TIDMHUW
RNS Number : 0680B
Helios Underwriting Plc
29 September 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Helios Underwriting plc
("Helios" or the "Company")
Interim Results for the Six Months Ended 30 June 2022
Helios Underwriting plc, the unique investment vehicle which
provides investors with exposure to the Lloyds insurance market
through an actively managed portfolio of syndicate capacity ,
announces its unaudited results for the six months ended 30 June
2022, during which it continued its strategy of driving portfolio
growth and future shareholder value, building on its recent rapid
growth in retained capacity.
-- Gross written premiums increased by 133% to GBP124m (30 June
2021 - GBP53m) reflecting the increase in the capacity
portfolio
-- Further rate increase achieved by Lloyds' of 7.7% over the
six month period which together with greater discipline encouraged
by the Franchise Board at Lloyd's market, has bolstered the
prospects for profitable underwriting
-- 76% improvement in the underwriting result to GBP3.3m with a 94.5% combined ratio
-- The increase in the underwriting exposure in 2022 to GBP172m
of retained capacity will contribute to the underwriting result in
the future.
-- Investment losses of GBP3.5m have been booked in the first
six months driven by mark to market investment losses as interest
rates have increased, which has masked the improvement in the
underwriting margins, although higher yields on both syndicate and
Group funds will benefit future returns
-- Operating costs of GBP3.6m include non-recurring costs of
GBP0.7m relating to a contemplated significant acquisition and
increased reinsurance costs given the increase in the underwriting
exposure
-- Operating loss is GBP3.4m (30 June 202 1 - a loss of GBP0.4m)
-- The net tangible asset value per share is GBP1.49 per share
(31(st) December 2021 - GBP1.57 per share)
Chairman's statement
Six months ended 30 June 2022
Nigel Hanbury, Chief Executive, provides the following
overview:
"The steady improvement in current market conditions continues
to open up exciting windows of opportunity for Helios. The progress
in underwriting conditions over five years is being reflected in
the improved underwriting margins.
"The results are skewed as a consequence of the recent 133%
growth in our retained capacity and a cautious approach to
reserving, as we would expect, by our portfolio. With the passage
of time, we are confident that our portfolio will demonstrate
outperformance against a prudent reserving strategy. The impact of
the increased yields on the Group investments will make a
contribution in the future.
"Mark to market losses within syndicates' investment bond
portfolios have also impacted results. Rising interest rates will
help negate that with improved returns from fixed income in future
periods.
" We have increased our retained capacity to GBP172m for the
2022 underwriting year to take advantage of the current market
conditions. We are confident that we can continue to demonstrate
our ability to achieve attractive shareholder returns over the next
few years."
SUMMARY FINANCIAL INFORMATION
6 months to 30(th) June Year to
31(st) December
2022 2021 2021
GBP000's GBP000's GBP000's
Gross written premium 124,097 53,351 106,058
------------ ------------ -----------------
Underwriting result 3,291 1,873 5,681
Investment Income
- syndicates (3,560) 179 37
Net quota share (383) (951) (2,319)
Net profits (652) 1,102 3,399
Other income 833 526 2,700
Costs (3,612) (2,107) (6,744)
Operating loss for
the period before impairment (3,431) (480) (645)
------------ ------------ -----------------
(Loss)/profit after
tax (3,902) (2,659) 4,932
------------ ------------ -----------------
Earnings per share (5.38)p (3.88)p (0.75)p
Net Tangible Asset GBP1.49p GBP1.46 GBP1.57
Value per Share
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
Gallagher (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
The combined underwriting result continues to recover as the
underlying profitability starts to be recognised. The potential
losses from Ukraine have been recognised to the extent that they
are known. The events in Ukraine continue to unfold and the full
extent of the insured losses have yet to be fully recognised.
2022 2021
GBP000's GBP000's % Increase
Gross premium written 124,067 53,351 133%
Net earned premium 59,990 28,626 110%
Net insurance claims & operating expenses (56,699) (26,752) 112%
Underwriting result 3,291 1,874 76%
Investment Income (3,560) 179
Operating loss / profit (269) 2,053
Combined ratio 94.5% 93.5%
The increase in the gross written premiums reflect the growth of
the capacity portfolio to GBP233m for the 2022 underwriting year.
The combined portfolio ratio of 94.5% has been impacted by the
early stage contribution of the 2022 underwriting year.
2020 and prior 2021 2022 Total
GBP000's GBP000's GBP000's GBP000's
Net Earned
Premium 3,306 35,444 21,240 59,990
-------------------------- ------------------------ ---------------------- --------------------
Underwriting
result 3,041 5,229 (4,979) 3,291
Investment Income (2,315) (941) (304) (3,560)
-------------------------- ------------------------ ---------------------- --------------------
Operating (loss)
/ profit 726 4,288 (5,283) (269)
Quota Share
Reinsurers (150) (1,621) 1,388 (383)
-------------------------- ------------------------ ---------------------- --------------------
Total Group
Underwriting
Profit/(loss) 576 2,667 (3,895) (652)
-------------------------- ------------------------ ---------------------- --------------------
The underwriting contribution from the 2020 and 2021
underwriting years reflects the expected development of those years
after recognising underwriting losses at an early stage. 2022 to
date represents an initial loss due to the higher proportion of
expenses and reinsurance costs allocated to the first six months of
the underwriting year. The future recognition of the Net Earned
Premiums from 2022 year, given the increased underwriting exposure,
will benefit the underwriting result for the full year.
