Helios Underwriting plc
Helios Underwriting Interim results announcement 2024
Portfolio continues to benefit from outstanding Lloyd's market conditions
Helios Underwriting ('Helios' or the 'Company'), the only publicly traded company offering instant access to a diverse portfolio of syndicates at Lloyd's of London, the world's largest insurance market, is pleased to announce its interim financial results for the half year ended 30 June 2024.
The Lloyd's Market continues to report excellent performance and the outlook for 2025 is also positive. Consequently, Helios will benefit from its outstanding pipeline profits generated from its spread Lloyd's syndicate portfolio.
2024 interim results: key financial highlights
· Gross written premiums increased by 45% to £230m (HY 2023 - £159m) reflecting the increase in the capacity portfolio
· Further rate increase achieved by the Lloyd's market of 1.5% (HY 2023 9.1%) over the six-month period continuing the excellent market conditions at Lloyd's.
· Similar underwriting result of £10.8m (HY 2023- £11.6m) with an 92% combined ratio
· Proforma combined ratio of 88% having stripped out the impact of the growth of the portfolio
· An increase of 62% (2023 33%) in the retained capacity and underwriting exposure for the 2024 Year of Account to £397m (2023 - £245m) and this will contribute to the underwriting result in the future.
· Group investment returns of £2.7m (HY 2023 - £0.0m) have been booked in the first six months benefiting from the higher yields seen since 2023
· Operating profit of £6.5m (HY 2023 - £6.0m)
· Capital returned to shareholders of 12p per share (FY 2023 - 7p per share)
· Net asset value per share is £1.91 per share as at June (FY 2023 - £1.89 per share)
Executive Chairman, Michael Wade, commented: "The Lloyd's market is experiencing exceptionally good market conditions, as increased underwriting discipline combines with strong growth and sustainable price increases. Helios' financial performance so far this year reflects the strength of our proposition as well as the overall health of the Lloyd's market.
"In the first half of the year, we have expanded our retained Lloyd's syndicate capacity participation to £397m, whilst cash levels remain strong at £35m. We remain confident that our spread Lloyd's syndicate portfolio strategy will continue to generate attractive returns for shareholders.
"This year we were also delighted to welcome John Chambers and Katie Wade to our Board as Independent Non-Executive Directors, both of whom bring different backgrounds and perspectives that will expand the breadth and depth of expertise of the Board.
"We remain satisfied with our 2024 Lloyd's syndicate portfolio and will be re-positioning our balance for 2025, reducing new syndicate participations, as we manage the underwriting cycle. We are making good progress in reducing prospective operational costs and attracting fee earning Third Party capacity alongside our syndicate participations."
For more information, please contact:
Helios Underwriting plc
Michael Wade - Executive Chairman
Email: Michael.wade@huwplc.com
Tel: +44 (0) 203 880 7518
Arthur Manners - Chief Financial Officer
Email: Arthur.manners@huwplc.com
Tel: +44 (0)203 965 6441
Deutsche Numis (Nomad and Broker)
Giles Rolls / Charles Farquhar
+44 (0)20 7260 1000
FTI Consulting
Ed Berry / Nathan Hambrook-Skinner
+44 (0)7703 330 199 / +44 (0)7977 817 092
Interim Results
Six months ended 30 June 2024
Helios Underwriting plc is the only listed vehicle where investors can own a share in a company which participates across a broad spread of Lloyd's syndicates and where the Funds at Lloyd's (FAL) ratio is less than 50% meaning that for every £1 of capital at work it underwrites £2 or more in capacity.
| SUMMARY FINANCIAL INFORMATION
| |||
| | 6 months to 30 June | ||
| | 2024 | 2023 |
|
| £000's | £000's |
| |
| Underwriting result | 10,881 | 11,658 |
|
| Investment Income - syndicates | 5,823 | 3,160 |
|
| Net quota share | (4,086) | (4,378) |
|
| Net profits from portfolio | 12,618 | 10,441 |
|
| Other income | 4,644 | 739 |
|
| Costs | (10,813) | (5,146) |
|
| Operating profit for the period | 6,450 | 6,034 |
|
| Profit after tax | 5,681 | 4,351 |
|
| Earnings per share | 7.40p | 5.71p |
|
| Net Asset Value per Share | £1.91 | £1.54 |
|
Capacity Portfolio Result
The underwriting results remain strong as the underlying profitability of the growing portfolio continues to be recognised. The improved terms achieved in the last few years on all lines business and the muted impact of worldwide natural catastrophes in the period has contributed to the profitability of the portfolio.
| | 2024 | 2023 | % Chg |
| £000's | £000's |
| |
| Portfolio capacity | 512,084 | 310,798 | 65% |
| Gross premium written | 230,495 | 160,493 | 44% |
| Net earned premium | 129,965 | 97,316 | 34% |
| Net insurance claims & operating expenses | (119,084) | (85,658) | 39% |
| Underwriting result | 10,881 | 11,658 | |
| Combined ratio | 92% | 88% | |
The 44% increase in the gross written premiums reflect the 65% growth of the capacity portfolio to £512m for the 2024 underwriting year. The earnings from the increased capacity for 2024 year of account will be a drag on overall profitability in 2024 due to nature of the recognition of underwriting profits for an underwriting year. The growth of the capacity portfolio in 2024 has impacted the combined ratio of 92% by 4% resulting in a proforma net combined ratio of 88%.
The contribution of the open years of account to the result of the Capacity Portfolio for the six months to 30th June 2024 is as follows:
| | 2022 and prior | 2023 | 2024 | Total |
| £000's | £000's | £000's | £000's | |
| Portfolio capacity by underwriting year | 245,249 | 310,798 | 512,112 | |
| Gross Underwriting result | 1,523 | 18,569 | (9,211) | 10,881 |
| Investment Income | 3,344 | 1,809 | 669 | 5,822 |
| Portfolio result by underwriting year | 4,867 | 20,378 | (8,541) | 16,704 |
| Gross result as % of capacity | 2.0% | 6.6% | -1.7% | |
| Helios retained % | 75% | 79% | 78% | |
| Helios share of the portfolio result | 3,675 | 16,048 | (7,104) | 12,618 |
| | | | | |
The underwriting contribution from the 2022 underwriting years reflects the expected development of that year. The 2023 underwriting year has made a significant contribution to the earned profits in the six months reflecting the larger retained capacity and the expected much improved underwriting result from that year.
2024 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 2024 year, given the increased underwriting exposure, will benefit the underwriting result in the future.
