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RNS Number : 1646S
Helios Underwriting Plc
29 September 2017
 

 

Helios Underwriting plc

Interim results for the six months ended 30 June 2017

Helios Underwriting plc, which provides investors with a limited liability direct investment into the Lloyd's insurance market, announces its unaudited results for the six months ended 30 June 2017.

 

The summary is as follows:

   Operating profits of £365,000 (30 June 2016 -  £821,000)

   Earnings per share has reduced to 2.03p per share (30 June 2016 restated - 8.44p)

   Adjusted Net Asset Value per share is £1.93p per share (30 June 2016 - £2.00 per share)

 

 

SUMMARY FINANCIAL INFORMATION

 

6 months to 30th June

Year ended 31st December

 

2017

£000's

Restated 2016

£000's

2016

£000's

 

 

 

 

Underwriting profits

 1,070  

 1,283  

 2,208  

Other Income

 391  

 429  

 904  

Costs

 (1,096) 

 (891) 

 (1,778) 

Profit for the year before impairment and goodwill

 365  

 821  

 1,334  

Profit after tax

 297  

 886  

 713  

 

 

 

 

Earnings per share

2.03p

8.44p

6.22p

Adjusted Net Asset Value per Share

£1.93

£2.00

£1.96

 

Note: The comparative figures for the period to 30thJune 2016 have been re-stated to include the "Other Comprehensive Income" as an underwriting profit to reflect the disclosure as at 31st December 2016.

 

Interim results to 30th June 2017

 

The underwriting conditions have remained difficult with profit margins continuing to be squeezed.  The profits for the half year have been impacted by the following factors:

·      The underwriting profits from the net retained capacity of Helios have reduced as a result of lower recognition of profits for the more mature years of account, in comparison to the position last year, and as the level of Helios retained capacity was lower than the comparative position.

·      Operating costs have increased as a loss on the conversion of the US$ profits to sterling received in the distribution from the 2014 underwriting year was realized.  The other costs including reinsurance costs are in line with expectations and we continue to benefit from the fees and profit commissions payable by the quota share reinsurers.  

·      The tax charge no longer benefits from tax losses carried forward.

·      The Adjusted Net Asset Value per share is £1.93 per share (June 2016 - £2.00 per share) and has reduced following the payment of the final dividend of 5.5p per share for the year ended 31st December 2016.

·      The earnings per share of 2.03p (2016: 8.44p) has been impacted by the lower after tax profits and the additional shares in issue following the placing in October 2016.

 

 

Recent Catastrophe Events

 

The catastrophe loss activity in the second half of 2017 has been substantial.  To date there have been four major insured losses in the US, Caribbean, Mexico and Puerto Rico, the latter being the largest insured loss. Although initial market wide estimates of insured losses have been announced, it is too early to assess both whether these are accurate and the extent of the potential effect on the Helios portfolio in terms of net losses to be recognized for 2017 underwriting year.  The Board expects that the reinsurance arrangements put in place by Helios will limit the losses recognized from these events.  We continue to reduce our exposure on the most recent underwriting year by 70% through quota share reinsurance.  Stop loss reinsurance has been bought to limit the Group's exposure in the event of large underwriting losses.  These reinsurances have been in place for a number of years to assist both in the funding of substantial losses and reduce the impact on capital.

 

The Board currently expects that the syndicate results for the 2015 and 2016 underwriting years will exceed current mid-point forecasts published by the managing agents, which should make a meaningful contribution to the Helios full year results whilst it is expected that the 2017 underwriting year at the 12-month stage will result in a significant loss that will be mitigated by the Helios reinsurance programs in place.

 

Capacity acquired

 

We have completed four transactions in 2017 so far, acquiring £3.7m of capacity for the 2017 year of account for a total consideration of £4.3m at an average discount to the Humphrey value of 6.8%   Value expectations of vendors of LLV's continued to exceed fair value in our estimation.  The increase in the capacity for the 2014 to 2017 years of account is shown below

 

 

Year of account - £m

2014

2015

2016

2017

Capacity at 1 January

35.5

32.2

33.7

32.6

Acquired during the year

2.1

3.4

3.5

3.7

Capacity at 28th September

37.6

35.6

37.2

36.3

Helios Retained Capacity

22.3

19.1

14.0

11.0

Increase in retained capacity from Quota Share Commutation

-

-

3.3

-

Adjusted Retained Capacity

22.3

19.1

17.3

11.0

 

 

 

 

 

Proportion of Capacity retained

59%

54%

47%

30%

 

In August 2017 we increased the retained capacity on the 2016 underwriting year by £3.3m as certain quota contracts with capital providers for 2016 underwriting year of account have been commuted.  This commutation is in-line with the Helios strategy of increasing the "off risk" capacity and this additional capacity should benefit the earnings in calendar year 2018.

 

Our strategy of building the portfolio of syndicate capacity continues to rely on the flow of vehicles for sale at reasonable prices.   We continue to remain selective on the vehicles acquired and several vehicles have been sold recently at prices which were unattractive to us.

 

The Lloyds' capacity auctions are scheduled for mid-November in 2017 and, although the recent major insured losses should affect the capacity values, it is expected that there will continue to be strong demand for the top syndicates that make up a significant proportion of the Helios Capacity Fund.

 

For further information please contact:

Helios

Nigel Hanbury - Chief Executive                                                              020 7863 6655 / nigel.hanbury@huwplc.com

Arthur Manners - Chief Financial Officer                                               07754 965 917

Stockdale Securities

Robert Finlay                                                                                                020 7601 6100

David Coaten

 

Financial results summary

Six months ended 30 June 2017

 

6 months to 30 June 2017

6 months to 30 June 2016

Year to 31 December 2016

 

 

 

 

Underwriting profits

1,070

1,283

2,208

Other Income

 

 

 

Fees from reinsurers

233

331

557

Investment  income

158

98

347

Total Other Income

391

429

904

Costs

 

 

 

Pre - acquisition

(126)

(133)

(63)

Stop loss costs

(113)

(121)

(248)

Operating costs

(857)

(637)

(1467)

Total Costs

(1,096)

(891)

(1,778)

    Profit for the year

365

821

1,334

    Impairment charge

8

39

(555)

Tax

(76)

26

(66)

Retained Profit

297

886

713

 

Period to 30th June 2017

Underwriting Year

Helios retained

 capacity at

30 June 2017

£m

Portfolio mid

point forecasts

Total profit

currently

estimated

£'000

% earned

in the 2017 half year

calendar

Helios

Profits

£'000

2015

18.5

10.8%

2,002

26%

518

2016

13.3

3.8%

501

141%

707

2017

11.2

N/A

 

