TIDMHUW
RNS Number : 4562N
Helios Underwriting Plc
30 September 2021
30 September 2021
Helios Underwriting plc
("Helios" or the "Company")
Interim Results for the Six Months Ended 30 June 2021
Helios Underwriting plc, the unique investment vehicle that
acquires and consolidates underwriting capacity at Lloyd's,
announces its unaudited results for the six months ended 30 June
2021, a half year in which Helios completed its successful
fundraising and continued its strategy of driving portfolio growth
and shareholder value.
Chairman's statement
Six months ended 30 June 2021
Nigel Hanbury, Chief Executive, provides the following
overview:
"Whilst these interim results have yet to reflect the
improvement in syndicate profitability following cumulative rate
increases of an average of 51% since January 2018, Helios' strategy
to generate growth and shareholder returns is firmly on track.
"We have completed or have agreed terms for the acquisition of
28 Limited Liability Vehicles with capacity of, in aggregate,
GBP33m for 2021 underwriting year for a total outlay of GBP38m. The
continued improvement in current market conditions have opened up
an exciting window of opportunity for Helios. The improvement in
underwriting conditions over 4 years will provide a platform for
better prospects for underwriting margins over the next few years,
and we are confident of a strong performance in the remainder of
the year."
SUMMARY FINANCIAL INFORMATION
6 months to 30(th) Year to 31(st)
June December
2021 2020 2020
GBP000's GBP000's GBP000's
Underwriting profits 1,102 154 639
Other income 526 850 2,887
Costs (2,108) (1,112) (3,190)
---------- ----------- ---------------
Operating (loss)/profit for the period
before impairment (480) (108) 336
---------- ----------- ---------------
(Loss)/profit after tax (2,319) (96) 301
Earnings per share (3.88p) (0.55p) 1.59p
Net Tangible Asset Value per Share GBP1.46 GBP1.90 ( GBP1.51
restated)
-- Operating loss is GBP480,000 (30 June 2020 - a loss of GBP108,000)
-- The underwriting profits have recovered following the losses
arising from the Covid-19 coronavirus pandemic in 2020
-- The cumulative premium rate increase achieved by underwriters
since 1(st) January 2018 is 51%, which together with greater
discipline encouraged by the Franchise Board at Lloyd's, has
improved the prospects for profitable underwriting
-- The Net Tangible Asset Value per share is GBP1.46 per share
(31(st) December 2020 - GBP1.51 per share)
-- Net Tangible Asset Value per share has been impacted by the
increase in the rate of corporation tax to 25%.
The underwriting profits have recovered following the losses
arising from the Covid-19 coronavirus pandemic in 2020. Both the
2019 and 2020 underwriting years have contributed to the result as
confidence in the reserves required for the Covid-19 losses have
improved and as the profits from the balance of the portfolio start
to be recognised. The contribution from the 2021 underwriting year
is an initial loss following the winter storms in the USA and as
Helios has increased its retained capacity to 54% of the portfolio,
this small loss has had a greater impact on the overall result.
The positive momentum in both insurance and reinsurance pricing
for many years has continued into 2021. The improvement in
underwriting conditions over 4 years will provide a platform for
better prospects for underwriting margins over the next few years.
. Cumulative rate increases since 1(st) January 2018 are 51%. We
have been advised of further pre-emptions of approximately GBP6.0m
of capacity (2020 - GBP9.5m) from our supported syndicates to take
advantage of improved market conditions.
Acquisition of LLV's
Following the capital raise in April 2021, we have been active
in agreeing terms for the acquisition of Limited Liability Vehicles
(LLV's). We have completed 8 acquisitions to date and have agreed
terms with a further 20 LLV's where completion is subject, inter
alia, to regulatory approval. The aggregate of the capacity,
consideration and total outlay for the LLV's agreed and completed
transactions to date are as follows:
GBPm
Consideration 24.6
Vendor Underwriting Capital
replaced 13.7
Total Outlay 38.3
-----
Humphrey Valuation 26.2
Consideration as a Discount
to Valuation 6.2%
These acquisitions have increased the capacity retained by
Helios for the 2021 underwriting year to 64% of the portfolio, an
increase of 20% so far in 2021.
Capacity by Year
of Account
GBPm 2021 2020 2019
Capacity as 1st Jan 2021 110.3 80.0 70.3
Capacity Acquired 33.0* 34.2* 34.8*
------ ------ ------
Total Current Capacity
by year of account 143.3 114.2 105.1
------ ------ ------
Capacity reinsured 51.5 49.1 39.0
Helios Retained Capacity 91.7 65.0 66.2
Helios Retained Capacity
- % 64% 57% 63%
*Acquired post 30 June 2021
Helios has received preliminary indications of pre-emptions for
2022 year of account from the syndicates supported, which are
subject to approval by Lloyd's, which together with the capacity
acquired will increase the capacity portfolio for 2022 year of
account to GBP151m - an increase of 37%.
The value of the capacity portfolio, using the 2020 weighted
average prices, including the value of the capacity acquired and
the value of the expected pre-emptions for 2022 (using the 2020
weighted average capacity prices) has increased to GBP46m - an
increase of 50%
Capacity
GBPm 2021 Capacity Value
2021 YOA as at 1st January
2021 110.3 30.8
Expected Pre-emptions 6.3 1.2
Capacity Acquired / agreed
terms 33.0 13.5
Expected Pre-emptions 1.8 0.6
Total 151.4 46.1
============== =========
Our strategy of building a portfolio of syndicate capacity
continues to rely on the flow of LLVs for sale at reasonable
prices. The discounts achieved to the Humphrey Valuations have
decreased as both Vendor expectations of future value have
increased and as other purchasers have realised the value of the
potential future profitability of these capacity portfolios.
The exposure on the 2021 open underwriting year as at 1st
January 2021 has been reduced by 46% through quota share
reinsurance. The quota share reinsurers fund their share of the
capital requirements and pay Helios a fee and a profit commission.
The reinsurance costs have increased as GBP7.6m of additional
underwriting capital has been sourced through a reinsurance
contract at a cost of GBP0.8m. In addition the stop loss for the
Helios retained capacity continues to be bought which has a 10%
indemnity to protect the Group from a loss excess of 5% loss for
the 2021 underwriting year.
The Net Tangible Asset Value per share is GBP1.46p per share
(Dec 2020 - GBP1.51p per share). The tax charge includes an
increased provision for deferred tax of GBP1.8m (3p per share) on
the value of the capacity portfolio following the increase in the
corporation tax to 25%. The total deferred tax provision on the
capacity value has increased to GBP7.0m representing 10p per share
of net asset value. It is expected that there will continue to be
demand for the top syndicates that make up a significant proportion
of the Helios Capacity Fund at the Lloyds Capacity Auctions that
take place later this year.
