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

I like the look of this one legend but given the state of play in the small caps market i`m not sure wether to have a punt or not.There are some very good profitable companies out there not getting the increase in their share price they and us investors deserve.
DB66

Couldn't agree more. I always pick good value stocks but the last few months has seen them drop back. I was in these at 61p and intend to hold until 1.50. I would think that it wouldn't be long after the results next month (12 july)

The growth in this company is phenomenal. I think its on a p/e of about 6. It will have approx 3-4m cash at results I would think.

If you are a shareholder doughboy, you would have got the recent broker network newsletter. This was very bullish from chief exec and the chairman.

Any sort of buy in will send this baby into orbit. There are not many shares around in this co so it tends to be quite illiquid and moves around on anything. It got tipped by shares mag as a play for 2005 shares of the year - this was at 1.28 in december. there has been no negative news about this whatsoever. It also got tipped a few weeks ago.

It is a must buy imho.

No i`m not a shareholder legend but i think after reading your last comments i am going to be.
Thanks
DB66

legend 290782 your posting 89.......the answer is YES....in fact top of the pops until i jumped out prior to the arrival of the big fool known by others as the FSA

a friend of mine was one of the first brokers to enter the broker network...and he speaks highly of them.

as i have intimated previously in this posting i am not enthusiastic in BN buying insurance brokers. BN should stick to what they know and are good at.. that is being a broker network

if you have any insurance queries or problems just post them

incidently my career in insurance broking was very rewarding indeed....but those days are now gone

Thanks for this MPW.

I very much appreciate your views on here. I totally take your comments on board that Broker Network's core business is its forte and that yes it perhaps should concentrate mainly on this if it wanted guaranteed and secure growth.

However a plus point of the acquisitions could be that acquiring the brokers could well be a good growth strategy for the company. So it looks to shareholders that the company is really trying to grow its business. Do you remember a company called Park Row?? This had the same model for IFA's... it was so successful that it got taken over.

I think BN has been around since 1994, so we are talking about a well established company here. I am interested in your friends take on BN (i.e reliability of the co... etc).

Believe it or not MPW I am a Mortgage Consultant (just passed my fpc exams last week too by the way!!!) and I have the insurance qualification to sell Buildings and Contents for clients. But why would i want to do that when the firm i work for will receive approx 25 commission and I would have to do a Suitability Letter, fill out the application form and all the relevant paperwork... It's just not worthwhile.. So I only advise on one company - Paymentshield. It's quite quick processing and they have a model suitability letter. Ok it may not be the best but at least it is an option for the client.

The FSA are killing us, and now mortgages are regulated by them which is causing me a lot of hassle. I honestly don't know which way this industry is going do you?????!!!!!

I do have to admit that my knowledge of the insurance industry is limited, but I sure as hell know a good value company when I see one.

Ramu, if your selling I might know someone that will buy them off you...

MPW,

I see your pzc have been flying of late. I take it drinks are on you then??
I thought when they went to 11 they seemed a bit cheap.

legend 290782 posting 95

put your money on the sound PZC....the A shares have been given voting rights and all the preference shares have been redeemed

my view is that this makes the company much simpler as a target for a takeover

the very full documents issued by PZC , by law, in connection with the events of the above first paragraph revealed the fullest details of the huge concentration of the share holding...which again shows how easy it is to make a bid for the company

i have a huge holding direct and indirect in PZC...it is a sensible share to hold and just be patient for that takeover to arrive

Finished up 14.55-95 and going strong!!

If you like good value stocks have a look at TND's balance sheet. Although a bearish chairman's statement it has doubled eps in a year and its profit. KBC forecast that 3/4 of its market cap will be in cash next year!! on a p/e of 4-5.... this has takeover written all over it too.

I have a small holding of pzc but most of my money is in this - all 36500 odd shares of this!!

Well i`ve joined you today Legend,this does look a great value stock but there doesn`t seem to be much interest on this BB ?
DB66

I can honestly say that this is so small that it has been overlooked. There was only 20% of the company that was floated and so it tends to be very illiquid (i.e. moves on small volumes). Hold these for 2 months and see what price they are.... trust the legend!!