6 months to 30th June
2022 2021
GBP000's GBP000's
Stop loss costs (1,224) (968)
Operating costs (2,389) (1,139)
Total Costs (3,612) (2,107)
=========== ===========
Operating costs have increased to GBP2.4m as a potential
significant acquisition was contemplated in the period where costs
of due diligence were incurred of GBP0.7m and as GBP20m
(2021-GBP7.6m) of additional underwriting capital has been sourced
through a bank facility adding a further GBP0.2m to the costs. The
stop loss for Helios retained capacity continues to be bought which
has a 10% indemnity to protect the Group from a loss excess of 7.5%
loss for the 2022 underwriting year. The increase in the retained
capacity of 84% to GBP172m contributed to the increase in the stop
loss costs incurred.
Investment
Return
Financial Investments GBP000's - GBP000's Yield
Syndicate investment assets 127,615 (3,560) (2.8%)
Group investment assets 58,838 85 0.1%
186,453 (3,475) (1.9%)
----------------------- ------------ -------
Helios's share of the syndicate investments incurred a loss in
the first six months of 2.8% as interest rates increased and this
has masked the improvement in underwriting margins. Group
investment funds remained in cash and targeted investments have
since been made. The Group funds will continue to earn interest for
the balance of the year. The Group's share of the syndicate
investments is expected to continue to increase to reflect the
growth of the capacity portfolio.
The positive momentum in both insurance and reinsurance pricing
has continued into 2022. The improvement in underwriting conditions
over the last five years will provide a platform for better
prospects for underwriting margins over the next few years.
Helios has increased its retained capacity to GBP172m for the
2022 underwriting year to take advantage of the current market
conditions. The proportion of the capacity reinsured has been
reduced while the capital provided by the reinsurers has remained
steady. The quota share reinsurers fund their share of the capital
requirements and pay Helios a fee and a profit commission. The
strategy of building a portfolio of underwriting capacity that can
be accessed by alternative sources of capital is expected to be
developed in the future as we regard this as an attractive
opportunity to increase the fee income generated from the
portfolio.
Helios has received preliminary indications of pre-emptions for
the 2022 year of account from the syndicates supported of GBP21m
which are subject to approval by Lloyd's and could increase the
capacity portfolio for the 2023 year of account to GBP254m - an
increase of 9%.
The value of the capacity portfolio, using the 2021 weighted
average prices, including the value of the expected pre-emptions
for 2023 (using the 2021 weighted average capacity prices) could
increase to GBP72m - an increase of 20%. Should the average
auctions prices in 2022 decrease by 10%, the net tangible asset
value per share should still increase by 5.37p.
Impact of pre-emptions on capacity portfolio
GBPm 2022 Capacity Capacity
Value
GBPm
2022 YOA as at 1st January 2022 232.7 59.9
Expected Pre-emptions 21.7 12.1
254.4 72.0
Decrease of 10% 64.8
Increase in NTAV per share - 25%
Corporation Tax 5.37p
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. 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. There are over 17 LLV's for sale at present and it is
expected that we will be able to conclude further acquisitions this
year.
The net tangible asset value per share is GBP1.49p per share
(Dec 2021 - GBP1.57p per share). The net assets include a deferred
tax provision of GBP13m on the value of the capacity portfolio. The
reduction of corporation tax rate to 19%, will reduce the deferred
tax provision by GBP3.5m and increase the net tangible asset per
share by 4.7p.
IFRS 17
The Company's consolidated accounts are presently prepared in
accordance with current IFRS applicable to the insurance industry.
In May 2017, the IASB published its standard on insurance
accounting (IFRS 17, 'Insurance Contracts') which replaces the
current IFRS 4 standard. Some targeted amendments to this standard,
including to the effective date, were issued in June 2020 and
December 2021. IFRS 17, 'Insurance Contracts', as amended, will
have the effect of introducing fundamental changes to the statutory
reporting of insurance entities that prepare accounts under IFRS
from 2023. Given compliance with IFRS will not be feasible due to
the UK GAAP based Lloyd's information provision and syndicate
disclosures, the Board is considering alternative arrangements
including the use of an alternative standard, including UK GAAP.
The Board is confident that an appropriate alternative will be
available and a further announcement will be made in due
course.
Financial results summary
Six months ended 30 June 2022
6 months to 30 June 2022 6 months to 30 June 2021 Year to 31 December 2021
GBP'000 GBP'000 GBP'000
Underwriting profits (652) 1,102 3,399
Other Income
Fees from reinsurers 442 474 616
Corporate reinsurance recoveries 307 14 (372)
Goodwill on bargain purchase - - 1,219
Investment income 84 38 1,237
------------------------- ------------------------- -------------------------
Total Other Income 833 526 2,700
Costs
Pre-acquisition - - (1,269)
Stop loss costs (1,224) (968) (1,871)
Operating costs (2,388) (1,140) (3,604)
------------------------- ------------------------- -------------------------
Total Costs (3,612) (2,108) (6,744)
Operating profit before impairments
of goodwill
and capacity (3,431) (480) (645)
Tax (214) (1,839) 211
Revaluation of syndicate capacity (257) (340) 8,132
Income tax relating to the
components of other
Comprehensive income - - (2,766)
------------------------- ------------------------- -------------------------
(Loss)/profit for the period/year (3,902) (2,659) 4,932
------------------------- ------------------------- -------------------------
Period to 30(th) June 2022
Helios retained
capacity at Helios
30 June 2022 Portfolio mid Profits
Underwriting Year GBPm point forecasts GBP'000
2020 65.9 1.84% 576
2021 92.8 2.4% 2,667
2022 171.9 N/A (3,895)
------------------ --------------- ---------------- --------
(653)
------------------ --------------- ---------------- --------
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
------------------ --------------- ---------------- --------
Year to 31 December 2021
Helios retained
capacity at
31 December Helios
2021 Portfolio mid Profits
Underwriting Year GBPm point forecasts GBP'000
------------------ --------------- ---------------- --------
2019 67.4 2.7% 4,092
2020 66.6 0.97% 2,915
2021 93.6 - (3,606)
------------------ --------------- ---------------- --------
3,401
------------------ --------------- ---------------- --------
Summary Balance Sheet
The summary Group balance sheet excludes items relating to
syndicate participations. See Note 15 for further information.
