Last checked at 30 Sep 2016 07:00
Helios Underwriting plc
("Helios Underwriting" or the "Company")
Interim results for the six months ended 30 June 2016
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 2016.
The Board is pleased to announce the results for the six months to 30th June 2016. The highlights are as follows:
• The operating profits have increased to £605,000 (30 June 2015 - £73,000)
• Contributions from the older underwriting years have benefitted from the weakening of sterling immediately before the half year end, from the additional capacity acquired on the "off risk" underwriting where Helios retains 100% of the benefit The loss activity continues to be muted and the loss from the 2016 underwriting year of £188,000 for the first half is as expected as expenses are incurred before the underlying profits from the underwriting are recognized.
• Operating and reinsurance costs are in line with expectations and we continue to benefit from the fees and profit commissions payable by the quota share reinsurers
• Earnings per share have increased to 6.38p per share 2015 (30 June 2015 - 2.89p)
• The Adjusted Net Asset Value per share (Humphrey's Valuation) has increased to £2.00 per share (30 June 2015 - £1.83 per share)
A fund raising up to approximately £5 million (net) by way of a placing of new ordinary shares in the Company is also being announced separately, together with a proposed open offer of new ordinary shares to shareholders to raise up to a further £3.2 million.
During the first half of 2016 we continued to build the portfolio of capacity through the acquisition of two further Limited Liability Vehicles ("LLVs"). These acquisitions have made significant contributions to the capacity retained by Helios for both 2014 and 2015 underwriting years. The table shows the current position of the capacity fund retained by Helios.
| Helios Capacity Fund as at 30th June 2016 | ||
Underwriting Year of Account | 2014 £m | 2015 £m | 2016 £m |
Total Capacity | 34.4 | 31.3 | 32.7 |
Helios Retained Capacity | 19.5 | 15.2 | 9.8 |
Proportion of capacity retained. | 57% | 48% | 30% |
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.
As such, the Company is proposing to undertake a placing to provide readily available funds to acquire further LLV's when attractive opportunities arise.
We continue to reduce our exposure by 70% on the open underwriting year 2016 through quota share reinsurance. The quota share reinsurers fund their share of the capital requirements and pay Helios a fee and a profit commission. Stop loss reinsurance is bought to limit the Group's exposure in the event of large underwriting losses.
The Adjusted Net Asset Value per share (Humphreys valuation) has increased to £2.00 per share. The Lloyds' capacity auctions are scheduled for mid November in 2016 and 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.
The syndicates that Helios supports have announced overall increases in the business to be underwritten for 2017 which is expected to increase the Helios Capacity Fund by over £2 million.
The Board currently expects that the syndicate results for the 2014 and 2015 underwriting years will exceed current mid-point forecasts published by the managing agents which should make a meaningful contribution to the Helios full year result.
Financial results summary
Six months ended 30 June 2016
6 months to June 2016
Underwriting Year | Helios retained capacity at 30 June 2016 £m | Portfolio mid point forecasts | Total profit currently estimated | % earned in the 2016 half year calendar | Helios profits |
2014 | 19.5 | 11.3% | 2,205 | 29% | 638 |
2015 | 15.2 | 7.2% | 1,090 | 55% | 601 |
2016 | 9.8 | N/A |
|
| (188) |
|
|
|
|
| 1,051 |
Pre-acquisition |
|
|
|
| (117) |
Fees from reinsurers |
|
|
|
| 331 |
Stop loss costs |
|
|
|
| (121) |
Operating costs |
|
|
|
| (637) |
Other income |
|
|
|
| 98 |
Operating profit |
|
|
|
| 605 |
Restated 6 months to June 2015
Underwriting Year | Helios retained capacity at 30 June 2015 £m | Portfolio mid point forecasts | Total profit currently estimated | % earned in the 2015 half year calendar | Helios profits |
2013 | 19.0 | 11.0% | 2,092 | 18.0% | 375 |
2014 | 12.5 | 7.5% | 934 | 57.0% | 529 |
2015 | 8.6 | N/A |
|
| (82) |
|
|
|
|
| 822 |
Pre-acquisition |
|
|
|
| (26) |
Fees from reinsurers |
|
|
|
| 244 |
Stop loss costs |
|
|
|
| (400) |
Operating costs |
|
|
|
| (610) |
Other income |
|
|
|
| 42 |
Operating profit |
|
|
|
| 73 |
Year to 31 December 2015
Underwriting Year | Helios retained capacity at 31 December 2015 £m | Portfolio mid point forecasts | Total profit currently estimated | % earned in the 2015 calendar year | Helios profits |
2013 | 20.6 | 14.2% | 2,925 | 41.0% | 1,198 |
2014 | 14.3 | 8.9% | 1,273 | 41.0% | 854 |
2015 | 10.6 | N/A |
|
| 12 |
|
|
|
|
| 2,064 |
Pre-acquisition |
|
|
|
| (190) |
Fees from reinsurers |
|
|
|
| 385 |
Stop loss costs |
|
|
|
| (407) |
Operating costs |
|
|
|
| (1,334) |
Other income |
|
|
|
| 91 |
Operating profit |
|
|
|
| 609 |
Summary Balance Sheet
The summary Group balance sheet excludes items relating to syndicate participations. See Note 15 for further information.
