TIDMHUW
RNS Number : 1597A
Helios Underwriting Plc
25 September 2015
25 September 2015
Helios Underwriting plc
("Helios Underwriting" or the "Company")
Interim results for the six months ended 30 June 2015
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
2015.
Financial results summary
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Gross premium written 11,942 10,183 17,062
Net earned premium 7,366 6,426 13,373
Net investment income 215 268 516
Other income - - 29
Net insurance claims and
loss adjustment expenses (4,469) (3,490) (5,915)
Operating expenses (3,039) (2,680) (6,773)
Goodwill and amortisation (325) (328) (96)
(Loss)/profit before tax (252) 196 1,134
(Loss)/profit attributable
to equity shareholders (226) 156 1,043
(Loss)/earnings per share (2.62p) 1.83p 12.23p
For further information please contact:
HUW nigel.hanbury@huwplc.com
Nigel Hanbury - Chief
Executive
Smith & Williamson Corporate
Finance
David Jones 020 7131 4000
Westhouse Securities
Robert Finlay 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 GBP27 million of capacity for the 2015
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.
Chairman's Statement
During the first half of 2015 we continued to implement our
strategy of building our portfolio of capacity through the purchase
of another four entities in exchange for cash and shares, plus two
further entities which were acquired post June 2015 in exchange for
shares. This brings our total 2015 acquisitions to six, increasing
the portfolio capacity by GBP6.3m in 2015 to date, an increase of
31%. We will continue to retain the risk on the mature underwriting
years on the capacity that we acquire in a financial year. We
believe that we can benefit from the improvements in profit
expectations by the underlying syndicates.
Our first half year figures have been affected by the increased
reinsurance expenditure on Stop Loss policies incurred in the first
half, which is consistent with our strategy of trading with lower
risk on the most recent open underwriting years. This is intended
to limit our exposure in the event of a major loss to less than 10%
of shareholder equity. The Group retains full exposure to changes
in open years of account on the entities acquired during the year,
which should help advance second half year profits.
Our quota share arrangement whereby 70% of the risk on the most
recent open years is ceded to reinsurers will continue into 2016
due to current market conditions. This provides the reinsurers with
access to Lloyds' capacity and the capital provided gives Helios
the flexibility to deploy its resources in building its
portfolio.
Having acquired some 19 vehicles since inception the Board has
examined the advantages of the consolidation of vehicles, and has
decided that Helios would be well served with just one trading
vehicle from the start of 2016. This will ease the administrative
burden as well as improving our capital ratios.
The Parent Company's adjusted net assets plus Humphrey & Co
valuation of the Group's underwriting subsidiaries at the period
end is GBP16.4m, up from GBP14.7m at December 2014. This equates to
GBP1.83 per share, up from GBP1.72.
Vehicles have recently sold at premiums to the Humphrey & Co
valuations, but there are still a significant number for sale which
may lead to more modest prices.