The development of the earned profits by year of account is shown below:
| As a % of capacity | 2022 | 2023 | 2024 |
| Portfolio profits / (losses) bought forward | 6.5% | 2.7% | - |
| Profit profits earned in the 6 months to 30th June 2024 | 2.0% | 6.6% | -1.7% |
| Cumulative profits earned to date | 8.5% | 9.3% | -1.7% |
| Mid-point estimates as at 30th June 2024 | 9.0% | 13.0% | - |
The development of the 2022 underwriting year is tracking expectations and the 2023 is showing much improved profitability as a result of the absence of major catastrophes impacting the year and as the improved pricing is reflected in the result.
Retained capacity update
|
| Year of Account | | ||
| £m | 2022 | 2023 | 2024 | CAGR |
| Retained Capacity | 184.5 | 244.5 | 397.0 | 29% |
| Third Party Capacity | 60.8 | 66.3 | 115.1 | 38% |
| Total Portfolio | 245.2 | 310.8 | 512.1 | 44% |
The capacity portfolio has been grown by a compound rate of 44% over the last three years to £512m for the 2024 year of account to take advantage of the excellent market conditions. The retained capacity providing underwriting exposure to shareholders has increased to £397m which is expected to form the bedrock of earnings in the next two years. Helios will continue to act for and expand its Third Party capital business into 2025 so that fees and commissions from the Third Party capital providers will increase, particularly as profits are recognised on the portfolio in the future.
New Syndicate Analysis
The table below shows the development of the new syndicate participations within the portfolio. Helios has supported syndicates that have been established recently but the proportion of New Syndicates within the overall portfolio is expected to reduce in 2025 to below 16% of the overall portfolio. The categories below are:
· New syndicate - being a new venture providing an opportunity to participate in portfolios that offer diversification to the existing established syndicates at Lloyd's. We do not anticipate supporting any new syndicates that are expecting to commence trading in 2025
· Syndicates trading for less than three years - we would consider that syndicates that have been trading for less than 3 years to be "new syndicates". Syndicates that commenced trading in 2024 and 2023 would be included in this category.
· New syndicate out of an established MGA - we have supported new syndicates that have transferred an underwriting portfolio with a profitable track record as an MGA. The proven profitability of the portfolio to be underwritten reduces the execution risk of setting up a new syndicate
| | 2023 | 2024 | Pro-forma 2025 |
| New Syndicate | 7% | 12% | 0% |
| Syndicate trading for less than 3 years | 8% | 13% | 9% |
| New Syndicate out of established MGA | 0% | 10% | 7% |
| | 16% | 34% | 16% |
The Board is currently undertaking a review of the capacity portfolio taking into account the expected evolution of the insurance underwriting cycle and expecting to reduce the proportion of the portfolio that is termed as "new syndicates". A detailed review of the New Syndicates is being undertaken to establish whether support in the future will be beneficial to the portfolio. As these new syndicates build their businesses, demonstrate the profitability of their portfolios, after three years of operation, the Board will no longer consider them as "new syndicates"
Costs
The costs incurred in the six months to 30th June 2024 are as follows:
| | 6 months to 30th June | |
|
| 2024 | 2023 |
|
| £000's | £000's |
| Portfolio Stop loss | 1,750 | 1,083 |
| Portfolio financing costs | 1,166 | 1,778 |
| Unsecured Loan Note Interest | 2,821 | - |
| Operating costs | 5,076 | 2,285 |
| Total Costs | 10,813 | 5,146 |
The stop loss premiums have increased in line with the growth of the retained capacity. The Portfolio Financing costs have reduced as the bank loan of £15m was repaid in December 2023 although the excess of loss facility remains in place. $75m of Unsecured Loan Notes were issued in December 2023 to re-finance existing debt and to provide additional working capital.
Earlier in the year Helios examined the possibility of establishing its own 'follow-only' Lloyd's syndicate although the board ultimately decided against pursuing it - the non-recurring costs of aborting the project including the costs of re-organization are contained within these first half results and have increased the costs by £1m+.
As we look towards to 2025 there will be a sharp reduction in overall costs - we will provide more details at year end.
Investment Return
|
| £000's | £000's | Yield |
| Syndicate investment assets | 281,949 | 5,822 | 2.06% |
| Group investment assets | 75,511 | 2,748 | 3.64% |
| | 357,460 | 8,570 | 2.41% |
Helios's share of the syndicate investments has increased by 54% since 30 June 2023 and has generated a positive return of 2.09% in the first 6 months of the year. The Group funds are invested in short term bonds and bank deposits the Group's share of the syndicate investments is expected to continue to increase to reflect the growth of the capacity portfolio.
Capital Position as at 30th June 2024
| Underwriting capital | 30 June 2024 | 31 December 2023 |
| £m | £m | |
| Third Party Capital | 31.5 | 31.3 |
| Excess of loss funds at Lloyd's | 25.9 | 25.8 |
| Helios own funds | 67.2 | 69.9 |
| Solvency credits | 77.1 | 47.0 |
| Total | 201.7 | 173.7 |
| | | |
| Total Portfolio | 512.1 | 310.8 |
| Capacity supported by Third Party members | (51.7) | - |
| Total Helios Capacity | 460.4 | 310.8 |
| Economic capital requirement | 167.3 | 128.6 |
| Capital Ratio | 36.2% | 41% |
| Surplus Capital | 34.3 | 1.6 |
The total capacity for the purpose of determining the capital requirements of Helios excludes the part of the capacity allocated to Third Party Capital. The improvement in the Solvency position of the capacity portfolio, increasing the solvency credits to £77m as profits have been recognized within the supported syndicates of which £47m is currently being used to support the underwriting. .
Net asset value per share
The growth in the net asset value per share remains a key management metric for determining growth in value to shareholders.
| | 30 June 2024 | 31 December 2023 |
| £'000 | £'000 | |
| Net assets | 58,309 | 57,984 |
| Fair value and capacity (WAV) | 82,436 | 82,436 |
| Total net assets | 140,553 | 140,101 |
| Shares in issue | 73,727 | 74,186 |
| Net asset value per share (£) | 1.91 | 1.89 |
The net asset value per share is £1.91p per share (Dec 2023 - £1.89p per share) having paid a dividend of 6p per share. The net assets include a deferred tax provision of £20m on the value of the capacity portfolio.
Return of Capital to Shareholders
Helios is committed to returning capital to shareholders. In 2024 capital of 12p per share (7p per share - 2023 has been returned to shareholders, a 70% increase. The capital has been returned by way of 6p base dividend (2023 - 3p base dividend) and by the repurchase of shares, mostly recently in July 2024.
| Return of capital to shareholders | |||||
|
| 2024 | 2023 |
| ||
| | £m | Pence per share | £m | Pence per share |
|
| Share buyback | 4.5 | 6 | 3.2 | 4 |
|
| Base Dividend | 4.5 | 6 | 2.3 | 3 |
|
| Per share (in pence) | 9 | 12 | 5.5 | 7 |
|
The repurchase of 2.5m ordinary shares in July 2024 at £1.50 per share, a discount of 41p to the net asset value is expected to enhance net asset value per share at the end of the year.
