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BF&M strategic review may lead to sale

BF&M Limited may be up for sale.

The domestic insurer – one of the largest on the island – has initiated a review of strategic alternatives “to maximise shareholder value”, which may include the sale of the company.

The initiative has arisen out of discussions involving the company and its principal 37.4 per cent shareholder, Camellia Plc.

BF&M said today that the board of directors had established a special committee headed by John Wight, group chairman and CEO.

It will include independent directors Jennifer Reynolds and Anthony Joaquin to oversee the strategic review.

To assist in this process, the special committee has already retained Desjardins Capital Markets, the investment banking firm based in Montreal, Canada.

John Wight said: “Throughout and beyond the strategic review process, BF&M will remain focused on enhancing corporate value by steadily carrying out business activities, delivering excellent customer service and executing on our long-term strategy.”

Camellia Plc is a global family of companies focused on agriculture across the world and headquartered in the UK.

But they are pursuing a strategy of disposing of non-core assets and expanding the agriculture division.

The Camellia board is undertaking a series of measures aimed at rebalancing the group’s portfolio of investments to take better advantage of its strengths,

The company valued their 37.4 per cent shareholding in BF&M at £57.7 million at the calendar year end.

The operational report in Camellia’s 2021 annual report said: “BF&M made a substantial contribution to our performance in 2021, recording net income up 19 per cent at $25.7 million (2020: $21.6 million) due to a 15 per cent uplift in gross premiums written in the period compared with the prior year.

“This was driven by increased property and group health premiums and new business. Short-term claims and adjustment expenses increased by 53 per cent to $14.8 million, while life and health policy benefits decreased by 24 per cent to $77.5 million.”

The chairman’s report, dated last month, said Camellia Plc had a profit before tax of £7.1 million after a number of one-off items with an aggregate net cost of £1.7 million (2020: profit before tax of £7.8 million after one-off net costs of £8.2 million).

Profits were also impacted by the important long-term strategic changes made in the last two financial years to the agriculture portfolio.

Generally, chairman Malcolm Perkins saw the world slowly getting back to normal with the uptake in vaccines. But he added: "We do not believe that normal trading conditions will emerge until 2023 at the earliest, and may be further delayed by the disastrous war in Ukraine.”

He also said: “The substantial rise in energy prices will continue to affect our global supply chain, with an increase in the cost of shipping affecting us and our customers alike.

“Linked to the increasing price of natural gas, fertiliser prices have increased substantially with the impact being felt in the cost of production across all our agricultural operations. Furthermore, rising inflation will lead to further increases in wages.”

BF&M has initiated a review of strategic alternatives to maximize shareholder value (File photograph)

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Published June 30, 2022 at 8:00 am (Updated July 01, 2022 at 8:30 am)

BF&M strategic review may lead to sale

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