Sir Michael Oliver
Non-executive Chairman
24 September 2015
Condensed Consolidated Statement of Financial Position
At 30 June 2015
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
--------------------------------- ----- ---------- ---------- ------------
Assets
Intangible assets 4,868 3,828 3,770
Reinsurance share of
assets
- reinsurers' share of
claims outstanding 3 4,851 4,221 4,682
- reinsurers' share of
unearned premium 3 2,278 1,637 1,014
Other receivables, including
insurance receivables 19,040 14,438 16,379
Prepayments and accrued
income 3,114 2,307 2,067
Financial assets at fair
value 8 25,388 21,909 22,977
Cash and cash equivalents 5,127 3,368 3,605
Total assets 64,666 51,708 54,494
--------------------------------- ----- ---------- ---------- ------------
Liabilities
Insurance liabilities:
- claims outstanding 3 28,258 23,668 26,179
- unearned premium 3 12,368 9,415 8,005
Deferred income tax liabilities 2,331 1,603 2,137
Other payables, including
insurance payables 9,652 5,909 6,213
Accruals and deferred
income 1,652 1,515 1,475
Total liabilities 54,261 42,110 44,009
--------------------------------- ----- ---------- ---------- ------------
Shareholders' equity
Share capital 9 896 853 853
Share premium 9 7,556 6,996 6,996
Retained earnings 10 1,953 1,749 2,636
--------------------------------- ----- ---------- ---------- ------------
Total shareholders' equity 10,405 9,598 10,485
--------------------------------- ----- ---------- ---------- ------------
Total liabilities and
shareholders' equity 64,666 51,708 54,494
--------------------------------- ----- ---------- ---------- ------------
Condensed Consolidated Income Statement
Six months ended 30 June 2015
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
-------------------------------------- ----- ---------- ---------- -------------
Gross premium written 11,942 10,183 17,062
Reinsurance premium ceded (3,125) (2,008) (3,418)
-------------------------------------- ----- ---------- ---------- -------------
Net premiums written 8,817 8,175 13,644
Change in unearned gross
premium provision (2,369) (2,435) (243)
Change in unearned reinsurance
premium provision 918 686 (28)
-------------------------------------- ----- ---------- ---------- -------------
(1,451) (1,749) (271)
-------------------------------------- ----- ---------- ---------- -------------
Net earned premium 2 7,366 6,426 13,373
Net investment income 4 215 268 516
Other income - - 29
-------------------------------------- ----- ---------- ---------- -------------
Revenue 7,581 6,694 13,918
-------------------------------------- ----- ---------- ---------- -------------
Gross claims paid (4,843) (3,291) (7,435)
Reinsurance share of gross
claims paid 790 593 1,375
-------------------------------------- ----- ---------- ---------- -------------
Claims paid, net of reinsurance (4,053) (2,698) (6,060)
-------------------------------------- ----- ---------- ---------- -------------
Change in provision for
gross claims 403 (464) 464
Reinsurance share of change
in provision for gross claims (819) (328) (319)
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
-------------------------------------- ----- ---------- ---------- -------------
Net change in provision
for claims (416) (792) 145
-------------------------------------- ----- ---------- ---------- -------------
Net insurance claims and
loss adjustment expenses 2 (4,469) (3,490) (5,915)
Expenses incurred in insurance
activities 2 (2,703) (2,203) (5,800)
Other operating expenses 2 (336) (477) (973)
-------------------------------------- ----- ---------- ---------- -------------
Operating expenses (3,039) (2,680) (6,773)
-------------------------------------- ----- ---------- ---------- -------------
Operating profit before
goodwill 2 73 524 1,230
Goodwill on bargain purchase 11 196 115 785
Impairment of goodwill 11 (45) (5) -
Amortisation of syndicate
capacity (476) (438) (881)
-------------------------------------- ----- ---------- ---------- -------------
(Loss)/profit before tax (252) 196 1,134
Income tax credit/(charge) 5 26 (40) (91)
(Loss)/profit attributable
to equity shareholders 10 (226) 156 1,043
-------------------------------------- ----- ---------- ---------- -------------
(Loss)/earnings per share
attributable to equity shareholders
Basic and diluted 6 (2.62p) 1.83p 12.23p
-------------------------------------- ----- ---------- ---------- -------------
The (loss)/profit and earnings per share set out above are in
respect of continuing operations.
The accounting policies and notes are an integral part of these
Condensed Consolidated Interim Financial Statements.