Financial results summary
Six months ended 30 June 2024
| | 6 months to 30 June 2024 £'000 | 6 months to 30 June 2023 £'000 |
| | |
|
| Underwriting profits | 12,618 | 10,441 |
| Other Income |
| |
| Fees from reinsurers | 1,151 | 720 |
| Amortisation of goodwill | 169 | 302 |
| Other income | 745 | - |
| Investment income | 2,748 | 19 |
| Total Other Income | 4,813 | 1,041 |
| Costs |
| |
| Pre-acquisition | - | (184) |
| Portfolio stop loss costs | (1,750) | (1,083) |
| Portfolio financing costs | (1,166) | (1,778) |
| Unsecured loan note interest | (2,821) | - |
| Operating costs | (5,075) | (2,101) |
| Total Costs | (10,812) | (5,146) |
| Operating profit before impairments of goodwill and capacity | 6,619 | 6,336 |
| Tax | (938) | (1,985) |
| Profit for the period | 5,681 | 4,351 |
Period to 30 June 2024
| Underwriting year | Helios retained capacity at 30 June 2024 £m | Portfolio mid-point forecasts | Helios profits £'000 |
| 2022 | 184.5 | 8.99% | 3,675 |
| 2023 | 244.5 | 13.0% | 16,048 |
| 2024 | 396.9 | N/A | (7,105) |
|
|
|
| 12,618 |
Period to 30 June 2023
| Underwriting year | Helios retained capacity at 30 June 2023 £m | Portfolio mid-point forecasts | Helios profits £'000 |
| 2021 | 102.3 | 4.90% | 2,346 |
| 2022 | 180.9 | 5.68% | 10,701 |
| 2023 | 234.2 | N/A | (2,606) |
|
|
|
| 10,441 |
Financial results summary continued
Six months ended 30 June 2024
Summary Balance Sheet
The summary Group balance sheet excludes items relating to syndicate participations. See Note 15 for further information.
| | 30 June 2024 £'000
| 31 December 2023 £'000
|
| 31Intangible assets | 82,287 | 61,236 |
| Funds at Lloyd's | 75,511 | 77,297 |
| Other cash | 35,517 | 2,020 |
| Other assets | 10,710 | 6,958 |
| Total assets | 204,025 | 147,511 |
| Deferred tax | 22,889 | 13,921 |
| Borrowings | 59,524 | 15,000 |
| Other liabilities | 22,694 | 7,732 |
| Total liabilities | 105,107 | 36,653 |
| Syndicate equity | 41,635 | 6,292 |
| Total equity | 140,553 | 117,150 |
Summary cash flow
| Analysis of free working capital | 30 June 2024 £'000
| 30 June 2023 £'000
|
| Opening Balance | 40,913 | 10,254 |
| Distribution of profits (net of tax retentions & QS Payments) | 7,439 | 3,091 |
| Transfers from Funds at Lloyd's | 32,093 | 2,508 |
| Other income | 931 | 375 |
| Sale / Purchase of capacity | - | - |
| Operating costs (inc Hampden / Nomina fees) | (4,031) | (2,988) |
| Reinsurance costs | (5,800) | (3,408) |
| Tax | - | (236) |
| Return of capital to shareholders | (1,010) | - |
| Transfers to Funds at Lloyd's | (35,018) | (6,067) |
| Free cash Flow | (5,396) | (6,725) |
| Senior debt principal | - | - |
| Repayment of Borrowings | - | - |
| Proceeds from issue of shares | - | - |
| Acquisitions | - | (1,569) |
| Net cash flow in the year | (5,396) | (8,294) |
| Balance carried forward | 35,517 | 1,960 |
| Asset value calculation | 30 June 2024 £'000 | 31 December 2023 £'000 |
| Net Assets | 140,553 | 140,101 |
| Add Total Debt | 59,524 | 59,055 |
| Add Deferred Tax on Intangible Asset | 20,136 | 20,136 |
| Asset Value | 220,213 | 219,293 |
| Debt ratio | 27% | 27% |
Net asset per share
| Net assets | 30 June 2024 £'000 | 31 December 2023 £'000 |
| Net assets | 58,117 | 57,665 |
| Fair value of capacity ("WAV") | 82,436 | 82,436 |
|
| 140,553 | 140,100 |
| Shares in issue - on the market | 73,690 | 74,186 |
| Shares in issue - total of on the market and JSOP shares | 76,228 | 75,286 |
| Net asset value per share £ - on the market | 1.91 | 1.89 |
| Net asset value per share £ - on the market and JSOP shares | 1.84 | 1.86 |
Interim condensed consolidated statement of comprehensive income
Six months ended 30 June 2024
|
| Note | 6 months ended 30 June 2024 Unaudited £'000 | 6 months ended 30 June 2023 Unaudited £'000 |
| Technical account |
|
|
|
| Gross premium written | 4 | 230,495 | 158,509 |
| Reinsurance premium ceded | 4 | (65,750) | (49,587) |
| Net premium written | 4 | 164,745 | 108,922 |
| Change in unearned gross premium provision | 5 | (67,401) | (34,899) |
| Change in unearned reinsurance premium provision | 5 | 25,622 | 15,782 |
| Net change in unearned premium and reinsurance provision | 5 | (41,779) | (19,117) |
| Net earned premium | 3,4 | 122,966 | 89,805 |
| Net investment income | 6 | 8,136 | 3,121 |
| Other underwriting income | | 1,538 | 720 |
| Total technical income |
| 132,640 | 93,646 |
| Gross claims paid | | (52,781) | (42,895) |
| Reinsurers' share of gross claims paid |
| 12,696 | 10,437 |
| Claims paid, net of reinsurance |
| (40,085) | (32,458) |
| Change in provision for gross claims | 5 | (34,889) | (15,696) |
| Reinsurers' share of change in provision for gross claims | 5 | 6,855 | (1,953) |
| Net change in provision for claims | 5 | (28,034) | (17,649) |
| Net insurance claims incurred and loss adjustment expenses |
| (68,119) | (50,107) |
| Expenses incurred in insurance activities | | (51,655) | (34,969) |
| Total technical account |
| 12,866 | 8,570 |
| | |
| |
| Non-technical account | | | |
| Net investment income | 6 | 434 | 20 |
| Other income | | 359 | - |
| Other operating expenses | | (7,209) | (2,556) |
| Total non-technical account |
| (6,416) | (2,536) |
|
|
|
|
|
| Operating profit before impairments of goodwill and capacity | | 6,450 | 6,034 |
| Amortisation of goodwill | | 169 | 302 |
| Profit before tax | | 6,619 | 6,336 |
| Income tax charge | 7 | (938) | (1,985) |
| Profit for the period |
| 5,681 | 4,351 |
| Other comprehensive income | |
| |
| Revaluation of syndicate capacity | | - | - |
| Deferred tax relating to the components of other comprehensive income |
| - | - |
| Other comprehensive income for the period, net of tax |
| - | - |
| Total comprehensive income for the period |
| 5,681 | 4,351 |
| Profit for the year attributable to owners of the Parent |
| 5,681 | 4,351 |
| Total comprehensive income for the period attributable to owners of the Parent |
| 5,681 | 4,351 |
