GRP promises more acquisitions in 2020 as run rate income grows

GRP’s 18 acquisitions this year have led to an increased run rate income of £139m, the group said in its yearly financial statement.

It also posted a run rate EBITDA of £50.0m for the same period, up 42% on the previous year, while its run rate GWP was close to £800m.

But the group reported a loss before tax of £17.9m due to a number of the acquisitions from 2018-2019 only partially affecting the financial results, as well as the technical accounting treatment of GRP’s financing costs, amortisation of goodwill, central finance and M&A costs, it said.

Commenting, GRP group managing director Mike Bruce said the “outstanding results have been fuelled by a combination of organic and acquisitive growth, (GRP has completed 53 acquisitions since its establishment) plus benefits accruing from GRP’s major focus on integration”.

Bruce added that integration had delivered tangible benefits internally and for its insurer partners.

“We now provide our insurer partners with leading edge data analytics giving new insight into how particular books of business are performing, and identifying development opportunities for new products that benefit our clients,” he said.

Retail growth

GRP increased its rate of retail acquisitions by 45% in 2019, with many of its regional hubs taking the lead. 

“Our hubs have identified and onboarded some real gems, supported by our capital, while rapid integration sets them on an immediate path to accelerate their growth,” Bruce said.

He also pointed out that GRP’s MGA division now generates more than £120m in GWP, with four businesses bought this year.

“Our MGA strategy is to selectively acquire quality specialist MGAs which focus on attractive niche markets, while delivering steady growth, via better penetration of our brokers and distribution networks and improved product and pricing,” Bruce said.

In the specialty division, Bruce said the merger of Lonmar and Ropner had brought about cost savings and created ”a leaner and highly efficient business with further headroom for growth this year”.

The group saw turnover increase to £112m to March 2019 (the end of its latest financial reporting year) from £75.9m the previous year, while operating profit rose to £27.8m for the latest accounting year compared with £10.2m the year before.

The positive results were driven by its acquisitions as well as organic growth, the company said.

Looking ahead

Looking at the year ahead, Bruce said GRP remained ”fully focused on growth through acquisition and integration of regional brokers, MGAs, portfolios and teams, and high-quality third-party financing remains in place to support GRP’s capital base and to invest in further expansion”.

“We accelerated the number of deals completed in FY 2018-19 from the previous year, and the trend has continued during the new financial year, with 13 since the end of March.

”Our model, which empowers our hub businesses to leverage their local and market relationships to deliver local ‘spoke’ acquisitions, means that our pipeline is stronger than ever, underlining the continuing attraction to broking entrepreneurs of GRP’s owner-driver philosophy,” Bruce said.

Chairman Peter Cullum said: “GRP has again enjoyed an excellent year of strong and sustainable growth. We are now one of the UK’s leading SME focussed insurance intermediary groups with national scale and coverage.

”Our track record of outstanding growth is underpinned by a proven M&A and organic growth strategy supported by a unique data led platform and high-performance culture.”

GRP’s last acquisition of the year came early in December when it bought Worcester-based agricultural broker Barpax via its regional hub business Country and Commercial Insurance Brokers.