Helios Underwriting plc
Nigel Hanbury - Chief Executive +44 (0)7787 530 404 / nigel.hanbury@huwplc.com
Arthur Manners - Chief Financial Officer +44 (0)7754 965 917
Shore Capital
Robert Finlay +44 (0)20 7601 6100
David Coaten
Willis Re Securities (Financial Adviser)
Alastair Rodger +44 (0)20 3124 6033
Buchanan
Helen Tarbet / Henry Wilson / George Beale +44 (0)7872 604 453
+44 (0)20 7466 5111
About Helios
Helios 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). Helios trades within the
Lloyd's insurance market writing approximately GBP110m of capacity
for the 2021 account. The portfolio provides a good spread of
business being concentrated in property insurance and reinsurance.
For further information please visit www.huwplc.com .
Financial results summary
Six months ended 30 June 2021
6 months to 6 months to 30 Year to 31 December
30 June 2021 June 2020 2020
Underwriting profits 1,102 154 639
Other Income -
Fees from reinsurers 474 400 334
Corporate reinsurance recoveries 14 202 (282)
Goodwill on bargain purchase - 172 1,260
Investment income 38 76 1,575
Total Other Income 526 850 2,887
Costs
Pre - acquisition - (9) (92)
Stop loss costs (968) (181) (1,097)
Operating costs (1,140) (922) (2,001)
Total Costs (2,108) (1,112) (3,190)
Operating profit before
impairments of goodwill
and capacity (480) (108) 336
Impairment charge for - - -
capacity
Tax (1,839) 12 (35)
Profit for the period/year (2,319) (96) 301
============== =============== ====================
Period to 30(th) June 2021
Helios retained
capacity at Helios
30 June 2021 Portfolio mid Profits
Underwriting Year GBPm point forecasts GBP'000
2019 31.3 0.01% 1,062
2020 30.8 0.98% 984
2021 58.7 - (944)
------------------ --------------- ---------------- --------
1,102
------------------ --------------- ---------------- --------
Period to 30(th) June 2020
Helios retained
capacity at Helios
30 June 2020 Portfolio mid Profits
Underwriting Year GBPm point forecasts GBP'000
------------------ --------------- ---------------- --------
2018 27.6 (3.10%) 439
2019 23.3 (1.60%) 101
2020 21.1 - (386)
------------------ --------------- ---------------- --------
154
------------------ --------------- ---------------- --------
Year to 31 December 2020
Helios retained
capacity at
31 December Helios
2020 Portfolio mid Profits
Underwriting Year GBPm point forecasts GBP'000
------------------ --------------- ---------------- --------
2018 36.1 (0.30)% 1,691
2019 31.3 (2.20)% 338
2020 30.8 - (1,391)
------------------ --------------- ---------------- --------
639
------------------ --------------- ---------------- --------
Summary Balance Sheet
The summary Group balance sheet excludes items relating to
syndicate participations. See Note 15 for further information.
6 Months to June 2021 6 Months to June 2020 Year to 31 December 2020
GBP'000 GBP'000 GBP'000
------------------ --------------------- ----------------------- ------------------------
Intangible assets 31,601 21,655 31,601
Funds at Lloyd's 18,543 8,989 19,713
Other cash 52,272 1,156 4,961
Other assets 12,385 8,179 12,731
------------------ --------------------- ----------------------- ------------------------
Total assets 114,801 39,979 69,006
------------------ --------------------- ----------------------- ------------------------
Deferred tax 8,546 3,686 6,492
Borrowings - 2,000 4,000
Other liabilities 3,409 1,118 2,222
------------------ --------------------- ----------------------- ------------------------
Total liabilities 11,955 6,804 12,714
------------------ --------------------- ----------------------- ------------------------
Syndicate equity (3,573) (5,123) (5,743)
------------------ --------------------- ----------------------- ------------------------
Total equity 99,273 28,052 50,549
------------------ --------------------- ----------------------- ------------------------
Summary Group Cash Flow
The summary group cash flow sheet excludes items relating to
syndicate participations. See Note 15 for further information.
6 months to 6 months to 30 Year to 31 December
30 June 2021 June 2020 2020
GBP'000 GBP'000 GBP'000
Opening Balance (free cash) 4,961 3,028 3,028
Income
Acquired on acquisition - 280 632
Distribution of profits (net
of tax retentions) 365 54 120
Transfers from Funds at Lloyds' 224 4,252 4,901
Investment income 5 28 248
Other income - - 1,649
Issue of new ordinary shares 53,231 - 11,283
Borrowings - 2,000 2,000
Expenditure
Operating costs (inc Hampden
/ Nomina fees) (933) (406) (2,810)
Reinsurance Cost (1,025) (353) -
Acquisition of LLV's - (4,875) (6,075)
Transfers to Funds at Lloyds' (8) (750) (9,733)
Tax (548) (102) (282)
Dividends paid - - -
Revolving credit facility
repayment (4,000) (2,000) -
Share buy backs - - -
Closing balance 52,272 1,156 4,961
-------------- --------------- --------------------
Net Tangible Asset per share
6 months 6 months Year to 31
to 30 June to 30 June December
2021 2020 2020
GBP'000 GBP'000 GBP'000
(restated)
Net tangible assets 67,642 6,397 18,948
Group letters of
credit - - -
Value of capacity
(WAV) 30,826 26,827 30,826
------------ ------------ -----------
98,468 33,224 49,774
------------ ------------ -----------
Shares in issue
- on the market 67,254 17,478 33,012
Shares in issue
- total of on the
market and JSOP
shares 67,754 17,978 33,512
Net tangible asset
value per share
GBP - on the market 1.46 1.90 1.51
Net tangible asset
value per share
GBP - on the market
and JSOP shares 1.45 1.85 1.49
Interim condensed consolidated statement of comprehensive
income
Six months ended 30 June 2021
6 months
ended 6 months 12 months
30 June ended 30 ended
2021 June 2020 31 December
Unaudited Unaudited 2020 Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------------------- ----- ---------- ---------- -------------
Gross premium written 4 53,351 36,950 68,263
Reinsurance premium ceded (17,107) (11,575) (17,660)
------------------------------------------------------- ----- ---------- ---------- -------------
Net premium written 4 36,244 25,375 50,603
------------------------------------------------------- ----- ---------- ---------- -------------
Change in unearned gross premium provision 5 (15,678) (7,700) (2,481)
Change in unearned reinsurance premium provision 5 6,141 3,837 647
------------------------------------------------------- ----- ---------- ---------- -------------
