Helios Underwriting plc
("Helios" or the "Company")
Capacity Update and Transaction in Own Shares
Helios, the unique investment vehicle which acquires and consolidates underwriting capacity at Lloyd's announces an update on the Company's capacity portfolio and its value for 2020 year of account.
Nigel Hanbury, Chief Executive of Helios, commented:
"I am delighted that the capacity portfolio will underwrite £70m for the 2020 underwriting year, a 33% increase on the size of the portfolio in January 2019, and the increase in the value of the Fund to £26m will increase the pro forma adjusted net asset value ("ANAV") per share to 198p."
Capacity Update
Helios announces that following the acquisition of a further LLV, Nameco 408 Limited, with capacity of £1 million, the underwriting capacity for Helios will be £70m for 2020 year of account a 33% increase in the capacity underwritten at the start of 2019.
|
Helios - 2020 Year of Account Capacity |
£m |
Retained |
Reinsured |
Total |
Capacity as at 1st January 2020 |
20.7 |
48.3 |
69.1 |
Acquisition of N408 |
0.3 |
0.7 |
1.0 |
Current 2020 Capacity |
21.0 |
49.0 |
70.1 |
Capacity as at 1st January 2019 |
15.8 |
36.8 |
52.6 |
% Increase |
|
|
33% |
Helios is continuing to reinsure 70% of the "on-risk" open year of account both to mitigate the downside risk and to provide the necessary underwriting capital for that proportion of the portfolio.
Capacity Value
The value of the capacity fund as at 31st December 2019 using the weighted average prices of capacity from the 2019 Lloyd's capacity auctions has increased to £26.3m (2018: £20.7m).
|
Capacity |
Value of Capacity |
|
£m |
£m |
2019 Capacity as at 1 Jan 2019 |
52.6 |
20.7 |
Capacity acquired with LLV's in 2019 |
9.3 |
3.2 |
Pre-emptions |
5.6 |
2.4 |
Capacity management |
1.5 |
(0.9) |
Capacity revaluation |
0.0 |
0.9 |
2020 Capacity at 31 Dec 2019 |
69.0 |
26.3 |
A summary of the movements in capacity and its value are:
Helios acquired five LLV's during 2019 with capacity of £9.3m, which was valued at 2018 capacity prices at £3.2m.
The syndicates supported by Helios offered free capacity of £5.6m by way of pre-emptions to support the improved underwriting market which is valued at £2.4m.
Helios continued to manage the capacity portfolio discarding unwanted syndicates and taking positions on new syndicates, in particular the Blenheim syndicate 5886 and the Beazley syndicate 5623. In addition, £1.4m of capacity was sold at the auctions to raise additional cash of £0.9m.
The average price per £ of capacity after the 2019 auctions was 38p (2018 - 39p) which was impacted by the increased capacity taken up on limited tenancy syndicates which have no value. The capacity that is traded at the Lloyd's Auctions showed an overall increase in value and this is reflected in the capacity revaluation of £0.9m. The combination of the value of the pre-emption capacity (£2.4m) and the capacity revaluation (£0.9) is expected to increase the Adjusted Net Asset Value by 18p per share as at 31st December 2019. The pro forma ANAV at 30th June 2019, adjusted for the capital raise in July 2019 was 180p, therefore the increase in the capacity value is expected to increase the pro forma ANAV to 198p.
Transactions in Own Shares
Following the Company's latest two LLV acquisitions, Whittle Martin Limited and Nameco 408 Limited, the 22,600 ordinary shares of 10 pence each in the Company ("ordinary shares") that were owned by these companies have been transferred to treasury for no consideration.
Following settlement of the above transactions, the Company's total number of ordinary shares in issue is 17,978,028 ordinary shares (not including the shares held in treasury), each carrying voting rights. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules. The Company also holds 412,878 ordinary shares in treasury, which do not carry voting rights.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information please contact:
Helios Underwriting plc
Nigel Hanbury - Chief Executive 07787 530404 / [email protected]
Arthur Manners - Chief Financial Officer 07754 965 917
Shore Capital
Robert Finlay/David Coaten 020 7408 4090
About Helios
Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £70m of capacity for the 2020 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.
