TIDMHUW
RNS Number : 7901S
Helios Underwriting Plc
29 September 2014
29 September 2014
Helios Underwriting plc
("Helios Underwriting" or the "Company")
Interim results for the six months ended 30 June 2014
Helios Underwriting plc, which provides investors with a limited
liability direct investment into the Lloyd's insurance market,
announces its unaudited results for the six months ended 30 June
2014.
Chairman's Statement
This has been another good period where we have utilised the
capital released by the initial quota share and as a result have
been able to continue to increase our underwriting capacity to
GBP21.3 million at the period end through the acquisition of Nomina
No 380 LLP on 16 January 2014 for GBP557,000, Bernul Limited on 27
March 2014 for GBP823,000 and Nomina No 372 LLP on 2 May 2014 for
GBP480,000. The open years of HUW owned vehicles have improved to a
degree that had been anticipated at the time of purchase. We have
also seen an increase in the number of vehicles that are available
for sale, which may lead to lower prices in due course and supports
our ongoing strategy to increase underwriting capacity through
acquisition.
The Parent Company's adjusted net assets plus Humphrey & Co
valuation of the Group's underwriting subsidiaries at the period
end is GBP14.3m or GBP1.69 per share based on current
legislation.
Market conditions over the period continue to worsen. We have
now opted for an increase to the quota share for the 2014
underwriting year of account from 50% to 70% as a result. We have
included two further reinsurers thereby increasing our
diversity.
Sir Michael Oliver
Non-executive Chairman
Condensed Consolidated Statement of Financial Position
At 30 June 2014
30 June 2014 30 June 31 December
2013 2013
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
----------------------------------------- ----- ------------- ---------- ------------
Assets
Intangible assets 3,828 1,571 2,929
Deferred income tax assets - - -
Reinsurance share of insurance
liabilities
- Reinsurers' share of outstanding
claims 3 4,221 3,658 4,154
- Reinsurers' share of unearned
premiums 3 1,637 1,379 800
Other receivables, including
insurance receivables 14,438 9,285 11,554
Prepayments and accrued income 2,307 1,577 1,569
Financial assets at fair value 8 21,909 19,817 22,213
Cash and cash equivalents 3,368 2,270 1,066
Total assets 51,708 39,557 44,285
----------------------------------------- ----- ------------- ---------- ------------
Liabilities
Insurance liabilities:
- Claims outstanding 3 23,668 17,487 21,596
- Unearned premiums 3 9,415 6,694 5,968
Deferred income tax liabilities 1,603 978 1,656
Other payables, including insurance
payables 5,909 4,108 4,116
Accruals and deferred income 1,515 733 1,123
Total liabilities 42,110 30,000 34,459
----------------------------------------- ----- ------------- ---------- ------------
Shareholders' equity
Share capital 9 853 853 853
Share premium 9 6,996 6,996 6,996
Retained earnings 10 1,749 1,708 1,977
----------------------------------------- ----- ------------- ---------- ------------
Total shareholders' equity 9,598 9,557 9,826
----------------------------------------- ----- ------------- ---------- ------------
Total liabilities and shareholders'
equity 51,708 39,557 44,285
----------------------------------------- ----- ------------- ---------- ------------
Condensed Consolidated Income Statement
Six months ended 30 June 2014
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------------ ----- ---------- ---------- -------------
Gross premium written 10,183 7,158 11,938
Reinsurance premium ceded (2,008) (1,634) (2,251)
------------------------------------------------ ----- ---------- ---------- -------------
Net premiums written 8,175 5,524 9,687
Change in unearned gross premium
provision (2,435) (1,626) (29)
Change in unearned reinsurance premium
provision 686 689 43
------------------------------------------------ ----- ---------- ---------- -------------
(1,749) (937) 14
------------------------------------------------ ----- ---------- ---------- -------------
Net earned premium 2 6,426 4,587 9,701
Net investment income 4 268 24 208
Other underwriting income - - -
Other income - 110 -
------------------------------------------------ ----- ---------- ---------- -------------
Revenue 6,694 4,721 9,909
------------------------------------------------ ----- ---------- ---------- -------------
Gross claims paid (3,291) (2,855) (5,867)
Reinsurance share of gross claims
paid 593 575 1,134
------------------------------------------------ ----- ---------- ---------- -------------
Claims paid, net of reinsurance (2,698) (2,280) (4,733)
------------------------------------------------ ----- ---------- ---------- -------------
Change in provision for gross claims (464) 4 1,148
Reinsurance share of change in provision
for gross claims (328) (95) (478)
------------------------------------------------ ----- ---------- ---------- -------------
Net change in provision for claims (792) (91) 670