5 (9,537) (3,863) (1,834)
------------------------------------------------------- ----- ---------- ---------- -------------
Net earned premium 3,4 26,707 21,512 48,769
Net investment income 6 185 1,174 2,006
Other underwriting income 476 400 420
Gain on bargain purchase 12 - 172 1,260
Other income 30 - 1,399
------------------------------------------------------- ----- ---------- ---------- -------------
Revenue 27,398 23,258 53,845
------------------------------------------------------- ----- ---------- ---------- -------------
Gross claims paid (19,108) (16,380) (38,496)
Reinsurers' share of gross claims paid 4,946 3,784 9,967
------------------------------------------------------- ----- ---------- ---------- -------------
Claims paid, net of reinsurance (14,162) (12,596) (28,529)
------------------------------------------------------- ----- ---------- ---------- -------------
Change in provision for gross claims 5 (2,118) (5,927) (8,255)
Reinsurers' share of change in provision for gross
claims 5 (156) 2,162 2,704
------------------------------------------------------- ----- ---------- ---------- -------------
Net change in provision for claims 5 (2,274) (3,765) (5,551)
------------------------------------------------------- ----- ---------- ---------- -------------
Net insurance claims and loss adjustment expenses 4 (16,436) (16,361) (34,080)
------------------------------------------------------- ----- ---------- ---------- -------------
Expenses incurred in insurance activities (10,665) (6,166) (17,916)
Other operating expenses (777) (839) (1,522)
------------------------------------------------------- ----- ---------- ---------- -------------
Operating expenses (11,442) (7,005) (19,438)
------------------------------------------------------- ----- ---------- ---------- -------------
Operating (loss)/profit before impairments of goodwill
and capacity 4 (480) (108) 336
Impairment of goodwill - - -
Impairment of syndicate capacity - - -
------------------------------------------------------- ----- ---------- ---------- -------------
(Loss)/profit before tax (480) (108) 336
Income tax charge 7 (112) 12 (35)
Income and deferred tax charge as a result of change
in tax rates 7 (1,727) - -
(Loss)/Profit for the period (2,319) (96) 301
------------------------------------------------------- ----- ---------- ---------- -------------
Other comprehensive income
Foreign currency translation differences - - -
Revaluation of syndicate capacity - - 5,604
Deferred tax relating to change in tax rates on
revaluation of capacity (340) - (1,622)
------------------------------------------------------- ----- ---------- ---------- -------------
Other comprehensive (loss)/income for the period,
net of tax (340) - 3,982
------------------------------------------------------- ----- ---------- ---------- -------------
Total other comprehensive (loss)/income for the
period (2,659) (96) 4,283
------------------------------------------------------- ----- ---------- ---------- -------------
(Loss)/profit for the period attributable to owners
of the Parent (2,659) (96) 301
------------------------------------------------------- ----- ---------- ---------- -------------
Total comprehensive (loss)/income for the period
attributable to owners of the Parent (2,659) (96) 4,283
------------------------------------------------------- ----- ---------- ---------- -------------
(Loss)earnings per share attributable to owners
of the Parent
Basic 8 -3.88p -0.55p 1.59p
Diluted 8 -3.82p -0.52p 1.55p
------------------------------------------------------- ----- ---------- ---------- -------------
The profit attributable to owners of the Parent and earnings per
share set out above are in respect of continuing operations.
The notes are an integral part of these Financial
Statements.
Interim condensed consolidated statement of financial
position
Six months ended 30 June 2021
6 months
ended 6 months 12 months
30 June ended 30 ended
2021 June 2020 31 December
Unaudited Unaudited 2020 Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------------------- ----- ---------- ---------- -------------
Assets
Intangible assets 31,601 21,655 31,601
Financial assets at fair value through profit or
loss 83,047 64,143 85,277
Reinsurance assets:
- reinsurers' share of claims outstanding 5 32,800 28,141 30,781
- reinsurers' share of unearned premium 5 10,694 9,195 6,028
Other receivables, including insurance and reinsurance
receivables 66,227 52,799 58,348
Deferred acquisition costs 8,119 6,853 7,726
Prepayments and accrued income 1,633 882 1,176
Cash and cash equivalents 62,143 8,501 8,495
------------------------------------------------------- ----- ---------- ---------- -------------
Total assets 296,264 192,169 229,432
------------------------------------------------------- ----- ---------- ---------- -------------
Liabilities
Insurance liabilities:
- claims outstanding 5 115,559 99,758 113,371
- unearned premium 5 42,974 35,961 32,356
Deferred income tax liabilities 8,546 3,686 6,507
Borrowings - 2,000 4,000
Other payables, including insurance and reinsurance
payables 25,640 20,841 19,356
Accruals and deferred income 4,272 1,871 3,293
------------------------------------------------------- ----- ---------- ---------- -------------
Total liabilities 196,991 164,117 178,883
------------------------------------------------------- ----- ---------- ---------- -------------
Equity
Equity attributable to owners of the Parent:
Share capital 11 6,817 1,839 3,393
Share premium 11 85,502 18,938 35,525
Revaluation reserve 3,642 - 3,982
Other reserves - treasury shares 11 (50) (50) (50)
Retained earnings 3,362 7,325 7,699
------------------------------------------------------- ----- ---------- ---------- -------------
Total equity 99,273 28,052 50,549
------------------------------------------------------- ----- ---------- ---------- -------------
Total liabilities and equity 296,264 192,169 229,432
------------------------------------------------------- ----- ---------- ---------- -------------
The Financial Statements were approved and authorised for issue
by the Board of Directors on 29 September 2021, and were signed on
its behalf by:
Nigel Hanbury
Chief Executive
The notes are an integral part of these Financial
Statements.