| 6 Months to June 2016 |
6 Months to June 2015 | Year to 31 December 2015 |
Intangible assets | 10,907 | 7,942 | 8,511 |
Funds at Lloyd's | 4,954 | 1,773 | 3,894 |
Other cash | 2,975 | 3,702 | 2,973 |
Other assets | 1,304 | 1,258 | 1,231 |
Total assets | 20,140 | 14,675 | 16,609 |
Deferred tax | 3,002 | 2,546 | 3,172 |
Other liabilities | 4,722 | 2,274 | 3,162 |
Total liabilities | 7,724 | 4,820 | 6,334 |
Total equity | 12,416 | 9,855 | 10,275 |
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 2016 | 6 months to 30 June 2015 | Year to 31 December 2015 |
|
|
|
|
Opening Balance (free cash) | 2,972 | 2,704 | 2,704 |
|
|
|
|
Income |
|
|
|
Acquired on acquisition | 577 | 942 | 977 |
Distribution of profits (net of tax retentions) | 3,378 | 2,329 | 2,510 |
Transfers from Funds at Lloyds' | 2,258 | 870 | 1,167 |
Investment income | 13 | 3 | 26 |
Other income | - | (4) | 151 |
Sale of investments | 15 | 225 | 260 |
Transfers from PTF accounts (early release) | - | - | 221 |
|
|
|
|
Expenditure |
|
|
|
Operating costs (inc Hampden / Nomina fees) | (250) | (237) | (774) |
Reinsurance Cost | (237) | (275) | (275) |
Payments to QS reinsurers | - | - | - |
Acquisition of LLV's | (4,885) | (2,316) | (2,316) |
Transfers to Funds at Lloyds' | (861) | (220) | (1,351) |
Tax | (5) | 1 | (7) |
Dividends paid | - | (320) | (320) |
Closing balance | 2,975 | 3,702 | 2,973 |
Condensed consolidated statement of comprehensive income
Six months ended 30 June 2016
|
Note | 6 months ended 30 June 2016 Unaudited £'000 | Restated 6 months ended 30 June 2015 Unaudited £'000 | 12 months ended 31 December 2015 Audited £'000 |
Gross premium written | 4 | 17,585 | 11,942 | 21,511 |
Reinsurance premium ceded |
| (4,710) | (3,369) | (5,582) |
Net premium written | 4 | 12,875 | 8,573 | 15,929 |
Change in unearned gross premium provision |
| (4,343) | (2,369) | (162) |
Change in unearned reinsurance premium provision |
| 1,650 | 918 | 93 |
|
| (2,693) | (1,451) | (69) |
Net earned premium | 3,4 | 10,182 | 7,122 | 15,860 |
Net investment income | 6 | 528 | 215 | 255 |
Other income |
| 330 | 244 | 392 |
Revenue |
| 11,040 | 7,581 | 16,507 |
Gross claims paid |
| (5,769) | (4,843) | (9,349) |
Reinsurers' share of gross claims paid |
| 745 | 790 | 1,650 |
Claims paid, net of reinsurance |
| (5,024) | (4,053) | (7,699) |
Change in provision for gross claims |
| (183) | 403 | 615 |
Reinsurers' share of change in provision for gross claims |
| (2,040) | (819) | (431) |
Net change in provision for claims |
| (2,223) | (416) | 184 |
Net insurance claims and loss adjustment expenses | 4 | (7,247) | (4,469) | (7,515) |
Expenses incurred in insurance activities |
| (2,808) | (2,703) | (7,571) |
Other operating expenses |
| (380) | (336) | (812) |
Operating expenses |
| (3,188) | (3,039) | (8,383) |
Operating profit before goodwill and impairment | 4 | 605 | 73 | 609 |
Goodwill on bargain purchase | 12 | - | 196 | 244 |
Impairment of goodwill | 12 | - | (45) | (136) |
Impairment of syndicate capacity |
| 39 | - | (63) |
Profit before tax |
| 644 | 224 | 654 |
Income tax charge | 7 | 26 | 26 | 135 |
Profit for the period |
| 670 | 250 | 789 |
Other comprehensive income for the period, net of tax |
| 216 | - | 121 |
Total other comprehensive income for the period |
| 216 | - | 121 |
|
|
|
|
|
|
|
|
|
|
Profit for the period attributable to owners of the Parent |
| 886 | 250 | 910 |
Total comprehensive income for the period attributable to owners of the Parent |
| 886 | 250 | 910 |
Earnings per share attributable to owners of the Parent |
|
|
|
|
Basic and diluted | 8 | 6.38p | 2.89p | 8.38p |
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.