| Profit per share attributable to owners of the Parent | |
| |
| Basic | 8 | 7.71p | 5.71p |
| Diluted | 8 | 7.40p | 5.55p |
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 2024
|
| Note | At 30 June 2024 Unaudited £'000
| 31 December 2023 Audited £'000
|
| Assets | | | |
| Intangible assets: | | | |
| - Capacity | | 82,436 | 82,436 |
| - Goodwill | | 246 | 348 |
| - Negative goodwill | | (395) | (667) |
| Financial assets at fair value through profit or loss | | 357,460 | 288,198 |
| Reinsurance assets: | |
| |
| - reinsurers' share of claims outstanding | 5 | 110,669 | 83,008 |
| - reinsurers' share of unearned premium | 5 | 47,670 | 23,962 |
| Other receivables, including insurance and reinsurance receivables | | 291,321 | 172,932 |
| Cash and cash equivalents | | 81,470 | 66,812 |
| Prepayments and accrued income | | 11,376 | 7,281 |
| Deferred acquisition costs | | 39,384 | 32,291 |
| Total assets |
| 1,021,637 | 756,601 |
| Liabilities | |
| |
| Equity | |
| |
| Equity attributable to owners of the Parent: | |
| |
| Share capital | 11 | 7,795 | 7,795 |
| Share premium | 11 | 98,596 | 98,596 |
| Revaluation reserve | 11 | 24,840 | 24,840 |
| Other reserves - treasury shares (JSOP and LTIP) | 11 | 190 | 190 |
| Retained earnings |
| 9,132 | 8,680 |
| Total equity |
| 140,553 | 140,101 |
| | | | |
| Insurance liabilities: | |
| |
| - claims outstanding | 5 | 401,593 | 309,188 |
| - unearned premium | 5 | 200,165 | 143,610 |
| Deferred income tax liabilities | | 22,889 | 22,335 |
| Borrowings | | 59,524 | 59,055 |
| Other payables, including insurance and reinsurance payables | | 178,656 | 70,594 |
| Accruals and deferred income |
| 18,257 | 11,718 |
| Total liabilities |
| 881,084 | 616,500 |
| Total liabilities and equity |
| 1,021,637 | 756,601 |
The Financial Statements were approved and authorised for issue by the Board of Directors on 26 September 2024, and were signed on its behalf by:
Arthur Manners
Finance Director
The notes are an integral part of these Financial Statements.
Interim condensed consolidated statement of changes in equity
Six months ended 30 June 2024
| | | | | Attributable to owners of the Parent | ||||
| Consolidated |
Note | Share capital £'000 | Share premium £'000 | Revaluation reserve | Other reserves £'000 | Retained earnings £'000 | Total £'000 | |
| At 1 January 2024 | | 7,795 | 98,596 | 24,840 | 190 | 8,680 | 140,101 | |
| Total comprehensive income for the period: | |
|
|
|
|
|
| |
| Profit for the period | | - | - | - | - | 5,681 | 5,681 | |
| Other comprehensive income, net of tax | | - | - | - | - | - | - | |
| Total comprehensive income for the period | | - | - | - | - | 5,681 | 5,681 | |
| Transactions with owners: | |
|
|
|
|
|
| |
| Dividends paid | 9 | - | - | - | - | (4,418) | (4,418) | |
| Company buy back of shares | 11 | - | - | - | - | (811) | (811) | |
| Share issue | | - | - | - | - | - | - | |
| Total transactions with owners | | - | - | - | - | (5,229) | (5,229) | |
| At 30 June 2024 | | 7,795 | 98,596 | 24,840 | 190 | 9,132 | 140,553 | |
| | | | | | | | | |
| At 1 January 2023 | | 7,774 | 98,268 | 11,350 | (110) | (2,163) | 115,119 | |
| Total comprehensive income for the period: | | | | | | | | |
| Profit for the period | | - | - | - | - | 4,351 | 4,351 | |
| Other comprehensive income, net of tax | | - | - | - | - | - | - | |
| Total comprehensive income for the period | | - | - | - | - | 4,351 | 4,351 | |
| Transactions with owners: | | | | | | | | |
| Dividends paid | 9 | - | - | - | - | (2,320) | (2,320) | |
| Company buy back of shares | 11 | - | - | - | - | - | - | |
| Share issue | | - | - | - | - | - | - | |
| Total transactions with owners | | - | - | - | - | (2,320) | (2,320) | |
| At 30 June 2023 | | 7,774 | 98,268 | 11,350 | (110) | (132) | 117,150 | |
The notes are an integral part of these Financial Statements.
Interim condensed consolidated statement of cash flows
Six months ended 30 June 2024
| |
| At 30 June 2024
Unaudited £'000
| At 30 June 2023 restated Unaudited £'000
|
| Cash flows from operating activities | | | |
| Profit before tax |
| 6,619 | 6,336 |
| Adjustments for: |
| | |
| - Interest received |
| (518) | (227) |
| - Investment income | | (6,507) | (3,502) |
| - Interest paid on borrowings | | 2,822 | - |
| - Amortisation of goodwill | | (169) | (302) |
| Changes in working capital: | | | |
| - change in fair value of financial assets held at fair value through profit or loss | | 80 | 512 |
| - Increase in other receivables |
| (129,577) | (18,147) |
| - Increase in other payables |
| 110,183 | 18,926 |
| - net increase in technical provisions |
| 97,591 | 27,941 |
| Cash generated from operations |
| 80,524 | 31,537 |
| Income tax paid/(received) |
| 4 | (237) |
| Net cash inflow from operating activities |
| 80,528 | 31,300 |
| Cash flows from investing activities | | | |
| Interest received |
| 518 | 227 |
| Investment income |
| 6,507 | 3,502 |
| Increase in financial assets at fair value through profit or loss |
| (69,262) | (30,214) |
| Acquisition of subsidiaries, net of cash acquired |
| - | (1,239) |
| Net cash inflow from investing activities |
| (62,237) | (27,724) |
| Cash flows from financing activities | | | |
| Net proceeds from issue of ordinary share capital | | - | - |
| Buy back of ordinary share capital | | (811) | - |
| Proceeds from borrowings | | - | - |
| Repayment of borrowings | | - | - |
| Interest paid on borrowings | | (2,822) | - |
| Dividends paid to owners of the Parent | | - | - |
| Net cash outflow from financing activities |
| (3,633) | - |
| Net increase in cash and cash equivalents |
| 14,658 | 3,576 |
| Cash and cash equivalents at beginning of period | | 66,812 | 24,624 |
| Cash and cash equivalents at end of period |
| 81,470 | 28,200 |
The 30 June 2023 comparative has been restated to present the changes in financial assets at fair value through the profit and loss as cashflows from investing activities.