Interim condensed consolidated statement of changes in
equity
Six months ended 30 June 2021
Attributable to owners
of the Parent
-------------------------------------------------------
Note Share Share Revaluation Other Retained
capital premium reserve reserves earnings Total
Consolidated GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
At 1 January 2021 3,393 35,525 3,982 (50) 7,699 50,549
Total comprehensive income for - -
the year: - - - -
Loss for the year - - - - (2,319) (2,319)
Other comprehensive income, net
of tax - - (340) - - (340)
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total comprehensive income for
the year - - (340) - (2,319) (2,659)
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Transactions with owners: - - - - - -
Dividends paid 9 - - - - (2,018) (2,018)
Company buy back of shares 11 - - - - - -
Share issue 3,424 49,977 - - - 53,401
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total transactions with owners 3,424 49,977 - - (2,018) 51,383
At 30 June 2021 6,817 85,502 3,642 (50) 3,362 99,273
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
At 1 January 2020 1,839 18,938 - (50) 7,421 28,148
Total comprehensive income for - -
the year: - - - -
Loss for the year - - - - (96) (96)
Other comprehensive income, net - -
of tax - - - -
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total comprehensive income for
the year - - - - (96) (96)
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Transactions with owners: - - - - - -
Dividends paid - - - - - -
Share issue - - - - - -
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total transactions with owners - - - - - -
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
At 30 June 2020 1,839 18,938 - (50) 7,325 28,052
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
At 1 January 2020 1,839 18,938 - (50) 7,421 28,148
Total comprehensive income for
the year:
Profit for the year - - - - 301 301
Other comprehensive income, net
of tax - - 3,982 - - 3,982
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total comprehensive income for
the year - - 3,982 - 301 4,283
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Transactions with owners:
Dividends paid - - - - - -
Company buy back of shares 11 - - - - (23) (23)
Share issue 11 1,554 16,587 - - - 18,141
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Total transactions with owners 1,554 16,587 - - (23) 18,118
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
At 31 December 2020 3,393 35,525 3,982 (50) 7,699 50,549
-------------------------------- ----- -------- --------- ----------- ---------- --------- --------
Interim condensed consolidated statement of cash flows
Six months ended 30 June 2021
Note 6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2021 2020 Unaudited 2020
Unaudited GBP'000 Audited
GBP'000 GBP'000
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash flows from operating activities
(Loss)/Profit before taxp (480) (108) 336
Adjustments for:
- Other comprehensive income, gross of tax - - -
- Interest received (2) (45) (156)
- Investment income 6 (183) (1,136) (1,318)
- Recognition of negative goodwill - (172) -
- Goodwill on bargain purchase - - (1,260)
- (Profit)/loss on sale of intangible assets - - (1,775)
Changes in working capital:
* change in fair value of financial assets held at fair
value through profit or loss (140) (79) (297)
* decrease/(increase) in financial assets at fair value
through profit or loss 2,230 4,171 (7,768)
- (increase)/decrease in other receivables (8,729) (3,863) 4,491
- decrease/(increase) in other payables 5,245 (1,193) (4,706)
- net decrease/(increase) in technical provisions 6,121 5,059 (650)
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash generated/(utilised) from operations 4,062 2,634 (13,103)
-------------------------------------------------------------- ----- ---------- --------------- ------------
Income tax paid - (312)
-------------------------------------------------------------- ----- ---------- --------------- ------------
Net cash inflow from operating activities 4,062 2,634 (13,415)
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash flows from investing activities
Interest received 2 45 156
Investment income 183 1,136 1,318
Purchase of intangible assets - - (186)
Proceeds from disposal of intangible assets - - 1,779
Acquisition of subsidiaries, net of cash acquired - (1,218) (364)
-------------------------------------------------------------- ----- ---------- --------------- ------------
Net cash inflow/(outflow) from investing activities 185 (37) 2,703
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash flows from financing activities
-------------------------------------------------------------- ----- ---------- --------------- ------------
Net proceeds from issue of ordinary share capital 53,401 - 11,193
Buy back of ordinary share capital - (133) -
Payment for company buy back of shares - - (23)
Proceeds from borrowings - - 2,000
Repayment of borrowings (4,000) - -
Dividends paid to owners of the Parent - - -
-------------------------------------------------------------- ----- ---------- --------------- ------------
Net cash inflow/(outflow) from financing activities 49,401 (133) 13,170
-------------------------------------------------------------- ----- ---------- --------------- ------------
Net increase in cash and cash equivalents 53,648 2,464 2,458
Cash and cash equivalents at beginning of period 8,495 6,037 6,037
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash and cash equivalents at end of period 62,143 8,501 8,495
-------------------------------------------------------------- ----- ---------- --------------- ------------
Cash held within the syndicates' accounts is GBP9,871,000 (2020:
GBP7,345,000) of the total cash and cash equivalents held at the
end of the period GBP62,143,000 (2020: GBP8,501,000). The cash held
within the syndicates' accounts is not available to the Group to
meet its day-to-day working capital requirements.
Cash and cash equivalents comprise cash at bank and in hand.
The notes are an integral part of these Financial
Statements.
Notes to the financial statements
Six months ended 30 June 2021
1. General information
The Company is a public limited company quoted on AIM. The
Company was incorporated in England, is domiciled in the UK and its
registered office is 40 Gracechurch Street, London EC3V 0BT. The
Company participates in insurance business as an underwriting
member at Lloyd's through its subsidiary undertakings.
2. 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 UK adopted International Accounting Standard (IAS)
34 Interim Financial Reporting, in accordance with the requirements
of the Companies Act 2006.
The Condensed Consolidated Interim Financial Statements are
prepared for the six months ended 30 June 2021.
The Condensed Consolidated Interim Financial Statements for the
six months ended 30 June 2021 and 2020 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 2020, and the adoption of new and amended standards as
set out further below.
The Condensed Consolidated Interim incorporate the Financial
Statements of Helios Underwriting plc, the Parent Company, and its
directly and indirectly held subsidiaries (see note 10).
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 as modified by
the revaluation of the financial assets at fair value through the
profit and loss. 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
2020.
International Financial Reporting Standards
Adoption of new and revised standards
In the current year, the Group has applied new IFRSs and
amendments to IFRSs issued by the IASB that are mandatory for an
accounting period that begins on or after 1 January 2020.
IFRS 16 Amendments, Leases COVID 19 Related Rent Concessions.
Lessees are provided with an exemption from assessing whether a
COVID-19-related rent concession is a lease modification. The Group
has not applied this exemption and the amendment has not had an
impact on the Consolidated Financial Statements.
IFRS 3 Amendments, Business Combinations. The amendment is aimed
at resolving the difficulties that arise when an entity determines
whether it has acquired a business or a group of assets. The
amendments provide further clarity on what constitutes an acquired
business, and this clarification has not impacted the Group's
recognition of acquired business in the year and has not had an
impact on the Consolidated Financial Statements
IFRS 9, IAS 39 and IFRS 7 Amendments, Interest Rate Benchmark
Reform. The amendments deal specifically with interest rate hedge
accounting and is the first phase of change relating to interest
rate benchmark reform and the replacement of LIBOR. The Group has
not been impacted by these amendments for hedge accounting.
IAS 1 and IAS 8 Amendments, Definition of Material. The
amendments clarify the definition of 'material' and align the
definition used in the Conceptual Framework and the standards
themselves. Information is material if omitting, misstating or
obscuring it could reasonably be expected to influence decisions
that the primary users of general purpose financial statements make
on the basis of those financial statements, which provide financial
information about a specific reporting entity. The Financial
Statements have been prepared in accordance with this
clarification.
New standards, amendments and interpretations not yet
adopted
A number of new standards and amendments adopted by the UK, as
well as standards and interpretations issued by the IASB but not
yet adopted by the UK, have not been applied in preparing the
Consolidated Financial Statements.
The Group does not plan to adopt these standards early; instead
it will apply them from their effective dates as determined by
their dates of UK endorsement. The Group continues to review the
upcoming standards to determine their impact.
IFRS 9, Financial Instruments (IASB effective date 1 January
2018) has not been applied under IFRS 4 Amendment option to defer
until IFRS 17 comes into effect on 1 January 2023.
IFRS 17, Insurance Contracts. (IASB effective date 1 January
2023).
IFRS 9, IAS 39 and IFRS 7 Amendments, Interest Rate Benchmark
Reform Phase 2. (IASB effective date 1 January 2021).
Amendments to IFRS 3 Business Combinations, IAS 16 Property,
Plant and Equipment, IAS 37 Provisions, Contingent Liabilities and
Contingent Assets. (IASB effective date 1 January 2022).
IAS 1 Presentation of Financial Statements Amendments,
Classification of Liabilities as Current or Non-current. (IASB
effective date 1 January 2023).
IAS 8 Accounting Policies Amendments, Changes in Accounting
Estimates and Errors. (IASB effective date 1 January 2023).