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2015
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------------------------------- ---------- ---------- -------------
Cash flow from operating activities
Results of operating activities (252) 196 1,134
Interest received (2) (3) (2)
Investment income (191) (240) (435)
Goodwill on bargain purchase (196) (115) (785)
Impairment of goodwill 45 5 -
Profit on sale of intangible
assets - - (36)
Amortisation of intangible
assets 476 438 881
Change in fair value of investments 255 41 156
Changes in working capital:
* Decrease/(increase) in other receivables 1,261 (1,214) (706)
* Increase in other payables 1,883 978 1,164
* Net (decrease)/increase in technical provisions (797) 274 (109)
Income tax paid 2 (49) (33)
Net cash inflow/(outflow) from
operating activities 2,484 311 (1,229)
-------------------------------------------------------------- ---------- ---------- -------------
Cash flows from investing activities
Interest received 2 3 2
Investment income 191 240 435
Purchase of intangible assets - - (439)
Net inflow of financial assets
at fair value 1,822 3,749 5,122
Acquisition of subsidiary,
net of cash acquired (2,657) (1,617) (3,930)
Proceeds from disposal of intangible
assets - - 504
Net cash (outflow)/inflow from
investing activities (642) 2,375 1,694
-------------------------------------------------------------- ---------- ---------- -------------
Cash flows from financing activities
Dividends paid (320) (384) (384)
-------------------------------------------------------------- ---------- ---------- -------------
Net cash outflow from financing
activities (320) (384) (384)
-------------------------------------------------------------- ---------- ---------- -------------
Net increase in cash and cash
equivalents 1,522 2,302 2,539
Cash and cash equivalents at
beginning of period 3,605 1,066 1,066
Cash and cash equivalents at
end of period 5,127 3,368 3,605
-------------------------------------------------------------- ---------- ---------- -------------
The accounting policies and notes are an integral part of these
Condensed Consolidated Interim Financial Statements.
Condensed Statement of Changes in Shareholders' Equity
Six months ended 30 June 2015
For the six months ended 30 June 2015
Ordinary
share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- ---------- --------
At 1 January 2015 853 6,996 2,636 10,485
Loss for the period attributable
to equity shareholders - - (226) (226)
Dividends paid - - (457) (457)
New ordinary shares issued 43 560 - 603
At 30 June 2015 896 7,556 1,953 10,405
----------------------------------- --------- --------- ---------- --------
For the six months ended 30 June 2014
Ordinary
share Share Retained
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)
New ordinary shares issued - - - -
At 30 June 2014 853 6,996 1,749 9,598
------------------------------------- --------- --------- ---------- --------
For the twelve months ended 31 December 2014
Ordinary
share Share Retained
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 year attributable
to equity shareholders - - 1,043 1,043
Dividends paid - - (384) (384)
New ordinary shares issued - - - -
---------------------------------- --------- --------- ---------- --------
At 31 December 2014 853 6,996 2,636 10,485
----------------------------------- --------- --------- ---------- --------
The accounting policies and notes are an integral part of these
Condensed Consolidated Interim Financial Statements.
Notes to the Interim Financial Statements
Six months ended 30 June 2015
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 2015.
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
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, Dumasco Limited,
Nameco (No. 311) Limited, Nameco (No. 402) Limited, Updown
Underwriting Limited, Nameco (No. 507) 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 2015 and 2014 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 2014.
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 2014. The new
standards and amendments to standards and interpretations effective
after 1 January 2015, as disclosed in the Annual Report for the
year ended 31 December 2014, have not had a significant impact on
the Condensed Consolidated Interim Financial Statements at 30 June
2015.
2. Segmental information
The Group has three segments which represent the primary way in
which the Group is managed:
-- Syndicate participation;
-- Investment management;
-- Other corporate activities.