6 Months to June 2022 6 Months to June 2021 Year to 31 December 2021
GBP'000 GBP'000 GBP'000
------------------ --------------------- ----------------------- ------------------------
Intangible assets 60,889 31,601 60,889
Funds at Lloyd's 58,838 18,543 43,589
Other cash 13,039 52,272 16,178
Other assets 6,108 12,385 5,517
------------------ --------------------- ----------------------- ------------------------
Total assets 138,874 114,801 126,173
------------------ --------------------- ----------------------- ------------------------
Deferred tax 11,568 8,546 11,887
Borrowings 15,000 - -
Other liabilities 3,587 3,409 3,052
------------------ --------------------- ----------------------- ------------------------
Total liabilities 30,155 11,955 14,939
------------------ --------------------- ----------------------- ------------------------
Syndicate equity (6,910) (3,573) (3,488)
------------------ --------------------- ----------------------- ------------------------
Total equity 101,809 99,273 107,746
------------------ --------------------- ----------------------- ------------------------
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 30 June 2022 6 months to 30 June 2021 Year to 31 December 2021
GBP'000 GBP'000 GBP'000
Opening Balance (free cash) 16,178 4,961 4,961
Income
Acquired on acquisition - - 1,939
Distribution of profits (net of tax
retentions) 2,422 365 475
Transfers from Funds at Lloyds' 5,277 224 336
Investment income 55 5 95
Issue of new ordinary shares - 53,231 53,231
Borrowings 15,000 - -
Cancelled Reinsurance policy refunds - - 6,964
Expenditure
Operating costs (inc Hampden /
Nomina fees) (1,409) (933) (3,702)
Purchase of capacity - - (2,663)
Reinsurance Cost (857) (1,025) -
Acquisition of LLV's - - (26,529)
Transfers to Funds at Lloyds' (21,886) - (12,270)
Tax 293 (8) (641)
Dividends paid (2,034) (548) (2,018)
Revolving credit facility repayment - (4,000) (4,000)
Closing balance 13,039 52,272 16,178
------------------------- ------------------------- -------------------------
Net tangible asset per share
6 months 6 months Year to
to 30 June to 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
Net tangible assets 40,919 67,642 46,856
Value of capacity
(WAV) 59,796 30,826 59,796
------------ ------------ -------------
100,715 98,468 106,652
------------ ------------ -------------
Shares in issue
- on the market 67,786 67,254 67,786
Shares in issue
- total of on the
market and JSOP
shares 68,886 67,754 68,886
Net tangible asset
value per share
GBP - on the market 1.49 1.46 1.57
Net tangible asset
value per share
GBP - on the market
and JSOP shares 1.46 1.45 1.55
Interim condensed consolidated statement of comprehensive
income
Six months ended 30 June 2022
6 months
ended 6 months 12 months
30 June ended 30 ended
2022 June 2021 31 December
Unaudited Unaudited 2021 Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------ ---------- ---------- -------------
Gross premium written 4 124,067 53,351 106,058
Reinsurance premium ceded (35,291) (17,107) (26,935)
------------------------------------------------------- ------ ---------- ---------- -------------
Net premium written 4 88,776 36,244 79,123
------------------------------------------------------- ------ ---------- ---------- -------------
Change in unearned gross premium provision 5 (46,338) (15,678) (11,201)
Change in unearned reinsurance premium provision 5 15,945 6,141 1,484
------------------------------------------------------- ------ ---------- ---------- -------------
(30,393) (9,537) (9,717)
------------------------------------------------------- ------ ---------- ---------- -------------
Net earned premium 3,4 58,383 26,707 69,406
Net investment income 6 (3,476) 185 568
Other underwriting income 442 476 723
Gain on bargain purchase - - 1,219
Other income - 30 (82)
------------------------------------------------------- ------ ---------- ---------- -------------
Revenue 55,349 27,398 71,834
------------------------------------------------------- ------ ---------- ---------- -------------
Gross claims paid (28,627) (19,108) (46,478)
Reinsurers' share of gross claims paid 7,153 4,946 11,328
------------------------------------------------------- ------ ---------- ---------- -------------
Claims paid, net of reinsurance 21,474 (14,162) (35,150)
------------------------------------------------------- ------ ---------- ---------- -------------
Change in provision for gross claims 5 (17,146) (2,118) (15,796)
Reinsurers' share of change in provision for gross
claims 5 3,879 (156) 6,204
------------------------------------------------------- ------ ---------- ---------- -------------
Net change in provision for claims 5 (13,267) (2,274) (9,592)
------------------------------------------------------- ------ ---------- ---------- -------------
Net insurance claims and loss adjustment expenses 4 (34,741) (16,436) (44,472)
------------------------------------------------------- ------ ---------- ---------- -------------
Expenses incurred in insurance activities (22,310) (10,665) (25,407)
Other operating expenses (1,729) (777) (2,330)
------------------------------------------------------- ------ ---------- ---------- -------------
Operating expenses (24,039) (11,442) (27,737)
------------------------------------------------------- ------ ---------- ---------- -------------
Operating (loss)/profit before impairments of goodwill
and capacity 4 (3,431) (480) (645)
Impairment of goodwill - - -
Impairment of syndicate capacity - - -
------------------------------------------------------- ------ ---------- ---------- -------------
(Loss)/profit before tax (3,431) (480) (645)
Income tax charge 7 (214) (112) 211
Income and deferred tax charge as a result of change
in tax rates 7 - (1,727) -