Condensed consolidated statement of financial position
Six months ended 30 June 2016
|
Note | 6 months ended 30 June 2016 Unaudited £'000 | Restated 6 months ended 30 June 2015 Unaudited £'000 | 12 months ended 31 December 2015 Audited £'000 |
Assets |
|
|
|
|
Intangible assets |
| 10,907 | 7,942 | 8,511 |
Reinsurance assets: |
|
|
|
|
- reinsurers' share of claims outstanding | 5 | 7,689 | 4,851 | 5,657 |
- reinsurers' share of unearned premium | 5 | 3,527 | 2,278 | 1,501 |
Other receivables, including insurance and reinsurance receivables |
| 28,579 | 19,040 | 20,427 |
Prepayments and accrued income |
| 4,618 | 3,114 | 3,070 |
Financial assets at fair value through profit or loss |
| 38,004 | 25,388 | 31,797 |
Cash and cash equivalents |
| 5,668 | 5,127 | 3,634 |
Total assets |
| 98,992 | 67,740 | 74,597 |
Liabilities |
|
|
|
|
Insurance liabilities: |
|
|
|
|
- claims outstanding | 5 | 43,060 | 28,258 | 32,985 |
- unearned premium | 5 | 18,054 | 12,368 | 11,169 |
Deferred income tax liabilities |
| 3,002 | 2,546 | 3,172 |
Other payables, including insurance and reinsurance payables |
| 13,948 | 9,652 | 9,360 |
Accruals and deferred income |
| 4,144 | 1,652 | 1,488 |
Total liabilities |
| 82,208 | 54,476 | 58,174 |
Equity |
|
|
|
|
Equity attributable to owners of the Parent: |
|
|
|
|
Share capital | 11 | 1,050 | 896 | 1,050 |
Share premium | 11 | 9,901 | 7,556 | 9,901 |
Other reserves |
| 337 | - | 121 |
Retained earnings |
| 5,496 | 4,812 | 5,351 |
Total equity |
| 16,784 | 13,264 | 16,423 |
Total liabilities and equity |
| 98,992 | 67,740 | 74,597 |
The Financial Statements were approved and authorised for issue by the Board of Directors on 29 September 2016, and were signed on its behalf by:
Nigel Hanbury
Chief Executive
The notes are an integral part of these Financial Statements.
Condensed consolidated statement of changes in equity
Six months ended 30 June 2016
|
|
| 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 2016 |
| 1,050 | 9,901 | 121 | 5,351 | 16,423 | |
Final dividend for year end 31 December 2015 |
| - | - | - | (525) | (525) | |
Share issue |
| - | - | - | - | - | |
Profit for the period |
| - | - | 216 | 670 | 886 | |
At 30 June 2016 |
| 1,050 | 9,901 | 337 | 5,496 | 16,784 | |
At 1 January 2015 |
| 853 | 6,996 | - | 5,019 | 12,868 | |
Dividends paid |
| - |
|
| (457) | (457) | |
Share issue |
| 43 | 560 | - | - | 603 | |
Profit for the period restated |
| - | - | - | 250 | 250 | |
At 30 June 2015 |
| 896 | 7,556 | - | 4,812 | 13,264 | |
At 1 January 2015 |
| 853 | 6,996 | - | 5,019 | 12,868 | |
Dividends paid |
| - |
|
| (457) | (457) | |
Share issue |
| 197 | 2,905 | - | - | 3,102 | |
Profit for the period |
| - | - | 121 | 789 | 910 | |
At 31 December 2015 |
| 1,050 | 9,901 | 121 | 5,351 | 16,423 | |
The notes are an integral part of these Financial Statements.
Condensed consolidated statement of cash flows
Six months ended 30 June 2016
|
Note | 6 months ended 30 June 2016 Unaudited £'000 | Restated 6 months ended 30 June 2015 Unaudited £'000 | 12 months ended 31 December 2015 Audited £'000 |
Cash flows from operating activities |
|
|
|
|
Profit before tax |
| 644 | 224 | 654 |
Adjustments for: |
|
|
|
|
Other comprehensive income, gross of tax |
| 270 | - | 149 |
Interest received |
| (4) | (2) | (60) |
Investment income | 6 | (424) | (191) | (926) |
Goodwill on bargain purchase | 12 | - | (196) | (244) |
Impairment of goodwill | 12 | - | 45 | 136 |
(Profit)/loss on sale of intangible assets |
| - | - | (120) |
Impairment of intangible assets |
| (39) | - | 63 |
Goodwill on acquisition |
| (449) | - | - |
Changes in working capital: |
|
|
|
|
- change in fair value of financial assets held at fair value through profit or loss | 6 | (50) | 255 | 360 |
- (increase)/decrease in financial assets at fair value through profit or loss |
| (409) | 1,822 | 1,020 |
- (increase)/decrease in other receivables |
| (3,234) | 1,261 | 709 |
- (increase)/decrease in other payables |
| 4,114 | 1,883 | 11 |
- net (increase)/decrease in technical provisions |
| 5,236 | (797) | (50) |
Cash generated/(utilised) from operations |
| 5,655 | 4,304 | 1,702 |
Income tax paid |
| 2 | 2 | 161 |
Net cash inflow from operating activities |
| 5,657 | 4,306 | 1,863 |
Cash flows from investing activities |
|
|
|
|
Interest received |
| 4 | 2 | 60 |
Investment income |
| 424 | 191 | 926 |
Purchase of intangible assets |
| - | - | (2) |
Proceeds from disposal of intangible assets |
| - | - | 24 |
Acquisition of subsidiaries, net of cash acquired |
| (4,051) | (2,657) | (2,521) |
Net cash inflow from investing activities |
| (3,623) | (2,464) | (1,513) |
Cash flows from financing activities |
|
|
|
|
Dividends paid to owners of the Parent |
| - | (320) | (321) |
Net cash outflow from financing activities |
| - | (320) | (321) |
Net increase in cash and cash equivalents |
| 2,034 | 1,522 | 29 |
Cash and cash equivalents at beginning of period |
| 3,634 | 3,605 | 3,605 |
Cash and cash equivalents at end of period |
| 5,668 | 5,127 | 3,634 |
Cash held within the syndicates' accounts is £3,456,000 (2015: £1,411,000) of the total cash and cash equivalents held at the period end of £5,668,000 (2015: £3,634,000). 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 2015
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 2016.