Analysis of changes in net debt
| | At 1 January 2024 | Cash flows | Currency translation | At 30 June 2024 |
|
| £000 | £000 | £000 | £000 |
| Cash at bank and in hand | 66,812 | 14,661 | (3) | 81,470 |
| Cash and cash equivalents | 66,812 | 14,661 | (3) | 81,470 |
| Revolving Loan Facility | - | - | - | - |
| Unsecured debt | (59,055) | - | (469) | (59,524) |
| Total | 7,757 | 14,661 | (472) | 21,946 |
Cash held within the syndicates' accounts is £45,953,000 (30 June 2023: £26,240,000) of the total cash and cash equivalents held at the end of the period £81,470,000 (30 June 2023: £28,200,000). 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 2024
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 1st Floor, 33 Cornhill, London EC3V 3ND. The Company participates in insurance business as an underwriting member at Lloyd's through its subsidiary undertakings.
These condensed consolidated 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 2023 were approved by the board of directors on 29 May 2024 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.
2. Accounting policies
Basis of preparation
These Financial Statements have been prepared in accordance with United Kingdom Accounting Standards (UK GAAP), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", FRS 103 "Insurance Contracts", FRS 104 "Interim Financial Reporting", and the Companies Act 2006 and Schedule 3 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations, relating to insurance.
The Condensed Consolidated Interim Financial Statements are prepared for the six months ended 30 June 2024.
The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2024 and June 2023 are unaudited, but have been subject to review by the Group's auditors.
The Condensed Consolidated Interim Financial Statements 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 syndicate's transactions, assets and liabilities.
Going concern
The Group has net assets at the end of the reporting period of £140,553,000 (31 December 2023: £140,101,000).
The Company's subsidiaries participate as underwriting members at Lloyd's on the 2022, 2023 and 2024 years of account, as well as any prior run-off years, and they intend to continue this participation in the 2025 year of account.
The Directors have a reasonable expectation that the Group have adequate resources to meet their underwriting and other operational obligations for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the Financial Statements.
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 Statement of Comprehensive Income.
With effect from 31 December 2020, the Group changed this policy so that syndicate capacity is revalued on a regular basis to its fair value which the Directors believe to be the average weighted value achieved in the Lloyd's auction process. The increase in value of syndicate capacity between its fair value and its cost less impairment is taken to the revaluation reserve through the statement of other comprehensive income net of any tax effect.
Notes to the financial statements
Six months ended 30 June 2024
3. Segmental information
Michael Wade is the Group's chief operating decision-maker. He determines 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.
| At 30 June 2024 Unaudited | Syndicate participation £'000 | Investment management £'000 | Other corporate activities £'000 | Total £'000 |
| Net earned premium | 127,052 | - | (4,086) | 122,966 |
| Net investment income | 5,822 | 2,748 | - | 8,570 |
| Other income | - | - | 1,897 | 1,897 |
| Net insurance claims and loss adjustment expenses | (68,119) | - | - | (68,119) |
| Expenses incurred in insurance activities | (50,514) | - | (1,141) | (51,655) |
| Other operating expenses | - | - | (7,209) | (7,209) |
| Amortisation of goodwill | - | - | 169 | 169 |
| Profit before tax | 14,241 | 2,748 | (10,370) | 6,619 |
| At 30 June 2023 Unaudited | Syndicate participation £'000 | Investment management £'000 | Other corporate activities £'000 | Total £'000 |
| Net earned premium | 94,183 | - | (4,378) | 89,805 |
| Net investment income | 3,160 | (19) | - | 3,141 |
| Other income | - | - | 720 | 720 |
| Net insurance claims and loss adjustment expenses | (50,107) | - | - | (50,107) |
| Expenses incurred in insurance activities | (34,925) | - | (44) | (34.969) |
| Other operating expenses | - | - | (2,556) | (2,556) |
| Amortisation of goodwill | - | - | 302 | 302 |
| Profit before tax | 12,311 | (19) | (5,956) | 6,336 |
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 2024 other corporate activities totalling £4,086,000 (2023: £4,378,000 - 2021, 2022 and 2023 years of account) represents the 2022, 2023 and 2024 years of account net Group quota share reinsurance premium payable to HIPCC 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.