------------------------------------------------ ----- ---------- ---------- -------------
Net insurance claims and loss adjustment
expenses 2 (3,490) (2,371) (4,063)
Expenses incurred in insurance activities 2 (2,203) (1,300) (4,042)
Other operating expenses 2 (477) (222) (524)
------------------------------------------------ ----- ---------- ---------- -------------
Operating expenses (2,680) (1,522) (4,566)
------------------------------------------------ ----- ---------- ---------- -------------
Operating profit before goodwill 2 524 828 1,280
Goodwill on bargain purchase 11 115 - 133
Impairment of goodwill 11 (5) - (98)
Amortisation of syndicate capacity (438) (226) (462)
------------------------------------------------ ----- ---------- ---------- -------------
Profit before tax 196 602 853
Income tax charge 5 (40) (140) (122)
Profit attributable to equity shareholders 10 156 462 731
------------------------------------------------ ----- ---------- ---------- -------------
Earnings per share attributable to
equity shareholders
Basic and diluted 6 1.83p 5.42p 8.57p
------------------------------------------------ ----- ---------- ---------- -------------
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2014
6 months 6 months 12 months
ended ended ended
30 June 2014 30 June 31 December
2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------------------- -------------- ---------- -------------
Cash flow from operating activities
Results of operating activities 196 602 853
Interest received (3) - (2)
Investment income (240) (49) (381)
Goodwill on bargain purchase (115) - (133)
Impairment of goodwill 5 - 98
Profit on sale of intangible assets - - - 8
Amortisation of intangible assets 438 226 462
Change in fair value of investments 41 93 137
Changes in working capital:
(Increase)/decrease in other receivables (1,214) (303) 2,687
Increase(Decrease) in other payables 978 (479) (1,336)
Net increase in technical provisions 274 (381) (3,273)
Income tax paid (49) (93) (86)
Net cash inflow/(outflow) from operating
activities 311 (384) (966)
-------------------------------------------------- -------------- ---------- -------------
Cash flows from investing activities
Interest received 3 - 2
Investment income 240 49 381
Purchase of intangible assets - - (3)
Net inflow of financial assets at fair
value 3,749 1,161 3,276
Acquisition of subsidiary, net of cash
acquired (1,617) - (3,070)
Proceeds from disposal of intangible
assets - - 2
Net cash used in investing activities 2,375 1,210 588
-------------------------------------------------- -------------- ---------- -------------
Cash flows from financing activities
Dividends paid (384) - -
-------------------------------------------------- -------------- ---------- -------------
Net cash used in financing activities (384) - -
-------------------------------------------------- -------------- ---------- -------------
Net increase/(decrease) in cash and
cash equivalents 2,302 826 (378)
Cash and cash equivalents at beginning
of period 1,066 1,444 1,444
Cash, cash equivalents and bank overdrafts
at end of period 3,368 2,270 1,066
-------------------------------------------------- -------------- ---------- -------------
Condensed Statement of Changes in Shareholders' Equity
Six months ended 30 June 2014
For the six months ended 30 June 2014
Ordinary Share Retained
share capital Premium Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- --------------- --------- ---------- --------
At 1 January 2014 853 6,996 1,977 9,826
Profit for the period attributable
to equity shareholders - - 156 156
Dividends paid - - (384) (384)
At 30 June 2014 853 6,996 1,749 9,598
---------------------------------------- --------------- --------- ---------- --------
For the six months ended 30 June 2013
Ordinary Share Retained
share capital Premium Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- --------------- --------- ---------- --------
At 1 January 2013 853 6,996 1,246 9,095
Profit for the period attributable
to equity shareholders - - 462 462
At 30 June 2013 853 6,996 1,708 9,557
---------------------------------------- --------------- --------- ---------- --------
For the twelve months ended 31 December 2013
Ordinary Share Retained
share capital Premium Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- --------------- --------- ---------- --------
At 1 January 2013 853 6,996 1,246 9,095
Profit for the year attributable
to equity shareholders - - 731 731
-------------------------------------- --------------- --------- ---------- --------
At 31 December 2013 853 6,996 1,977 9,826
-------------------------------------- --------------- --------- ---------- --------
Notes to the Interim Financial Statements
Six months ended 30 June 2014
1. Accounting policies
Basis of preparation
The Condensed Consolidated Interim Financial Statements have
been prepared using accounting policies consistent with
International Financial Reporting Standards (IFRSs) and in
accordance with International Accounting Standard (IAS) 34 Interim
Financial Reporting.