IFRS 9, Financial instruments (IASB effective date 1 January
2018) has not been applied under IFRS 4 Amendment option. IFRS 9
provides a reform of financial instruments accounting to supersede
IAS 39 Financial Instruments: Recognition and Measurement. Applying
IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
contained an optional temporary exemption from applying IFRS 9 for
entities whose predominant activity is issuing contracts within the
scope of IFRS 4. The Group meets the eligibility criteria and has
taken advantage of this temporary exemption not to apply this
standard until the effective date of IFRS 17.
3. Segmental information
Nigel Hanbury is the Group's chief operating decision-maker. He
has determined its operating segments based on the way the Group is
managed, for the purpose of allocating resources and assessing
performance.
The Group has three segments that represent the primary way in
which the Group is managed, as follows:
-- syndicate participation;
-- investment management; and
-- other corporate activities.
Other
Syndicate Investment corporate
participation management activities Total
6 months ended 30 June 2021 Unaudited GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------------- ----------- ----------- --------
Net earned premium 27,658 - (951) 26,707
Net investment income 157 28 - 185
Other income - - 506 506
Net insurance claims and loss adjustment
expenses (16,436) - - (16,436)
Expenses incurred in insurance activities (9,068) - (1,597) (10,665)
Other operating expenses - - (777) (777)
Loss before tax 2,311 28 (2,819) (480)
------------------------------------------ -------------- ----------- ----------- --------
Other
Syndicate Investment corporate
participation management activities Total
6 months ended 30 December 2020 Audited GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------------- ----------- ----------- --------
Net earned premium 48,769 - - 48,769
Net investment income 2,126 (120) - 2,006
Other income 101 - 1,718 1,819
Net insurance claims and loss adjustment
expenses (33,990) - (90) (34,080)
Expenses incurred in insurance activities (17,572) - (343) (17,916)
Other operating expenses 203 - (1,725) (1,522)
Goodwill on bargain purchase - - 1,260 1,260
Impairment of syndicate capacity - - - -
------------------------------------------ -------------- ----------- ----------- --------
Profit before tax (363) (120) 820 336
------------------------------------------ -------------- ----------- ----------- --------
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 2021 other corporate activities
totalling GBP951,000 (2020: GBP90,000 Net insurance claims and loss
adjustment expenses - 2018, 2019 and 2020 years of account)
represents the 2019, 2020 and 2021 years of account net Group quota
share reinsurance premium payable to Hampden Insurance Guernsey PCC
Limited - Cell 6. This net quota share reinsurance premium payable
is included within "reinsurance premium ceded" in the Consolidated
Statement of Comprehensive Income of the period.
4. Operating profit before impairments of goodwill and
capacity
Underwriting year of account*
-------------------------------------------
2019 and Pre- Corporate Other
6 months ended 30 prior 2020 2021 Sub-total acquisition reinsurance corporate Total
June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Gross premium written 285 5,823 47,243 53,351 - - - 53,351
Reinsurance ceded (430) (1,168) (13,590) (15,188) - (951) (968) (17,107)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Net premium written (145) 4,655 33,653 38,163 - (951) (968) 36,244
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Net earned premium 1,218 18,769 8,639 28,626 - (951) (968) 26,707
Other income 84 41 54 179 - 474 38 691
Net insurance claims
and loss adjustment
expenses 901 (11,323) (6,028) (16,450) - - 14 (16,436)
Operating expenses (725) (5,225) (4,353) (10,302) - - (1,139) (11,442)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity 1,478 2,262 (1,687) 2,053 - (477) (2,056) (480)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Quota share adjustment (416) (1,278) 743 (951) - (951) - -
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity
after quota share
adjustment 1,062 984 (944) 1,102 - 474 (2,056) (480)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Underwriting year of account*
---------------------------------------------
2018 and Pre- Corporate Other
6 months ended 30 prior 2019 2020 Sub-total acquisition reinsurance corporate Total
June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Gross premium written 115 4,439 32,491 37,045 (95) - - 36,950
Reinsurance ceded (131) (1,089) (9,578) (10,798) 24 (621) (181) (11,575)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net premium written (16) 3,350 22,913 26,247 (70) (621) (181) 25,375
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net earned premium 1,519 15,105 5,756 22,380 (66) (621) (181) 21,512
Other income 702 301 102 1,105 (7) 400 248 1,746
Net insurance claims
and loss adjustment
expenses (401) (10,523) (5,686) (16,610) 48 - 202 (16,361)
Operating expenses (581) (4,092) (1,427) (6,100) 18 - (922) (7,005)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity 1,239 791 (1,255) 775 (9) (221) (653) (108)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Quota share
adjustment (800) (690) 869 (621) - 621 - -
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity
after quota share
adjustment 439 101 (386) 154 (9) 400 (653) (108)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Underwriting year of account*
---------------------------------------------
2018 Pre- Corporate Other
12 months ended 31 and prior 2019 2020 Sub-total acquisition reinsurance corporate Total
December 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Gross premium written 348 6,105 69,693 76,146 (7,883) - - 68,263
Reinsurance ceded 202 (1,410) (16,817) (18,025) 1,462 - (1,097) (17,660)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net premium written 550 4,695 52,876 58,121 (6,421) - (1,097) 50,6303
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net earned premium 3,116 24,807 27,759 55,682 (5,816) - (1,097) 48,769
Other income 1,242 585 604 2,431 (515) 334 2,835 5,085
Net insurance claims
and loss adjustment
expenses 579 (17,074) (21,386) (37,881) 4,174 (90) (283) (34,080)
Operating expenses (1,473) (7,373) (10,657) (19,503) 2,065 - (2,000) (19,438)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity 3,464 945 (3,680) 729 (92) 244 (545) 336
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Quota share
adjustment (1,773) (606) 2,289 (90) - 90 - -
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity
after quota share
adjustment 1,691 339 (1,391) 639 (92) 334 (545) 336
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Pre-acquisition relates to the element of results from the new
acquisitions before they were acquired by the Group.
* The underwriting year of account results represent the Group's
share of the syndicates' results by underwriting year of account
before corporate member level reinsurance and members' agents
charges.
5. Insurance liabilities and reinsurance balances
Movement in claims outstanding
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2021 113,371 30,781 82,590
Increase in reserves arising from acquisition of
subsidiary undertakings - - -
Movement of reserves 2,118 (156) 2,274
Other movements 70 2,175 (2,105)
------------------------------------------------- -------- ----------- --------
At 30 June 2021 115,559 32,800 82,759
------------------------------------------------- -------- ----------- --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2021 32,356 6,028 26,328
Increase in reserves arising from acquisition of
subsidiary undertakings - - (1)
Movement of reserves 15,678 6,141 9,537
Other movements (5,060) (1,475) (3,584)
------------------------------------------------- -------- ----------- --------
At 30 June 2021 42,974 10,694 32,280
------------------------------------------------- -------- ----------- --------
Included within other movements are the 2018 and prior years'
claims reserves reinsured into the 2019 year of account on which
the Group does not participate and currency exchange
differences.