 

(155)

 

 

 

 

 

1,070

 

Period to 30th June 2016

Underwriting Year

Helios retained

 capacity at

30 June 2016

£m

Portfolio mid

point forecasts

Total profit

currently

estimated

£'000

% earned

in the 2017 half year

calendar

Helios

Profits

£'000

2014

19.5

11.3%

2,205

38%

841

2015

15.1

7.2%

1,090

60%

651

2016

9.8

N/A

 

 

(209)

 

 

 

 

 

1,283

 

Year to 31 December 2016

Underwriting Year

Helios retained

 capacity at

 31 December

2016

£m

Portfolio mid

point forecasts

Total profit

currently

estimated

£'000

% earned

in the 2017 half year

calendar

Helios

Profits

£'000

2014

20.6

15,5%

3,193

52%

1,661

2015

16.1

8.2%

1,314

79%

1,031

2016

10.8

N/A

 

 

(484)

 

 

 

 

 

2,208

 

Summary Balance Sheet

The summary Group balance sheet excludes items relating to syndicate participations. See Note 15 for further information.

 

6 Months to June 2017

£'000

 

6 Months to June 2016

£'000

Year to 31 December 2016

£'000

Intangible assets

12,495

10,906

10,732

Funds at Lloyd's

6,884

4,954

 4,083

Other cash

5,832

2,975

 7,229

Other assets

2,382

1,304

 3,480

Total assets

27,594

20,139

 25,524

Deferred tax

2,943

3,002

 3,581

Other liabilities

5,903

4,722

 4,618

Total liabilities

8,846

7,724

 8,199

Syndicate equity

3,253

4,369

5,194

Total equity

22,001

16,784

 22,519

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 2017

£'000

6 months to 30 June 2016

£'000

Year to 31 December 2016

£'000

 

 

 

 

Opening Balance (free cash)

7,230

                   2,972

                  2,972

 

 

 

 

Income

 

 

 

Acquired on acquisition

237

                      577

                     413

Distribution of profits (net of tax retentions)

4,490

                   3,378

                  3,378

Transfers from Funds at Lloyds'

66

                     2,258

                  3,775

Investment income

25

                         28

                       271

Other income

-

                          -

                     5,722

Sale of investments

-

                     -

                     -

Transfers from PTF accounts (early release)

-

                          -

                     -

 

 

 

 

Expenditure

 

 

 

Operating costs (inc Hampden / Nomina fees)

(647)

                     (250)

                    (815)

Reinsurance Cost

(115)

                     (237)

                    (237)

Payments to QS  reinsurers

-

                            -

                         (741)

Acquisition of LLV's

(4,080)

                  (4,885)

                 (5,592)

Transfers to Funds at Lloyds'

(560)

                     (861)

                 (1,524)

Tax

(2)

                        (5)

                       (95)

Dividends paid

(812)

                        -

                    (299)

Closing balance

5,832

                   2,975

                  7,230

 

 

Interim condensed consolidated statement of comprehensive income

Six months ended 30 June 2017

 

 

Note

6 months ended 30 June 2017

Unaudited

£'000

Restated  6 months ended 30 June 2016 Unaudited £'000

12 months ended 31 December 2016 Audited £'000

Gross premium written

4

17,061

17,585

31,307

Reinsurance premium ceded

 

(5,119)

(4,710)

(7,772)

Net premium written

4

11,942

12,875

23,535

Change in unearned gross premium provision

5

(432)

(4,343)

(826)

Change in unearned reinsurance premium provision

5

771

1,650

199

 

5

339

(2,693)

(627)

Net earned premium

3,4

12,281

10,182

22,908

Net investment income

6

581

528

885

Other income

 

255

546

2,134

Revenue

 

13,117

11,256

25,927

Gross claims paid

 

(8,108)

(5,769)

(13,355)

Reinsurers' share of gross claims paid

 

1,038

745

2,472

Claims paid, net of reinsurance

 

(7,070)

(5,024)

(10,883)

Change in provision for gross claims

5

(1,810)

(183)

(3,826)

Reinsurers' share of change in provision for gross claims

5

678

(2,040)

1,904

Net change in provision for claims

5

(1,132)

(2,223)

(1,922)

Net insurance claims and loss adjustment expenses

4

(8,202)

(7,247)

(12,805)

Expenses incurred in insurance activities

 

(3,967)

(2,808)

(10,819)

Other operating expenses

 

(583)

(380)

(969)

Operating expenses

 

(4,550)

(3,188)

(11,788)

Operating profit before goodwill and impairment

4

365

821

1,334

Goodwill on bargain purchase

12

-

-

-

Impairment of goodwill

12

-

-

-

Impairment of syndicate capacity

 

8

39

(555)

Profit before tax

 

373

860

779

Income tax charge

7

(76)

26

(66)

Profit for the period

 

297

886

713

Other comprehensive income

 

 

 

 

Foreign currency translation differences

 

-

-

-

Income tax relating to the components of other comprehensive income

 

-

-

 

Other comprehensive income for the period, net of tax

 

-

-

-

Total other comprehensive income for the period

 

297

886

713

 

 

 

 

 

 

 

 

 

 

Profit for the period attributable to owners of the Parent

 

297

886

713

Total comprehensive income for the period attributable to owners of the Parent

 

297

886

713

Earnings per share attributable to owners of the Parent

 

 

 

 

Basic and diluted

8

2.03p

8.44p

6.22p

 

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 2017

 

 

Note

6 months ended 30 June 2017

Unaudited

£'000

Restated 6 months ended 30 June 2016 Unaudited £'000

12 months ended 31 December 2016 Audited £'000

Assets

 

 

 

 

Intangible assets

 

12,495

10,907

10,732

Financial assets at fair value through profit or loss

 

43,886

38,004

45,580

Reinsurance assets:

 

 

 

 

- reinsurers' share of claims outstanding

5

8,840

7,689

9,674

- reinsurers' share of unearned premium

5

3,976

3,527

2,548

Other receivables, including insurance and reinsurance receivables

 

28,967

28,579

30,243

Deferred acquisition costs

 

4,218

4,204

4,255

Prepayments and accrued income

 

364

414

187

Cash and cash equivalents

 

6,853

5,668

6,212

Total assets

 

109,599

98,992

109,431

Liabilities

 

 

 

 

Insurance liabilities:

 

 

 

 

- claims outstanding

5

45,772

43,060

50,087

- unearned premium

5

19,193

18,054

16,821

Deferred income tax liabilities

 