(Loss)/Profit for the period (3,645) (2,319) (434)
------------------------------------------------------- ------ ---------- ---------- -------------
Other comprehensive income
Foreign currency translation differences - - -
Revaluation of syndicate capacity - - 8,132
Deferred tax relating to change in tax rates on
revaluation of capacity (257) (340) (2,766)
------------------------------------------------------- ------ ---------- ---------- -------------
Other comprehensive (loss)/income for the period,
net of tax (257) (340) 5,366
------------------------------------------------------- ------ ---------- ---------- -------------
Total other comprehensive (loss)/income for the
period (3,902) (2,659) 4,932
------------------------------------------------------- ------ ---------- ---------- -------------
(Loss)/profit for the period attributable to owners
of the Parent (3,645) (2,319) (434)
------------------------------------------------------- ------ ---------- ---------- -------------
Total comprehensive (loss)/income for the period
attributable to owners of the Parent (3,902) (2,659) 4,932
------------------------------------------------------- ------ ---------- ---------- -------------
(Loss)earnings per share attributable to owners
of the Parent
Basic 8 (5.38)p (3.88)p (0.75)p
Diluted 8 (5.38)p (3.88)p (0.75)p
------------------------------------------------------- ------ ---------- ---------- -------------
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 2022
6 months
ended 6 months 12 months
30 June ended 30 ended
2022 June 2021 31 December
Unaudited Unaudited 2021 Audited
Note GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------ ---------- ---------- -------------
Assets
Intangible assets 60,889 31,601 60,889
Financial assets at fair value through profit or
loss 186,453 83,047 153,844
Reinsurance assets:
- reinsurers' share of claims outstanding 5 73,074 32,800 53,433
- reinsurers' share of unearned premium 5 23,992 10,694 10,538
Other receivables, including insurance and reinsurance
receivables 127,483 66,227 87,859
Deferred acquisition costs 19,424 8,119 13,615
Prepayments and accrued income 2,922 1,633 799
Cash and cash equivalents 36,064 62,143 24,624
------------------------------------------------------- ------ ---------- ---------- -------------
Total assets 530,301 296,264 405,601
------------------------------------------------------- ------ ---------- ---------- -------------
Liabilities
Insurance liabilities:
- claims outstanding 5 241,783 115,559 186,653
- unearned premium 5 97,509 42,974 59,611
Deferred income tax liabilities 11,568 8,546 11,965
Borrowings 15,000 - -
Other payables, including insurance and reinsurance
payables 58,147 25,640 34,927
Accruals and deferred income 4,485 4,272 4,700
------------------------------------------------------- ------ ---------- ---------- -------------
Total liabilities 428,492 196,991 297,856
------------------------------------------------------- ------ ---------- ---------- -------------
Equity
Equity attributable to owners of the Parent:
Share capital 11 6,931 6,817 6,931
Share premium 11 86,330 85,502 86,330
Other reserves - treasury shares 11 (110) (50) (110)
Retained earnings 8,658 7,004 14,595
------------------------------------------------------- ------ ---------- ---------- -------------
Total equity 101,809 99,273 107,746
------------------------------------------------------- ------ ---------- ---------- -------------
Total liabilities and equity 530,301 296,264 405,602
------------------------------------------------------- ------ ---------- ---------- -------------
The Financial Statements were approved and authorised for issue
by the Board of Directors on 28 September 2022, 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 2022
Attributable to owners
of the Parent
-------------------------------------------------------
Share Share Revaluation Other Retained
capital premium reserve reserves earnings Total
Consolidated Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
At 1 January 2022 6,931 86,330 9,348 (110) 5,247 107,746
Total comprehensive income for
the year:
Loss for the year - - - - (3,645) (3,645)
Other comprehensive income, net
of tax - - (257) - - (257)
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Total comprehensive income for
the year - - (257) - (3,645) (3,902)
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Transactions with owners: - - - - - -
Dividends paid 9 - - - - (2,034) (2,034)
Company buy back of shares 11 - - - - - -
Share issue - - - - - -
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Total transactions with owners - - - - (2,034) (2,034)
At 30 June 2022 6,931 86,330 9,091 (110) (432) 101,810
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
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 2021 3,393 35,525 3,982 (50) 7,699 50,549
Total comprehensive income for
the year:
Profit for the year - - - - (434) (434)
Other comprehensive income, net
of tax - - 5,366 - - 5,366
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Total comprehensive income for
the year - - 5,366 - (434) 4,932
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Transactions with owners:
Dividends paid - - - - (2,018) (2,018)
Company buy back of shares 11 - - - - - -
Share issue 11 3,538 50,805 - (60) - 54,283
Other comprehensive income, net - -
of tax - - - -
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
Total transactions with owners 3,538 50,805 - (60) (2,018) 52,265
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
At 31 December 2021 6,931 86,330 9,348 (110) 5,247 107,746
-------------------------------- ------ -------- --------- ----------- ---------- --------- --------
The notes are an integral part of these Financial
Statements.