Movement in claims outstanding
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2020 95,616 25,760 69,856
Increase in reserves arising from acquisition of
subsidiary undertakings 2,036 505 1,531
Movement of reserves 5,927 2,162 3,765
Other movements (3,821) (286) (3,535)
------------------------------------------------- -------- ----------- --------
At 30 June 2020 99,758 28,141 71,617
------------------------------------------------- -------- ----------- --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2020 26,522 5,023 21,499
Increase in reserves arising from acquisition of
subsidiary undertakings 530 92 438
Movement of reserves 7,700 3,837 3,863
Other movements 1,209 243 966
------------------------------------------------- -------- ----------- --------
At 30 June 2020 35,961 9,195 26,766
------------------------------------------------- -------- ----------- --------
Included within other movements are the 2017 and prior years'
claims reserves reinsured into the 2018 year of account on which
the Group does not participate and currency exchange
differences.
Movement in claims outstanding
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2020 95,616 25,760 69,856
Increase in reserves arising from acquisition of
subsidiary undertakings 17,737 3,592 14,145
Movement of reserves 8,255 2,704 5,551
Other movements (8,237) (1,275) (6,962)
------------------------------------------------- -------- ----------- --------
At 31 December 2020 113,371 30,781 82,590
------------------------------------------------- -------- ----------- --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2020 26,522 5,023 21,499
Increase in reserves arising from acquisition of
subsidiary undertakings 4,679 613 4,066
Movement of reserves 2,481 647 1,834
Other movements (1,326) (255) (1,071)
------------------------------------------------- -------- ----------- --------
At 31 December 2020 32,356 6,028 26,328
------------------------------------------------- -------- ----------- --------
Included within other movements are the 2018 and prior years'
claims reserves reinsured into the 2019 year of account on which
the Group does not participate and currency exchange
differences.
6. Net investment income
6 months 6 months 12 months
ended ended ended 31
30 June 30 June December
2021 Unaudited 2020 Unaudited 2020 Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------------ --------------- ---------------- -------------
Investment income 183 1,136 1,318
Realised (losses)/gains on financial assets at fair
value through profit or loss - 126 288
Unrealised (losses)/gains on financial assets at fair
value through profit or loss - (133) 297
Investment management expenses - - (53)
Bank interest 2 45 156
------------------------------------------------------ --------------- ---------------- -------------
Net investment income 185 1,174 2,006
------------------------------------------------------ --------------- ---------------- -------------
7. Income tax charge
Analysis of tax charge/(credit) in the period
6 months 6 months 12 months
ended ended ended 31
30 June 30 June December
2021 Unaudited 2020 Unaudited 2020 Audited
GBP'000 GBP'000 GBP'000
------------------ --------------- ---------------- -------------
Income tax credit 1,839 (12) 35
------------------ --------------- ---------------- -------------
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 19.00% (2019: 19.00%). Included above is GBP1,727,000 which
relates to the increase in deferred tax rates from 1 April
2023.
8. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to ordinary shareholders after tax by the weighted
average number of ordinary shares outstanding during the
period.
Diluted earnings per share is calculated by dividing the net
profit attributable to ordinary equity holders of the Company by
the weighted average number of ordinary shares outstanding during
the period, plus the weighted average number of ordinary shares
that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
Earnings per share has been calculated in accordance with IAS 33
"Earnings per share".
The earnings per share and weighted average number of shares
used in the calculation are set out below:
6 months 6 months 12 months
ended 30 ended 30 ended 31
June 2021 June 2020 December
Unaudited Unaudited 2020 Audited
----------------------------------------------------- ----------- ----------- -------------
(Loss)/profit for the year after tax attributable
to ordinary equity holders of the parent (2,319,000) (96,000) 301,000
----------------------------------------------------- ----------- ----------- -------------
Basic - weighted average number of ordinary shares* 59,704,671 17,978,841 18,921,902
----------------------------------------------------- ----------- ----------- -------------
Adjustments for calculating the diluted earnings per
share: Treasury shares (JSOP scheme) 500,000 500,000 500,000
----------------------------------------------------- ----------- ----------- -------------
Diluted - weighted average number of shares* 60,204,671 17,478,841 19,412,902
----------------------------------------------------- ----------- ----------- -------------
Basic (loss)/earnings per share (3.88) (0.55p) 1.59p
----------------------------------------------------- ----------- ----------- -------------
Diluted (loss)/earnings per share (3.82) (0.52p) 1.55p
----------------------------------------------------- ----------- ----------- -------------
* Used as the denominator in calculating the basic earnings per
share, and diluted earnings per share, respectively.
9. Dividends paid or proposed
It was proposed and agreed at the AGM on 29 June 2021 that a
dividend of 3p will be payable in 2021 (2020: nil).
10. Investments in subsidiaries
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------------- -------- -------- -----------
Total 45,335 25,905 32,901
------------------------------------------------------------------------------- -------- -------- -----------
30 June 30 June 31 December
Company or Direct/indirect 2021 2020 2020
partnership interest ownership ownership ownership Principal activity
--------------------- ---------------- ---------- ----------- ------------ ---------------------------------
Hampden Corporate
Member Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 917) Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Nameco (No. 229) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 518) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 804) Lloyd's of London corporate
Limited Direct - 100% - vehicle
Halperin Underwriting Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Lloyd's of London corporate
Bernul Limited Direct - 100% 100% vehicle
Nameco (No. 311) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 402) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Updown Underwriting Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 507) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Nameco (No. 76) Lloyd's of London corporate
Limited Direct - 100% 100% vehicle
Kempton Underwriting Lloyd's of London corporate
Limited Direct - 100% - vehicle
Devon Underwriting Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Nameco (No. 346) Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Lloyd's of London corporate
Pooks Limited Direct 100% 100% 100% vehicle
Charmac Underwriting Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
RBC CEES Trustee Joint Share Ownership
Limited Direct 100% 100% 100% Plan
Nottus (No 51) Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Chapman Underwriting Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Helios UTG Partner
Limited Direct 100% 100% 100% Corporate partner
Lloyd's of London corporate
Nomina No 035 LLP Indirect - 100% - vehicle
Lloyd's of London corporate
Nomina No 342 LLP Indirect - 100% - vehicle
Lloyd's of London corporate
Nomina No 372 LLP Indirect - 100% - vehicle
Lloyd's of London corporate
Salviscount LLP Indirect 100% 100% 100% vehicle
Lloyd's of London corporate
Inversanda LLP Indirect 100% 100% 100% vehicle
Fyshe Underwriting Lloyd's of London
LLP Indirect 100% 100% 100% corporate vehicle
Lloyd's of London corporate
Nomina No 505 LLP Indirect 100% 100% 100% vehicle
Lloyd's of London corporate
Nomina No 321 LLP Direct 100% 100% 100% vehicle
Llewellyn House
Underwriting Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Lloyd's of London corporate
Advantage DCP Limited Direct 100% 100% 100% vehicle
Romsey Underwriting Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Nameco (No 409) Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Nameco (No 1113 Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Lloyd's of London corporate
Catbang 926 Limited Direct 100% 100% 100% vehicle
Whittle Martin Lloyd's of London corporate
Underwriting Direct 100% 100% 100% vehicle
Nameco (No 408) Lloyd's of London corporate
Limited Direct 100% 100% 100% vehicle
Lloyd's of London corporate
Nomina No 084 LLP Indirect 100% - 100% vehicle
Nameco (No 510) Lloyd's of London corporate
Limited Direct 100% - 100% vehicle
Nameco (No 544) Lloyd's of London corporate
Limited Direct 100% - 100% vehicle
Lloyd's of London corporate
N J Hanbury Limited Direct 100% - 100% vehicle
Helios UTG Partner Limited, a subsidiary of the Company, owns
100% of Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 372 LLP,
Salviscount LLP, Inversanda LLP, Fyshe Underwriting LLP, Nomina No
505 LLP and Nomina No 321 LLP. The cost of acquisition of these
LLPs is accounted for in Helios UTG Partner Limited, their
immediate Parent Company.