2,943

3,002

3,581

Other payables, including insurance and reinsurance payables

 

15,273

13,948

14,708

Accruals and deferred income

 

4,417

4,144

1,715

Total liabilities

 

87,598

82,208

86,912

Equity

 

 

 

 

Equity attributable to owners of the Parent:

 

 

 

 

Share capital

11

1,460

1,050

1,460

Share premium

11

15,387

9,901

15,399

Retained earnings

 

5,154

5,833

5,660

Total equity

 

22,001

16,784

22,519

Total liabilities and equity

 

109,599

98,992

109,431

 

 

Interim condensed consolidated statement of changes in equity

Six months ended 30 June 2017

 

 

 

 

Attributable to owners of the Parent Restated

Consolidated

 

 

Note

Share

 capital

£'000

 Share

 premium

£'000

 Other reserves

£'000

Retained

earnings

£'000

Total

£'000

At 1 January 2017

 

1,460

15,399

-

5,660

22,519

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

297

297

Other comprehensive income, net of tax

 

-

-

 

 

 

Total comprehensive income for the year

 

-

-

-

297

297

Transactions with owners:

 

 

 

 

 

 

Dividends paid

 

-

-

-

-

-

Other

 

-

(12)

-

(803)

(815)

Total transactions with owners

 

-

(12)

-

(803)

(815)

At 30 June 2017

 

1,460

15,387

-

5,154

22,001

At 1 January 2016

 

1,050

9,901

-

5,472

16,423

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

886

886

Other comprehensive income, net of tax

 

-

-

-

-

-

Total comprehensive income for the year

 

-

-

-

886

886

Transactions with owners:

 

 

 

 

 

 

Dividends paid

 

-

-

-

(525)

(525)

Share issue

 

-

-

-

-

-

Total transactions with owners

 

-

-

-

(525)

(525)

At 30 June 2016

 

1,050

9,901

-

5,833

16,784

At 1 January 2016

 

1,050

9,901

-

5,472

16,423

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

713

713

Other comprehensive income, net of tax

 

-

-

-

-

-

Total comprehensive income for the year

 

-

-

-

713

713

Transactions with owners:

 

 

 

 

 

 

Dividends paid

 

-

-

-

(525)

(525)

Share issue

 

410

5,498

-

-

5,908

Total transactions with owners

 

410

5,498

-

(525)

5,383

At 31 December 2016

 

1,460

15,399

-

5,660

22,519

               

 

Interim condensed consolidated statement of cash flows

Six months ended 30 June 2017

 

 

 

 

 

Note

6 months ended 30 June 2017 Unaudited

£'000

Restated 6 months ended 30 June 2016 Unaudited £'000

12 months ended 31 December 2016 Audited

£'000

Cash flows from operating activities

 

 

 

 

Profit before tax

 

373

914

779

Adjustments for:

 

 

 

 

Other comprehensive income, gross of tax

 

-

-

-

Interest received

 

(2)

(4)

(113)

Investment income

6

(526)

(424)

(594)

Goodwill on bargain purchase

12

 

-

-

Impairment of goodwill

12

 

-

-

(Profit)/loss on sale of intangible assets

 

 

-

(94)

Impairment of intangible assets

 

(8)

(39)

555

Goodwill on acquisition

 

(134)

(449)

-

Changes in working capital:

 

 

 

 

-  change in fair value of financial assets held at fair value through profit or loss

6

(105)

(50)

(256)

-  (increase)/decrease in financial assets at fair value through profit or loss

 

5,835

(409)

(6,825)

- (increase)/decrease in other receivables

 

5,636

(3,234)

(3,848)

- (increase)/decrease in other payables

 

(463)

4,114

3,090

- net (increase)/decrease in technical provisions

 

(7,017)

5,236

8,361

Cash generated/(utilised) from operations

 

3,589

5,655

1,055

Income tax paid

 

2

2

(15)

Net cash inflow from operating activities

 

3,591

5,657

1,040

Cash flows from investing activities

 

 

 

 

Interest received

 

2

4

113

Investment income

 

526

424

594

Purchase of intangible assets

 

-

-

(6)

Proceeds from disposal of intangible assets

 

-

-

137

Acquisition of subsidiaries, net of cash acquired

 

(3,478)

(4,051)

(4,723)

Net cash inflow from investing activities

 

(2,950)

(3,623)

(3,885)

Cash flows from financing activities

 

 

 

 

Net proceeds from issue of ordinary share capital

 

-

-

5,722

Dividends paid to owners of the Parent

 

-

-

(299)

Net cash outflow from financing activities

 

-

-

5,423

Net increase in cash and cash equivalents

 

641

2,034

2,578

Cash and cash equivalents at beginning of period

 

6,212

3,634

3,634

Cash and cash equivalents at end of period

 

6,853

5,668

6,212

 

Cash held within the syndicates' accounts is £4,439,000 (2016: £3,456,000) of the total cash and cash equivalents held at the period end of £6,853,000 (2016: £5,668,000). 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.

 

Notes to the financial statements

Six months ended 30 June 2017

1. General information

The Company is a public limited company quoted on AIM. The Company was incorporated in England, is domiciled in the UK and its registered office is 40 Gracechurch Street, London EC3V 0BT. The Company participates in insurance business as an underwriting member at Lloyd's through its subsidiary undertakings.

2. Accounting policies

Basis of preparation

The Condensed Consolidated Interim Financial Statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) and in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

 

The Condensed Consolidated Interim Financial Statements are prepared for the six months ended 30 June 2017.

 

The Condensed Consolidated Interim incorporate the Financial Statements of Helios Underwriting plc, the Parent Company, and its directly and indirectly held subsidiaries being Hampden Corporate Member Limited, Nameco (No. 365) Limited, Nameco (No. 605) Limited, Nameco (No. 321) Limited, Nameco (No. 917) Limited, Nameco (No. 229) Limited, Nameco (No. 518) Limited, Nameco (No. 804) Limited, Halperin Underwriting Limited, Bernul Limited, Dumasco Limited, Nameco (No. 311) Limited, Nameco (No. 402) Limited, Updown Underwriting Limited, Nameco (No. 507) Limited, Nameco (No. 76) Limited, Kempton Underwriting Limited, Devon Underwriting Limited, Nameco (No 346) Limited, Pooks Limited, Charmac Underwriting Limited, Nottus (No 51) Limited,  Helios UTG Partner Limited, Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 380 LLP, Nomina No 372 LLP and Salviscount LLP. (Note 10).