The Condensed Consolidated Interim Financial Statements are
prepared for the six months ended 30 June 2014.
The Condensed Consolidated Interim Financial Statements
incorporate the results of Helios Underwriting plc, Hampden
Corporate Member Limited, Nameco (No. 365) Limited, Nameco (No.
605) Limited, Nameco (No. 321) Limited, Nameco (No. 917) Limited,
Nameco (No. 229) Limited, Nameco (No. 518) Limited, Nameco (No.
804) Limited, Halperin Limited, Bernul Limited, Nomina No 035 LLP,
Nomina No 342 LLP, Nomina No 380 LLP, Nomina No 372 LLP and Helios
UTG Partner Limited.
The Condensed Consolidated Interim Financial Statements for the
six months ended 30 June 2014 and 2013 are unaudited, but have been
subject to review by the Group's auditors. The Condensed
Consolidated Interim Financial Statements have been prepared in
accordance with the accounting policies adopted for the year ended
31 December 2013.
The underwriting data on which these Condensed Consolidated
Interim Financial Statements are based upon has been supplied by
the managing agents of those syndicates which the Group supports.
The data supplied is the 100% figures for each syndicate. The Group
has applied its share of the syndicate participations to the gross
figures to derive its share of the syndicates transactions, assets
and liabilities.
Significant accounting policies
The Condensed Consolidated Interim Financial Statements have
been prepared under the historical cost convention. The same
accounting policies, presentation and methods of computation are
followed in these Condensed Consolidated Interim Financial
Statements as were applied in the preparation of the Group
Financial Statements for the year ended 31 December 2013. The new
standards and amendments to standards and interpretations effective
after 1 January 2014, as disclosed in the Annual Report for the
year ended 31 December 2013, have not had a significant impact on
the Condensed Consolidated Interim Financial Statements at 30 June
2014.
2. Segmental information
The Group has three primary segments which represent the primary
way in which the Group is managed:
-- Syndicate participation;
-- Investment management;
-- Other corporate activities.
6 months ended 30 June 2014 Syndicate Investment Other corporate
Unaudited participation management activities Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ------------ ---------------- --------
Net earned premium 6,502 - (76) 6,426
Net investment income 244 24 - 268
Other income - - - -
Net insurance claims and loss
adjustment expenses (3,490) - - (3,490)
Expenses incurred in insurance
activities (2,030) - (173) (2,203)
Other operating expenses - - (477) (477)
Goodwill on bargain purchase - - 115 115
Impairment of goodwill - - (5) (5)
Amortisation of syndicate capacity - - (438) (438)
Profit before tax 1,226 24 (1,054) 196
------------------------------------ --------------- ------------ ---------------- --------
6 months ended 30 June 2013 Syndicate Investment Other corporate
Unaudited participation management activities Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ------------ ---------------- --------
Net earned premium 4,587 - - 4,587
Net investment income 21 3 - 24
Other income - - 110 110
Net insurance claims and loss
adjustment expenses (2,397) - 26 (2,371)
Expenses incurred in insurance
activities (1,300) - - (1,300)
Other operating expenses (139) - (83) (222)
Goodwill on bargain purchase - - - -
Impairment of goodwill - - - -
Amortisation of syndicate capacity - - (226) (226)
Profit before tax 772 3 (173) 602
------------------------------------ --------------- ------------ ---------------- --------
12 months ended 31 December Syndicate Investment Other corporate
2013 Audited participation management activities Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ --------------- ------------ ---------------- --------
Net earned premium 9,723 - (22) 9,701
Net investment income 247 (39) - 208
Other income - - - -
Net insurance claims and loss
adjustment expenses (4,063) - - (4,063)
Expenses incurred in insurance
activities (4,042) - - (4,042)
Other operating expenses 51 - (575) (524)
Goodwill on bargain purchase - - 133 133
Impairment of goodwill - - (98) (98)
Amortisation of syndicate capacity - - (462) (462)
Profit before tax 1,916 (39) (1,024) 853
------------------------------------ --------------- ------------ ---------------- --------
The Group does not have any geographical segments as it
considers all of its activities to arise from trading within the
UK.
