Source - LSE Regulatory
RNS Number : 9083N
Helios Underwriting Plc
28 September 2023
 

28 September 2023

Helios Underwriting plc

("Helios" or the "Company")

Interim Results for the Six Months Ended 30 June 2023

Helios Underwriting plc is an investment vehicle which provides shareholders with participation in the Lloyd's insurance market through an actively managed spread portfolio of syndicate capacity, announces its unaudited results for the six months ended 30 June 2023.

 

·      Gross written premiums increased by 28% to £160 (HY 2022 - £124m) reflecting the increase in the capacity portfolio

·      Further rate increase achieved by the Lloyd's market of 9.1% (HY 2022 7.7%) over the six month period continuing the excellent market conditions at Lloyd's.

·      252% improvement in the underwriting result to £11.6m (HY 2022- £3.3m) with an 88% combined ratio

·      The increase of 33% in the underwriting exposure in 2023 Year of Account to £244m of retained capacity will contribute to the underwriting result in the future.

·      Investment returns of £3.1m (HY 2022 - losses £3.5m) have been booked in the first six months benefiting from the increased interest rates

·      Operating profit is £6.0m (30 June 2022 - a loss of £3.4m)

·      The net tangible asset value per share is £1.54 per share (FY 2022 - £1.52 per share)

 

Martin Reith, Chief Executive, provides the following overview:

 

"The continued improvement in market conditions presents exciting opportunities for Helios. The portfolio is positioned to benefit from pricing and market discipline and underwriting profits are now being recognised from five years of improved underwriting margins. We are confident that given market discipline, we should continue to see favorable returns across our portfolio. The resilience of these conditions seem to be more sustainable and we fully expect our portfolio to thrive.

 

"The results are a little skewed as a consequence of the recent rapid 33% growth in our retained capacity in 2023 and a cautious approach to reserving adopted within our portfolio. With the passage of time and as the better loss ratio premium earns through, we are confident that our portfolio will demonstrate outperformance against a prudent reserving strategy. The impact of the increased yields on the Group investments will make a contribution in the future."

 

Helios Underwriting plc

Martin Reith - Chief Executive                                        

Arthur Manners - Chief Financial Officer                       +44 203 965 6441

 

Numis

Giles Rolfe                                                                      +44 (0)20 260 1000

Charles Farquhar

 

Buchanan

Helen Tarbet / George Beale                                          +44 (0)7872 604 453

                                                                                        +44 (0)20 7466 5111

 

Chairman's statement

Six months ended 30 June 2023

 

Helios Underwriting plc is the only listed vehicle where investors can own a share in a company with a broad spread of Lloyd's syndicate participations 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.

Under the direction of our new Chief Executive, Helios has plans to continue its growth and broaden still further into insurance underwriting activities at a time when market conditions are attractive.

These conditions give us confidence to return capital to shareholders, initially through a share buyback programme and the Board will be reviewing the dividend policy in the future.

 

 

 

 


SUMMARY FINANCIAL INFORMATION

 

6 months  to 30 June

 

2023

 2022

£000's

£000's

Gross written premium

158,509

124,067

Underwriting result

11,658

3,291

Investment Income - syndicates

3,160

(3,560)

Net quota share

(4,378)

(383)

Net profits from portfolio

 10,441

(652)

Other income

739

833

Costs

(5,146)

(3,612)

Operating profit / loss for the period

6,034

(3,431)

Profit/(loss) after tax

4,351

(3,264)

Earnings per share

 5.71p

(4.44)p

Net Tangible Asset Value per Share

£1.54p

£1.52p

 

The combined underwriting result has improved substantially as the underlying profitability of the portfolio starts to be recognised.  Given the improved terms on property and property catastrophe business achieved at the beginning of the year, the impact of worldwide natural catastrophes in the period has been muted.     


2023

2022

% Increase

£000's

£000's

Gross premium written

160,493

124,067

28%

Net earned premium

97,316

59,990

62%

Net insurance claims & operating expenses

(85,658)

(56,699)

51%

Underwriting result

11,658

3,291

254%

Investment Income

3,160

(3,560)


Operating profit/loss

14,819

(269)


Combined ratio

88%

95%







The figures in the above table are gross of pre-acquition

 

The increase in the gross written premiums reflect the growth of the capacity portfolio to £310m for the 2023 underwriting year.  The combined portfolio ratio of 88% is in line with the combined ratio for the Lloyds market of 85% and has improved substantially given the contribution of the profitability from the 2022 year.


6 months to 30th June


 2021 and prior

2022

2023

 Total

£000's

£000's

£000's

£000's

Net Earned Premium

4,113

68,516

24,687

97,316

Underwriting result

1,973

13,215

(3,531)

11,658

Investment Income

1,801

1,165

195

3,160

Operating (loss) / profit

3,774

14,380

(3,336)

14,818

Quota Share Reinsurers

(1,429) 

(3,679)

730 

(4,378)

Total Group Underwriting Profit/(loss)

2,345 

10,701

(2,606)

10,440 

 

The underwriting contribution from the 2022 underwriting years reflects the expected development of those years after recognising underwriting losses at an early stage.  2023 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 2023 year, given the increased underwriting exposure, will benefit the underwriting result in the future.