The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2017 and 2016 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 2016.

 

The underwriting data on which these Condensed Consolidated Interim Financial Statements are based upon has been supplied by the managing agents of those syndicates which the Group supports. The data supplied is the 100% figures for each syndicate. The Group has applied its share of the syndicate participations to the gross figures to derive its share of the syndicates transactions, assets and liabilities.

 

Significant accounting policies

 

The Condensed Consolidated Interim Financial Statements have been prepared under the historical cost convention. The same accounting policies, presentation and methods of computation are followed in these Condensed Consolidated Interim Financial Statements as were applied in the preparation of the Group Financial Statements for the year ended 31 December 2016.  The new standards and amendments to standards and interpretations effective after 1 January 2017, as disclosed in the Annual Report for the year ended 31 December 2016, have not had a significant impact on the Condensed Consolidated Interim Financial Statements at 30 June 2017.

 

New standards effective from 1 January 2017:-

-  IAS 7 Amendment: Disclosure initiative. (EU effective date: 1 January 2017); and

-  IAS 12 Amendment: Recognition of deferred tax assets for unrealised losses. (EU effective date: 1 January 2017); and

-  IFRS 2014-2016 annual improvement cycle, IFRS 12 Disclosure of Interests in Other Entities. (EU effective date: 1 January 2017)

 These amendments will not result in any material impact on the interim financial statements of the group and there have been no amendments to the Group's accounting policies as a result of the new standards listed above.

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.

6 months ended 30 June 2017 Unaudited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

13,738

-

(1,457)

12,281

Net investment income

446

135

-

581

Other income

-

-

255

255

Net insurance claims and loss adjustment expenses

(8,203)

-

1

(8,202)

Expenses incurred in insurance activities

(2,987)

-

(980)

(3,967)

Other operating expenses

-

-

(583)

(583)

Goodwill on bargain purchase

-

-

-

-

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

8

8

Profit before tax

2,994

135

(2,756)

373

 

Restated 6 months ended 30 June 2016 Unaudited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

10,741

-

(559)

10,182

Net investment income

495

33

-

528

Other income

216

-

330

546

Net insurance claims and loss adjustment expenses

(7,247)

-

-

(7,247)

Expenses incurred in insurance activities

(2,241)

-

(567)

(2,808)

Other operating expenses

-

-

(380)

(380)

Goodwill on bargain purchase

-

-

-

-

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

39

39

Profit before tax

1,964

33

(1,137)

860

 

12 months ended 31 December 2016 Audited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

24,302

-

(1,394)

22,908

Net investment income

663

222

-

885

Other income

643

-

1,491

2,134

Net insurance claims and loss adjustment expenses

(12,805)

-

-

(12,805)

Expenses incurred in insurance activities

(10,422)

-

(397)

(10,819)

Other operating expenses

884

-

(1,853)

(969)

Goodwill on bargain purchase

-

-

-

-

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

(555)

(555)

Profit before tax

3,265

222

(2,708)

779

 

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 2017 other corporate activities totalling £1,457,000 (2016: 559,000 - 2014, 2015 and 2016 years of account) represents the 2015, 2016 and 2017 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 Income Statement of the period.

4. Operating profit before goodwill and impairment

 

Underwriting year of account*

 

 

 

 

6 months ended 30 June 2017

2015 and prior

£'000

 

2016

£'000

 

2017

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

(61)

3,374

14,513

17,826

(765)

-

-

17,061

Reinsurance ceded

164

(663)

(3,232)

(3,731)

182

(1,457)

(113)

(5,119)

Net premium written

103

2,711

11,281

14,095

(583)

(1,457)

(113)

11,942

Net earned premium

1,393

9,849

3,190

14,432

(581)

(1,457)

(113)

12,281

Other income

311

199

5

515

(70)

233

158

836

Net insurance claims and loss adjustment expenses

(95)

(5,389)

(3,059)

(8,543)

341

-

-

(8,202)

Operating expenses

(557)

(2,668)

(652)

(3,877)

184

-

(857)

(4,550)

Operating profit before goodwill and impairment

1,052

1,991

(516)

2,527

(126)

(1,224)

(812)

365

Quota share adjustment

(534)

(1,284)

361

(1,457)

-

1,457

-

-

Operating profit before goodwill and impairment after quota share adjustment

518

707

(155)

1,070

(126)

233

(812)

365

 

Underwriting year of account*

 

 

 

 

6 months ended 30 June 2016

2014 and prior

£'000

 

2015

£'000

 

2016

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

432

2,485

16,319

19,236

(1,651)

-

-

17,585

Reinsurance ceded

(4)

(342)

(4,065)

(4,411)

421

(599)

(121)

(4,710)

Net premium written

428

2,143

12,254

14,825

(1,230)

(599)

(121)

12,875

Net earned premium

1,291

7,578

3,048

11,917

(1,056)

(559)

(121)

10,182

Other income

533

148

4

685

(39)

330

98

1,074

Net insurance claims and loss adjustment expenses

(382)

(4,289)

(3,269)

(7,940)

693

-

-

(7,247)

Operating expenses

61

(2,024)

(857)

(2,820)

269

-

(637)

(3,188)

Operating profit before goodwill and impairment

1,503

1,413

(1,074)

1,842

(133)

(229)

(660)

821

Quota share adjustment

(662)

(762)

865

(559)

-

559

-

 

-Operating profit before goodwill and impairment after quota share adjustment

841

651

(209)

1,283

(133)

330

(660)

821

 

 

Underwriting year of account*

 

 

 

 

12 months ended 31 December 2016

2014

and prior

£'000

 

2015

£'000

 

2016

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

250

3,521

30,131

33,902

(2,595)

-

-

31,307

Reinsurance ceded

26

(487)

(6,244)

(6,705)

575

(1,394)

(248)

(7,772)

Net premium written

276

3,035

23,886

27,197

(2,020)

(1,394)

(248)

23,535

Net earned premium

1,679

11,986

12,676

26,341

(1,791)

(1,394)

(248)

22,908

Other income

1,566

543

82

2,191

(76)

557

347

3,019

Net insurance claims and loss adjustment expenses

990

(6,196)

(8,680)

(13,886)

1,081

-

-

(12,805)

Operating expenses

(1,300)

(4,169)

(5,575)

(11,044)

723

-

(1,467)

(11,788)

Operating profit before goodwill and impairment

2,935

2,164

(1,497)

3,602

(63)

(837)

(1,368)

1,334

Quota share adjustment

(1,274)

(1,133)

1,013

(1,394)