6 months ended Other
30 June 2015 Unaudited Syndicate Investment corporate
participation management activities Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------------- ------------ ------------ --------
Net earned premium 8,166 - (800) 7,366
Net investment
income 206 9 - 215
Other income - - - -
Net insurance claims
and loss adjustment
expenses (4,469) - - (4,469)
Expenses incurred
in insurance activities (2,420) - (283) (2,703)
Other operating
expenses - - (336) (336)
Goodwill on bargain
purchase - - 196 196
Impairment of goodwill - - (45) (45)
Amortisation of
syndicate capacity - - (476) (476)
Loss before tax 1,483 9 (1,744) (252)
-------------------------- --------------- ------------ ------------ --------
6 months ended Other
30 June 2014 Unaudited Syndicate Investment corporate
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
-------------------------- --------------- ------------ ------------ --------
12 months ended Other
31 December 2014 Syndicate Investment corporate
Audited participation management activities Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------------- ------------ ------------ --------
Net earned premium 13,838 - (465) 13,373
Net investment
income 473 43 - 516
Other income - - 29 29
Net insurance claims
and loss adjustment
expenses (5,915) - - (5,915)
Expenses incurred
in insurance activities (5,800) - - (5,800)
Other operating
expenses (87) - (886) (973)
Goodwill on bargain
purchase - - 785 785
Impairment of goodwill - - - -
Amortisation of
syndicate capacity - - (881) (881)
Profit before tax 2,509 43 (1,418) 1,134
-------------------------- --------------- ------------ ------------ --------
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 2015 other corporate activities
totalling GBP800,000 (2014: GBP76,000) includes the net Group quota
share reinsurance premium payable to Hampden Insurance PCC
(Guernsey) Limited - Cell 6 for the 2013, 2014 and 2015
underwriting years of account of GBP400,000 (2014: GBP26,000). Also
included is the stop loss premium payable to Hampden Insurance PCC
(Guernsey) Limited - Cell 7 for the 2015 underwriting year of
account of GBP181,000 (2014: GBP50,000), the Hampden aggregate stop
loss policy premium payable to Hampden Insurance PCC (Guernsey)
Limited - Cell 1 for the 2013, 2014 and 2015 underwriting years of
account of GBP212,000 (2014: GBPnil) and Chaucer Syndicate 1176
premium for the 2015 underwriting year of account of GBP7,000
(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 2015 26,179 4,682 21,497
Increase in reserves arising from acquisition of subsidiary undertaking 4,825 (845) 5,670
Movement of reserves (403) (819) 416
Other movements (2,343) 1,833 (4,176)
------------------------------------------------------------------------- -------- ------------ --------
At 30 June 2015 28,258 4,851 23,407
------------------------------------------------------------------------- -------- ------------ --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------- -------- ------------ --------
At 1 January 2015 8,005 1,014 6,991
Increase in reserves arising from acquisition of subsidiary undertaking 2,269 (421) 2,690
Movement of reserves 2,369 918 1,451
Other movements (275) 767 (1,042)
------------------------------------------------------------------------- -------- ------------ --------
At 30 June 2015 12,368 2,278 10,090
------------------------------------------------------------------------- -------- ------------ --------
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
Included within other movements are the 2012 and prior years'
reinsured into the 2013 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
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------- ---------- ---------- -------------
Investment income 191 240 435
Realised gains on financial
investments at fair value
through income statement 193 2 279
Unrealised (losses)/gains
on financial investments
at fair value through
income statement (171) 23 (156)
Investment management
expenses - - (44)
Bank interest 2 3 2
----------------------------- ---------- ---------- -------------
Net investment income 215 268 516
----------------------------- ---------- ---------- -------------
5. Income tax expense
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------- ---------- ---------- -------------
Income tax credit/(expense) 26 (40) (91)
----------------------------- ---------- ---------- -------------
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% (2014: 21.49%). 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
2015 2014 2014
Unaudited Unaudited Audited
(Loss)/profit for the (GBP226,000) GBP156,000 GBP1,043,000
period
---------------------------- ------------- ----------- -------------
Weighted average number
of shares in issue 8,640,938 8,526,948 8,526,948
---------------------------- ------------- ----------- -------------
Basic and diluted earnings
per share (p) (2.62p) 1.83p 12.23p
---------------------------- ------------- ----------- -------------
7. Dividends
During the period a dividend of 5.1p per share (2014: 4.5p per
share) was paid totalling GBP457,000 (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 2015, the Group held GBP20,817,000 (31 December
2014: GBP19,742,000) Level 1 Financial Assets and GBP4,571,000 (31
December 2014: GBP3,235,000) Level 2 Financial Assets. The Group
has no Level 3 investments (31 December 2014: GBPnil).