6 months to 30th June


2023

2022


£000's

£000's

Stop loss costs

(1,083)

(783)

Excess of Loss costs

(1,778)

(812)

Operating costs

(2,285)

(2,017)

Total Costs

(5,146)

(3,612)

 

The excess of loss costs has increased in line with the additional funds provided by reinsurers and by banks.  Operating costs have been impacted by the additional resources taken on to manage the larger portfolio


Financial Investments

£000's

Investment Return - £000's

Yield

Syndicate investment assets

182,253

3,160

1.71%

Group investment assets

77,297

(19)

0.03%


259,550

3,141

1.21%

 

Helios's share of the syndicate investments has increased by 43% since 30 June 2022 and has generated a positive return of 1.71% in the first 6 months of the year in comparison to a negative yield of 2.8% in the comparative period last year.  The Group funds will continue to earn interest for the balance of the year. The Group's share of the syndicate investments is expected to continue to increase to reflect the growth of the capacity portfolio.

 

Helios Retained Capacity

The positive momentum in both insurance and reinsurance pricing has continued into 2023 as the property and property reinsurance rates increased significantly at the beginning of the year. The improvement in underwriting conditions over the last five years will provide a platform for better prospects for underwriting returns over the next few years.

 

Helios has increased its retained capacity to £244.5m for the 2023 underwriting year, an increase of 42% to take advantage of the current market conditions. The proportion of the capacity reinsured has been reduced while the capital provided by the reinsurers has remained steady. The quota share reinsurers fund their share of the capital requirements and pay Helios a fee and a profit commission. The strategy of building a portfolio of underwriting capacity that can be accessed by alternative sources of capital is expected to be developed in the future as we regard this as an attractive opportunity to increase the fee income generated from the portfolio. 

 

£m

2023 Capacity

Capacity Value

2023 YOA

310.8

62.6

Expected Pre-emptions

14.5

6.3

Increase in NTAV per share

6.2p

 



 

Helios has received preliminary indications of pre-emptions for the 2023 year of account from the syndicates supported of £14.5m which are subject to approval by Lloyd's.  The value of the capacity portfolio, using the 2022 weighted average prices, including the value of the expected pre-emptions for 2023 (using the 2022 weighted average capacity prices) could increase to £69m - an increase of 10%. 

 

Wild-fire Defense Syndicate

 

Helios became the cornerstone FAL provider in a new SIAB 1996 which commenced underwriting from July this year underwriting £6m of capacity for 2023 year of account. WDS provides insurance cover to commercial businesses located in California for the risks of wildfire. Their intervention techniques have saved may properties from destruction and provide much needed cover in this challenging environment.

 

 


 

Acquisitions in 2023 to date

Four acquisitions have been completed to date increasing the portfolio by £8m of capacity.

2023 Capacity

Humphrey's Valuation

Total Consideration**

Discount

Nameco 606

2.0

1.6

1.5

5.8%

Nameco 1208

1.8

1.0

0.7

25.0%

Park Farm UW*

2.3

3.4

3.2

6.3%

Chorlton UW*

2.1

2.1

2.0

10.0%

Total

8.2

8.1

7.4

11.1%

*Completed after 30th June 2023

** includes the cash consideration plus the proprietors loans assumed by the group

 

Our strategy of building a portfolio of syndicate capacity continues to rely on the flow of LLVs for sale at reasonable prices.  The discounts achieved to the Humphrey Valuations have decreased as both Vendor expectations of future value have increased and as other purchasers have realised the value of the potential future profitability of these capacity portfolios. 

 


 Capital Position as at 30th June 2023

 

Underwriting capital

30 June 2023

31 December 2022

£m

£m

Quota share reinsurance panel

22.3

27.8

Excess of loss funds at Lloyd's

46.4

41.2

Helios own funds

62.4

58.3

Solvency credits

21.2

0.7

Total

152.3

128.0

 



Total Capacity

310.8

296.7

Economic capital requirement

128.6

126.4

Capital Ratio

41%

42%

Surplus Capital

23.7

1.6

 

The improvement in the Solvency position of the capacity portfolio, increasing the solvency credits to £21m as profits have been recognized within the supported syndicates.  Surplus solvency credits of £10m have recently been released to improve the free cash position of the Company.  

 

Return of Capital to Shareholders

Helios is committed to returning capital to shareholders. The Board has already announced a share repurchase program and is actively considering other mechanisms to achieve this goal. This will also potentially include the review and increase of our dividend policy.

 

The Company has allocated £1million recently for the buyback of its shares as the share price is below tangible book value.  The Board believes that while the share price remains at these levels it is in shareholders' interests to continue to buy back shares in the market.

 

The net tangible asset value per share is £1.54p per share (Dec 2022 - £1.52p per share).  The net assets include a deferred tax provision of £14m on the value of the capacity portfolio.