Notes to the financial statements
Six months ended 30 June 2024
4. Operating profit before impairments of goodwill and capacity
| | Underwriting year of account* | | | | | |||
| At 30 June 2023 | 2021 and prior £'000- |
2022 £'000 | - 2023 £'000 |
Sub-total £'000 | Pre- acquisition £'000 | Corporate reinsurance £'000 | Other corporate £'000 | Total £'000 |
| Gross premium written | 1,606 | 25,982 | 132,905 | 160,493 | (1,984) | - | - | 158,509 |
| Reinsurance ceded | (1,410) | (4,786) | (37,624) | (43,820) | 542 | (4,378) | (1,931) | (49,587) |
| Net premium written | 196 | 21,196 | 95,281 | 116,673 | (1,442) | (4,378) | (1,931) | 108,922 |
| Net earned premium | 4,113 | 68,516 | 24,687 | 97,316 | (1,202) | (4,378) | (1,931) | 89,805 |
| Other income | 1,801 | 1,165 | 195 | 3,161 | (39) | 720 | 19 | 3,861 |
| Net insurance claims and loss adjustment expenses | 629 | (36,119) | (15,244) | (50,734) | 627 | - | - | (50,107) |
| Operating expenses | (2,768) | (19,182) | (12,974) | (34,924) | 430 | - | (3,031) | (37,525) |
| Operating profit before impairments of goodwill and capacity | 3,775 | 14,380 | (3,336) | 14,819 | (184) | (3,658) | (4,943) | 6,034 |
| Quota share adjustment | (1,429) | (3,679) | 730 | (4,378) | - | 4,378 | - | - |
| Operating profit before impairments of goodwill and capacity after quota share adjustment | 2,346 | 10,701 | (2,606) | 10,441 | (184) | 720 | (4,943) | 6,034 |
| | Underwriting year of account* | | | | | |||
| At 30 June 2024 | 2022 and prior £'000 |
2023 £'000 |
2024 £'000 |
Sub-total £'000 | Pre- acquisition £'000 | Corporate reinsurance £'000 | Other corporate £'000 | Total £'000 |
| Gross premium written | 1,614 | 37,680 | 191,201 | 230,495 | - | - | - | 230,495 |
| Reinsurance ceded | (318) | (4,871) | (53,562) | (58,751) | - | (4,086) | (2,913) | (65,750) |
| Net premium written | 1,296 | 32,809 | 137,639 | 171,744 | - | (4,086) | (2,913) | 164,745 |
| Net earned premium | 9,627 | 83,526 | 36,812 | 129,965 | - | (4,086) | (2,913) | 122,966 |
| Other income | 3,344 | 1,809 | 670 | 5,823 | - | 1,151 | 3,493 | 10,467 |
| Net insurance claims and loss adjustment expenses | (3,827) | (39,201) | (25,091) | (68,119) | - | - | - | (68,119) |
| Operating expenses | (4,277) | (25,756) | (20,932) | (50,965) | - | - | (7,899) | (58,864) |
| Operating profit before impairments of goodwill and capacity | 4,867 | 20,378 | (8,541) | 16,704 | - | (2,935) | (7,319) | 6,450 |
| Quota share adjustment | (1,192) | (4,330) | 1,436 | (4,086) | - | 4,086 | - | - |
| Operating profit before impairments of goodwill and capacity after quota share adjustment | 3,675 | 16,048 | (7,105) | 12,618 | - | 1,151 | (7,319) | 6,450 |
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.
Notes to the financial statements continued
Six months ended 30 June 2024
5. Insurance liabilities and reinsurance balances
Movement in claims outstanding
| | Gross £'000 | Reinsurance £'000 | Net £'000 |
| At 1 January 2024 | 309,188 | 83,008 | 226,180 |
| Increase in reserves arising from acquisition of subsidiary undertakings | - | - | - |
| Movement of reserves | 34,889 | 6,855 | 28,034 |
| Other movements | 57,516 | 20,806 | 36,710 |
| At 30 June 2024 | 401,593 | 110,669 | 290,924 |
Movement in unearned premium
| | Gross £'000 | Reinsurance £'000 | Net £'000 |
| At 1 January 2024 | 143,610 | 23,962 | 119,648 |
| Increase in reserves arising from acquisition of subsidiary undertakings | - | - | - |
| Movement of reserves | 67,401 | 25,622 | 41,779 |
| Other movements | (10,846) | (1,914) | (8,932) |
| At 30 June 2024 | 200,165 | 47,670 | 152,495 |
Included within other movements are the 2021 and prior years' claims reserves reinsured into the 2022 year of account on which the Group does not participate and currency exchange differences.
Movement in claims outstanding
| | Gross £'000 | Reinsurance £'000 | Net £'000 |
| At 1 January 2023 | 272,015 | 80,726 | 191,289 |
| Increase in reserves arising from acquisition of subsidiary undertakings | 5,316 | 1,530 | 3,786 |
| Movement of reserves | 15,696 | (1,953) | 17,649 |
| Other movements | 12,355 | 9,322 | 3,033 |
| At 30 June 2023 | 305,382 | 89,625 | 215,757 |
Movement in unearned premium
| | Gross £'000 | Reinsurance £'000 | Net £'000 |
| At 1 January 2023 | 114,663 | 21,333 | 93,330 |
| Increase in reserves arising from acquisition of subsidiary undertakings | 1,690 | 301 | 1,388 |
| Movement of reserves | 34,899 | 15,782 | 19,117 |
| Other movements | (15,966) | (4,108) | (11,857) |
| At 30 June 2023 | 135,286 | 33,308 | 101,978 |
Included within other movements are the 2020 and prior years' claims reserves reinsured into the 2021 year of account on which the Group does not participate and currency exchange differences.
6. Net investment income
| |
At 30 June 2024 Unaudited £'000 |
At 30 June 2023 Unaudited £'000 |
| Investment income | 6,507 | 3,502 |
| Realised (losses)/gains on financial assets at fair value through profit or loss | 1,087 | (100) |
| Unrealised (losses)/gains on financial assets at fair value through profit or loss | (80) | (512) |
| Investment management expenses | 538 | 24 |
| Bank interest | 518 | 227 |
| Net investment income | 8,570 | 3,141 |
Included within Net investment income is investment income of £8,136,000 (2023: £3,121,000) from Syndicate participations.
Notes to the financial statements continued
Six months ended 30 June 2024
7. Income tax charge
Analysis of tax charge in the period
| | At 30 June 2024 Unaudited £'000 |
At 30 June 2023 Unaudited £'000 |
| Income tax credit | 938 | 1,985 |
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 25% (2023: 23.50%).
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:
| | 30 June 2024 Unaudited
|
At 30 June 2023 Unaudited
|
| Profit for the period after tax attributable to ordinary equity holders of the parent | 5,681,000 | 4,351,000 |
| Basic - weighted average number of ordinary shares* | 73,727,064 | 76,218,203 |
| Weighted average number of ordinary shares for diluted earnings per share* | 76,285,215 | 77,889,630 |
| Basic earnings/(loss) per share | 7.71p | 5,71p |
| Diluted earnings/(loss) per share | 7.40p | 5.55p |
* 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 2024 that a dividend of 6p would be payable. The Dividend was paid post period end on 12 July 2024 totalling £4,418,000 and has been accrued in these financial statements.