No major customers exceed 10% of revenue.
Net earned premium within 2014 other corporate activities
totalling (GBP76,000) (2013: (GBP22,000) includes the net Group
quota share reinsurance premium payable to Hampden Insurance PCC
(Guernsey) Limited - Cell 6 for the 2013 and 2014 underwriting
years of accounts of (GBP26,000) (2013: GBP22,000) and the Stop
loss premium payable to Hampden Insurance PCC (Guernsey) Limited -
Cell 7 for the 2014 underwriting year of account of (GBP50,000)
(2013: GBPnil).
Syndicate participation represents the Groups direct share of
the underlying syndicate's results for the period.
3. Insurance liabilities and reinsurance balances
Movement in claims outstanding
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------- -------- ------------ --------
At 1 January 2014 21,596 4,154 17,442
Increase in reserves arising from acquisition of subsidiary undertaking 4,198 (818) 5,016
Movement of reserves 464 (328) 792
Other movements (2,590) 1,213 (3,803)
------------------------------------------------------------------------- -------- ------------ --------
At 30 June 2014 23,668 4,221 19,447
------------------------------------------------------------------------- -------- ------------ --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------- -------- ------------ --------
At 1 January 2014 5,968 800 5,168
Increase in reserves arising from acquisition of subsidiary undertaking 1,108 (147) 1,255
Movement of reserves 2,435 686 1,749
Other movements (96) 298 (394)
------------------------------------------------------------------------- -------- ------------ --------
At 30 June 2014 9,415 1,637 7,778
------------------------------------------------------------------------- -------- ------------ --------
Included within other movements are the 2011 and prior years'
reinsured into the 2012 year of account on which the Group does not
participate and currency exchange differences.
4. Net investment income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------- ---------- ---------- -------------
Investment income 240 49 381
Realised gains on financial investments
at fair value through income statement 2 129 5
Unrealised gains/(losses) on financial
investments at fair value through income
statement 23 (144) (137)
Investment management expenses - (10) (43)
Bank interest 3 - 2
------------------------------------------- ---------- ---------- -------------
Net investment income 268 24 208
------------------------------------------- ---------- ---------- -------------
5. Income tax expense
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------- ---------- ---------- -------------
Income tax expense (40) (140) (122)
-------------------- ---------- ---------- -------------
The income tax expense is recognised based on management's best
estimate of the weighted average annual income tax rate expected
for the full financial year. The estimated average annual tax rate
used is 20% (2013: 23.25%). Material disallowed terms have been
adjusted for in the income tax calculation.
6. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
The Group has no dilutive potential ordinary shares.
Earnings per share have been calculated in accordance with IAS
33.
Reconciliation of the earnings and weighted average number of
shares used in the calculation is set out below.
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
Profit for the period GBP156,000 GBP462,000 GBP731,000
-------------------------------------- ----------- ----------- -------------
Weighted average number of shares in
issue 8,526,948 8,526,948 8,526,948
-------------------------------------- ----------- ----------- -------------
Basic and diluted earnings per share
(p) 1.83p 5.42p 8.57p
-------------------------------------- ----------- ----------- -------------
7. Dividends
During the period dividends of 4.5p per share (2013 - Nil) were
paid, totalling GBP384,000 (see note 10).
8. Financial assets at fair value
The Group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities.
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: techniques which use inputs that have a significant
effect on the recorded fair value that are not based on observable
market data.
As at 30 June 2014, the Group held GBP18,408,000 (31 December
2013: GBP17,709,000) Level 1 Financial Assets and GBP3,501,000 (31
December 2013: GBP2,108,000) Level 2 Financial Assets. The Group
has no level 3 investments (31 December 2013 GBPNil).