 


Financial results summary

Six months ended 30 June 2023


6 months to 30 June 2023

£'000

6 months to 30 June 2022

£'000



 

Underwriting profits

10,441

(652)

Other Income



Fees from reinsurers

720

442

Corporate reinsurance recoveries

-

307

Goodwill on bargain purchase

-

-

Investment income

19

84

Total Other Income

739

833

Costs



Pre-acquisition

(184)

-

Stop loss costs

(1,931)

(1,224)

Operating costs

(3,031)

(2,388)

Total Costs

(5,146)

(3,612)

Operating profit before impairments of goodwill

and capacity

6,034

(3,431)

Amortisation of goodwill

302

638

Tax

(1,985)

(214)

Revaluation of syndicate capacity

-

-

Income tax relating to the components of other

Comprehensive income

-

(257)

Profit/(loss) for the period/year

4,351

(3,264)

 

 

 

 

 

Period to 30 June 2023

 





Underwriting Year

Helios retained capacity at

Portfolio mid point forecasts

Portfolio Expected Profits

Helios Earned before tax

Helios Profits

Helios Profits to be earned in the future

30 June 2023

 at 30 June 2023

 

to 31 Dec 2022

to 30th June 2023

 

£m

 

£'000

£'000

£'000

£'000

 






2021

102.3

4.90%

         5,016

711

2,346

          1,959

2022

180.9

5.68%

        10,272

(7,088)

10,701

         6,659

2023

234.2

N/A



(2,606)







10,441

          8,618




Impact on NTAV

 

                  12.8p

                    8.5p










 


Financial results summary continued

Six months ended 30 June 2023

 

Summary Balance Sheet

The summary Group balance sheet excludes items relating to syndicate participations. See Note 16 for further information.


30 June 2023

£'000

 

 

 

31 December 2022

£'000

 

Intangible assets

61,236

59,375

Funds at Lloyd's

77,297

73,771

Other cash

2,020

10,254

Other assets

6,958

6,909

Total assets

147,511

150,309

Deferred tax

13,921

11,228

Borrowings

15,000

15,000

Other liabilities

7,732

3,839

Total liabilities

36,653

30,067

Syndicate equity

6,292

(5,123)

Total equity

117,150

115,119

Summary Group Cash Flow

The summary group cash flow sheet excludes items relating to syndicate participations. See Note 16 for further information.

 


6 months to 30 June 2023

£'000

6 months to 30 June 2022

£'000




Opening Balance (free cash)

10,254

16,178




Income

 

 

Acquired on acquisition

9

-

Distribution of profits (net of tax retentions)

3,091

2,422

Transfers from Funds at Lloyds'

2,499

5,277

Investment income

375

55

Borrowings

-

15,000




Expenditure

 

 

Operating costs (inc Hampden / Nomina fees)

(2,988)

(1,409)

Reinsurance Cost

(3,408)

(857)

Acquisition of LLV's

(1,569)

-

Transfers to Funds at Lloyds'

(6,067)

(21,886)

Tax

(236)

293

Dividends paid

-

(2,034)

Closing balance

1,960

13,039

 

 


Financial results summary continued

Six months ended 30 June 2023

Net tangible asset per share


6 months to 30 June 2023

£'000

Year to 31 December 2022

£'000


 

 

Net tangible assets

55,915

55,743

Value of capacity (WAV)

61,548

59,967


117,463

115,710

Shares in issue -  on the market

76,218

76,218

Shares in issue - total of on the market and JSOP shares

77,318

77,318

Net tangible asset value per share £ - on the market

£1.54p

£1.52p

Net tangible asset value per share £ - on the market and JSOP shares

£1.52p

£1.50p

 

 


Interim condensed consolidated statement of comprehensive income

Six months ended 30 June 2023

 


 

Note

6 months ended

 30 June 2023

Unaudited

£'000

 

 6 months ended

 30 June 2022

Unaudited

£'000

 

Gross premium written

4

158,509

124,067

Reinsurance premium ceded


(49,587)

(35,291)

Net premium written

4

108,922

88,776

Change in unearned gross premium provision

5

(34,899)

(46,338)

Change in unearned reinsurance premium provision

5

15,782

15,945



(19,117)

(30,393)

Net earned premium

3,4

89,805

58,383

Net investment income

6

3,141

(3,476)

Other underwriting income


720

442

Revenue


93,666

55,349

Gross claims paid


(42,895)

(28,627)

Reinsurers' share of gross claims paid


10,437

7,153

Claims paid, net of reinsurance


(32,458)

21,474

Change in provision for gross claims

5

(15,696)

(17,146)

Reinsurers' share of change in provision for gross claims

5

(1,953)

3,879

Net change in provision for claims

5

(17,649)

(13,267)

Net insurance claims and loss adjustment expenses

4

(50,107)

(34,741)

Expenses incurred in insurance activities


(34,969)

(22,310)

Other operating expenses


(2,556)

(1,729)

Operating expenses


(37,525)

(24,039)

Operating profit/(loss) before impairments of goodwill and capacity

4

6,034

(3,431)

Amortisation of goodwill


302

638

Profit/(loss) before tax


6,336

(2,793)

