2022 Report and Accounts

Chairman's Statement

I should open by saying that while my comments on 2022 are a little downbeat I am optimistic about 2023 and beyond. As with all years since 2020, 2022 presented Thomas Miller with a highly challenging and unpredictable environment, and this was the principal reason the Group missed its financial targets. Overall, however our business has shown great resilience and we are now well placed to get back on track.

In 2022 we continued to be impacted by the measures put in place to prevent the spread of COVID, particularly in China, but also, notably, by the conflict in Ukraine. This conflict not only affected those businesses trading into Ukraine, Russia and Belarus, but it was also a major contributing factor to an adverse investment environment that affected those of our businesses with investment portfolios. Shortly following the start of the conflict, a number of our transport businesses decided to discontinue their relationships with Russian and Belarusian clients, while for other parts of the Group they saw a major increase in work to enable their clients to continue to operate. We also faced a major task in navigating and complying with the sanctions regimes put in place following the Russian invasion and I am pleased that every business managed this successfully.

I am of course disappointed that Thomas Miller missed its Corporate Plan target in 2022 and for the second year running. I wrote last year about the Board’s commitment to take action to ensure the Group can get back on track and work is in progress to review both the Group’s activities and the Corporate Plan so we are positioned to deliver results in line with expectations. In 2022 there were a small number of factors which adversely impacted performance and foremost amongst these is the business result of
the TT Club. Following excellent returns in the years running up to 2021, returns in both 2021 and 2022 were below budget. We are however hopeful of an improvement in the Club’s results in 2023. Further, underperformance in our owned businesses is being addressed and good progress is being made. Whilst
uncertainty continues to be a notable feature of our operating environment, the indications from our performance in the early part of the year are positive and I do believe there are grounds for optimism
about 2023. Hugh Titcomb, our new CEO, shares more detail on this in his CEO’s Report.

I am a strong believer in the importance of culture to the success of the Group. We are a service driven organisation with a strong, shared identity and value set. It is important that we continue to invest in
our culture as we grow. In this context, we now employ over 850 employees and a significant number of people have joined in the past year, which puts a premium on making sure we blend existing practices with embracing new ideas as we continue our unequivocal focus on providing the highest levels of service to our clients.

Among the new joiners in 2022, I would like to welcome those who have joined following our assumption of the management of three mutual insurers: the Activities Industry Mutual, The Livery Companies Mutual and the Fire and Rescue Indemnity Company Mutual. Taking on the management of these businesses is a welcome addition to our portfolio of businesses and of course, the management of mutuals is at the heart of the Thomas Miller Group. We also welcome those joining from Neal Consulting Engineers following Brookes Bell’s acquisition of the business as part of its strategy to expand the range of services it can offer.

Diversity, equity and inclusion are important to us across all of our businesses and for every colleague. We recognise that embracing such factors is not only the right thing to do, but also encourages more creative thinking, improved decision making and ultimately better business outcomes. Led by the Executive Committee, we are actively pursuing a range of measures aimed at improving our performance in this area. These initiatives are part of the project to develop our Environmental, Social and Governance (ESG) credentials.

ESG is a major area of focus for the bigger Clubs we manage and for Thomas Miller itself. Last year, I reported on the initial steps we had taken and our plans for the future. Now, in these Financial Statements, you will see we have published our first ESG report. You will read that we have developed a roadmap to guide the work we will do over the next few years and we are working together with those developing plans for the Clubs to establish a comprehensive set of initiatives that recognise where we can
make most impact. Our Investment business has embedded ESG considerations into its investment process in line with client requirements and has supported this with UN PRI submissions, a voluntary initiative but one we believe is important for our businesses to be part of.

I believe that embracing ESG initiatives takes into account who we are and what difference we can make, aligns well with our culture and is at the heart of our values. We have always worked hard to be a good corporate citizen and ESG gives a framework within which to identify and implement initiatives.

Our most notable CSR work continues to be in partnership with our chosen charity, Street Child. Street Child are experts in education, economic empowerment and protection programming. Their interventions are designed to confront challenges, assuring safety as they afford access to schooling. Since the
Ukraine crisis began in March 2022, Thomas Miller employees have collectively raised over £11,000 for the
Street Child Ukraine Appeal, with Thomas Miller donating a further £20,000. This follows total donations of
£90,000 to Street Child in the first year of our partnership.

The Board & Governance

The work of the Thomas Miller Holdings Board is vital to the Group and I would like to thank our Non-Executive Directors for their time and dedication. Their work, and indeed that of all Directors assumes
even more importance when the business is not running on target. The Board has spent a considerable amount of time in 2022 discussing, and then agreeing the actions to take to address the challenges the business faces.

Notably, and after 35 years with Thomas Miller and 16 years as CEO, Bruce Kesterton retired from the Group in October. Bruce was central to most of the big decisions taken during his time with the Group, notably the change from a partnership structure to incorporation in 1999. The Group owes Bruce a huge debt of gratitude for his service and I am sure all shareholders will wish to join with me in recording our thanks to him. In October, we welcomed Hugh Titcomb as Bruce’s successor. Hugh previously led our investment business and many of you will have seen or heard from Hugh as he has reported on our performance in the final quarter of the year. I’m sure you will join with me and wish him well in the role.

In the year, Adam Taylor was appointed as our Chief Financial Officer and to the Board and we wish him well in the role.

The Executive Committee, which is led by Hugh as CEO, is made up of the leaders of our major businesses, our two divisions and largest central functions. This Committee was reinvigorated during
2021 and became established in 2022. In its role, the Committee is able to facilitate change and implement decisions quickly for the benefit of all owned and managed businesses. I am pleased the new structure is already working well.

The environment in which we operate will no doubt continue to present challenges, but the manner in which we have weathered and adapted to the obstacles faced in recent years, and the inherent strength of the business gives us much to be positive about for the future. Thomas Miller is a great organisation and I do believe we have a bright future ahead.

Of course, none of what we do would be possible without the support of our clients, our business partners and indeed our dedicated and hardworking employees. These are challenging times for businesses but they are equally challenging for individuals and their families. The continued commitment of all our colleagues is never taken for granted and is always very much appreciated.

In 2021, we included our first ESG Statement in our annual report and accounts and we presented an ESG
report to the AGM in June 2022. Since then, we have made considerable progress in further developing our ESG strategy to bring to life the early commitments we made in our ESG Roadmap following the completion of a materiality assessment in early 2022.

During 2022, we have delivered against our phase 1 and phase 2 project commitments under the oversight of the newly formed ESG Committee and the leadership of the Executive Committee. These include the following:

Phase 1

Undertaking a baseline global carbon footprint mapping exercise
Implementing regulatory and legal ESG horizon scanning
Running an ESG focused employee engagement survey
Beginning a pilot for employee diversity data gathering

Phase 2

Developing an internal communications ESG strategy
Agreeing an external ESG communications plan which included publication of our first ESG Statement
in December and agreement to publish our first ESG report in June 2023
Defining our initial ESG set of metrics
Mapping our ESG governance and ownership structure including the appointment of ESG Ambassadors

We continue to work very closely with the ESG leads for each of our largest mutual clubs to ensure that there is common understanding about our strategy and the direction of travel and to support the clubs in their own ESG activities.

We have published our first full ESG report alongside our 2022 annual report and accounts which lays out the further commitments we are making for the next phase of our project and we aim to move
ESG from project status to business as usual as we further engage with employees and our other stakeholder groups.