Interim condensed consolidated statement of cash flows
Six months ended 30 June 2022
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
Note 2022 2021 Unaudited 2021
Unaudited GBP'000 Audited
GBP'000 GBP'000
-------------------------------------------------------------- ------- ---------- --------------- ------------
Cash flows from operating activities
Loss before tax (3,431) (480) (645)
Adjustments for:
- Other comprehensive income, gross of tax - - -
- Interest received (78) (2) (17)
- Investment income 3,503 (183) (1,549)
- Recognition of negative goodwill - - -
- Goodwill on bargain purchase - - (1,219)
- Loss on sale of intangible assets - - (12)
Changes in working capital:
* change in fair value of financial assets held at fair
value through profit or loss (617) (140) 1,316
* decrease/(increase) in financial assets at fair value
through profit or loss (32,609) 2,230 (31,436)
- (increase)/decrease in other receivables (47,556) (8,729) 1,162
- decrease/(increase) in other payables 23,005 5,245 (3,799)
- net decrease/(increase) in technical provisions 59,933 6,121 18,285
----------------------------------------------------------------------- ---------- --------------- ------------
Cash generated/(utilised) from operations 2,150 4,062 (17,914)
----------------------------------------------------------------------- ---------- --------------- ------------
Income tax paid (252) - (675)
----------------------------------------------------------------------- ---------- --------------- ------------
Net cash inflow from operating activities 1,898 4,062 (18,589)
----------------------------------------------------------------------- ---------- --------------- ------------
Cash flows from investing activities
Interest received 78 2 17
Investment income (3,503) 183 1,549
Purchase of intangible assets - - (2,984)
Proceeds from disposal of intangible assets - - 1,809
Acquisition of subsidiaries, net of cash acquired - - (13,255)
----------------------------------------------------------------------- ---------- --------------- ------------
Net cash inflow/(outflow) from investing activities (3,425) 185 (12,864)
----------------------------------------------------------------------- ---------- --------------- ------------
Cash flows from financing activities
-------------------------------------------------------------- ------- ---------- --------------- ------------
Net proceeds from issue of ordinary share capital - 53,401 53,601
Buy back of ordinary share capital - - -
Payment for company buy back of shares - - -
Proceeds from borrowings 15,000 - -
Repayment of borrowings - (4,000) (4,000)
Dividends paid to owners of the Parent (2,034) - (2,018)
----------------------------------------------------------------------- ---------- --------------- ------------
Net cash inflow from financing activities 12,966 49,401 47,583
----------------------------------------------------------------------- ---------- --------------- ------------
Net increase in cash and cash equivalents 11,439 53,648 16,130
Cash and cash equivalents at beginning of period 24,625 8,495 8,495
----------------------------------------------------------------------- ---------- --------------- ------------
Cash and cash equivalents at end of period 36,064 62,143 24,625
----------------------------------------------------------------------- ---------- --------------- ------------
Cash held within the syndicates' accounts is GBP23,085,000
(2021: GBP9,871,000) of the total cash and cash equivalents held at
the end of the period GBP36,064,000 (2021: GBP62,143,000). 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 2022
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.
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2021 were approved by the board of directors on 26 May
2022 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006. The financial
statements have been reviewed, not audited
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 2022.
The Condensed Consolidated Interim Financial Statements for the
six months ended 30 June 2022 and 2021 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 2021, 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
2021.
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 2022.
Amendments to IFRS 3: Business combinations - Reference to the
Conceptual Framework. IFRS 3 is updated so that it refers to the
2018 Conceptual Framework instead of the 1989 Framework. They also
add to IFRS 3 a requirement that, for transactions and other events
within the scope of IAS 37 or IFRIC 21, an acquirer applies IAS 37
or IFRIC 21 to identify the liabilities it has assumed in a
business combination. Lastly, they add to IFRS 3 an explicit
statement that an acquirer does not recognise contingent assets
acquired in a business combination.
Amendments to IAS 16: Property, Plant and Equipment. The changes
introduced amend the standard to prohibit deducting from the cost
of an item of property, plant and equipment any proceeds from
selling items produced while bringing that asset to the location
and condition necessary for it to be capable of operating in the
manner intended by management. Instead, an entity recognises the
proceeds from selling such items, and the cost of producing those
items, in profit or loss.
Amendments to IAS 37: Provisions, Contingent Liabilities and
Contingent Assets. The changes specify that the 'cost of
fulfilling' a contract comprises the 'costs that relate directly to
the contract'. Costs that relate directly to a contract can either
be incremental costs of fulfilling that contract or an allocation
of other costs that relate directly to fulfilling contracts.
Annual Improvements to IFRS Standards 2018-2020 Cycle. The
pronouncement contains amendments to four International Financial
Reporting Standards (IFRS 1, IFRS 9, IFRS 16 and IAS 41) as result
of the IASB's annual improvements project
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.
Notes to the financial statements
Six months ended 30 June 2022
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).
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).
IAS 12 Income Taxes - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction (IASB effective date
1 January 2023)
IFRS 9 "Financial Instruments" (IASB effective date 1 January
2018) has not been applied under the 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.
IFRS 17 "Insurance Contracts" (IASB effective date 1 January
2023) - This replaces IFRS 4 and requires an IFRS reporter to
measure insurance contracts using updated estimates and assumptions
that reflect the timing of cash flows and any uncertainty relating
to insurance contracts. It also requires that profits are
recognised as insurance services are delivered (rather than when
premiums are received) and for the IFRS reporter to provide
information about insurance contract profits the company expects to
recognise in the future.