9. Share capital and share premium
Ordinary
share Share
Allotted, called up and fully capital premium Total
paid GBP'000 GBP'000 GBP'000
------------------------------------------ --------- --------- ---------
8,526,948 ordinary shares of 10p
each and share premium at 30 June
2014 853 6,996 7,849
8,526,948 ordinary shares of 10p
each and share premium at 31 December
2014 853 6,996 7,849
8,956,787 ordinary shares of 10p
each and share premium at 30 June
2015 896 7,556 8,452
------------------------------------------ --------- --------- ---------
10. Retained earnings
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
---------------------------- ---------- ---------- ------------
At 1 January 2,636 1,977 1,977
(Loss)/profit attributable
to equity shareholders (226) 156 1,043
Dividends paid (457) (384) (384)
---------------------------- ---------- ---------- ------------
At 30 June 2015 1,953 1,749 2,636
---------------------------- ---------- ---------- ------------
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:
Nameco (No. 311) Limited
On 8 January 2015 Helios Underwriting plc acquired 100% of the
issued share capital of Nameco (No. 311) Limited for a total
consideration of GBP926,000. Nameco (No. 311) Limited is
incorporated in England and Wales and is a corporate member of
Lloyd's.
The acquisition has been accounted for using the acquisition
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 GBP982,000. Negative goodwill of GBP56,000 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 4 328 332
Reinsurance assets:
- reinsurers' share of claims
outstanding 190 - 190
- reinsurers' share of unearned
premium 96 - 96
Other receivables, including
insurance receivables 1,014 172 1,186
Prepayments and accrued income 112 - 112
Financial assets at fair value 907 - 907
Cash and cash equivalents 234 - 234
Insurance liabilities:
- claims outstanding (1,029) - (1,029)
- unearned premium (506) - (506)
Deferred income tax liabilities (72) (100) (172)
Other payables, including
insurance payables (323) - (323)
Accruals and deferred income (45) - (45)
--------------------------------- --------- ------------ -----------
Net assets acquired 582 400 982
--------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 926 - 926
--------------------------------- --------- ------------ -----------
Negative goodwill 344 (400) (56)
--------------------------------- --------- ------------ -----------
Nameco (No. 402) Limited
On 20 February 2015 Helios Underwriting plc acquired 100% of the
issued share capital of Nameco (No. 402) Limited for a total
consideration of GBP823,000. Nameco (No. 402) Limited is
incorporated in England and Wales and is a corporate member of
Lloyd's.
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
The acquisition has been accounted for using the acquisition
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 GBP778,000. Goodwill of GBP45,000 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 1 346 347
Reinsurance assets:
- reinsurers' share of claims
outstanding 166 - 166
- reinsurers' share of unearned
premium 78 - 78
Other receivables, including
insurance receivables 752 265 1,017
Prepayments and accrued income 95 - 95
Financial assets at fair value 881 - 881
Cash and cash equivalents 60 - 60
Insurance liabilities:
- claims outstanding (973) - (973)
- unearned premiums (437) - (437)
Deferred income tax liabilities (75) (122) (197)
Other payables, including
insurance payables (213) - (213)
Accruals and deferred income (46) - (46)
--------------------------------- --------- ------------ -----------
Net assets acquired 289 489 778
--------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 823 - 823
--------------------------------- --------- ------------ -----------
Goodwill 534 (489) 45
--------------------------------- --------- ------------ -----------
Updown Underwriting Limited
On 13 March 2015 Helios Underwriting plc acquired 100% of the
issued share capital of Updown Underwriting Limited for a total
consideration of GBP1,202,000. Updown Underwriting Limited is
incorporated in England and Wales and is a corporate member of
Lloyd's.
The acquisition has been accounted for using the acquisition
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 GBP1,259,000. Negative goodwill of GBP57,000 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 - 411 411
Reinsurance assets:
- reinsurers' share of claims
outstanding 186 - 186
- reinsurers' share of unearned
premium 76 - 76
Other receivables, including
insurance receivables 1,307 - 1,307
Prepayments and accrued income 84 - 84
Financial assets at fair value 1,037 - 1,037
Cash and cash equivalents 149 - 149
Insurance liabilities:
- claims outstanding (1,111) - (1,111)
- unearned premiums (414) - (414)
Deferred income tax liabilities (106) (82) (188)
Other payables, including
insurance payables (230) - (230)
Accruals and deferred income (48) - (48)
--------------------------------- --------- ------------ -----------
Net assets acquired 930 329 1,259
--------------------------------- --------- ------------ -----------
Satisfied by:
Cash 600 - 600
Shares issued by the company 602 - 602
--------------------------------- --------- ------------ -----------
Negative goodwill 272 (329) (57)
--------------------------------- --------- ------------ -----------
Nameco (No. 507) Limited
On 12 June 2015 Helios Underwriting plc acquired 100% of the
issued share capital of Nameco (No. 507) Limited for a total
consideration of GBP900,000. Nameco (No. 507) Limited is
incorporated in England and Wales and is a corporate member of
Lloyd's.