Income tax charge

7

(1,985)

(214)

Income and deferred tax charge as a result of change in tax rates

7

-

-

Profit/(loss) for the period


4,351

(3,007)

Other comprehensive income




Deferred tax relating to change in tax rates on revaluation of capacity


-

(257)

Other comprehensive income/(loss) for the period, net of tax


-

(257)

Total other comprehensive income/(loss) for the period


-

(3,264)









Profit/(loss) for the period attributable to owners of the Parent


4,351

(3,264)

Total comprehensive income/(loss) for the period attributable to owners of the Parent

 

4,351

(3,264)

Earnings/(loss) per share attributable to owners of the Parent




Basic

8

5.71p

(4.44)p

Diluted

8

5.55p

(4.44)p

 

The profit attributable to owners of the Parent and earnings per share set out above are in respect of continuing operations.

The notes are an integral part of these Financial Statements.



Interim condensed consolidated statement of financial position

Six months ended 30 June 2023

 


 

Note

At 30 June

 2023

Unaudited

£'000

 

At 31 December 2022

Unaudited

£'000

 

Assets




Intangible assets


61,236

59,375

Financial assets at fair value through profit or loss


259,550

226,013

Reinsurance assets:




- reinsurers' share of claims outstanding

5

89,625

80,726

- reinsurers' share of unearned premium

5

33,308

21,333

Other receivables, including insurance and reinsurance receivables


165,315

147,676

Deferred acquisition costs


26,696

24,991

Prepayments and accrued income


8,088

5,076

Cash and cash equivalents


28,200

25,300

Total assets


672,018

590,490

Liabilities




Insurance liabilities:




- claims outstanding

5

305,382

272,015

- unearned premium

5

135,286

114,663

Deferred income tax liabilities


13,921

11,312

Borrowings


15,000

15,000

Other payables, including insurance and reinsurance payables


76,475

54,893

Accruals and deferred income


8,804

7,488

Total liabilities


554,868

475,371

Equity




Equity attributable to owners of the Parent:




Share capital

11

7,774

7,774

Share premium

11

98,268

98,268

Revaluation reserve

11

11,350

11,350

Other reserves - treasury shares

11

(110)

(110)

Retained earnings


(132)

(2,163)

Total equity


117,150

115,119

Total liabilities and equity


672,018

590,490

 

The Financial Statements were approved and authorised for issue by the Board of Directors on 27 September 2023, and were signed on its behalf by:

Martin Reith

Chief Executive

 

The notes are an integral part of these Financial Statements.


Interim condensed consolidated statement of changes in equity

Six months ended 30 June 2023

 





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 2023


7,774

98,268

11,350

(110)

(2,163)

115,119

Total comprehensive income for the year:


-

-

-

-

-

-

Profit for the year


-

-

-

-

4,351

4,351

Other comprehensive income, net of tax


-

-

-

-

-

-

Total comprehensive income for the year


-

-

-

-

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

At 1 January 2022


6,931

86,330

9,348

(110)

3,188

105,687

Total comprehensive income for the year:








Loss for the year


-

-

-

-

(3,007)

(3,3007)

Other comprehensive income, net of tax


-

-

(257)

-

-

(257)

Total comprehensive income for the year


-

-

(257)

-

(3,007)

(3,264)

Transactions with owners:


-

-

-

-

-

-

Dividends paid

9

-

-

-

-

(2,034)

(2,034)

Company buy back of shares

11

-

-

-

-

-

-

Share issue


-

-

-

-

-

-

Total transactions with owners


-

-

-

-

(2,034)

(2,034)

At 30 June 2022


6,931

86,330

9,091

(110)

(1,853)

100,389










 

The notes are an integral part of these Financial Statements.


Interim condensed consolidated statement of cash flows

Six months ended 30 June 2023

 


 

 

 

Note

At 30 June 2023 Unaudited

£'000

 

At 30 June 2022 Unaudited

 £'000

 

Cash flows from operating activities




Profit/(loss) before tax

 

6,336

(2,793)

Adjustments for:

 



- Interest received

 

(227)

(78)

- Investment income


(3,502)

3,503

- Amortisation of goodwill


(302)

638

Changes in working capital:




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


512

(617)

-  Increase in financial assets at fair value through profit or loss


(30,214)

(32,609)

- Increase in other receivables

 

(18,147)

(47,556)

- Increase in other payables

 

18,926

23,005

- net increase in technical provisions

 

27,941

59,933

Cash generated from operations

 

1,323

2,150

Income tax paid/(received)

 

(237)

(252)

Net cash inflow from operating activities

 

1,086

1,898

Cash flows from investing activities




Interest received

 

227

78

Investment income

 

3,502

(3,503)

Acquisition of subsidiaries, net of cash acquired

 

(1,239)

-

Net cash inflow/(outflow) from investing activities

 

2,490

(3,425)

Cash flows from financing activities




Net proceeds from issue of ordinary share capital


-

-

Proceeds from borrowings


-

15,000

Repayment of borrowings


-

-

Dividends paid to owners of the Parent


-

(2,034)

Net cash inflow from financing activities

 

-

12,966

Net increase in cash and cash equivalents

 

3,576

11,439

Cash and cash equivalents at beginning of period


24,624

24,625

Cash and cash equivalents at end of period

 

28,200

36,064

 

Cash held within the syndicates' accounts is £26,240,000 (30 June 2022: £23,085,000) of the total cash and cash equivalents held at the end of the period £28,200,000 (30 June 2022: £36,064,000). 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 2023

1. General information

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

These condensed 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 2022 were approved by the board of directors on 25 May 2023 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 31 December 2022 and 30 June 2022 Financial Statements were prepared under International Financial Reporting Standards (IFRSs) and the prior period figures have been amended to reflect the changes in the reporting framework (see note 17).