-

1,394

-

-

-Operating profit before goodwill and impairment after quota share adjustment

1,661

1,031

(484)

2,208

(63)

557

(1,368)

1,334

 

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

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2017

50,087

9,674

40,413

Increase in reserves arising from acquisition of subsidiary undertakings

4,114

(1,458)

5,573

Movement of reserves

1,810

678

1,132

Other movements

(10,239)

(54)

(10,186)

At 30 June 2017

45,772

8,840

36,932

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2017

16,821

2,548

14,273

Increase in reserves arising from acquisition of subsidiary undertakings

(886)

87

(974)

Movement of reserves

432

771

(339)

Other movements

2,826

570

2,257

At 30 June 2017

19,193

3,976

15,217

 

Included within other movements are the 2014 and prior years' claims reserves reinsured into the 2015 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 2016

32,985

5,657

27,328

Increase in reserves arising from acquisition of subsidiary undertakings

6,643

1,142

5,501

Movement of reserves

183

(2,040)

2,223

Other movements

3,249

2,930

319

At 30 June 2016

43,060

7,689

35,371

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2016

11,169

1,501

9,668

Increase in reserves arising from acquisition of subsidiary undertakings

2,616

451

2,164

Movement of reserves

4,343

1,650

2,693

Other movements

(74)

(75)

2

At 30 June 2016

18,054

3,527

14,527

 

Included within other movements are the 2013 and prior years' claims reserves reinsured into the 2014 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 2016

32,985

5,657

27,328

Increase in reserves arising from acquisition of subsidiary undertakings

8,122

1,417

6,705

Movement of reserves

3,826

1,904

1,922

Other movements

5,154

696

4,458

At 31 December 2016

50,087

9,674

40,413

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2016

11,169

1,501

9,668

Increase in reserves arising from acquisition of subsidiary undertakings

3,154

531

2,623

Movement of reserves

826

199

627

Other movements

1,672

317

1,355

At 31 December 2016

16,821

2,548

14,273

 

Included within other movements are the 2013 and prior years' claims reserves reinsured into the 2014 year of account on which the Group does not participate and currency exchange differences.

 

6. Net investment income

 

6 months ended 30 June 2017 Unaudited

£'000

 

6  months ended 30 June 2016 Unaudited £'000

12 months ended 31 December

2016 Audited

£'000

Investment income

526

424

594

Realised gains on financial assets at fair value through profit or loss

193

48

(19)

Unrealised losses on financial assets at fair value through profit or loss

(139)

52

256

Investment management expenses

(1)

-

(59)

Bank interest

2

4

113

Net investment income

581

528

885

 

7. Income tax charge

Analysis of tax charge/(credit) in the period

 

6 months ended 30 June 2017 Unaudited

£'000

 

 

6 months ended 30 June 2016 Unaudited  £'000

12 months ended 31 December 2016 Audited

£'000

Income tax charge

179

(26)

66

 

The income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used is 20% (2016: 20%). Material disallowed terms have been adjusted for in the income tax calculation.

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.

The Group has no dilutive potential 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 ended 30 June 2017 Unaudited

 

Restated

6 months ended 30 June 2016 Unaudited

 

12 months ended 31 December 2016 Audited

 

Profit for the period after tax attributable to ordinary shareholders

297,000

886,000

713,000

Weighted average number of shares in issue

14,604,240

10,495,350

11,463,456

Basic and diluted earnings per share

2.03

8.44

6.22

 

9. Dividends paid or proposed

A final dividend of 5.5p per share was proposed and agreed at the AGM on 28 June 2017 (2016: 5.0p).

10. Investments in subsidiaries

 

30 June

2017

£'000

30 June

2016

£'000

31 December

2016

£'000

Total

23,015

19,503

19,503

 

At 30 June 2017 the Company owned 100% of the following companies and limited liability partnerships, either directly or indirectly. All subsidiaries are incorporated in England and Wales.

Company or partnership

Direct/indirect interest

30 June 2017

ownership

30 June 2016

 ownership

31 December 2016

 ownership

Principal activity

Hampden Corporate Member Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 365) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 605) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 321) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 917) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 229) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 518) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 804) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Halperin Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Bernul Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Dumasco Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 311) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 402) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Updown Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 507) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 76) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Kempton Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Devon Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No 346) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Pooks Limited

Direct

100%

-

-

Lloyd's of London corporate vehicle

 

Charmac Underwriting Limited

Direct

100%

-

-

Lloyd's of London corporate vehicle

 

Nottus (No 51) Limited

Direct

100%

-

-

Lloyd's of London corporate vehicle

 

Nomina No 035 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 342 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 380 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 372 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Salviscount LLP

Indirect

100%

-

100%

Lloyd's of London corporate vehicle

 

Helios UTG Partner Limited

Direct

100%

100%

100%

Corporate partner

 

 

Helios UTG Partner Limited, a subsidiary of the Company, owns 100% of Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 380 LLP, Nomina No 372 LLP and Salviscount LLP.

For details of all new acquisitions made during the period refer to Note 12.

 

11. Share capital and share premium

Allotted, called up and fully paid

 

 

Number of shares

Ordinary share

capital

£'000

Share

premium

£'000

Total

£'000

Ordinary shares of 10p each and share premium at 30 June 2016

10,495,350

1,050

9,901

8,452

Ordinary shares of 10p each and share premium at 31 December 2016

14,604,240

1,460

15,399

16,859

Ordinary shares of 10p each and share premium at 30 June 2017

14,604,240

1,460

15,387

16,847

 

12. Acquisition of Limited Liability Vehicles

 

Pooks Limited

On 25 January 2017, Helios Underwriting plc acquired 100% of the issued share capital of Pooks Limited for a total consideration of £308,000. Pooks Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £279,000. Goodwill of £29,000 arose on acquisition which has been recognised as an intangible asset and will be assessed at each period end for impairment. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

-

516

516

Reinsurance assets:

 

 

 

Financial assets at fair value through profit or loss

747

-

747

- reinsurers' share of claims outstanding

206

-

206

- reinsurers' share of unearned premium

38

-

38

Other receivables, including insurance and reinsurance receivables

914

-

914

Deferred acquisition costs

64

-

64

Prepayments and accrued income

5

-

5

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

104

-

104

Insurance liabilities:

 

 

 

- claims outstanding

(1,019)

-

(1,019)

- unearned premium

(327)

-

(327)

Deferred income tax liabilities

-

(98)

(98)

Other payables, including insurance and reinsurance payables

(839)

-

(839)

Accruals and deferred income

(32)

-

(32)

Net assets acquired

(139)

418

279

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

871

-

871

Loan paid on acquisition

(563)

-

(563)

Acquisition costs paid

-

-

-

Total consideration

308

-

308

 

 

 

 

Goodwill

447

418

29

 

 

 

2014 year of account

2015 year of account

2016 year of account

Capacity acquired

749,927

756,697

784,666

 

The net earned premium and profit of Pooks Limited for the period since the acquisition date to 30 June 2017 are £353,000 and £119,000 respectively.