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, Helios UTG Partner Limited, Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 380 LLP and Nomina No 372 LLP (Note 10).
The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2016 and 2015 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 2015.
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 2015. The new standards and amendments to standards and interpretations effective after 1 January 2016, as disclosed in the Annual Report for the year ended 31 December 2015, have not had a significant impact on the Condensed Consolidated Interim Financial Statements at 30 June 2016.
Change of accounting policy
Up to 31 December 2014 the Group's intangible asset, syndicate capacity, was stated at cost, less any provision for impairment at initial recognition, and amortised on a straight line basis over the useful economic life, which was estimated to be seven years.
As of 1 January 2015 the Group changed its accounting policy for intangible assets, being its syndicate capacity. The new accounting policy has been applied retrospectively, as if the policy had always been in place. This impact of this change in accounting policy was to increase retained profits by £2,383,000 as 1 January 2014, full details were disclosed in the financial statements for the year ended 31 December 2015.
The new accounting policy adopted measures the intangible asset, syndicate capacity, at cost less any impairment. The change in accounting policy was approved by the Board after the 2015 interim results were announced, accordingly the period ended 30 June 2015 has been restated to add back the amortisation of £476,000 from the condensed consolidated statement of comprehensive income to the intangible assets in the condensed consolidated statement of financial position.
Historically, the Group's quota share arrangements have been shown net of profit share payable less fees receivable in the condensed consolidated statement of comprehensive income. When preparing the financial statements for 31 December 2015 and 30 June 2016, the profit share payable has been restated to show as gross of fees receivable to provide consistent presentation. The fees receivable of £244,000 are now shown as other income rather than as part of reinsurance ceded.
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 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 | - | - | 330 | 330 |
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 | 1,748 | 33 | (1,137) | 644 |
Restated 6 months ended 30 June 2015 Unaudited | Syndicate participation £'000 | Investment management £'000 | Other corporate activities £'000 | Total £'000 |
Net earned premium | 7,765 | - | (643) | 7,122 |
Net investment income | 206 | 9 | - | 215 |
Other income | - | - | 244 | 244 |
Net insurance claims and loss adjustment expenses | (4,469) | - | - | (4,469) |
Expenses incurred in insurance activities | (2,420) | - | (283) | (2,703) |
Other operating expenses | - | - | (336) | (336) |
Goodwill on bargain purchase | - | - | 196 | 196 |
Impairment of goodwill | - | - | (45) | (45) |
Impairment of syndicate capacity (see Note 13) |
|
|
|
|
Profit before tax | 1,082 | 9 | (867) | 224 |
12 months ended 31 December 2015 Audited | Syndicate participation £'000 | Investment management £'000 | Other corporate activities £'000 | Total £'000 |
Net earned premium | 17,257 | - | (1,397) | 15,860 |
Net investment income | 250 | 5 | - | 255 |
Other income | - | - | 392 | 392 |
Net insurance claims and loss adjustment expenses | (7,515) | - | - | (7,515) |
Expenses incurred in insurance activities | (7,178) | - | (393) | (7,571) |
Other operating expenses | 35 | - | (847) | (812) |
Goodwill on bargain purchase | - | - | 244 | 244 |
Impairment of goodwill | - | - | (136) | (136) |
Impairment of syndicate capacity (see Note 13) | - | - | (63) | (63) |
Profit before tax | 2,849 | 5 | (2,200) | 654 |
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 2016 other corporate activities totalling £559,000 (2015: 1,397,000 - 2013, 2014 and 2015 years of account) represents the 2014, 2015 and 2016 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 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 |
Net premium written | 428 | 2,143 | 12,254 | 14,825 | (1,271) | (559) | (121) | 12,875 |
Net earned premium | 1,291 | 7,578 | 3,049 | 11,918 | (1,056) | (559) | (121) | 10,182 |
Other income | 330 | 97 | 26 | 453 | (23) | 330 | 98 | 858 |
Net insurance claims and loss adjustment expenses | (382) | (4,289) | (3,269) | (7,940) | 693 | - | - | (7,247) |
Operating expenses | 61 | (2,023) | (858) | (2,820) | 269 | - | (637) | (3,188) |
Operating profit before goodwill and impairment | 1,300 | 1,363 | (1,052) | 1,611 | (117) | (229) | (660) | 605 |
Quota share adjustment | (662) | (762) | 865 | (559) | - | 559 | - | - |
Operating profit before goodwill and impairment after quota share adjustment | 638 | 601 | (187) | 1,052 | (117) | 330 | (660) | 605 |
| Underwriting year of account* |
|
|
|
| |||
Restated 6 months ended 30 June 2015 | 2013 and prior £'000 |
2014 £'000 |
2015 £'000 |
Sub-total £'000 | Pre- acquisition £'000 | Corporate reinsurance £'000 | Other corporate £'000 | Total £'000 |
Gross premium written | 18 | 1,788 | 11,343 | 13,149 | (1,207) | - | - | 11,942 |
Net premium written | 42 | 1,525 | 8,934 | 10,501 | (885) | (643) | (400) | 8,573 |
Net earned premium | 655 | 5,884 | 2,343 | 8,882 | (717) | (643) | (400) | 7,122 |
Other income | 148 | 46 | 12 | 206 | (33) | 244 | 42 | 459 |
Net insurance claims and loss adjustment expenses | 116 | (3,082) | (1,938) | (4,904) | 435 | - | - | (4,469) |
Operating expenses | (409) | (1,675) | (635) | (2,719) | 290 | - | (610) | (3,039) |
