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 )

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.