The acquisition has been accounted for using the acquisition
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 GBP983,000. Negative goodwill of GBP83,000 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 26 463 489
Reinsurance assets:
- reinsurers' share of claims
outstanding 303 - 303
- reinsurers' share of unearned
premium 171 - 171
Other receivables, including
insurance receivables 1,408 161 1,569
Prepayments and accrued income 226 - 226
Financial assets at fair value 1,429 - 1,429
Cash and cash equivalents 150 - 150
Insurance liabilities:
- claims outstanding (1,712) - (1,712)
- unearned premiums (912) - (912)
Deferred income tax liabilities (124) (125) (249)
Other payables, including
insurance payables (422) - (422)
Accruals and deferred income (59) - (59)
--------------------------------- --------- ------------ -----------
Net assets acquired 484 499 983
--------------------------------- --------- ------------ -----------
Satisfied by:
Cash and cash equivalents 900 - 900
--------------------------------- --------- ------------ -----------
Negative goodwill 416 (499) (83)
--------------------------------- --------- ------------ -----------
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 2015 are set out below:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Company GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ------------
Balances due from/(to) Group
companies at the period end:
Hampden Corporate Member Limited 335 807 562
Nameco (No. 365) Limited 50 65 58
Nameco (No. 605) Limited (118) 210 199
Nameco (No. 321) Limited (35) 74 5
Nameco (No. 917) Limited 221 569 217
Nameco (No. 229) Limited 13 42 62
Nameco (No. 518) Limited (33) (17) (5)
Nameco (No. 804) Limited 99 298 405
Halperin Limited (48) (184) 15
Bernul Limited (33) (263) 195
Dumasco Limited (24) - 472
Nameco (No. 311) Limited (181) - -
Nameco (No. 402) Limited (241) - -
Updown Underwriting Limited (197) - -
Nameco (No. 507) Limited - - -
Nomina No 035 LLP - - -
Nomina No 342 LLP - - -
Nomina No 372 LLP - - -
Nomina No 380 LLP - - -
Helios UTG Partner Limited 1,776 2,143 1,772
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
Total 1,584 3,744 3,957
---------------------------------- ---------- ---------- ------------
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 GBP108,000 (2014:
GBP66,000).
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
2015 and 2014 are set out below:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Company GBP'000 GBP'000 GBP'000
----------------------------- ---------- ---------- ------------
Hampden Corporate Member
Limited 43 38 38
Nameco (No. 365) Limited 11 7 7
Nameco (No. 605) Limited 36 18 18
Nameco (No. 321) Limited 14 7 7
Nameco (No. 917) Limited 7 6 6
Nameco (No. 229) Limited 10 7 7
Nameco (No. 518) Limited 18 10 10
Nameco (No. 804) Limited 32 24 24
Halperin Limited 14 9 9
Bernul Limited 9 10 6
Dumasco Limited - - 11
Nameco (No. 311) Limited 17 - -
Nameco (No. 402) Limited 18 - -
Updown Underwriting Limited 1 - -
Nameco (No. 507) Limited 26 - -
Nomina No 035 LLP 14 9 9
Nomina No 342 LLP 14 9 9
Nomina No 380 LLP 13 14 14
Nomina No 372 LLP 16 12 12
Helios UTG Partner Limited - - -
----------------------------- ---------- ---------- ------------
Total 313 180 187
----------------------------- ---------- ---------- ------------
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 and 2015 underwriting years