Operating profit before goodwill and impairment | 510 | 1,173 | (218) | 1,465 | (25) | (399) | (968) | 73 |
Quota share adjustment | (135) | (644) | 136 | (643) | - | 643 | - | - |
-Operating profit before goodwill and impairment after quota share adjustment | 375 | 529 | (82) | 822 | (25) | 244 | (968) | 73 |
| Underwriting year of account* |
|
|
|
| |||
12 months ended 31 December 2015 | 2013 and prior £'000 |
2014 £'000 |
2015 £'000 |
Sub-total £'000 | Pre- acquisition £'000 | Corporate reinsurance £'000 | Other corporate £'000 | Total £'000 |
Gross premium written | (25) | 2,362 | 21,331 | 23,668 | (2,157) | - | - | 21,511 |
Net premium written | (148) | 2,009 | 17,607 | 19,468 | (1,735) | (1,397) | (407) | 15,929 |
Net earned premium | 712 | 9,092 | 9,475 | 19,279 | (1,615) | (1,397) | (407) | 15,860 |
Other income | 170 | 62 | 22 | 254 | (80) | 382 | 91 | 647 |
Net insurance claims and loss adjustment expenses | 1,414 | (4,190) | (5,468) | (8,244) | 726 | 3 | - | (7,515) |
Operating expenses | (706) | (3,160) | (3,962) | (7,828) | 779 | - | (1,334) | (8,383) |
Operating profit before goodwill and impairment | 1,590 | 1,804 | 67 | 3,461 | (190) | (1,012) | (1,650) | 609 |
Quota share adjustment | (392) | (950) | (55) | (1,397) | - | 1,397 | - | - |
-Operating profit before goodwill and impairment after quota share adjustment | 1,198 | 854 | 12 | 2,064 | (190) | 385 | (1,650) | 609 |
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 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 |
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 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 |
6. Net investment income
| 6 months ended 30 June 2016 Unaudited £'000 |
6 months ended 30 June 2015 Unaudited £'000 | 12 months ended 31 December 2015 Audited £'000 |
Investment income | 424 | 191 | 926 |
Realised gains on financial assets at fair value through profit or loss | 48 | 193 | (327) |
Unrealised losses on financial assets at fair value through profit or loss | 52 | (171) | (360) |
Investment management expenses | - | - | (44) |
Bank interest | 4 | 2 | 60 |
Net investment income | 528 | 215 | 255 |
7. Income tax charge
Analysis of tax charge/(credit) in the period
| 6 months ended 30 June 2016 Unaudited £'000 |
6 months ended 30 June 2015 Unaudited £'000 | 12 months ended 31 December 2015 Audited £'000 |
Income tax charge | (26) | (26) | (135) |
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% (2015: 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 2016 Unaudited | Restated 6 months ended 30 June 2015 Unaudited | 12 months ended 31 December 2015 Audited |
Profit for the period after tax attributable to ordinary shareholders | 670,000 | 250,000 | £789,000 |
Weighted average number of shares in issue | 10,495,350 | 8,640,938 | 9,411,794 |
Basic and diluted earnings per share | 6.38 | 2.89 | 8.38p |
9. Dividends paid or proposed
A Dividend of 5.0p per share was proposed and agreed at the AGM (2015: 5.1p).
10. Investments in subsidiaries
| 30 June 2016 £'000 | 30 June 2015 £'000 | 31 December 2015 £'000 |
Total | 19,503 | 8,705 | 14,706 |
At 30 June 2016 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 | 2016 ownership | 2015 ownership | Principal activity |
Hampden Corporate Member Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 365) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 605) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 321) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 917) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 229) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 518) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 804) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Halperin Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Bernul Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Dumasco Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 311) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 402) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Updown Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 507) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Nameco (No. 76) Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Kempton Underwriting Limited | Direct | 100% | 100% | Lloyd's of London corporate vehicle |
Devon Underwriting Limited | Direct | 100% | - | Lloyd's of London corporate vehicle |
Nameco (No 346) Limited | Direct | 100% | - | Lloyd's of London corporate vehicle |
Nomina No 035 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
Nomina No 342 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
Nomina No 380 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
Nomina No 372 LLP | Indirect | 100% | 100% | Lloyd's of London corporate vehicle |
Helios UTG Partner Limited | Direct | 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 and Nomina No 372 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 2015 | 8,956,787 | 896 | 7,556 | 8,452 |
Ordinary shares of 10p each and share premium at 31 December 2015 | 10,495,350 | 1,050 | 9,901 | 10,951 |
Ordinary shares of 10p each and share premium at 30 June 2016 | 10,495,350 | 1,050 | 9,901 | 10,951 |
12. Acquisition of Limited Liability Vehicles
Acquisitions of Limited Liability Vehicles are accounted for using the acquisition method of accounting. Comparing the consideration paid to the fair value of net assets acquired gives rise to goodwill. Goodwill on bargain purchases is taken to the Consolidated Income Statement and Goodwill is taken to intangible assets and tested at each period end for impairment. Details of which are shown below:
| 30 June 2016 | 30 June 2016 | 30 June 2015 | 30 June 2015 | 31 December 2015 | 31 December 2015 |