9. Share capital and share premium
Ordinary
Share
Capital Share Premium Total
Allotted, called up and fully paid GBP'000 GBP'000 GBP'000
------------------------------------------------- --------- -------------- ---------
8,526,948 ordinary shares of 10p each and share
premium at 30 June 2013 853 6,996 7,849
8,526,948 ordinary shares of 10p each and share
premium at 31 December 2013 853 6,996 7,849
8,526,948 ordinary shares of 10p each and share
premium at 30 June 2014 853 6,996 7,849
------------------------------------------------- --------- -------------- ---------
10. Retained earnings
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------- ---------- ------------
Group
At 1 January 2014 1,977 1,246 1,246
Profit attributable to equity shareholders 156 462 731
Dividends paid (384) - -
-------------------------------------------- ---------- ---------- ------------
At 30 June 2014 1,749 1,708 1,977
-------------------------------------------- ---------- ---------- ------------
11. Acquisition of limited liability vehicles
In order to increase the Group's underwriting capacity, the
Company has, since the balance sheet date, acquired 100% of the
voting rights (either directly or indirectly) of the following
Limited Liability Vehicles:
Nomina No 380 LLP
On 16 January 2014 Helios UTG Partner Limited, a 100% subsidiary
of the Company, became a 100% corporate partner in Nomina No 380
LLP for a total consideration of GBP557,000. Nomina No 380 LLP is
incorporated in England and Wales and is a member of Lloyd's.
The acquisition has been accounted for using the purchase method
of accounting. After the alignment of accounting policies and other
adjustments to the valuation of assets and liabilities to reflect
their fair value at acquisition, the fair value of the net assets
was GBP622,000. Negative goodwill of GBP65,000 arose on acquisition
and has been immediately recognised as goodwill on bargain purchase
in the income statement. The following table explains the fair
value adjustments made to the carrying values of the major
categories of assets and liabilities at the date of
acquisition:
Carrying
value Adjustments Fair value
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- ------------ -----------
Intangible assets 442 82 524
Reinsurance assets:
- reinsurers' share of claims outstanding 279 - 279
- reinsurers' share of unearned premium 109 - 109
Other receivables, including insurance receivables 724 - 724
Prepayments and accrued income 104 - 104
Financial assets at fair value 1,228 - 1,228
Cash and cash equivalents 81 - 81
Insurance liabilities:
- claims outstanding (1,451) - (1,451)
- unearned premiums (579) - (579)
Deferred income tax liabilities - (55) (55)
Other payables, including insurance payables (293) - (293)
Accruals and deferred income (49) - (49)
---------------------------------------------------- --------- ------------ -----------
Net assets acquired 595 27 622
---------------------------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 557 - 557
---------------------------------------------------- --------- ------------ -----------
Negative goodwill (38) (27) (65)
---------------------------------------------------- --------- ------------ -----------
Bernul Limited
On 27 March 2014 Helios Underwriting plc acquired 100% of the
issued share capital of Bernul Limited for a total consideration of
GBP823,000. Bernul Limited is incorporated in England and Wales and
is a corporate member of Lloyd's.
The acquisition has been accounted for using the purchase method
of accounting. After the alignment of accounting policies and other
adjustments to the valuation of assets and liabilities to reflect
their fair value at acquisition, the fair value of the net assets
was GBP818,000. Goodwill of GBP5,000 arose on acquisition. The
following table explains the fair value adjustments made to the
carrying values of the major categories of assets and liabilities
at the date of acquisition:
Carrying
value Adjustments Fair value
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- ------------ -----------
Intangible assets 1 322 323
Reinsurance assets:
- reinsurers' share of claims outstanding 147 - 147
- reinsurers' share of unearned premium 59 - 59
Other receivables, including insurance receivables 768 - 768
Prepayments and accrued income 80 - 80
Financial assets at fair value 1,056 - 1,056
Cash and cash equivalents 79 - 79
Insurance liabilities:
- claims outstanding (970) - (970)
- unearned premiums (358) - (358)
Deferred income tax liabilities (52) (64) (116)
Other payables, including insurance payables (215) - (215)
Accruals and deferred income (35) - (35)
---------------------------------------------------- --------- ------------ -----------
Net assets acquired 560 258 818
---------------------------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 823 - 823
---------------------------------------------------- --------- ------------ -----------
Goodwill 263 258 5
---------------------------------------------------- --------- ------------ -----------
Nomina No 372 LLP
On 2 May 2014 Helios UTG Partner Limited, a 100% subsidiary of
the Company, became a 100% corporate partner in Nomina No 372 LLP
for GBP480,000. Nomina No 372 LLP is incorporated in England and
Wales and is a member of Lloyd's.