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 2022 Unaudited GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------------- ----------- ----------- --------
Net earned premium 58,767 - (383) 58,384
Net investment income (3,561) 85 - (3,476)
Other income - - 442 442
Net insurance claims and loss adjustment
expenses (34,740) - (1) (34,741)
Expenses incurred in insurance activities (21,650) - (660) (22,310)
Other operating expenses - - (1,729) (1,729)
Loss before tax (1,184) 85 (2,331) (3,430)
------------------------------------------ -------------- ----------- ----------- --------
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)
Profit before tax 2,311 28 (2,819) (480)
------------------------------------------ -------------- ----------- ----------- --------
Other
Syndicate Investment corporate
participation management activities Total
12 months ended 31 December 2021 Audited GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------------- ----------- ----------- --------
Net earned premium 69,407 - - 69,407
Net investment income 185 383 - 568
Other income 119 - 523 642
Net insurance claims and loss adjustment
expenses (42,423) - (2,319) (44,742)
Expenses incurred in insurance activities (24,491) - (916) (25,407)
Other operating expenses (267) - (2,063) (2,330)
Gain on bargain purchase - - 1,219 1,219
Impairment of syndicate capacity - - - -
------------------------------------------ -------------- ----------- ----------- --------
Profit before tax 2,531 383 (3,558) (644)
------------------------------------------ -------------- ----------- ----------- --------
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 2022 other corporate activities
totalling GBP383,000 (2021: GBP951,000 Net insurance claims and
loss adjustment expenses - 2019, 2020 and 2021 years of account)
represents the 2020, 2021 and 2022 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*
-------------------------------------------
2020 and Pre- Corporate Other
6 months ended 30 prior 2021 2022 Sub-total acquisition reinsurance corporate Total
June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Gross premium written 930 11,407 111,730 124,067 - - - 124,067
Reinsurance ceded (96) (2,410) (31,178) (33,684) - (383) (1,224) (35,291)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Net premium written 834 8,997 80,552 90,383 - (383) (1,224) 88,776
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Net earned premium 3,306 35,444 21,240 59,990 - (383) (1,224) 58,383
Other income (2,315) (941) (304) (3,560) - 442 84 (3,034)
Net insurance claims
and loss adjustment
expenses 578 (20,389) (15,237) (35,048) - - 307 (34,741)
Operating expenses (843) (9,826) (10,982) (21,651) - - (2,388) (24,039)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity 726 4,288 (5,283) (269) - 59 (3,221) (3,431)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Quota share adjustment (150) (1,621) 1,388 (383) - 383 - -
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity
after quota share
adjustment 576 2,667 (3,895) (652) - 442 (3,221) (3,431)
----------------------- -------- --------- --------- ----------- ------------ ------------ ---------- --------
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*
---------------------------------------------
2019 Pre- Corporate Other
12 months ended 31 and prior 2020 2021 Sub-total acquisition reinsurance corporate Total
December 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Gross premium written 721 11,712 122,179 134,612 (28,554) - - 106,058
Reinsurance ceded (713) (2,569) (28,909) (32,191) 7,126 - (1,871) (26,936)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net premium written 8 9,143 93,270 102,421 (21,428) - (1,871) 79,122
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Net earned premium 3,426 40,573 48,693 92,692 (21,415) - (1,871) 69,404
Other income 206 (166) (3) 37 (681) 616 2,456 2,428
Net insurance claims
and loss adjustment
expenses 5,113 (22,945) (36,256) (54,088) 12,037 (2,319) (372) (44,742)
Operating expenses (2,261) (12,406) (18,254) (32,921) 8,788 - (3,604) (27,737)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity 6,484 5,056 (5,820) 5,720 (1,271) (1,703) (3,391) (645)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Quota share
adjustment (2,392) (2,141) 2,214 (2,319) - 2,319 - -
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
Operating profit
before impairments
of goodwill and
capacity
after quota share
adjustment 4,092 2,915 (3,606) 3,401 (1,271) 616 (3,391) (645)
--------------------- ---------- --------- --------- ----------- ------------ ------------ ---------- --------
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 2022 186,653 53,433 133,220
Increase in reserves arising from acquisition of
subsidiary undertakings - - -
Movement of reserves 17,146 3,879 13,267
Other movements 37,984 15,762 22,222
------------------------------------------------- -------- ----------- --------
At 30 June 2022 241,783 73,074 168,709
------------------------------------------------- -------- ----------- --------
Movement in unearned premium
Gross Reinsurance Net
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------- ----------- --------
At 1 January 2022 59,611 10,538 49,073
Increase in reserves arising from acquisition of
subsidiary undertakings - - -
Movement of reserves 46,338 15,945 30,393
Other movements (8,440) (2,491) (5,949)
------------------------------------------------- -------- ----------- --------
At 30 June 2022 97,509 23,992 73,517
------------------------------------------------- -------- ----------- --------
Included within other movements are the 2019 and prior years'
claims reserves reinsured into the 2020 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 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 2021 113,371 30,781 82,590
Increase in reserves arising from acquisition of
subsidiary undertakings 57,941 15,405 42,537
Movement of reserves 15,796 6,204 9,592
Other movements (455) 1,043 (1,499)
------------------------------------------------- -------- ----------- --------
At 31 December 2021 186,653 53,433 133,220
------------------------------------------------- -------- ----------- --------
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 15,649 3,095 12,553
Movement of reserves 11,201 1,484 9,717
Other movements 405 (69) 475
------------------------------------------------- -------- ----------- --------
At 31 December 2021 59,611 10,538 49,073
------------------------------------------------- -------- ----------- --------
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
ended 6 months 12 months
30 June ended ended 31
2022 Unaudited 30 June December
GBP'0 2021 Unaudited 2021 Audited
00 GBP'000 GBP'000
------------------------------------------------------ --------------- ---------------- -------------
Investment income (3,503) 183 1,549
Realised (losses)/gains on financial assets at fair
value through profit or loss 12 - 392
Unrealised (losses)/gains on financial assets at fair
value through profit or loss (61) - (1,316)
Investment management expenses (2) - (74)
Bank interest 78 2 17
------------------------------------------------------ --------------- ---------------- -------------
Net investment income (3,476) 185 568
------------------------------------------------------ --------------- ---------------- -------------
Included within Investment income are investment losses of
GBP3,560,000 from Syndicate participations.
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
2022 Unaudited 2021 Unaudited 2021 Audited
GBP'000 GBP'000 GBP'000
------------------ --------------- ---------------- -------------
Income tax credit 214 1,839 (210)
------------------ --------------- ---------------- -------------
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% (2021: 19.00%).
On 23 September 2022, the Chancellor announced that next year's
increase in the corporation tax rate from 19% to 25% will be
cancelled. The deferred tax asset provided in the financial
statements has been calculated at 25% being the substantively
enacted corporation tax rate at the Balance Sheet date. The maximum
impact of the reduction in the corporation tax rate is a reduction
in the deferred tax asset of GBP3.5m.