Company or partnership | Goodwill on bargain purchase £'000 | Goodwill £'000 | Goodwill on bargain purchase £'000 | Impairment of goodwill £'000 | Goodwill on bargain purchase £'000 | Impairment of goodwill £'000 |
Nameco (No. 311) Limited | - | - | 56 | - | 59 | - |
Nameco (No. 402) Limited | - | - | - | (45) | - | (30) |
Updown Underwriting Limited | - | - | 57 | - | 51 | - |
Nameco (No. 507) Limited | - | - | 83 | - | 134 | - |
Nameco (No. 76) Limited | - | - | - | - | - | (52) |
Kempton Underwriting Limited | - | - | - | - | - | (54) |
Devon Underwriting Limted | - | 100 | - | - | - | - |
Nameco (No. 346) Limited | - | 350 | - | - | - | - |
| - | 450 | 196 | (45) | 244 | (136) |
Further details of individual 2016 acquisitions are shown below:
(a) 2016 acquisitions
Devon Underwriting Limited
On 21 January 2016, Helios Underwriting plc acquired 100% of the issued share capital of Devon Underwriting Limited for a total consideration of £1,070.000 Devon 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 £970,000. Goodwill of £100,000 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 | - | 604 | 604 |
Reinsurance assets: |
|
|
|
- reinsurers' share of claims outstanding | 332 | - | 332 |
- reinsurers' share of unearned premium | 67 | - | 67 |
Other receivables, including insurance and reinsurance receivables | 1,242 | - | 1,242 |
Prepayments and accrued income | 164 | - | 164 |
Financial assets at fair value through profit or loss | 1,863 | - | 1,863 |
Cash and cash equivalents | 104 | - | 104 |
Insurance liabilities: |
|
|
|
- claims outstanding | (2,121) | - | (2,121) |
- unearned premium | (584) | - | (584) |
Deferred income tax liabilities | (109) | (121) | (230) |
Other payables, including insurance and reinsurance payables | (440) | - | (440) |
Accruals and deferred income | (31) | - | (31) |
Net assets acquired | 487 | 483 | 970 |
|
|
|
|
Satisfied by: |
|
|
|
Cash and cash equivalents | 1,070 | - | 1,070 |
Total consideration | 1,070 | - | 1,070 |
|
|
|
|
Goodwill | 583 | (483) | 100 |
| 2014 year of account | 2015 year of account | 2016 year of account |
Capacity acquired | 1,866,053 | 1,298,575 | 1,244,242 |
The net earned premium and profit of Devon Underwriting Limited for the period since the acquisition date to 30 June 2016 are £448,000 and £66,000 respectively.
Goodwill has arisen on the acquisition of Devon Underwriting Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.
Nameco (No. 346) Limited
On 27 May 2016, Helios Underwriting plc acquired 100% of the issued share capital of Nameco (No.346) Limited for a total consideration of £3,728,000. Nameco (No. 346) 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 £3,378,000. Goodwill of £350,000 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 | 3 | 1,300 | 1,303 |
Reinsurance assets: |
|
|
|
- reinsurers' share of claims outstanding | 810 | - | 810 |
- reinsurers' share of unearned premium | 384 | - | 384 |
Other receivables, including insurance and reinsurance receivables | 4,502 | - | 4,502 |
Prepayments and accrued income | 558 | - | 558 |
Financial assets at fair value through profit or loss | 3,598 | - | 3,598 |
Cash and cash equivalents | 643 | - | 643 |
Insurance liabilities: |
|
|
|
- claims outstanding | (4,522) | - | (4,522) |
- unearned premium | (2,032) | - | (2,032) |
Deferred income tax liabilities | (271) | (260) | (531) |
Other payables, including insurance and reinsurance payables | (1,130) | - | (1,130) |
Accruals and deferred income | (205) | - | (205) |
Net assets acquired | 2,338 | 1,040 | 3,378, |
|
|
|
|
Satisfied by: |
|
|
|
Cash and cash equivalents | 3,728 | - | 3,728 |
Total consideration | 3,728 | - | 3,728 |
|
|
|
|
Goodwill | 1,390 | (1,040) | 350 |
| 2014 year of account | 2015 year of account | 2016 year of account |
Capacity acquired | 3,367,971 | 3,187,015 | 3,320,877 |
The net earned premium and profit of Nameco (No. 346) Limited for the period since the acquisition date to 30 June 2016 are £270,000 and £31,000 respectively.
Goodwill has arisen on the acquisition of Nameco (No. 346) 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 2016, the Consolidated Statement of Comprehensive Income would show net earned premium of £1,774,000 and a profit after tax of £232,000.
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 2016 are set out below:
Company | 30 June 2016 Unaudited £'000 | 30 June 2015 Unaudited £'000 | 31 December 2015 £'000 |
Balances due from/(to) Group companies at the period end: |
|
|
|
Hampden Corporate Member Limited | (221) | 335 | 327 |
Nameco (No. 365) Limited | (40) | 50 | (5) |
Nameco (No. 605) Limited | (281) | (118) | (4) |
Nameco (No. 321) Limited | (40) | (35) | 9 |
Nameco (No. 917) Limited | 2,357 | 221 | 1,451 |
Nameco (No. 229) Limited | 12 | 13 | 58 |
Nameco (No. 518) Limited | (47) | (33) | 14 |
Nameco (No. 804) Limited | (99) | 99 | 274 |
Halperin Underwriting Limited | (55) | (48) | 32 |
Bernul Limited | (59) | (33) | 47 |
Dumasco Limited | (183) | (24) | 177 |
Nameco (No. 311) Limited | (69) | (181) | 37 |
Nameco (No. 402) Limited | (220) | (241) | (104) |
Updown Underwriting Limited | 540 | (197) | 713 |
Nameco (No. 507) Limited | (56) | - | 660 |
Nameco (No. 76) Limited | 12 | - | 393 |
Kempton Underwriting Limited | 188 | - | 573 |
Devon Underwriting Limited | (113) | - | - |
Nameco (No 346) Limited | (892) | - | - |
Nomina No 035 LLP | - | - | - |
Nomina No 342 LLP | - | - | - |
Nomina No 380 LLP | - | - | - |
Nomina No 372 LLP | - | - | - |
Helios UTG Partner Limited | 107 | 1,776 | 553 |
Total (note 15) | 841 | 1,584 | 5,205 |
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 £142,000 (2015: £112,000).