 

The Condensed Consolidated Interim Financial Statements are prepared for the six months ended 30 June 2023.

 

The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023 and June 2022 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 £117,150,000 (31 December 2022: £115,119,000).

The Company's subsidiaries participate as underwriting members at Lloyd's on the 2021, 2022 and 2023 years of account, as well as any prior run-off years, and they intend to continue this participation in the 2024 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.

 

The 31 December 2022 and the 30 June 2022 Financial Statements were prepared in accordance International Financial Reporting Standards (IFRSs).  The 30 June 2023 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" and FRS 104 "Interim Financial Reporting".

 

The reason for this change in reporting framework is that it is not possible for the directors to obtain financial information in respect of the underlying syndicate participations that would be required to comply with IFRS 17 "Insurance Contracts" which is effective under IFRS for accounting periods beginning on or after 1 January 2023. (see note 17).

 

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 2022 except the following as a result of the conversion from IFRS to UK GAAP:

-       positive goodwill which is taken to the Consolidated Statement of Financial Position (CSOFP) is now amortised over the its estimated useful life of three years (see note 17).

-     goodwill on bargain purchases which was taken straight to the Consolidated Statement of Comprehensive Income (CSOCI) under IFRS is now capitalised and taken the CSOFP and amortised over its estimated useful life of three years (see note 17).

 

Notes to the financial statements

Six months ended 30 June 2023

 

3. Segmental information

Martin Reith and Nigel Hanbury are the Group's chief operating decision-makers. They determine 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 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

 

6 months ended 30 June 2022 Unaudited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

58,767

-

(383)

58,384

Net investment income

(3,561)

85

-

(3,476)

Other income

-

-

442

442

Net insurance claims and loss adjustment expenses

(34,740)

-

(1)

(34,741)

Expenses incurred in insurance activities

(21,650)

-

(660)

(22,310)

Other operating expenses

-

-

(1,729)

(1,729)

Amortisation of goodwill

-

-

637

637

Loss before tax

(1,184)

85

(1,693)

(2,793)

 

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 2023 other corporate activities totalling £4,378,000 (2022: £383,000 - 2020, 2021 and 2022 years of account) represents the 2021, 2022 and 2023 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 2023

 

4. Operating profit before impairments of goodwill and capacity

 



Underwriting year of account*





6 months ended 30 June 2022

2020 and prior

£'000

 

2021

£'000

 

2022

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

930

11,407

111,730

124,067

-

-

-

124,067

Reinsurance ceded

(96)

(2,410)

(31,178)

(33,684)

-

(383)

(1,224)

(35,291)

Net premium written

834

8,997

80,552

90,383

-

(383)

(1,224)

88,776

Net earned premium

3,306

35,444

21,240

59,990

-

(383)

(1,224)

Other income

(2,315)

(941)

(304)

(3,560)

-

442

84

(3,034)

Net insurance claims and loss adjustment expenses

578

(20,389)

(15,237)

(35,048)

-

-

307

(34,741)

Operating expenses

(843)

(9,826)

(10,982)

(21,651)

-

-

(2,388)

(24,039)

Operating profit before impairments of goodwill and capacity

726

4,288

(5,283)

(269)

-

59

(3,221)

(3,431)

Quota share adjustment

(150)

(1,621)

1,388

(383)

-

383

-

-

Operating profit before impairments of goodwill and capacity after quota share adjustment

576

2,667

(3,895)

(652)

-

442

(3,221)

(3,431)

 


Underwriting year of account*





6 months ended 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

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 2023

5. Insurance liabilities and reinsurance balances

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.

Movement in claims outstanding


Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2022

186,653

53,433

133,220

Increase in reserves arising from acquisition of subsidiary undertakings

-

-

-

Movement of reserves

17,146

3,879

13,267

Other movements

37,984

15,762

22,222

At 30 June 2022

241,783

73,074

168,709

Movement in unearned premium 


Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2022

59,611

10,538

49,073

Increase in reserves arising from acquisition of subsidiary undertakings

-

-

-

Movement of reserves

46,338

15,945

30,393

Other movements

(8,440)

(2,491)

(5,949)

At 30 June 2022

97,509

23,992

73,517

Included within other movements are the 2019 and prior years' claims reserves reinsured into the 2020 year of account on which the Group does not participate and currency exchange differences.