RBC CEES Trustee Limited is a newly incorporated entity in year
2017 to satisfy the requirements of the Joint Share Ownership
Plan.
11. Share capital and share premium
Partly
Ordinary share paid ordinary Share
Number of capital share capital premium Total
shares (i) GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- ----------- -------------- -------------- -------- --------
Ordinary shares of 10p each and share premium at 31
December 2020 33,931,345 3,343 50 35,525 38,918
----------------------------------------------------- ----------- -------------- -------------- -------- --------
Ordinary shares of 10p each and share premium at 30
June 2021 68,173,232 6,817 50 85,502 92,369
----------------------------------------------------- ----------- -------------- -------------- -------- --------
(i) Number of shares
30 June 2021 31 December 2020
------------------------------------------------------------------- ------------ ----------------
Allotted, called up and fully paid ordinary shares:
On the market 67,254,063 33,012,176
Company buy back of ordinary shares held in treasury 419,169 419,169
------------------------------------------------------------------- ------------ ----------------
67,673,232 33,431,345
------------------------------------------------------------------- ------------ ----------------
Uncalled and partly paid ordinary share under the JSOP scheme (ii) 500,000 500,000
------------------------------------------------------------------- ------------ ----------------
68,173,232 33,931,345
------------------------------------------------------------------- ------------ ----------------
(ii) The partly paid ordinary shares are not entitled to
dividend distribution rights during the year.
12. Related party transactions
A number of subsidiary companies have entered into quota share
reinsurance contracts for the 2019, 2020 and 2021 years of account
with protected cell companies of Hampden Insurance PCC (Guernsey)
Limited. The quota share percentages for the above years was 70% on
the 2019 and 2020 years of account, and an average of 46% on the
2021 year of account.
Nigel Hanbury, a Director of Helios Underwriting plc and its
subsidiary companies, is also a director and majority shareholder
in Hampden Insurance Guernsey PCC Limited. Hampden Capital plc, a
substantial shareholder in Helios Underwriting plc, is also a
substantial shareholder in Hampden Insurance Guernsey PCC Limited -
Cell 6. Under quota share agreements between Cell 6 and certain
Helios subsidiaries, the Group accrued a net reinsurance premium
recovery of GBP4,232,000 (2020: GBP4,741,000) during the
period.
In addition, HIPCC provide stop loss, portfolio stop loss and
HASP reinforce policies for the company.
HIPCC Limited acts as an intermediary for the reinsurance
products purchased by Helios. An arrangement has been put in place
so that 51% of the profits generated by HIPCC (being Nigel
Hanbury's share) in respect of the business relating to Helios will
be repaid to Helios for the business transacted for the 2021 and
subsequent underwriting years.
13. Ultimate controlling party
The Directors consider that the Group has no ultimate
controlling party.
14. 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:
Allocated capacity per year
of account
-----------------------------------------------
Syndicate
or MAPA 2021 2020 2019 2018
number Managing or members' agent GBP GBP GBP GBP
--------- ------------------------------------ ----------- ---------- ---------- ----------
33 Hiscox Syndicates Limited 8,701,668 8,697,873 7,325,844 8,354,200
218 ERS Syndicate Management Limited 6,478,828 5,900,943 5,901,060 5,896,524
308 Tokio Marine Kiln Syndicates Limited - - - -
318 Beaufort Underwriting Agency Limited 742,948 150,000 836,250 866,250
386 QBE Underwriting Limited 1,434,079 1,365,177 1,365,180 1,360,797
510 Tokio Marine Kiln Syndicates Limited 16,780,613 13,642,803 12,379,884 12,364,816
557 Tokio Marine Kiln Syndicates Limited 3,177,784 2,969,384 2,122,922 2,136,776
609 Atrium Underwriters Limited 6,779,365 6,205,260 5,501,013 5,490,164
623 Beazley Furlonge Limited 12,982,891 10,685,023 9,456,718 9,041,504
727 S A Meacock & Company Limited 1,048,498 2,048,498 2,181,026 2,181,026
958 Canopius Managing Agents Limited - - - -
1176 Chaucer Syndicates Limited 2,563,237 2,563,238 2,593,236 2,592,140
1200 Argo Managing Agency Limited - - 57,397 58,111
1729 Asta Managing Agency Limited - 4,096 90,318 360,221
Charles Taylor Managing Agency
1884 Limited - - - -
1910 Asta Managing Agency Limited - - - -
1969 Apollo Syndicate Management Limited 400,001 - - 131,082
1991 Covery's Managing Agency Limited - - - -
2010 Cathedral Underwriting Limited 8,095,459 2,635,873 2,589,260 2,586,521
2014 Pembroke Managing Agency Limited - - 184,534 644,994
2121 Argenta Syndicate Management Limited 4,723,104 1,503,868 1,003,093 1,003,093
2525 Asta Managing Agency Limited 689,091 637,609 512,869 475,051
2689 Asta Managing Agency Limited - 2,377 145,853 586,706
2791 Managing Agency Partners Limited 5,845,085 6,695,085 6,892,527 6,877,501
2988 Brit Syndicates Limited - - 23,461 247,848
4242 Asta Managing Agency Limited 8,013,778 15,894 321,154 385,199
4444 Canopius Managing Agents Limited - - - 1,205,277
5623 Beazley Furlonge Limited 4,688,357 2,839,943 - -
Amtrust Syndicate Limited Syndicates
5820 Limited - - - -
5886 Asta Managing Agency Limited 11,047,742 6,173,502 554,077 467,960
6103 Managing Agency Partners Limited 2,290,041 1,734,879 1,663,522 1,808,645
6104 Hiscox Syndicates Limited 1,427,825 1,427,825 1,522,434 1,647,436
6107 Beazley Furlonge Limited 1,287,436 1,287,435 1,482,427 1,169,554
6111 Catlin Underwriting Agencies Limited - - - 249,065
6117 Argo Managing Agency Limited 1,064,471 803,055 3,573,409 4,100,230
6123 Asta Managing Agency Limited - - 6,406 12,369
--------- ------------------------------------ ----------- ---------- ---------- ----------
Total 110,262,301 79,989,640 70,285,874 74,301,060
--------- ------------------------------------ ----------- ---------- ---------- ----------
15. Group-owned net assets
The Group statement of financial position includes the following
assets and liabilities held by the syndicates on which the Group
participates. These assets are subject to trust deeds for the
benefit of the relevant syndicates' insurance creditors. The table
below shows the split of the statement of financial position
between Group and syndicate assets and liabilities:
30 June 2021 30 June 2020 31 December 2020
------------------------- ----------------------------- ----------------------------- -----------------------------