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 2016 are set out below:
Company | 30 June 2016 Unaudited £'000 | 30 June 2015 Unaudited £'000 | 31 December 2015 £'000 |
Hampden Corporate Member Limited | 34 | 43 | 43 |
Nameco (No. 365) Limited | 7 | 11 | 11 |
Nameco (No. 605) Limited | 34 | 36 | 36 |
Nameco (No. 321) Limited | 10 | 14 | 13 |
Nameco (No. 917) Limited | 121 | 7 | 7 |
Nameco (No. 229) Limited | 9 | 10 | 10 |
Nameco (No. 518) Limited | 13 | 18 | 18 |
Nameco (No. 804) Limited | 23 | 32 | 32 |
Halperin Underwriting Limited | - | 14 | 14 |
Bernul Limited | - | 9 | 9 |
Dumasco Limited | - | - | - |
Nameco (No. 311) Limited | 12 | 17 | 17 |
Nameco (No. 402) Limited | 12 | 18 | 18 |
Updown Underwriting Limited | - | 1 | 1 |
Nameco (No. 507) Limited | 21 | 26 | 26 |
Nameco (No. 76) Limited | 12 | - | 16 |
Kempton Underwriting Limited | - | - | 11 |
Devon Underwriting Limited | 9 | - | - |
Nameco (No 346) Limited | 51 | - | - |
Nomina No 035 LLP | 10 | 14 | 14 |
Nomina No 342 LLP | 9 | 14 | 14 |
Nomina No 380 LLP | 15 | 13 | 13 |
Nomina No 372 LLP | 10 | 16 | 16 |
Helios UTG Partner Limited | - | - | - |
Total | 412 | 313 | 339 |
The Group entered into quota share reinsurance contracts for the 2014, 2015 and 2016 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 | 2014 | 2015 | 2016 |
Hampden Corporate Member Limited | 70% | 70% | - |
Nameco (No. 365) Limited | 70% | 70% | - |
Nameco (No. 605) Limited | 70% | 70% | - |
Nameco (No. 321) Limited | 70% | 70% | - |
Nameco (No. 917) Limited | 70% | 70% | 70% |
Nameco (No. 229) Limited | 70% | 70% | - |
Nameco (No. 518) Limited | 70% | 70% | - |
Nameco (No. 804) Limited | 70% | 70% | - |
Halperin Underwriting Limited | 70% | 70% | - |
Bernul Limited | 70% | 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% |
Nameco (No. 346) Limited | - | - | 70% |
Helios UTG Partner Limited | - | - | - |
Nomina No 035 LLP | 70% | 70% | - |
Nomina No 342 LLP | 70% | 70% | - |
Nomina No 380 LLP | 70% | 70% | - |
Nomina No 372 LLP | 70% | 70% | - |
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 £1,768,000 (2015: £1,541,000) 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 | |||
2016* £ | 2015* £ | 2014* £ | 2013 £ | ||
33 | Hiscox Syndicates Limited | 2,757,244 | 2,563,464 | 2,413,044 | 1,182,895 |
218 | ERS Syndicate Management Limited | 1,313,279 | 1,216,951 | 1,457,074 | 824,028 |
308 | Tokio Marine Kiln Syndicates Limited | 100,000 | 184,528 | 244,528 | - |
386 | QBE Underwriting Limited | 800,289 | 711,365 | 729,313 | 347,509 |
510 | Tokio Marine Kiln Syndicates Limited | 5,030,389 | 4,755,942 | 4,422,296 | 2,688,563 |
557 | Tokio Marine Kiln Syndicates Limited | 575,567 | 553,433 | 543,871 | 301,001 |
609 | Atrium Underwriters Limited | 3,069,913 | 2,846,566 | 2,685,423 | 1,279,982 |
623 | Beazley Furlonge Limited | 3,919,673 | 3,238,987 | 3,188,218 | 1,431,928 |
727 | S A Meacock & Company Limited | 959,404 | 932,005 | 879,582 | 539,378 |
958 | Canopius Managing Agents Limited | - | 268,646 | 721,004 | 553,663 |
1176 | Chaucer Syndicates Limited | 551,376 | 456,986 | 422,886 | 356,992 |
1200 | Argo Managing Agency Limited | 170,411 | 233,819 | 298,071 | 157,370 |
1729 | Asta Managing Agency Limited | 42,000 | 103,758 | 139,443 | - |
1884 | Charles Taylor Managing Agency Limited | - | 25,000 | - | - |
1910 | Asta Managing Agency Limited | 1,177,236 | - | - | - |
1991 | R&Q Managing Agency Limited | - | 60,000 | 80,001 | - |
2010 | Cathedral Underwriting Limited | 844,831 | 765,756 | 788,022 | 527,247 |
2014 | Pembroke Managing Agency Limited | 1,450,000 | 1,417,938 | 1,427,152 | - |
2121 | Argenta Syndicate Management Limited | - | 260,341 | 160,341 | 120,309 |