If you look at it like this:

Shares mag tipped this as top share for 2005 at 1.27...

Nothing has changed in fact, You assume everything is in line with expectations
as the company would have to have said by now...

If anything things are better than expected because my broker went to a presentation by the company and they said the following:
'The acquisitions have been acquired 30% cheaper than budgeted, and performed much better than expected'...

Cash will be strong...

House broker Teather and Greenwood have a 1.30 price tag on these and will be reviewed on results...

I think you will be ok with these!!

I can honestly say that this is so small that it has been overlooked. There was only 20% of the company that was floated and so it tends to be very illiquid (i.e. moves on small volumes). Hold these for 2 months and see what price they are.... trust the legend!!

If you look at it like this:

Shares mag tipped this as top share for 2005 at 1.27...

Nothing has changed in fact, You assume everything is in line with expectations
as the company would have to have said by now...

If anything things are better than expected because my broker went to a presentation by the company and they said the following:
'The acquisitions have been acquired 30% cheaper than budgeted, and performed much better than expected'...

Cash will be strong...

House broker Teather and Greenwood have a 1.30 price tag on these and will be reviewed on results...

I think you will be ok with these!!

Thanks for the info Legend sounds good to me!
If these come good i will buy you a drink,hey what the heck you can even have the wife.lol
DB66

lol!!! Well, there is no real reason why not.. they will have approx a quarter of their market cap in cash and low p/e with good prospects. It is the second largest network in the country. i can hopefully see very very good things around the corner.

I have held these since 61p and do not intend selling for any less than 1.50...perhaps keep these even longer...

All the trades this week and the back end of last week were buys ,even if volumes were small.The only problem i can see now is the falls on Wall Street having a knock on effect on the home markets and in turn damping down the gains we could possibly get from the BNH results.
Fingers Crossed
DB66

Not concerned one bit doughboy...

I have been assured these results will be good....

Have been watching these last 6 months - like the feel of it, but will continue to wait, at least until next results. Rightly or wrongly, insurance brokers are tainted because of past actions by some and management of all the acquisitions will take some handling. They look to be focussing on the right areas (e.g. compliance, integration of systems) and so far they seem to be doing a good job, but balance sheet shows essentially a "fresh air" business. Few real tangible fixed assets and cash probably belongs to the insurance companies shown within creditors. Turnround when it comes may be swift, but one bit of bad news could still hit them hard. Would be happy to hold if I had any, so good luck with the results legend.

Well here we go Legend, a nice little rise today i`m not sure how on only 1 buy of 500 shares but who cares as long as it goes up.
db66

I spoke to a broker today at teather and greenwood and she backed up what I pretty much said - this is worth more than 1.30!! The broker said that she thinks these are good. I asked for the research note that says based on no more acquisitions the company should be worth 1.30ish, but couldn't give it to me, so I am waiting for this from my broker. If i get anything I will post it on here.

Just wait until the results and I am pretty sure they will trade up from here.

All imho and dyor

Thanks for that Legend.
DB66

Look what I found boys and girls.... ;-)

Broker Network to Implement Trintech's ReconNET to
Improve Internal Financial Controls and Operating
Efficiency; Network of Community Insurance Broker
By Business Wire




DALLAS & DUBLIN, Ireland June 27, 2005 Trintech
(Nasdaq (NASDAQ: news) :TTPA), a leading provider of
transaction reconciliation and payment infrastructure
solutions, today announced that Broker Network
Holdings PLC has selected ReconNET to automate the
verification and reconciliation of its central
depository account and insurance premium payments
between its independent insurance brokers and
insurance providers. In addition to streamlining
internal operations, ReconNET will also strengthen
Broker Network (LSE: BNH.L - news) 's financial
controls.

Broker Network Holdings PLC provides service to more
than 130 independent, community insurance brokers in
the UK that specialize in commercial insurance for
small businesses. Broker Network provides its brokers
with the benefits of collective buying power as well
as offering access to a wider range of insurers.

