with confidence. The Board believes that the
Company is well placed to exploit its position in line with its plans.

Faisal Rahmatallah
Chairman
Broker Network Holdings plc


Consolidated profit and loss account
for the eight months ended 31 October 2004


Unaudited Eight Unaudited Six Unaudited Audited Year
months ended months ended Six months ended
31 October 2004 31 October 2004 ended 30 April
31 October 2003 2004


Gross commission receivable 26,634,745 19,563,493 17,307,000 35,473,246

Turnover 4,529,102 3,746,804 2,140,215 4,522,282
Administrative expenses (3,771,299) (3,173,634) (1,803,032) (3,901,165)

Operating profit 757,803 573,170 337,184 621,117
Interest receivable 165,651 136,684 84,855 148,571
Interest payable (1,061) (1,061) - -

Profit on ordinary activities before 922,393 708,793 422,039 769,688
taxation
Tax on profit on ordinary activities (231,779) (177,199) (130,668) (180,914)
Profit on ordinary activities after
taxation 690,614 531,594 291,371 588,774

Minority interests - equity (3,251) (3,251) - -

Retained profit for the financial period 687,363 528,343 291,371 588,774

Earnings per share
Basic 4.62p 3.55p 1.96p 3.96p
Diluted 4.44p 3.41p 1.88p 3.80p

Dividends per share - - - -

All of the activities during the year relate to continuing operations.

The group has no recognised gains or losses other than the results above and,
therefore, no separate statement of total recognised gains and losses has been
presented.

There is no difference between the profit on ordinary activities before taxation
and the profit sustained for the financial year stated above, and their
historical cost equivalents.

During the period the Group carried out a corporate restructuring including the
introduction of a new holding company. The profit and loss account has been
prepared using merger accounting and is presented on a pro forma basis as if the
new holding company had been in existence throughout both the current and prior
periods. Further information is given in note 1.

Consolidated balance sheet
at 31 October 2004
Unaudited Unaudited Audited
31 October 2004 31 October 2003 30 April
2004


Fixed assets
Intangible assets
Goodwill 2,736,364 - -
Other intangible assets - 10,000 -
2,736,364 10,000 -
Tangible assets 372,696 295,444 251,781
Investments 500 - -
3,109,560 305,444 251,781

Current assets
Debtors 11,179,473 11,115,129 12,651,364
Insurance broking account 6,336,349 5,726,357 7,200,169
Cash at bank and in hand 3,186,592 838,044 339,144
20,702,414 17,679,530 20,190,677

Creditors: amounts falling due within one year (17,899,365) (16,651,289) (18,823,574)
__________ __________ __________

Net current assets 2,803,049 1,028,241 1,367,103
_________ _________ __________
Total assets less current liabilities 5,912,609 1,333,685 1,618,884

Creditors: amounts falling due after more than one year (1,580,869) - -

Provisions for liabilities and charges (5,800) (15,600) (3,400)

Net assets 4,325,940 1,318,085 1,615,484

Capital and reserves
Called up share capital 301,298 226,424 226,424
Share premium account 2,095,215 454,322 454,322
Capital reserve 454,322 - -
Profit and loss account 1,463,081 637,339 934,738
Shareholders' funds - equity 4,313,916 1,318,085 1,615,484
Minority interests 12,024 - -

4,325,940 1,318,085 1,615,484


Consolidated cash flow statement
for the eight months ended 31 October 2004


Eight months Six months Six months Year ended
Note ended ended ended
31 October 2004 31 October 2004 31 October 2003 30 April 2004


Net cash inflow from operating 2 887,205 1,166,124 295,880 595,506
activities

Returns on investment and servicing
of finance
Interest received 164,590 140,177 85,749 148,016
_______ _______ _______ _______
Net cash inflow from returns on
investment and servicing of finance 164,590 140,177 84,749 148,016

Capital expenditure and investment
Purchase of tangible fixed assets (234,280) (194,424) (57,494) (123,356)
Proceeds on sale of tangible fixed 24,204 - - 24,204
assets
Purchase of fixed asset investment (500) (500) - -
_______ _______ _______ ________
Net cash outflow from capital
expenditure and investment (210,576) (194,924) (57,494) (99,152)

Acquisitions and disposals
Purchase of subsidiary undertakings (779,142) (431,972) - (704,288)
and broker businesses

Net cash outflow from acquisitions (779,142) (431,972) - (704,288)
and disposals

Corporation tax paid (9,617) (2,046) (8,630) (123,478)
Financing
Issue of shares 2,170,089 2,170,089 - -
Increase/(decrease) in net cash 3 2,222,549 2,847,448 315,505 (183,396)

Notes

1. On 22 March 2004 Broker Network Holdings plc acquired The Broker
Network Limited in a share for share exchange.

On 10 May 2004 the Company restructured its share capital, issued 3,743,706 new
ordinary shares of 2p each in a placing and offer for subscription priced at 71p
each, and floated on AIM.

The total issued share capital of the Company at 31 October 2004 was 15,064,906
ordinary shares of 2p each.