 

Goodwill has arisen on the acquisition of Pooks Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.

 

Charmac Underwriting Limited

On 4 April 2017, Helios Underwriting plc acquired 100% of the issued share capital of Charmac Underwriting Limited for a total consideration of £2,240,000. Charmac Underwriting Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £2,137,000. Goodwill of £103,000 arose on acquisition, which has been recognised as an intangible asset and will be assessed at each period end for impairment. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

38

642

680

Financial assets at fair value through profit or loss

1,692

-

1,692

Reinsurance assets:

 

 

 

- reinsurers' share of claims outstanding

439

-

439

- reinsurers' share of unearned premium

119

-

119

Other receivables, including insurance and reinsurance receivables

2,086

277

2,363

Deferred acquisition costs

250

-

250

Prepayments and accrued income

9

-

9

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

431

-

431

Insurance liabilities:

 

 

 

- claims outstanding

(2,120)

-

(2,120)

- unearned premium

(832)

-

(832)

Deferred income tax liabilities

(73)

(175)

(248)

Other payables, including insurance and reinsurance payables

(574)

-

(574)

Accruals and deferred income

(72)

-

(72)

Net assets acquired

1,393

744

2,137

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

2,240

-

2,240

Total consideration

2,240

-

2,240

 

 

 

 

Goodwill

847

744

103

 

 

 

2015 year of account

2016 year of account

2017 year of account

Capacity acquired

1,417,006

1,491,671

1,622,890

 

The net earned premium and profit of Charmac Underwriting Limited for the period since the acquisition date to 30 June 2017 are £296,000 and £30,000 respectively.

 

Goodwill has arisen on the acquisition of Charmac Underwriting Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.

 

Nottus (No 51) Limited

 

On 8 June 2017, Helios Underwriting plc acquired 100% of the issued share capital of Nottus (No 51) Limited  for a total consideration of £96,000. Nottus (No 51) Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £962,000. Goodwill of £3,000 arose on acquisition, which has been recognised as an intangible asset and will be assessed at each period end for impairment. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

-

370

370

Financial assets at fair value through profit or loss

1,061

-

1,061

Reinsurance assets:

 

 

 

- reinsurers' share of claims outstanding

240

-

240

- reinsurers' share of unearned premium

49

-

49

Other receivables, including insurance and reinsurance receivables

813

-

813

Deferred acquisition costs

78

-

78

Prepayments and accrued income

4

-

4

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

62

-

62

Insurance liabilities:

 

 

 

- claims outstanding

(975)

-

(975)

- unearned premium

(300)

-

(300)

Deferred income tax liabilities

(61)

(70)

(131)

Other payables, including insurance and reinsurance payables

(276)

-

(276)

Accruals and deferred income

(33)

-

(33)

Net assets acquired

662

300

962

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

965

-

965

Total consideration

965

-

965

 

 

 

 

Goodwill

303

300

3

 

 

 

2015 year of account

2016 year of account

2017 year of account

Capacity acquired

619,244

634,067

669,597

 

The net earned premium and profit of Nottus (No 51) Limited for the period since the acquisition date to 30 June 2017 are £28,000 and £10,000 respectively.

 

Goodwill has arisen on the acquisition of Nottus (No 51) Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.

 

Had the two Limited Liability Vehicles been consolidated from 1 January 2017, the Consolidated Statement of Comprehensive Income would show net earned premium of £12,862,000 and a profit after tax of £286,000.

 

13. Related party transactions

Helios Underwriting plc has inter-company loans with its subsidiaries which are repayable on three months' notice provided it does not jeopardise each company's ability to meet its liabilities as they fall due. All inter-company loans are therefore classed as falling due within one year. The amounts outstanding as at 30 June 2017 are set out below:

Company

30 June 2017 Unaudited

£'000

30 June 2016 Unaudited £'000

31 December

2016

£'000

Balances due from/(to) Group companies at the period end:

 

 

 

Hampden Corporate Member Limited

(363)

34

(82)

Nameco (No. 365) Limited

(54)

7

(34)

Nameco (No. 605) Limited

(282)

34

(164)

Nameco (No. 321) Limited

(73)

10

(43)

Nameco (No. 917) Limited

3,989

121

3,397

Nameco (No. 229) Limited

(4)

9

28

Nameco (No. 518) Limited

(81)

13

(35)

Nameco (No. 804) Limited

(69)

23

104

Halperin Underwriting Limited

(43)

-

(16)

Bernul Limited

2

-

27

Dumasco Limited

(194)

-

(37)

Nameco (No. 311) Limited

(115)

12

(29)

Nameco (No. 402) Limited

(275)

12

(181)

Updown Underwriting Limited

525

-

644

Nameco (No. 507) Limited

(252)

21

(80)

Nameco (No. 76) Limited

(90)

12

8

Kempton Underwriting Limited

18

-

128

Devon Underwriting Limited

105

9

110

Nameco (No 346) Limited

(703)

51

(382)

Pooks Limited

-

-

-

Charmac Underwriting Limited

511

-

-

Nottus (No 51) Limited

(316)

-

-

Nomina No 035 LLP

-

10

-

Nomina No 342 LLP

-

9

-

Nomina No 380 LLP

-

15

-

Nomina No 372 LLP

-

10

-

Salviscount LLP

-

-

 

Helios UTG Partner Limited

735

-

909

Total (note 15)

2,971

412

4,272

 

Helios Underwriting plc and its subsidiaries have entered into a management agreement with Nomina plc. Jeremy Evans, a Director of Helios Underwriting plc and its subsidiary companies, is also a Director of Nomina plc. Under the agreement, Nomina plc provides management and administration, financial, tax and accounting services to the Group for an annual fee of £154,000 (2016: £142,000).