In January 2005, the Financial Services Authority
(FSA), an independent non-governmental body, was given
regulatory oversight over the insurance industry in
the UK. Insurers and brokers must now be authorized by
the FSA, which requires compliance with a number of
new regulations, including one that requires brokers
and providers to demonstrate that they have adequate
financial controls in place.

"The functionality and flexibility of ReconNET
addresses our need to automate reconciliation and
exception management processes to enable us to grow
the business more cost effectively. It will also help
us comply with industry regulations in a more
efficient manner," said Julie Hale, Group Finance
Director, Broker Network. "The gains we expect in
efficiency and financial control will improve our work
practices and overall operational effectiveness."

The installation of ReconNET will automate Broker
Network's reconciliation procedures, increasing the
efficiencies of finance staff, and provide effective
risk management and reporting for its daily and
month-end operations. Additionally, ReconNET will help
Broker Network better meet industry compliance
requirements through built-in detective and
preventative financial controls.

"Industry regulations like FSA have necessitated the
move to automated transaction reconciliation to reduce
manual processes and mitigate risk," said John Harte,
General Manager of Trintech's Funds Management Systems
Division. "Companies like Broker Network rely on
ReconNET because the solution supports financial
accountability, audit and reporting requirements for
data integrity through automation and a closed system
architecture."

About Broker Network Limited

Formed in 1994, Broker Network is a network of over
130 independent, community insurance brokers, known as
Members. The Members, who retain their own trading
brand, are contractually obliged to place all of their
general insurance business with Broker Network. Broker
Network in turn provides support services to Members
including: IT, training & regulatory compliance. The
service provided by Broker Network makes it possible
for community brokers to compete, at least on equal
terms, with other larger brokers for the insurance
business of their target customers, which are
predominantly SME businesses. Additionally through the
network, Members have access to a greater range of
insurers and thus are able to negotiate better
remuneration terms than they could otherwise obtain
independently. Likewise, Broker Network also provides
insurers with a channel to obtain business from
community brokers. For more information visit
www.brokernetwork.co.uk.

About Trintech FMS

Trintech Funds Management Systems (FMS), a division of
Trintech Group, provides comprehensive,
industry-leading solutions that optimize enterprise
funds management including the ReconNET reconciliation
product suite, Bank Fee Analysis, and DataFlow
transaction data network and services. Trintech's FMS
solutions are optimizing performance in nearly 400
leading companies in retail, hospitality, food
service, insurance, banking, government and other
industries, including YUM! Brands Restaurants, Foot
Locker (NYSE: FL - news) , Radio Shack, 7-Eleven,
Whitbread Group, Verizon Wireless, Kroger (NYSE: KR -
news) , Regal Entertainment, Budget Rent A Car,
Wendy's, Farmer's Insurance Group, and the University
of Missouri. Trintech FMS is headquartered in Dallas,
and can be contacted at 972-701-9802 and on the web at
www.trintech.com/fms.

About Trintech

Trintech is a leading provider of transaction
reconciliation and payment infrastructure solutions to
retailers, financial institutions, payment processors
and network operators globally. Built on 18 years of
experience, Trintech's solutions manage each area of
the payment transaction cycle from authentication,
authorization, settlement, dispute resolution and
reconciliation - enabling its customers to reduce
transaction costs, eliminate fraud, minimize risk,
maximize cashflow and increase profitability. Trintech
can be contacted in Ireland at Trintech Building,
South County Business Park, Leopardstown, Dublin 18
(Tel: +353 1 2074000), in the US at 15851 Dallas
Parkway, Suite 855, Addison, TX 75001 (Tel:
972-701-9802), and in the UK at 186-192 Darkes Lane,
Potters Bar, Hertfordshire, EN6 1AF (Tel: +44 (0) 1707
827000). www.trintech.com.

Contact

Trintech FMS, Dallas
Donna Martinez, 972-739-1611
donna.martinez@trintech.com
or
Trintech Group (NASDAQ: TTPA - news) , Ireland
Breda Leonard, +353 1 207 4164
breda.leonard@trintech.com