10. Investments in subsidiaries
| | A 30 June 2024 £'000 | At 31 December 2023 £'000 |
| Total | 66,722 | 66,722 |
Notes to the financial statements continued
Six months ended 30 June 2024
10. Investments in subsidiaries (continued)
| Company or partnership | Direct/indirect interest | 2024 ownership | 2023 ownership | Principal activity |
| Nameco (No. 917) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 346) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Charmac Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| RBC CEES Trustee Limited(ii) | Direct | 100% | 100% | Joint Share Ownership Plan |
| Chapman Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Advantage DCP Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Romsey Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios UTG Partner Limited(i) | Direct | 100% | 100% | Corporate partner |
| Salviscount LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Inversanda LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Fyshe Underwriting LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 505 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 321 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 409) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1113) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Catbang 926 Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Whittle Martin Underwriting | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 408) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 084 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 510) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 544) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| N J Hanbury Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1011) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1111) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 533 LLP | Indirect | 100% | 100% | Corporate partner |
| North Breache Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| G T C Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Hillnameco Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 2012) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1095) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| New Filcom Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Kemah Lime Street Capital | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1130) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 070 LLP | Indirect | 100% | 100% | Corporate partner |
| Nameco (No. 389) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No. 469 LLP | Indirect | 100% | 100% | Corporate partner |
| Nomina No. 536 LLP | Indirect | 100% | 100% | Corporate partner |
| Nameco (No. 301) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1232) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Shaw Lodge Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Queensberry Underwriting | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 472 LLP | Indirect | 100% | 100% | Corporate partner |
| Nomina No 110 LLP | Indirect | 100% | 100% | Corporate partner |
| Chanterelle Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Kunduz LLP | Indirect | 100% | 100% | Corporate partner |
| Exalt Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1110) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Clifton 2011 Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nomina No 378 LLP | Indirect | 100% | 100% | Corporate partner |
| Gould Scottish Limited Partnership | Indirect | 100% | 100% | Corporate partner |
| Harris Family UTG Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Whitehouse Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Risk Capital UTG Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 606) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Nameco (No. 1208) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Chorlton Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Park Farm Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV One Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Two Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Five Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Six Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Seven Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Eight Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
| Helios LLV Ten LLP | Indirect | 100% | 100% | Corporate partner |
Notes to the financial statements continued
Six months ended 30 June 2024
10. Investments in subsidiaries (continued)
(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 Plan.
(iii) During the period, the Company sold 100% of the shares in Helios LLV Three Limited, Helios LLV Four Limited and Helios LLV Nine Limited.
11. Share capital and share premium
|
| Number of shares (i) | Ordinary share capital £'000 | Partly paid ordinary share capital £'000 | Share premium £'000 | Total £'000 |
| Ordinary shares of 10p each and share premium at 31 December 2023 | 77,945,833 | 7,685 | 110 | 98,596 | 106,391 |
| Ordinary shares of 10p each and share premium at 30 June 2024 | 77,945,833 | 7,685 | 110 | 98,596 | 106,391 |
(i) Number of shares
|
| At 30 June 2024 | At 31 December 2023 |
| Allotted, called up and fully paid ordinary shares: | | |
| On the market | 73,645,144 | 74,186,068 |
| Company buy back of ordinary shares held in treasury | 3,200,689 | 2,659,765 |
|
| 76,845,833 | 76,845,833 |
| Uncalled and partly paid ordinary share under the JSOP scheme (ii) | 1,100,000 | 1,100,000 |
|
| 77,945,833 | 77,945,833 |
(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 2022, 2023 and 2024 years of account with protected cell companies of HIPCC Limited.
Nigel Hanbury, a Director of Helios Underwriting plc and its subsidiary companies, was also a director and majority shareholder in HIPCC Limited until 29 November 2023 when he sold his majority shareholding in full, and resigned as a director on the same date.
In addition, HIPCC provide stop loss, portfolio stop loss and HASP reinforce policies for the company.
13. Ultimate controlling party
The Directors consider that the Group has no ultimate controlling party.
Notes to the financial statements continued
Six months ended 30 June 2024
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 number | Managing or members' agent | 2024 £000 | 2023 £000 | 2022* £000 |
| |
| 33 | Hiscox Syndicates Limited | 15,358 | 15,358 | 15,357 | | |
| 218 | IQUW Syndicate Management Limited | 17,711 | 17,711 | 7,519 | | |
| 318 | Cincinnati Global Underwriting Agency Limited | 1,082 | 862 | 993 | | |
| 386 | QBE Underwriting Limited | 3,139 | 3,139 | 3,067 | | |
| 510 | Tokio Marine Kiln Syndicates Limited | 30,294 | 28,183 | 34,097 | | |
| 557 | Tokio Marine Kiln Syndicates Limited | - | - | 3,509 | | |
| 609 | Atrium Underwriters Limited | 19,528 | 18,421 | 13,714 | | |
| 623 | Beazley Furlonge Limited | 32,687 | 28,909 | 23,293 | | |
| 727 | S A Meacock & Company Limited | 2,956 | 2,956 | 2,423 | | |
| 1176 | Chaucer Syndicates Limited | 2,875 | 2,875 | 2,875 | | |
| 1200 | Argo Managing Agency Limited | - | 55 | 10,050 | | |
| 1699 | Asta Managing Agency Limited | 5,000 | - | - | | |
| 1729 | Dale Managing Agency Limited | 25,118 | 20,094 | 10,220 | | |
| 1796 | Asta Managing Agency Limited | 7,000 | - | - | | |
| 1902 | Asta Managing Agency Limited | 12,636 | 10,688 | 10,000 | | |
| 1925 | Apollo Syndicate Management Limited | 12,500 | - | - | | |
| 1955 | Arch Managing Agency Limited | 20,000 | 12,500 | - | | |