The Limited Liability Vehicles have entered into a members' agent agreement with Hampden Agencies Limited. Jeremy Evans, a Director of Helios Underwriting plc and its subsidiary companies, is also a director of Hampden Capital plc, which controls Hampden Agencies Limited. Under the agreement, the Limited Liability Vehicles will pay Hampden Agencies Limited a fee based on a fixed amount, which will vary depending upon the number of syndicates the Limited Liability Vehicles underwrite on a bespoke basis, and a variable amount depending on the level of underwriting through the members' agent pooling arrangements. In addition, the Limited Liability Vehicles will pay profit commission on a sliding scale from 1% of the net profit up to a maximum of 10%. The total fees payable for 2017 are set out below:

Company

30 June 2017 Unaudited

£'000

30 June 2016 Unaudited £'000

31 December

2016

£'000

Hampden Corporate Member Limited

-

34

34

Nameco (No. 365) Limited

-

7

7

Nameco (No. 605) Limited

-

34

34

Nameco (No. 321) Limited

-

10

10

Nameco (No. 917) Limited

70

121

121

Nameco (No. 229) Limited

-

9

9

Nameco (No. 518) Limited

-

13

13

Nameco (No. 804) Limited

-

23

23

Halperin Underwriting Limited

-

-

10

Bernul Limited

-

-

-

Dumasco Limited

-

-

-

Nameco (No. 311) Limited

13

12

12

Nameco (No. 402) Limited

14

12

12

Updown Underwriting Limited

-

-

-

Nameco (No. 507) Limited

24

21

21

Nameco (No. 76) Limited

13

12

12

Kempton Underwriting Limited

3

-

-

Devon Underwriting Limited

8

9

9

Nameco (No 346) Limited

49

51

51

Pooks Limited

1

 

-

Charmac Underwriting Limited

25

 

-

Nottus (No 51) Limited

14

 

-

Nomina No 035 LLP

-

10

10

Nomina No 342 LLP

-

9

9

Nomina No 380 LLP

19

15

15

Nomina No 372 LLP

15

10

11

Salviscount LLP

21

 

20

Helios UTG Partner Limited

-

-

-

Total

289

412

443

 

The Group entered into quota share reinsurance contracts for the 2015, 2016 and 2017 years of account with Hampden Insurance PCC (Guernsey) Limited - Cell 6.  The Limited Liability Vehicles' underwriting year of account quota share participations are set out below:

Company or partnership

2015

2016

2017

Hampden Corporate Member Limited

70%

-

-

Nameco (No. 365) Limited

70%

-

-

Nameco (No. 605) Limited

70%

-

-

Nameco (No. 321) Limited

70%

-

-

Nameco (No. 917) Limited

70%

70%

70%

Nameco (No. 229) Limited

70%

-

-

Nameco (No. 518) Limited

70%

-

-

Nameco (No. 804) Limited

70%

-

-

Halperin Underwriting Limited

70%

-

-

Bernul Limited

70%

-

-

Dumasco Limited

-

-

-

Nameco (No. 311) Limited

70%

-

-

Nameco (No. 402) Limited

70%

-

-

Updown Underwriting Limited

70%

-

-

Nameco (No. 507) Limited

-

-

-

Nameco (No. 76) Limited

-

-

-

Kempton Underwriting Limited

-

-

-

Devon Underwriting Limited

-

70%

70%

Nameco (No. 346) Limited

-

70%

70%

Pooks Limited

-

-

70%

Charmac Underwriting Limited

-

-

70%

Nottus (No 51) Limited

-

-

70%

Helios UTG Partner Limited

-

-

-

Nomina No 035 LLP

70%

-

-

Nomina No 342 LLP

70%

-

-

Nomina No 380 LLP

70%

-

-

Nomina No 372 LLP

70%

-

-

Salviscount LLP

-

-

100%

 

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 - Cell 6. Hampden Capital plc, a substantial shareholder in Helios Underwriting plc, is also a substantial shareholder in Hampden Insurance Guernsey PCC Limited - Cell 6. Under the agreement, the Group accrued a net reinsurance premium payable of £2,910,000 (2016: £1,768,000) during the period.

 

14. Ultimate controlling party

The Directors consider that the Group has no ultimate controlling party.

 

15. Syndicate participations

The syndicates and members' agent pooling arrangements ("MAPA") in which the Company's subsidiaries participate as corporate members of Lloyd's are as follows:

Syndicate or MAPA number

Managing or members' agent

Allocated capacity per year of account

2017*

£

2016*

£

2015*

£

2014

£

33

Hiscox Syndicates Limited

3,485,689

2,982,036

2,788,256

2,637,836

218

ERS Syndicate Management Limited

1,994,934

1,505,955

1,389,275

1,672,479

308

Tokio Marine Kiln Syndicates Limited

100,000

100,000

184,528

244,528

386

QBE Underwriting Limited

605,840

811,005

722,081

741,868

510

Tokio Marine Kiln Syndicates Limited

5,685,556

5,246,046

4,971,599

4,637,953

557

Tokio Marine Kiln Syndicates Limited

580,415

575,567

553,433

543,871

609

Atrium Underwriters Limited

3,349,435

3,292,552

3,069,205

2,908,062

623

Beazley Furlonge Limited

4,978,151

4,137,922

3,433,853

3,397,299

727

S A Meacock & Company Limited

998,560

991,078

963,679

916,256

958

Canopius Managing Agents Limited

-

-

268,646

753,749

1176

Chaucer Syndicates Limited

722,837

661,905

556,986

522,886

1200

Argo Managing Agency Limited

77,143

267,554

293,819

358,071

1729

Asta Managing Agency Limited

-

42,000

103,758

139,443

1884

Charles Taylor Managing Agency Limited

-

-

25,000

-

1910

Asta Managing Agency Limited

-

1,247,268

-

-

1991

R&Q Managing Agency Limited

-

-

60,000

118,995

2010

Cathedral Underwriting Limited

931,506

911,045

831,970

863,695

2014

Pembroke Managing Agency Limited

1,012,113

1,617,349

1,585,287

1,569,358

2121

Argenta Syndicate Management Limited

-

-

260,341

160,341

2525

Asta Managing Agency Limited

173,558

171,414

134,698

116,690

2689

Asta Managing Agency Limited

835,100

-

-

-

2791

Managing Agency Partners Limited

4,107,191

4,056,484

3,851,738

4,113,012

2988

Brit Syndicates Limited

47,511

-

-

-

4444

Canopius Managing Agents Limited

-

101,429

-

-

5820

ANV Syndicates Limited

-

139,479

316,535

416.145

6103

Managing Agency Partners Limited

299,357

261,937

233,876

580,708

6104

Hiscox Syndicates Limited

932,970

1,296,995

1,323,728

1,371,954

6105

Ark Syndicate Management Limited

-

-

668,070

647,738

6107

Beazley Furlonge Limited

635,222

453,737

453,737

453,737

6111

Catlin Underwriting Agencies Limited

-

1,902,876

1,659,850

1,597,305

6113

Barbican Managing Agency Limited

-

-

-

160,528

6117

Asta Managing Agency Limited

2,616,798

1,870,283

929,036

1,400,144

7200

Members' agent pooling arrangement

101,019

145,078

314,067

477,466

7201

Members' agent pooling arrangement

531,055

739,931

1,599,412

2,436,667

7202

Members' agent pooling arrangement

196,563

270,988

570,574

875,976

7203

Members' agent pooling arrangement

77,697

84,378

202,119

260,095

7211

Members' agent pooling arrangement

192,184

175,265

272,262

972,513

7215

Members' agent pooling arrangement

164,129

150,917

150,468

-

7217

Members' agent pooling arrangement

274,428

260,707

246,987

219,547

7227

Members' agent pooling arrangement

3,613

80,070

42,705

-

Total

 