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 GBP400,000 during the period. A total cumulative
amount owed to Hampden Insurance PCC (Guernsey) Limited of
GBP886,000 (31 December 2014: GBP486,000) 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 2013 2014 2015
Member Limited
Nameco (No. 365) Limited 2013 2014 2015
Nameco (No. 605) Limited 2013 2014 2015
Nameco (No. 321) Limited 2013 2014 2015
Nameco (No. 917) Limited 2013 2014 2015
Nameco (No. 229) Limited 2013 2014 2015
Nameco (No. 518) Limited 2013 2014 2015
Nameco (No. 804) Limited - 2014 2015
Halperin Limited - 2014 2015
Bernul Limited - 2014 2015
Nomina No 035 LLP - 2014 2015
Nomina No 342 LLP - 2014 2015
Nomina No 380 LLP - 2014 -
Nomina No 372 LLP - 2014 2015
Dumasco Limited - - -
Nameco (No. 311) Limited - - 2015
Nameco (No. 402) Limited - - 2015
Updown Underwriting - - 2015
Limited
Nameco (No. 507) Limited - - -
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
Managing or Members' 2013 2014 2015
MAPA Number Agent
------------ --------------------------- ------------- ----------- -----------
Hiscox Syndicates
33 Limited 1,017,000 1,801,387 2,006,809
Equity Syndicates
218 Management Limited 770,066 1,156,125 1,000,192
308 R.J. Kiln & Co Limited 70,000 84,528 84,528
QBE Underwriting
386 Limited 284,386 624,877 622,220
510 RJ Kiln & Co. Limited 2,363,455 3,671,124 4,009,770
557 RJ Kiln & Co. Limited 316,109 453,590 488,331
Atrium Underwriters
609 Limited 1,129,982 2,030,088 2,276,231
Beazley Furlonge
623 Limited 1,214,571 2,486,682 2,615,026
S.A. Meacock & Company
727 Limited 519,378 601,211 628,634
ANV Syndicate Management
779 Limited 20,000 - -
Canopius Managing
958 Agency Limited 474,378 583,955 123,765
Chaucer Syndicates
1176 Limited 340,939 406,833 440,933
Argo Managing Agency
1200 Limited 157,370 158,071 93,819
Asta Managing Agency
1729 Limited - 88,432 52,747
Cathedral Underwriting
2010 Limited 442,247 703,022 691,381
Pembroke Managing
2014 Agency Limited - 1,152,199 1,051,182
Argenta Syndicate
2121 Management Limited 67,037 96,415 96,415
Asta Managing Agency
2525 Limited - 96,690 114,698
Managing Agency
2791 Partners Limited 2,446,787 3,289,868 3,153,582
ANV Syndicate Management
5820 Limited 224,170 220,259 160,259
Managing Agency
6103 Partners Limited 550,173 499,546 201,189
Hiscox Syndicates
6104 Limited 591,224 1,016,224 1,017,998
Ark Syndicate Management
6105 Limited 95,296 447,192 465,932
Amlin Underwriting
6106 Limited 346,805 - -
Beazley Furlonge
6107 Limited 32,500 372,500 372,500
Pembroke Managing
6110 Agency Limited 1,042,507 - -
Catlin Underwriting
6111 Agencies Limited 688,475 1,197,928 1,277,613
Barbican Managing
6113 Agency Limited 67,328 67,328
Asta Managing Agency
6117 Limited - 1,122,567 745,785
Members' Agents
7200 Pooling Arrangement 533,339 229,690 75,199
Members' Agents
7201 Pooling Arrangement 2,721,726 1,164,942 384,686
Members' Agents
7202 Pooling Arrangement 969,857 417,197 134,665
Members' Agents
7203 Pooling Arrangement 206,642 146,016 93,572
Members' Agents
7211 Pooling Arrangement 5,545,064 793,462 101,068
Members' Agents
7217 Pooling Arrangement 177,460 177,460 199,640
Members' Agents
7227 Pooling Arrangement - - 31,448
Total 25,426,271 27,357,408 24,811,817
(MORE TO FOLLOW) Dow Jones Newswires
September 25, 2015 02:00 ET (06:00 GMT)
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