| 1966 | Asta Managing Agency Limited | 15,000 | - | - | | |
| 1969 | Apollo Syndicate Management Limited | 25,499 | 12,171 | 5,675 | | |
| 1971 | Apollo Syndicate Management Limited | 25,000 | 10,000 | 6,467 | | |
| 1985 | Asta Managing Agency Limited | 20,000 | 16,874 | - | | |
| 1988 | Asta Managing Agency Limited | 15,125 | 15,000 | - | | |
| 1996 | Polo Managing Agency Limited | 9,527 | 5,988 | - | | |
| 2010 | Lancashire Syndicates Limited | 7,338 | 7,338 | 10,642 | | |
| 2024 | Probitas Managing Agency Limited | 8,522 | - | - | | |
| 2121 | Argenta Syndicate Management Limited | 5,206 | 272 | 10,267 | | |
| 2358 | Nephila Syndicate Managing Agency Limited | 20,000 | - | - | | |
| 2427 | Asta Managing Agency Limited | 15,024 | - | - | | |
| 2454 | Apollo Syndicate Management Limited | 5,800 | - | - | | |
| 2525 | Asta Managing Agency Limited | 2,612 | 2,311 | 1,856 | | |
| 2689 | Asta Managing Agency Limited | 5,477 | 2,699 | 10,111 | | |
| 2791 | Managing Agency Partners Limited | 16,422 | 12,001 | 10,123 | | |
| 3123 | Asta Managing Agency Limited | 5,000 | - | - | | |
| 3939 | Apollo Syndicate Management Limited | 12,000 | - | - | | |
| 4242 | Asta Managing Agency Limited | 15,000 | 10,807 | 12,987 | | |
| 4444 | Canopius Managing Agents Limited | 24 | 21 | 20 | | |
| 5183 | Asta Managing Agency Limited | 1,727 | 5,000 | - | | |
| 5623 | Beazley Furlonge Limited | 27,001 | 17,672 | 6,894 | | |
| 5886 | Blenheim Underwriting Limited | 30,833 | 27,131 | 23,165 | | |
| 6103 | Managing Agency Partners Limited | 4,150 | 3,301 | 3,480 | | |
| 6104 | Hiscox Syndicates Limited | 10,000 | 32 | 1,774 | | |
| 6107 | Beazley Furlonge Limited | 1,550 | 164 | 1,682 | | |
| 6117 | Ariel Re Managing Agency Limited | 391 | 265 | 2,989 |
| |
| Total |
| 512,112 | 310,798 | 245,249 |
| |
Notes to the financial statements continued
Six months ended 30 June 2024
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:
| | At 30 June 2024 | | At 31 December 2023 | ||||
|
| Group £'000 | Syndicate £'000 | Total £'000 |
| Group £'000 | Syndicate £'000 | Total £'000 |
| Assets | | | | | | | |
| Intangible assets: | | | | | | | |
| - Capacity | 82,436 | - | 82,436 | | 82,436 | - | 82,436 |
| - Positive goodwill | 246 | - | 246 | | 348 | - | 348 |
| - Negative goodwill | (395) | - | (395) | | (667) | - | (667) |
| Financial assets at fair value through profit or loss | 75,511 | 281,949 | 357,460 | | 70,754 | 217,444 | 288,198 |
| Deferred income tax asset | - | - | - | | - | - | - |
| Reinsurance assets: |
|
|
| | | | |
| - reinsurers' share of claims outstanding | 60 | 110,609 | 110,669 | | 60 | 82,948 | 83,008 |
| - reinsurers' share of unearned premium | - | 47,670 | 47,670 | | - | 23,962 | 23,962 |
| Other receivables, including insurance and reinsurance receivables | 4,486 | 286,835 | 291,321 | | 357 | 172,575 | 172,932 |
| Cash and cash equivalents | 35,517 | 45,953 | 81,470 | | 40,913 | 25,899 | 66,812 |
| Prepayments and accrued income | 6,164 | 5,212 | 11,376 | | 4,459 | 2,822 | 7,281 |
| Deferred acquisition costs | - | 39,384 | 39,384 |
| - | 32,291 | 32,291 |
| Total assets | 204,025 | 817,612 | 1,021,637 |
| 198,660 | 557,941 | 756,601 |
| Liabilities |
|
|
| | | | |
| Equity |
|
|
| | | | |
| Equity attributable to owners of the Parent: |
|
|
| | | | |
| Share capital | 7,795 | - | 7,795 | | 7,795 | - | 7,795 |
| Share premium | 98,596 | - | 98,596 | | 98,596 | - | 98,596 |
| Revaluation reserve | 24,840 | - | 24,840 | | 24,840 | - | 24,840 |
| Other reserves - treasury shares (JSOP and LTIP) | 190 | - | 190 | | 190 | - | 190 |
| Retained earnings | (32,503) | 41,635 | 9,132 |
| (26,174) | 34,854 | 8,680 |
| Total equity | 98,918 | 41,635 | 140,553 |
| 105,247 | 34,854 | 140,101 |
| Insurance liabilities: |
|
|
| | | | |
| - claims outstanding | - | 401,593 | 401,593 | | - | 309,188 | 309,188 |
| - unearned premium | - | 200,165 | 200,165 | | - | 143,610 | 143,610 |
| Deferred income tax liabilities | 22,889 | - | 22,889 | | 22,277 | 58 | 22,335 |
| Borrowings | 59,524 | - | 59,524 | | 59,055 | - | 59,055 |
| Other payables, including insurance and reinsurance payables | 11,615 | 167,041 | 178,656 | | 6,984 | 63,610 | 70,594 |
| Accruals and deferred income | 11,079 | 7,178 | 18,257 |
| 5,097 | 6,621 | 11,718 |
| Total liabilities | 105,107 | 775,977 | 881,084 |
| 93,413 | 523,087 | 616,500 |
| Total liabilities and equity | 204,025 | 817,612 | 1,021,637 |
| 198,660 | 557,941 | 756,601 |
16. Event after the financial reporting period
Share buy backs
On 23 July 2024 the Company bought back a further 2,466,666 shares for a total consideration of £3,719,000.
Notes to the financial statements continued
Six months ended 30 June 2024
Directors, Registered office and advisers
Directors
Michael John Wade (Executive Chairman)
Nigel John Hanbury (Non-Executive Deputy Chairman)
Andrew Hildred Christie (Non-Executive Director)
Arthur Roger Manners (Finance Director)
Thomas John Libassi (Non-Executive Director)
John Chambers (Non-Executive Director) appointed 1 July 2024
Katherine Wade (Non-Executive Director) appointed 30 August 2024
Company Secretary
Kristel van der Meijden
Shakespeare Martineau
No 1 Colmore Square
Birmingham
B4 6AA
Company number
05892671
Registered office
1st Floor, 33 Cornhill, London, EC3V 3ND
Statutory auditors
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
Lloyd's members' agent
Hampden Agencies Limited
40 Gracechurch Street
London EC3V 0BT
Argenta Private Capital Limited
70 Gracechurch Street
London EC3V 0HR
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen B62 8HD
Nominated adviser and broker
Numis Sercurities Limited
45 Gresham Street
London EC2V 7BF
INDEPENDENT REVIEW REPORT TO HELIOS UNDERWRITING PLC
Conclusion
We have been engaged by the group to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises the Interim Condensed Consolidated Income Statement, the Interim Condensed Statement of Comprehensive Income, the Interim Condensed Statement of Financial Position, the Interim Condensed Statement of Changes in Equity, the Interim Condensed Statement of Cash Flows, and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 is not prepared, in all material respects, in accordance with FRC's Financial Reporting Standard 104 and AIM Rules for Companies.
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with UK GAAP. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with FRC's Financial Reporting Standard 104, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management has identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for companies.
In preparing the half-yearly financial report, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of financial information
In reviewing the half-yearly report, we are responsible for expressing to the group a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report.
Use of our report
This report is made solely to the company's directors, as a body, in accordance with the terms of our engagement letter dated 23 September 2024. Our review has been undertaken so that we might state to the company's directors those matters we have agreed to state to them in a reviewer's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's directors as a body, for our work, for this report, or for the conclusions we have formed.
PKF Littlejohn LLP 15 Westferry Circus
Statutory Auditor Canary Wharf
26 September 2024 London E14 4HD
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