35,710,574

36,551,250

35,031,578

38,286,915

 

* Including the new acquisitions in 2017.

 

16. 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 2017

Restated 30 June 2016

31 December 2016

Group

£'000

Syndicate

£'000

Total

£'000

Group

£'000

Syndicate

£'000

Total

£'000

Group

£'000

Syndicate

£'000

Total

£'000

Assets

 

 

 

 

 

 

 

 

 

Intangible assets

12,495

-

12,495

10,907

-

10,907

10,732

-

10,732

Financial assets at fair value through profit or loss

10,302

33,584

43,886

 

5,717

 

32,287

 

38,004

7,263

38,317

45,580

Reinsurance assets:

 

 

 

 

 

 

 

 

 

- reinsurers' share of claims outstanding

-

8,840

8,840

-

7,689

7,689

-

9,674

9,674

- reinsurers' share of unearned premium

-

3,976

3,976

-

3,527

3,527

-

2,548

2,548

Other receivables, including insurance and reinsurance receivables

2,315

26,652

28,967

 

1,178

 

27,401

 

28,579

3,480

26,763

30,243

Deferred acquisition costs

-

4,218

4,218

-

4,204

4,204

-

4,255

4,255

Prepayments and accrued income

67

296

364

126

288

414

-

187

187

Cash and cash equivalents

2,414

4,439

6,853

2,212

3,456

5,668

4,049

2,163

6,212

Total assets

27,594

82,004

109,599

20,140

78,852

98,992

25,524

83,907

109,431

Liabilities

 

 

 

 

 

 

 

 

 

Insurance liabilities:

 

 

 

 

 

 

 

 

 

- claims outstanding

-

45,772

45,772

-

43,060

43,060

-

50,087

50,087

- unearned premium

-

19,193

19,193

-

18,054

18,054

-

16,821

16,821

Deferred income tax liabilities

2,943

-

2,943

3,002

-

3,002

3.581

-

3,581

Other payables, including insurance and reinsurance payables

1,915

13,358

15,273

965

12,983

13,948

3,028

11,680

14,708

Accruals and deferred income

3,988

429

4,417

3,757

387

4,144

1,590

125

1,715

Total liabilities

8,846

78,752

87,598

7,725

74,484

82,209

8,199

78,713

86,912

Equity attributable to owners of the Parent

 

 

 

 

 

 

 

 

 

Share capital

1,460

-

1,460

1,050

-

1,050

1,460

-

1,460

Share premium

15,387

-

15,387

9,901

-

9,901

15,399

-

15,399

Other reserves

-

-

-

-

-

-

-

-

-

Retained earnings

1,901

3,253

5,154

1,465

4,368

5,833

466

5,194

5,660

Total equity

18,748

3,253

22,001

12,416

4,368

16,784

17,325

5,194

22,519

Total liabilities and equity

27,594

82,005

109,599

20,141

78,852

98,993

25,524

83,907

109,431

 

17. Events after the financial reporting period

Effects of reclassification in the 30 June 2016 comparatives

The period ended 30 June 2016 comparative, at consolidation level, in these financial statements include the effects of the reclassification of the foreign exchange differences originally included in the other comprehensive income, net of tax, amounting to £216,000, and now reclassified into the income statement, within the other income line. As a result of the reclassification the earnings per share for the period ending 30 June 2016 comparative, at consolidation level has increased by 2.06p to 8.44p.

 

These foreign exchange differences arose as a result of the retranslation of the syndicates' results whose functional currency is not the Pound Sterling, into the Pound Sterling as the reporting currency to Lloyd's. Hence, such foreign exchange differences were accounted for as other comprehensive income within the syndicates' reported results.

 

As the functional and presentation currency of the Helios Group is the Pound Sterling, such foreign exchange differences were accounted for as other income in the income statement in the consolidated Financial Statements of the year ended 31 December 2016 and the period ended 30 June 2017

 

18. Events after the financial reporting period

A final dividend of 5.5p per share was agreed at the AGM on 28 June 2017 and has been accrued at the period end.  The dividend payment was settled on 7th July 2017.

 

Invansander Limited

 

On 25 September 2017, Helios Underwriting plc acquired 100% of the issued share capital of Invansander Limited for a total consideration of £235,000.Invansander Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the provisional fair value of the net assets at the date of acquistion was £240,000 giving rise to Negative Goodwill of £5,000 on acquisition.  The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

87

202

289

Financial assets at fair value through profit or loss

308

-

308

Reinsurance assets:

 

 

 

- reinsurers' share of claims outstanding

18

-

18

- reinsurers' share of unearned premium

43

-

43

Other receivables, including insurance and reinsurance receivables

283

-

283

Deferred acquisition costs

73

-

73

Prepayments and accrued income

3

-

3

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

44

-

44

Insurance liabilities:

 

 

 

- claims outstanding

(395)

-

(395)

- unearned premium

(288)

-

(288)

Deferred income tax liabilities

-

(38)

(38)

Other payables, including insurance and reinsurance payables

(92)

-

(92)

Accruals and deferred income

(8)

-

(8)

Net assets acquired

76

164

240

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

235

-

235

Total consideration

235

-

235

 

 

 

 

Goodwill

159

164

(5)

 

 

 

2015 year of account

2016 year of account

2017 year of account

Capacity acquired

646,587

634,095

616,211

 

Reinsurance commuted

In August 2017 the Company increased the retained capacity on the 2016 underwriting year by £3.3m as certain quota contracts with capital providers for 2016 underwriting year of account have been commuted for a total fee of £113,000.

 

The Interim Report will be made available in electronic format on the Company's website, www.huwplc.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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