6. Net investment income


6 months ended

30 June 2023 Unaudited

£'000

6 months ended

30 June 2022 Unaudited

£'000

Investment income

3,502

(3,503)

Realised (losses)/gains on financial assets at fair value through profit or loss

(100)

12

Unrealised (losses)/gains on financial assets at fair value through profit or loss

(512)

(61)

Investment management expenses

24

(2)

Bank interest

227

78

Net investment income

3,141

(3,476)

Included within Investment income are investment gains of £3,160,000 (2022: £3,560,000 investment losses) from Syndicate participations.


Notes to the financial statements continued

Six months ended 30 June 2023

7. Income tax charge

Analysis of tax charge/(credit) in the period


6 months ended 30 June 2023 Unaudited

£'000

 

6 months ended 30 June 2022 Unaudited

£'000

Income tax credit

1,985

214

 

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 23.50% (2022: 19.00%). 

8. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders after tax by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period, plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Earnings per share has been calculated in accordance with IAS 33 "Earnings per share".

The earnings per share and weighted average number of shares used in the calculation are set out below:


6 months ended 30 June 2023 Unaudited

 

 

 

6 months ended 30 June 2022Unaudited

 

 

Profit/(loss) for the year after tax attributable to ordinary equity holders of the parent

4,351,000

(3,007,000)

Basic - weighted average number of ordinary shares*

76,218,203

67,786,212

Weighted average number of ordinary shares for diluted earnings per share*

77,889,630

68,889,212

Basic earnings/(loss) per share

5,71p

(4.44)p

Diluted earnings/(loss) per share

5.55p

(4.44)p

* Diluted loss per share is not permitted to be reduced from the basic loss per share.

9. Dividends paid or proposed

It was proposed and agreed at the AGM on 29 June 2023 that a dividend of 3p would be payable.  The Dividend was paid post period end on 14 July 2023 totalling £2,320,000 and has been accrued in these financial statements.

10. Investments in subsidiaries


30 June

2023

£'000

31 December

2022

£'000

Total

66,722

65,546



 

Notes to the financial statements continued

Six months ended 30 June 2023

10. Investments in subsidiaries (continued)

 

 

 

Direct/indirect

interest

30 June 2023

ownership

31 December 2022

ownership

Principal activity

Nameco (No. 917) Limited

Direct

100%

100%

Lloyd's of London corporate vehicle

Devon Underwriting Limited

Direct

100%

100%

Lloyd's of London corporate vehicle

Nameco (No. 346) Limited

Direct

100%

100%

Lloyd's of London corporate vehicle

Pooks 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

Nottus (No 51) Limited

Direct

100%

100%

Lloyd's of London corporate vehicle

Chapman Underwriting Limited

Direct

100%

100%

Lloyd's of London corporate vehicle

Llewellyn House 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

 

 (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.

Notes to the financial statements continued

Six months ended 30 June 2023

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 2022

77,737,372

7,664

110

98,268

106,042

Ordinary shares of 10p each and share premium at 30 June 2023

77,737,372

7,664

110

98,268

106,042

 

 (i) Number of shares

 

30 June 2023

31 December 2022

Allotted, called up and fully paid ordinary shares:



On the market

76,218,203

76,218,203

Company buy back of ordinary shares held in treasury

419,169

419,169

 

76,637,372

76,637,372

Uncalled and partly paid ordinary share under the JSOP scheme (ii)

1,100,000

1,100,000

 

77,737,372

77,737,372

 

(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 2021, 2022 and 2023 years of account with protected cell companies of HIPCC Limited.

Nigel Hanbury, a Director of Helios Underwriting plc and its subsidiary companies, is also a director and majority shareholder in HIPCC Limited. Hampden Capital plc, a substantial shareholder in Helios Underwriting plc, is also a substantial shareholder in HIPCC Limited - Cell 6.  Under quota share agreements between Cell 6 and certain Helios subsidiaries, the Group accrued a net reinsurance premium payable of £1,736,000 (31 December 2022: £1,921,000 recoverable) during the period.

In addition, HIPCC provide stop loss, portfolio stop loss and HASP reinforce policies for the company.

HIPCC Limited acts as an intermediary for the reinsurance products purchased by Helios. An arrangement has been put in place so that 51% of the profits generated by HIPCC (being Nigel Hanburys share) in respect of the business relating to Helios will be repaid to Helios for the business transacted for the 2021 and subsequent underwriting years.