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 2022 June 2021 December
Unaudited Unaudited 2021 Audited
------------------------------------------------------- ----------- ----------- -------------
(Loss)/profit for the year after tax attributable
to ordinary equity holders of the parent (3,645,000) (2,319,000) (434,000)
------------------------------------------------------- ----------- ----------- -------------
Basic - weighted average number of ordinary shares* 67,786,212 59,704,671 58,058,164
------------------------------------------------------- ----------- ----------- -------------
Weighted average number of ordinary shares for diluted
earnings per share* 67,786,212 59,704,671 58,058,164
------------------------------------------------------- ----------- ----------- -------------
Basic (loss)/earnings per share (5.38)p (3.88)p (0.75)p
------------------------------------------------------- ----------- ----------- -------------
Diluted (loss)/earnings per share (5.38)p (3.88)p (0.75)p
------------------------------------------------------- ----------- ----------- -------------
* Diluted loss per share is not permitted to be reduced from the
basic loss per share.
9. Dividends paid or proposed
It was proposed and agreed at the AGM on 29 June 2022 that a
dividend of 3p would be payable.
10. Investments in subsidiaries
30 June 30 June 31 December
2022 2021 2021
GBP'000 GBP'000 GBP'000
------ -------- -------- -----------
Total 71,362 45,335 71,362
------ -------- -------- -----------
30 June 31 December
Direct/indirect 2022 2021
interest ownership ownership Principal activity
----------------------------------- ---------------- ---------- ----------- ---------------------------
Lloyd's of London corporate
Nameco (No. 917) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Devon Underwriting Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No. 346) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Pooks Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Charmac Underwriting Limited Direct 100% 100% vehicle
Joint Share Ownership
RBC CEES Trustee Limited(ii) Direct 100% 100% Plan
Lloyd's of London corporate
Nottus (No 51) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Chapman Underwriting Limited Direct 100% 100% vehicle
Llewellyn House Underwriting Lloyd's of London corporate
Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Advantage DCP Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Romsey Underwriting Limited Direct 100% 100% vehicle
Helios UTG Partner Limited(i) Direct 100% 100% Corporate partner
Lloyd's of London corporate
Salviscount LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Inversanda LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Fyshe Underwriting LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Nomina No 505 LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Nomina No 321 LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Nameco (No. 409) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No. 1113) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Catbang 926 Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Whittle Martin Underwriting Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 408) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nomina No 084 LLP Indirect 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 510) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 544) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
N J Hanbury Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1011) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1111) Limited Direct 100% 100% vehicle
Nomina No 533 LLP Indirect 100% 100% Corporate partner
North Breache Underwriting Lloyd's of London corporate
Limited Direct 100% 100% vehicle
Lloyd's of London corporate
G T C Underwriting Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Hillnameco Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 2012) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1095) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
New Filcom Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Kemah Lime Street Capital Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1130) Limited Direct 100% 100% vehicle
Nomina No 070 LLP Indirect 100% 100% Corporate partner
Lloyd's of London corporate
Nameco (No 389) Limited Direct 100% 100% vehicle
Nomina No 469 LLP Indirect 100% 100% Corporate partner
Nomina No 536 LLP Indirect 100% 100% Corporate partner
Lloyd's of London corporate
Nameco (No 301) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1232) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Shaw Lodge Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Queensberry Underwriting Direct 100% 100% vehicle
Nomina No 472 LLP Indirect 100% 100% Corporate partner
Nomina No 110 LLP Indirect 100% 100% Corporate partner
Lloyd's of London corporate
Chanterelle Underwriting Limited Direct 100% 100% vehicle
Kunduz LLP Indirect 100% 100% Corporate partner
Lloyd's of London corporate
Exalt Underwriting Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Nameco (No 1110) Limited Direct 100% 100% vehicle
Lloyd's of London corporate
Clifton 2011 Limited Direct 100% 100% vehicle
Nomina No 378 LLP Indirect 100% 100% Corporate partner
Gould Scottish Limited Partnership Indirect 100% 100% Corporate partner
(i) Helios UTG Partner Limited, a subsidiary of the Company,
owns 100% of Salviscount LLP, Inversanda LLP, Fyshe Underwriting
LLP, Nomina No 505 LLP, Nomina No 321 LLP Nomina No 084 LLP, Nomina
No 533 LLP, Nomina No 070 LLP, Nomina No 469 LLP, Nomina No 536
LLP, Nomina No 472 LLP, Nomina No 110 LLP, Kunduz LLP. Nomina No
348 LLP and Gould Scottish Limited Partnership. The cost of
acquisition of these LLPs is accounted for in Helios UTG Partner
Limited, their immediate parent company.
(ii) RBC CEES Trustee Limited was an incorporated entity in year
2017 to satisfy the requirements of the Joint Share Ownership.
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 2021 69,305,381 6,821 110 86,330 93,261
----------------------------------------------------- ----------- -------------- -------------- -------- --------
Ordinary shares of 10p each and share premium at 30
June 2022 69,305,381 6,821 110 86,330 93,261
----------------------------------------------------- ----------- -------------- -------------- -------- --------
(i) Number of shares
30 June 2022 31 December 2021
------------------------------------------------------------------- ------------ ----------------
Allotted, called up and fully paid ordinary shares:
On the market 67,786,212 67,786,212
Company buy back of ordinary shares held in treasury 419,169 419,169
------------------------------------------------------------------- ------------ ----------------
68,205,381 68,205,381
------------------------------------------------------------------- ------------ ----------------
Uncalled and partly paid ordinary share under the JSOP scheme (ii) 1,100,000 1,100,000
------------------------------------------------------------------- ------------ ----------------
69,305,381 69,305,381
------------------------------------------------------------------- ------------ ----------------
(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 2020, 2021 and 2022 years of account
with protected cell companies of Hampden Insurance PCC (Guernsey)
Limited.