2. Cash flow from operating activities


Eight months ended Six months Six months Year ended
31 October 2004 ended ended 30 April
31 October 2004 31 October 2003 2004

Reconciliation of operating profit
to net cash inflow:
Operating profit 757,803 573,170 337,184 621,117
Amortisation charge 190,380 190,380 - -
Depreciation charge 92,740 73,510 55,669 127,964
Loss on disposal of fixed assets 23,028 - - 23,028
(Increase)/decrease in debtors (364,532) 109,489 (121,913) (294,888)
Increase in creditors 187,786 219,575 24,940 118,285

Net cash inflow from operating 887,205 1,166,124 295,880 595,506
activities

Movement in debtors and creditors shown above exclude amounts relating to
insurance transactions.

3. Analysis of net funds

1 May 2004 Cashflow 31 October 2004


Cash at bank and in hand 339,144 2,847,448 3,186,592

4. The unaudited results for the six months and eight months have been
prepared on a basis consistent with the accounting policies disclosed in
The Broker Network Limited's group accounts for the year to 30 April 2004
and do not constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985.

5. The figures for the year ended 30 April 2004 have been extracted from
the Broker Network Limited group statutory accounts which have been delivered to
the Registrar of Companies and received an unqualified audit report.

6. The tax charge is based on the estimated tax rate for the year to 30
April 2005.

7. The calculation of earnings per share for the period is based on the
profit after taxation divided by the weighted average number of ordinary shares
in issue, being 14,881,790. The diluted earnings per share has been calculated
using 15,481,790 shares which includes the weighted average number of dilutive
shares in respect of share options outstanding during the period of 600,000
shares. The earnings per share for prior periods are calculated on a pro forma
basis using the weighted average number of shares in issue during the six months
ended 31 October 2004, being 14,881,790 shares.

8. Copies of this interim report will be distributed to all holders of
the Company's ordinary shares. Copies will also be available at the Company's
registered office: Mowbray House, Mowbray Square, Harrogate HG1 5AU. In
addition, this report will be available on the company's website:

www.brokernetworkholdingsplc.co.uk
.

ENDS

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

A good set of results it seems to me... just as expected. I really think people will start looking at this company.

legend

Results do look good but probably in line with market expectation. Can you see any reason for positive movement in share price? In the present market, SP seems to drop after results are out, e.g. MPH (Marchpole) and even ASC. In the latter case, there is a positive news flow with the Xmas season and new lines in the New Year. Slight drop today is not really significant because red right across the market and negligible trading. However, well done! although Leeds Town Hall will be missing a treat!

Eric

lol,

Just a bit of profit taking, not even tempted to sell.

My broker remains optimistic, he is probably the best valuer of a firm you could ever wish to meet. His view is more than good enough for me.

The price has hit the mark over the past few weeks, as soon as investors and possibly fund managers start buying in, it will move.

IC are due an update as to their buy recommendation a few months ago.

Thanks for your post eric.

Legend

Good rise this morning, starting to look the quality company that it is.

blimey o riley.

Yes totally agree, an excellent company

Overall, a very good day, I really think now the results are out, there will be big interest in the company. I would hope plenty more to come.

Wouldn't be surprised at all to see it in IC as it was tipped as a buy a few months ago.

Did you get many Balli??

Got in when you first mentioned this share. Bought a nice handful - now up 39%

good lad. Someone said there was a line in the sun today about yesterdays rise... will have to have a look.

Hats off to you Legend. A true winner. What's on your radar at the moment?

BVM a dead cert - from my broker. PDX at a gamble and TOA all look good. TOA and BVM a safer bet than PDX. Not got so many in them (PDX), but have done well so far.

Write up in the Insurance Times 2nd December....

'Broker Network chief executive Grant Ellis said the "signs are good for the future" as the company reported its first results since floatation on the AIM in May this year. The network reported pre-tax profits of 709,000 for the six months ended 31 October 2004, up 68% on the same period in 2003. Membership numbers have risen to 138 members from 133 last year. The network has acquired nine members so far in 2004. Keith Insch, formerly of Hill House Hammond has been appointed managing director of the network-owned brokers.'

OMG Blimey o riley. Thanks for post Balli

i am still not happy ath the continual movement to purchase insurance brokers....there is no worthwhile profit in that area,

management should continue what they are good at...which is being a broker network.

i exspected that a much greater number of brokers would be joining this respected and fair dealing network.

it will be increasingly difficult for so many brokers to:
gain good trading terms from insurers....and good credit periods
place certain risks
meet new business volume terms of insurers
demonstrate to the FSA there facility to search a wider market
deal with the horrendous FSA in the brokers own right

any prudent broker should commence a two year plan to construct his business and accounts ready for a sale in the market place......and see the benefit in better health which on its own will be worth a million pounds

Yes point taken, but you have to admit that the figures do look good.

Wills and Co brokers believe this will be 1.80-2.00 within 1 week someone said on another BB. Some others reckon 4 by 2006... not so sure myself!!!

Did you buy any at 77p when you were commenting on here MPW777?

What are anyone elses thoughts? I welcome any response on here, the price has almost doubled in a month!!!! Surely some happy punters about!!!

hello legend i tanks to you for this recomentation,i enter at 77 now doubble
fantastic,i wish i would put more money that time , but better not to be to gredy sometime,,,,,,,,what you think this company share will reach soon??
tank you again legend very much appreciate for your comment
anymore recomendation?