13. Ultimate controlling party

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


 

Notes to the financial statements continued

Six months ended 30 June 2023

 

14. Acquisition of Lloyd's Limited Liability Vehicles

During the period, the company has acquired the following Lloyd's Limited Liability Vehicles either directly, or indirectly:

 

 

Helios Acquisitions

 

 

 

 

Date of acquisition

 2023 Capacity 

 Purchase price

Fair value of asset acquired

 Goodwill recognised

 

 





Nameco (No 606) Limited

2 June 2023

    2,024,096

1,175,131

    1,112,121

63,010

Nameco (No 1208) Limited

12 June 2023

    1,776,807

-

         87,000

(87,000)







Total Acquisitions Completed

 

3,800,903

1,175,131

1,112,208

(23,990)







 

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:



Allocated capacity per year of account

Syndicate or
MAPA number

Managing or members' agent

2023

£

2022

£

2021

£

33

Hiscox Syndicates Limited

14,862,935

14,862,935

14,837,949

218

IQUW Syndicate Management Limited

17,624,778

7,427,997

7,428,004

318

Cincinnati Global Underwriting Agency Limited

862,407

992,637

992,635

386

QBE Underwriting Limited

2,966,471

2,897,646

2,634,241

510

Tokio Marine Kiln Syndicates Limited

27,562,480

33,536,417

23,760,440

557

Tokio Marine Kiln Syndicates Limited

-

3,485,330

3,485,330

609

Atrium Underwriters Limited

17,661,850

13,153,869

12,653,790

623

Beazley Furlonge Limited

28,099,719

22,713,565

19,890,751

727

S A Meacock & Company Limited

2,834,522

2,323,378

2,255,711

1176

Chaucer Syndicates Limited

2,854,340

2,854,339

2,854,347

1200

Argo Managing Agency Limited

54,999

10,050,000

-

1729

Asta Managing Agency Limited

20,083,504

1,211,467

189,401

1902

Asta Managing Agency Limited

10,688,300

10,000,002

-

1955

Arch Managing Agency Limited

12,500,000

-

-

1969

Apollo Syndicate Management Limited

12,170,742

5,675,170

459,001

1971

Apollo Syndicate Management Limited

10,000,001

6,467,147

-

1985

Asta Managing Agency Limited

16,874,190

-

-

1988

Asta Managing Agency Limited

15,000,000

-

-

2010

Lancashire Syndicates Limited

7,713,238

10,499,418

9,864,905

2121

Argenta Syndicate Management Limited

140,000

10,134,894

5,577,177

2288

Astra Managing Agency Limited

-

-

-

2525

Asta Managing Agency Limited

2,141,973

1,721,029

1,601,833

2689

Asta Managing Agency Limited

2,686,871

10,100,276

534,813

2791

Managing Agency Partners Limited

11,677,739

9,850,281

9,850,285

4242

Asta Managing Agency Limited

10,749,622

12,937,527

8,933,909

4444

Canopius Managing Agents Limited

21,176

20,000

182,189

5183

Asta Managing Agency Limited

5,000,000

-

-

5623

Beazley Furlonge Limited

17,631,646

6,894,032

4,769,792

5886

Asta Managing Agency Limited

26,929,794

22,989,002

12,432,907

6103

Managing Agency Partners Limited

3,263,814

3,447,515

3,072,388

6104

Hiscox Syndicates Limited

-

1,758,333

1,781,360

6107

Beazley Furlonge Limited

132,363

1,649,683

1,649,378

6117

Argo Managing Agency Limited

230,404

2,957,188

2,104,208

6133

Apollo Syndicate Management Limited

-

-

-

Total

 

300,479,878

241,611,077

153,796,744

 

 

Notes to the financial statements continued

Six months ended 30 June 2023

 

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 2023

31 December 2022

Group

£'000

Syndicate

£'000

Total

£'000

Group

£'000

Syndicate

£'000

Total

£'000

Assets






 

Intangible assets

61,236

-

61,236

59,375

-

59,375

Financial assets at fair value through profit or loss

77,297

182,253

259,550

73,771

152,242

226,013

Reinsurance assets:







- reinsurers' share of claims outstanding

60

89,565

89,625

60

80,666

80,726

- reinsurers' share of unearned premium

-

33,308

33,308

-

21,333

21,333

Other receivables, including insurance and reinsurance receivables

1,790

163,525

165,315

3,103

144,573

147,676

Deferred acquisition costs

-

26,696

26,696

-

24,991

24,991

Prepayments and accrued income

5,168

2,920

8,088

3,746

1,330

5,076

Cash and cash equivalents

1,960

26,240

28,200

10,254

15,046

25,300

Total assets

147,511

524,507

672,018

150,309

440,181

590,490

Liabilities

 

 

 




Insurance liabilities:

 

 

 




- claims outstanding

-

305,382

305,382

-

272,015

272,015

- unearned premium

-

135,286

135,286

-

114,663

114,663

Deferred income tax liabilities

13,921

-

13,921

11,228

84

11,312

Borrowings

15,000

-

15,000

15,000

-

15,000

Other payables, including insurance and reinsurance payables

2,170

74,305

76,475

157

54,736

54,893

Accruals and deferred income

5,562

3,242

6,484

3,682

3,806

7,488

Total liabilities

36,653

518,215

552,548

30,067

445,304

475,371

Equity attributable to owners of the Parent

 

 

 




Share capital

7,774

-

7,774

7,774

-

7,774

Share premium

98,268

-

98,268

98,268

-

98,268

Revaluation reserve

11,350

-

11,350

11,350

-

11,350

Other reserves

(110)

-

(110)

(110)

-

(110)

Retained earnings

(6,424)

6,292

(132)

2,960

(5,123)

(2,163)

Total equity

110,858

6,292

117,150

120,242

(5,123)

(115,119)

Total liabilities and equity

147,511

524,507

672,018

150,310

440,181

590,491

 


 

Notes to the financial statements continued

Six months ended 30 June 2023

 

17.  Changes arising from the conversion from IFRS to UK GAAP

 

The 31 December 2022 and the 30 June 2022 Financial Statements were prepared in accordance with International Financial Reporting Standards (IFRSs).  The 30 June 2023 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" and FRS 104 "Interim Financial Reporting".