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 GBP2,596,000 (2021: GBP4,232,000) 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 2022 2021 2020
number Managing or members' agent GBP GBP GBP
--------- ------------------------------------ ----------- ----------- -----------
33 Hiscox Syndicates Limited 13,830,779 13,830,793 14,193,201
218 IQUW Syndicate Management Limited 7,070,046 7,070,053 6,558,839
Cincinnati Global Underwriting
318 Agency Limited 992,637 992,635 404,687
386 QBE Underwriting Limited 2,543,190 2,312,008 2,249,975
510 Tokio Marine Kiln Syndicates Limited 32,301,169 22,594,020 19,595,324
557 Tokio Marine Kiln Syndicates Limited 3,458,576 3,458,576 3,236,695
609 Atrium Underwriters Limited 12,071,789 11,612,849 10,545,464
623 Beazley Furlonge Limited 21,576,129 18,913,248 16,129,766
727 S A Meacock & Company Limited 2,059,162 1,999,191 3,053,284
1176 Chaucer Syndicates Limited 2,784,204 2,784,212 2,813,031
1200 Argo Managing Agency Limited 10,050,000 - 160,714
1729 Asta Managing Agency Limited 10,148,838 131,123 295,476
1902 Asta Managing Agency Limited 10,000,002 - -
1969 Apollo Syndicate Management Limited 5,610,170 400,001 -
1971 Apollo Syndicate Management Limited 6,467,147 - -
1991 Coverys Manageming Agency Limited - - 53,345
2010 Lancashire Syndicates Limited 10,137,041 9,547,814 4,188,754
2014 Pembroke Managing Agency Limited - - -
2121 Argenta Syndicate Management Limited 10,019,394 5,472,177 2,473,682
2288 Astra Managing Agency Limited - - 8,139
2525 Asta Managing Agency Limited 1,281,801 1,193,027 1,149,189
2689 Asta Managing Agency Limited 10,025,276 438,655 518,866
2791 Managing Agency Partners Limited 9,217,847 9,217,851 10,303,120
4242 Asta Managing Agency Limited 12,561,664 8,483,065 423,592
4444 Canopius Managing Agents Limited - 162,189 281,110
5623 Beazley Furlonge Limited 6,894,032 4,769,792 2,883,293
5886 Asta Managing Agency Limited 22,520,345 12,054,953 7,277,465
6103 Managing Agency Partners Limited 3,073,952 2,704,446 2,076,669
6104 Hiscox Syndicates Limited 1,702,213 1,695,393 1,738,097
6107 Beazley Furlonge Limited 1,562,047 1,548,102 1,562,779
6117 Argo Managing Agency Limited 2,741,022 1,715,599 1,556,376
6133 Apollo Syndicate Management Limited - - 14,400
--------- ------------------------------------ ----------- ----------- -----------
Total 232,700,472 145,101,772 115,745,332
--------- ------------------------------------ ----------- ----------- -----------
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 2022 30 June 2021 31 December 2021
------------------------- ----------------------------- ----------------------------- -----------------------------
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 60,889 - 60,889 31,601 - 31,601 60,889 - 60,889
Financial assets at fair
value through profit or
loss 58,838 127,615 186,453 18,543 64,504 83,047 43,589 110,256 153,844
Reinsurance assets:
- reinsurers' share of
claims outstanding 60 73,014 73,074 61 32,739 32,800 60 53,373 53,433
- reinsurers' share of
unearned premium - 23,992 23,992 - 10,694 10,694 - 10,538 10,538
Other receivables,
including
insurance and
reinsurance
receivables 4,885 122,598 127,483 11,496 54,731 66,227 5,456 82,403 87,859
Deferred acquisition
costs - 19,424 19,424 - 8,119 8,119 - 13,615 13,615
Prepayments and accrued
income 1,223 1,699 2,922 828 805 1,633 1 798 799
Cash and cash equivalents 12,979 23,085 36,064 52,272 9,871 62,143 16,178 8,447 24,624
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total assets 138,874 391,427 530,301 114,801 181,463 296,264 126,173 279,430 405,601
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Liabilities
Insurance liabilities:
- claims outstanding - 241,783 241,783 - 115,559 115,559 - 186,653 186,653
- unearned premium - 97,509 97,509 - 42,974 42,974 - 59,611 59,611
Deferred income tax
liabilities 11,568 - 11,568 8,546 - 8,546 11,887 79 11,965
Borrowings 15,000 - 15,000 - - - - - -
Other payables, including
insurance and
reinsurance
payables 844 57,303 58,147 89 25,551 25,640 445 34,482 34,926
Accruals and deferred
income 2,743 1,742 4,485 3,320 952 4,272 2,607 2,093 4,700
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total liabilities 30,155 398,337 428,492 11,955 185,036 196,991 14,939 282,918 297,855
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Equity attributable to
owners of the Parent
Share capital 6,931 - 6,931 6,817 - 6,817 6,931 - 6,931
Share premium 86,330 - 86,330 85,502 - 85,502 86,330 - 86,330
Revaluation reserve - - - 3,642 - 3,642 - - -
Other reserves (110) - (110) (50) - (50) (110) - (110)
Retained earnings 15,568 (6,910) 8,658 6,935 (3,573) 3,362 18,083 (3,488) 14,595
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total equity 108,719 (6,910) 101,809 102,846 (3,573) 99,273 111,234 (3,488) 107,746
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
Total liabilities and
equity 138,874 391,427 530,301 114,801 181,463 296,264 126,173 279,430 405,601
------------------------- -------- --------- -------- -------- --------- -------- -------- --------- --------
The Interim Report will be made available in electronic format
on the Company's website, www.huwplc.com .
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END
IR QVLFLLKLEBBE
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