The acquisition has been accounted for using the purchase method
of accounting. After the alignment of accounting policies and other
adjustments to the valuation of assets and liabilities to reflect
their fair value at acquisition, the fair value of the net assets
was GBP530,000. Negative goodwill of GBP50,000 arose on acquisition
and has been immediately recognised as goodwill on bargain purchase
in the income statement. The following table explains the fair
value adjustments made to the carrying values of the major
categories of assets and liabilities at the date of
acquisition:
Carrying
value Adjustments Fair value
GBP'000 GBP'000 GBP'000
---------------------------------------------------- --------- ------------ -----------
Intangible assets 380 62 442
Reinsurance assets:
- reinsurers' share of claims outstanding 231 231
- reinsurers' share of unearned premium 80 80
Other receivables, including insurance receivables 521 521
Prepayments and accrued income 95 95
Financial assets at fair value 1,007 1,007
Cash and cash equivalents 84 84
Insurance liabilities:
- claims outstanding (1,173) (1,173)
- unearned premiums (457) (457)
Deferred income tax liabilities - (40) (40)
Other payables, including insurance payables (213) (213)
Accruals and deferred income (47) (47)
---------------------------------------------------- --------- ------------ -----------
Net assets acquired 508 22 530
---------------------------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 480 - 480
---------------------------------------------------- --------- ------------ -----------
Negative goodwill (28) 22 (50)
---------------------------------------------------- --------- ------------ -----------
12. Related party transactions
Helios Underwriting plc has provided inter-company loans to its
subsidiaries which are repayable on three months' notice provided
it does not jeopardise each subsidiary's ability to meet its
liabilities as they fall due. All inter-company loans are therefore
classed as falling due within one year. The amounts outstanding as
at 30 June 2014 are set out below:
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
Company GBP'000 GBP'000 GBP'000
---------------------------------------- ---------- ---------- ------------
Balances due from/(to) Group companies
at the period end:
Hampden Corporate Member Limited 807 3,109 1,257
Nameco (No. 365) Limited 65 330 136
Nameco (No. 605) Limited 210 1,092 362
Nameco (No. 321) Limited 74 321 134
Nameco (No. 917) Limited 569 1,449 573
Nameco (No. 229) Limited 42 355 110
Nameco (No. 518) Limited (17) (163) 34
Nameco (No. 804) Limited 298 - 1,429
Halperin Limited (184) - -
Nomina No 035 LLP - - -
Nomina No 342 LLP - - -
Nomina No 380 LLP - - -
Bernul Limited (263) - -
Nomina No 372 LLP - - -
Helios UTG Partner Limited 2,143 - 1,238
Total 3,744 6,493 5,273
---------------------------------------- ---------- ---------- ------------
The Limited Liability Vehicles are 100% subsidiaries of the
Company (either directly or indirectly) and have entered into a
management agreement with Nomina plc. Jeremy Evans, a Director of
Helios Underwriting plc and its subsidiary companies, is also a
director of Nomina plc. Under the agreement, Nomina plc provides
management and administration, financial, tax and accounting
services to the Group for an annual fee of GBP66,250 (2013:
GBP42,750).
The Limited Liability Vehicles have entered into a member's
agent agreement with Hampden Agencies Limited. Jeremy Evans, a
Director of Helios Underwriting plc and its subsidiary companies,
is also a director of Hampden Capital plc which controls Hampden
Agencies Limited. Under the agreement the Limited Liability
Vehicles will pay Hampden Agencies Limited a fee based on a fixed
amount, plus a fee which will vary depending upon the total level
of Group underwriting capacity. In addition, some Limited Liability
Vehicles will pay profit commission on a sliding scale from 1% of
the net profit up to a maximum of 10%. The total fees payable for
2014 and 2013 are set out below:
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
Company GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ------------
Hampden Corporate Member Limited 38 20 20
Nameco (No. 365) Limited 7 5 5
Nameco (No. 605) Limited 18 15 15
Nameco (No. 321) Limited 7 6 6
Nameco (No. 917) Limited 6 10 10
Nameco (No. 229) Limited 7 6 6
Nameco (No. 518) Limited 10 7 7
Nameco (No. 804) Limited 24 - 8
Halperin Limited 9 - 7
Nomina No 035 LLP 9 - 7
Nomina No 342 LLP 9 - 6
Nomina No 380 LLP 14 - -
Bernul Limited 10 - -
Nomina No 372 LLP 12 - -
Helios UTG Partner Limited - - -
---------------------------------- ---------- ---------- ------------
Total 180 69 97
---------------------------------- ---------- ---------- ------------
The Group has entered into a 50% quota share reinsurance
contract for the 2013 underwriting year of account and a 70% quota
share reinsurance contact for the 2014 underwriting year of account
with Hampden Insurance PCC (Guernsey) Limited, a company registered
in Guernsey.