 

The reason for this change in reporting framework is that it is not possible for the directors to obtain financial information in respect of the underlying syndicate participations that would be required to comply with IFRS 17 "Insurance Contracts" which is effective under IFRS for accounting periods beginning on or after 1 January 2023.

 

Under IFRS any goodwill on bargain purchases is credited immediately to the Consolidated Statement of Comprehensive Income (CSOCI).  Any positive goodwill is taken to the Consolidated Statement of Financial Position (CSOFP) and subject to an annual impairment review.  Under UK GAAP, both goodwill on bargain purchases and positive goodwill are taken to the CSOFP and amortised over their estimated useful life.

 

The directors have concluded an estimated useful life of three years for both elements of goodwill to be amortised over, which is in line with the usual life of a Lloyd's underwriting year of account.

 

The prior period figures have been adjusted to reflect the changes in the accounting framework as per below:

 

Total other comprehensive loss

£'000

Total other comprehensive (loss)/income for the period - as originally reported at 30 June 2022 under IFRS

(3,902)

Impact of IFRS to UK GAAP conversion - bargain purchase goodwill amortisation

670

Impact of IFRS to UK GAAP conversion - positive goodwill amortisation

(32)

Total other comprehensive loss for the period - at 30 June 2022 under UK GAAP

(3,264)

 

Total equity

£'000

Total equity - as originally reported at 31 December 2022 under IFRS

117,178

Impact of IFRS conversion to UK GAAP - total bargain purchases goodwill booked to 31 December 2022

(4,182)

Impact of IFRS conversion to UK GAAP - cumulative bargain purchase goodwill amortisation to 31 December 2022

3,108

Impact of IFRS conversion to UK GAAP - cumulative positive goodwill amortisation to 31 December 2022

(985)

Total equity - at 31 December 2022 under UK GAAP

115,119

 

Goodwill intangible assets

£'000

Positive goodwill intangible assets - as originally reported at 31 December 2022 under IFRS

1,468

Impact of IFRS conversion to UK GAAP - positive goodwill amortisation to 31 December 2022

(985)

Positive goodwill intangible assets - as reported at 31 December 2022 under UK GAAP

483



Impact of IFRS conversion to UK GAAP - bargain purchase goodwill booked to 31 December 2022

(4,182)

Impact of IFRS conversion to UK GAAP - bargain purchase goodwill amortisation to 31 December 2022

3,108

Bargain purchase goodwill amortisation to 31 December 2022 under UK GAAP

(1,074)



Goodwill intangible asset - at 31 December 2022 under UK GAAP

(591)

 

 

 

Notes to the financial statements continued

Six months ended 30 June 2023

 

18. Event after the financial reporting period

 

Acquisitions of LLV's since the period end

Since the Financial reporting period, the company has acquired the following entities either directly, or indirectly:

 

 

Helios Acquisitions

 

 

 

 

 

 2023 Capacity

 Purchase price

£m

 Humphrey Valuation

 Discount to Humphreys (%)

 






Chorlton Underwriting Limited

 

2.1

2.0

2.1

10.0%

Park Farm Underwriting Limited

 

2.3

3.2

3.4

6.3%

Total

 

4.4

5.2

5.5

 







 


Notes to the financial statements continued

Six months ended 30 June 2023

 

Directors, Registered office and advisers

Directors

Michael John Wade (Non-Executive Chairman) appointed 29 June 2023

Martin Robert Davidson Reith (Chief Executive Officer)

Nigel John Hanbury (Executive Deputy Chairman)
Andrew Hildred Christie (Non-Executive Director)
Arthur Roger Manners (Finance Director)
Edward Fitzalan-Howard (Non-Executive Director)
Thomas John Libassi (Non-Executive Director)

Company secretary

Martha Bruce
Shakespeare Martineau
No 1 Colmore Square

Birmingham B4 6AA

Company number

05892671

Registered office

40 Gracechurch Street
London EC3V 0BT

Statutory auditors

PKF Littlejohn LLP

15 Westferry Circus
Canary Wharf
London E14 4HD

 

Nominated adviser and broker

Numis Sercurities Limited

45 Gresham Street

London EC2V 7BF

 

Lloyd's members' agent

Hampden Agencies Limited

40 Gracechurch Street
London EC3V 0BT

Registrars

Neville Registrars Limited

Neville House
Steelpark Road
Halesowen B62 8HD



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 2023 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 2023 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 29 August 2023.  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

27 September 2023                                                                                                                                    London E14 4HD

                                                                                                                                                                                                                        

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