Group Syndicate Total Group Syndicate Total Group Syndicate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Assets
Intangible assets 31,601 - 31,601 21,655 - 21,655 31,601 - 31,601
Financial assets at fair
value through profit or
loss 18,543 64,504 83,047 8,989 55,154 64,143 19,713 65,564 85,277
Reinsurance assets: - - - - - - - - -
- reinsurers' share of
claims outstanding 61 32,739 32,800 61 28,080 28,141 61 30,720 30,781
- reinsurers' share of
unearned premium - 10,694 10,694 - 9,195 9,195 - 6,028 6,028
Other receivables,
including
insurance and
reinsurance
receivables 11,496 54,731 66,227 7,837 44,962 52,799 12,008 46,340 58,348
Deferred acquisition
costs - 8,119 8,119 - 6,853 6,853 - 7,726 7,726
Prepayments and accrued
income 828 805 1,633 281 601 882 662 514 1,176
Cash and cash equivalents 52,272 9,871 62,143 1,156 7,345 8,501 4,961 3,534 8,495
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total assets 114,801 181,463 296,264 39,979 152,190 192,169 69,006 160,426 229,432
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Liabilities
Insurance liabilities:
- claims outstanding - 115,559 115,559 - 99,758 99,758 - 113,371 113,371
- unearned premium - 42,974 42,974 - 35,961 35,961 - 32,356 32,356
Deferred income tax
liabilities 8,546 - 8,546 3,686 - 3,686 6,492 15 6,507
Borrowings - - - 2,000 - 2,000 4,000 - 4,000
Other payables, including
insurance and
reinsurance
payables 89 25,551 25,640 10 20,831 20,841 364 18,992 19,356
Accruals and deferred
income 3,320 952 4,272 1,108 763 1,871 1,858 1,435 3,293
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total liabilities 11,955 185,036 196,991 6,804 157,313 164,117 12,714 166,169 178,883
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Equity attributable to
owners of the Parent
Share capital 6,817 - 6,817 1,839 - 1,839 3,393 - 3,393
Share premium 85,502 - 85,502 18,938 - 18,938 35,525 - 35,525
Revaluation reserve 3,642 - 3,642 - - - 3,982 - 3,982
Other reserves (50) - (50) (50) - (50) (50) - (50)
Retained earnings 6,935 (3,573) 3,362 12,448 (5,123) 7,325 13,442 (5,743) 7,699
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total equity 102,846 (3,573) 99,273 33,175 (5,123) 28,052 56,292 (5,743) 50,549
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total liabilities and
equity 114,801 181,463 296,264 39,979 152,190 192,169 69,006 160,426 229,432
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
16. Event after the financial reporting period
On 16th August 2021, the company issued and allotted 600,000 new
ordinary shares of GBP0.10 each in the Company ("Ordinary Shares").
The new Ordinary Shares have been issued at a subscription price of
155.0p per Ordinary Share, being the closing price of an Ordinary
Share on 13th August 2021, pursuant to The Helios Underwriting plc
Employees' Joint Share Ownership Plan (the "Plan").
The new Ordinary Shares have been issued into the respective
joint beneficial ownership of (i) each of the participating
executive Directors listed below and (ii) the trustee of the Trust
upon and subject to the terms of joint ownership agreements
("JOAs") respectively entered into between the Director, the
Company and the Trustee. The nominal value of the new Ordinary
Shares has been paid by the Trust out of funds advanced to it by
the Company (with the participating executives contributing to
those funds) with the additional consideration of 145p per Ordinary
Share left outstanding until such time as new Ordinary Shares are
sold. The Company has waived its lien on the Shares such that there
are no restrictions on their transfer.
The terms of the JOAs provide, inter alia, that if jointly owned
shares become vested and are sold, the proceeds of sale will be
divided between the joint owners so that the participating Director
receives an amount equal to the amount initially provided by the
participating Director plus any growth in the market value of the
jointly owned Ordinary Shares above a target share price of 174.8p
(so that the participating Director will only ever receive value if
the share sale price exceeds this).
The vesting of the award will be subject to performance
conditions relating to growth in Net Tangible Asset Value per share
measured over the three calendar years from the Net Tangible Asset
per share disclosed as at 31 December 2021 of 151p.
Note:
The Plan was established and approved by resolution of the
Remuneration Committee of the Company on 13 December 2017 and
provides for the acquisition by employees, including executive
directors, of beneficial interests as joint owners (with the Trust)
of Ordinary Shares in the Company upon the terms of a JOA. The
terms of the JOA provide that if the jointly owned shares become
vested and are sold, the proceeds of sale will be divided between
the joint owners on the terms set out above.
The beneficial interests of the executives as follows:
Director Interests Interests Other interests Total Shareholding
in jointly in jointly in Ordinary
owned Ordinary owned Ordinary Shares
Shares issued Shares
under JSOP issued
awarded 14th under JSOP
December 2017 awarded
16th August
2021
Arthur Manners 200,000 277,500 709,868 1,187,368
---------------- ---------------- ---------------- -------------------
Nigel Hanbury 300,000 322,500 8,927,294 9,549,794
---------------- ---------------- ---------------- -------------------
Acquisitions of LLV's since the period end
Since the Financial reporting period, the company has acquired
the following entities either directly, or indirectly:
Helios Acquisitions
2021 Purchase Humphrey Discount
Capacity price Valuation to Humphreys
North Breache Underwriting
Limited 3,934,673 3,856,593 4,170,520 7.53%
Nameco (No 1095) Limited 2,914,405 2,919,483 3,057,575 4.52%
Nomina No 533 LLP 682,419 280,000 295,420 5.22%
Nameco (No 1011) Limited 949,407 891,000 973,324 8.46%
Hillnameco Limited 1,005,873 335,000 371,977 9.94%
Nameco (No 2012) Limited 618,385 360,000 388,993 7.45%
G.T.C. Underwriting Limited 820,013 700,000 752,748 7.01%
Nameco (No 1111) Limited 556,362 225,000 241,851 6.97%
Total Acquisitions Completed 8 11,481,537 9,567,076 10,252,408 6.68%
Acquisitions With Terms
Agreed 20 21,475,110 15,002,500 15,943,058 5.90%
The Interim Report will be made available in electronic format
on the Company's website, www.huwplc.com
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END
IR DKLFLFKLEBBV
(END) Dow Jones Newswires
September 30, 2021 02:00 ET (06:00 GMT)
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