Nigel Hanbury, a Director of Helios Underwriting plc and its
subsidiary companies, is also a director and majority shareholder
in Hampden Insurance PCC (Guernsey) Limited. Hampden Capital Plc, a
substantial shareholder in Helios Underwriting plc is also a
substantial shareholder in Hampden Insurance PCC (Guernsey)
Limited. Under the agreements, the Group accrued a net reinsurance
premium payable of GBP26,000 during the period. A total cumulative
amount owed to Hampden Insurance PCC (Guernsey) Limited of
GBP49,000 (2013: GBP22,000) has been recognised in the balance
sheet.
The underwriting year of account quota share reinsurance
contract that each group subsidiary participates in is detailed
below:
Company
------------------------- ----- -----
Hampden Corporate Member 2013 2014
Limited
Nameco (No. 365) Limited 2013 2014
Nameco (No. 605) Limited 2013 2014
Nameco (No. 321) Limited 2013 2014
Nameco (No. 917) Limited 2013 2014
Nameco (No. 229) Limited 2013 2014
Nameco (No. 518) Limited 2013 2014
Nameco (No. 804) Limited - 2014
Halperin Limited - 2014
Nomina No 035 LLP - 2014
Nomina No 342 LLP - 2014
Nomina No 380 LLP - 2014
Bernul Limited - 2014
Nomina No 372 LLP - 2014
13. Syndicate participations
The syndicates and members' agent pooling arrangements ("MAPA")
in which the Company's subsidiaries participate as corporate
members of Lloyd's are as follows:
Syndicate Allocated capacity
or Year of account
MAPA Number Managing or Members' Agent 2012 2013 2014
------------ ------------------------------- -------------- --------------- ---------------
33 Hiscox Syndicates Limited 754,377 754,377 1,524,940
Equity Syndicates Management
218 Limited 359,400 438,285 824,344
308 R.J. Kiln & Co Limited 73,125 70,000 84,528
386 QBE Underwriting Limited 179,894 179,894 493,385
510 RJ Kiln & Co. Limited 1,265,425 1,240,770 2,548,439
557 RJ Kiln & Co. Limited 767,556 308,582 446,063
609 Atrium Underwriters Limited 1,098,065 1,047,455 1,947,561
623 Beazley Furlonge Limited 727,450 859,870 2,103,700
S.A. Meacock & Company
727 Limited 375,222 375,222 457,055
ANV Syndicate Management
779 Limited 20,000 20,000 -
Canopius Managing Agency
958 Limited 416,434 327,200 466,880
1176 Chaucer Syndicates Limited 214,874 261,818 327,712
1200 Argo Managing Agency Limited 240,542 63,551 64,252
1729 Asta Managing Agency Limited - - 35,685
Cathedral Underwriting
2010 Limited 249,769 249,769 510,544
Pembroke Managing Agency
2014 Limited - - 925,079
Argenta Syndicate Management
2121 Limited 156,969 11,691 -
2525 Asta Managing Agency Limited 17,206 - 96,690
Managing Agency Partners
2791 Limited 1,415,120 1,471,095 2,430,679
ANV Syndicate Management
5820 Limited - 107,754 60,000
Managing Agency Partners
6103 Limited 332,500 405,307 392,320
6104 Hiscox Syndicates Limited 345,000 415,730 810,730
Ark Syndicate Management
6105 Limited 116,569 64,724 314,592
6106 Amlin Underwriting Limited 308,251 271,170 -
6107 Beazley Furlonge Limited 135,000 10,000 350,000
Pembroke Managing Agency
6110 Limited 393,302 879,892 -
Catlin Underwriting Agencies
6111 Limited 428,894 589,808 1,066,267
Barbican Managing Agency
6113 Limited - 30,000 20,000
6117 Asta Managing Agency Limited - - 963,112
Members' Agents Pooling
7200 Arrangement 455,323 455,302 151,688
Members' Agents Pooling
7201 Arrangement 2,318,974 2,318,948 762,204
Members' Agents Pooling
7202 Arrangement 828,123 828,098 275,470
Members' Agents Pooling
7203 Arrangement 108,289 108,262 47,678
Members' Agents Pooling
7211 Arrangement 5,439,354 5,439,337 687,749
Members' Agents Pooling
7217 Arrangement 95,912 95,911 95,913
Total 19,636,919 19,699,822 21,285,259
------------ ------------------------------- -------------- --------------- ---------------
14. Group owned net assets
The Group balance sheet includes the following assets and
liabilities held by the syndicates on which the Group participates.
The syndicate assets are subject to trust deeds for the benefit of
the relevant syndicates' insurance creditors. The table below shows
the split of the Group balance sheet between Group and syndicate
assets and liabilities.
30 June 2014 30 June 2013 31 December 2013
Group Syndicate Total Group Syndicate Total Group Syndicate Total
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
Assets
Intangible
assets 3,828 - 3,828 1,571 - 1,571 2,929 - 2,929
Deferred income - - - - - - - - -
tax
assets
Reinsurance
share
of insurance
liabilities
- Reinsurers'
share
of
outstanding
claims - 4,221 4,221 - 3,658 3,658 - 4,154 4,154
- Reinsurers'
share
of unearned
premiums - 1,637 1,637 - 1,379 1,379 - 800 800
Other
receivables,
including
insurance
receivables 774 13,664 14,438 386 8,899 9,285 793 10,761 11,554
Prepayments and
accrued
income 16 2,291 2,307 34 1,543 1,577 36 1,533 1,569
Financial
assets
at fair value 4,226 17,683 21,909 7,881 11,936 19,817 5,932 16,281 22,213
Cash and cash
equivalents 1,055 2,313 3,368 296 1,974 2,270 86 980 1,066
Total assets 9,899 41,809 51,708 10,168 29,389 39,557 9,776 34,509 44,285
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
Liabilities
Insurance
liabilities
- Claims
outstanding - 23,668 23,668 - 17,487 17,487 - 21,596 21,596
- Unearned
premiums - 9,415 9,415 - 6,694 6,694 - 5,968 5,968
Deferred income
tax
liabilities 1,603 - 1,603 978 - 978 1,656 - 1,656
Other payables,
including
insurance
payables 349 5,560 5,909 233 3,875 4,108 34 4,082 4,116
Accruals and
deferred
income 1,165 350 1,515 487 246 733 866 257 1,123
Current income - - - - - - - - -
tax
liabilities
Total
liabilities 3,117 38,993 42,110 1,698 28,302 30,000 2,556 31,903 34,459
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
Shareholders'
equity
Share capital 853 - 853 853 - 853 853 - 853
Share premium 6,996 - 6,996 6,996 - 6,996 6,996 - 6,996
Retained
earnings (1,066) 2,815 1,749 621 1,087 1,708 (629) 2,606 1,977
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
Total
shareholders'
equity 6,783 2,815 9,598 8,470 1,087 9,557 7,220 2,606 9,826
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
Total
liabilities
and
shareholders'
equity 9,900 41,808 51,708 10,168 29,389 39,557 9,776 34,509 44,285
---------------- -------- ---------- -------- -------- ---------- -------- -------- -------------- ----------
15. Events after the reporting period
Dumasco Limited
On 16 September 2014 Helios Underwriting plc acquired 100% of
the issued share capital of Dumasco Limited for a total
consideration of GBP2,500,000. No information is available at
present to accurately determine the fair value of the net assets
acquired. Dumasco Limited is incorporated in England and Wales and
is a corporate member of Lloyd's.
For further information please contact:
Helios Underwriting Nigel Hanbury nigel.hanbury@hampdenplc.com
Smith & Williamson Corporate
Finance David Jones 020 7131 4000
Robert Finlay
Westhouse Securities Darren Vickers 020 7601 6100
About HUW
HUW provides a limited liability direct investment into the
Lloyd's insurance market and is quoted on the London Stock
Exchange's AIM market (ticker: HUW). HUW's subsidiary underwriting
vehicles trade within the Lloyd's insurance market as corporate
members of Lloyd's writing GBP23 million of capacity for the 2014
account. The portfolio provides a good spread of classes of
business being concentrated in property insurance and reinsurance.
For further information please visit www.huwplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGZLVVMGDZM
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