2525 | Asta Managing Agency Limited | 171,414 | 134,698 | 116,690 | 20,000 |
2791 | Managing Agency Partners Limited | 3,796,944 | 3,592,198 | 3,818,945 | 2,646,342 |
4444 | Canopius Managing Agents Limited | 101,429 | - | - | - |
5820 | ANV Syndicates Limited | 109,479 | 269,738 | 329,738 | 224,170 |
6103 | Managing Agency Partners Limited | 253,649 | 1,157,998 | 1,206,224 | 611,224 |
6104 | Hiscox Syndicates Limited | 1,154,675 | 226,476 | 562,334 | 550,173 |
6105 | Ark Syndicate Management Limited | - | 611,146 | 590,814 | 115,296 |
6106 | Amlin Underwriting Limited | - | - | - | 361,805 |
6107 | Beazley Furlonge Limited | 413,737 | 413,737 | 413,737 | 32,500 |
6110 | Pembroke Managing Agency Limited | - | - | - | 1,072,507 |
6111 | Catlin Underwriting Agencies Limited | 1,818,311 | 1,583,657 | 1,522,247 | 775,544 |
6113 | Barbican Managing Agency Limited | - | - | 145,528 | 67,328 |
6117 | Asta Managing Agency Limited | 1,765,271 | 872,296 | 1,314,198 | - |
7200 | Members' agent pooling arrangement | - | 172,250 | 330,362 | 533,338 |
7201 | Members' agent pooling arrangement | - | 881,178 | 1,684,730 | 2,721,724 |
7202 | Members' agent pooling arrangement | - | 308,463 | 600,114 | 969,860 |
7203 | Members' agent pooling arrangement | - | 121,426 | 175,290 | 206,643 |
7211 | Members' agent pooling arrangement | - | 101,070 | 793,460 | 5,545,063 |
7217 | Members' agent pooling arrangement | 241,878 | 229,149 | 203,691 | 177,460 |
7227 | Members' agent pooling arrangement | 72,159 | 38,485 | - | - |
Total |
| 32,660,558 | 31,309,450 | 34,408,371 | 26,941,842 |
* Including the new acquisitions in 2016.
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 2016 | Restated 30 June 2015 | 31 December 2015 | ||||||
Group £'000 | Syndicate £'000 | Total £'000 | Group £'000 | Syndicate £'000 | Total £'000 | Group £'000 | Syndicate £'000 | Total £'000 | |
Assets |
|
|
|
|
|
|
|
|
|
Intangible assets | 10,907 | - | 10,907 | 7,942 | - | 7,942 | 8,511 | - | 8,511 |
Reinsurance assets: |
|
|
|
|
|
|
|
|
|
- reinsurers' share of claims outstanding | - | 7,689 | 7,689 | - | 4,851 | 4,851 | - | 5,657 | 5,657 |
- reinsurers' share of unearned premium | - | 3,527 | 3,527 | - | 2,278 | 2,278 | - | 1,501 | 1,501 |
Other receivables, including insurance and reinsurance receivables | 1,178 | 27,401 | 28,579 |
1,245 |
17,795 |
19,040 | 1,216 | 19,211 | 20,427 |
Prepayments and accrued income | 126 | 4,492 | 4,618 | 13 | 3,101 | 3,114 | 15 | 3,055 | 3,070 |
Financial assets at fair value through profit or loss |
5,717 | 32,287 | 38,004 |
2,723 |
22,665 |
25,388 | 4,644 | 27,153 | 31,797 |
Cash and cash equivalents | 2,212 | 3,456 | 5,668 | 2,752 | 2,375 | 5,127 | 2,223 | 1,411 | 3,634 |
Total assets | 20,140 | 78,852 | 98,992 | 14,675 | 53,065 | 67,740 | 16,609 | 57,988 | 74,597 |
Liabilities |
|
|
|
|
|
|
|
|
|
Insurance liabilities: |
|
|
|
|
|
|
|
|
|
- claims outstanding | - | 43,060 | 43,060 | - | 28,258 | 28,258 | - | 32,985 | 32,985 |
- unearned premium | - | 18,054 | 18,054 | - | 12,368 | 12,368 | - | 11,169 | 11,169 |
Deferred income tax liabilities | 3,002 | - | 3,002 | 2,546 | - | 2,546 | 3,172 | - | 3,172 |
Other payables, including insurance and reinsurance payables | 965 | 12,983 | 13,948 |
1,069 |
8,583 |
9,652 | 1,585 | 7,774 | 9,360 |
Accruals and deferred income | 3,757 | 387 | 4,144 | 1,204 | 448 | 1,652 | 1,577 | (89) | 1,488 |
Total liabilities | 7,724 | 74,484 | 82,208 | 4,819 | 49,657 | 54,476 | 6,334 | 51,839 | 58,174 |
Equity attributable to owners of the Parent |
|
|
|
|
|
|
|
|
|
Share capital | 1,050 | - | 1,050 | 896 | - | 896 | 1,050 | - | 1,050 |
Share premium | 9,901 | - | 9,901 | 7,556 | - | 7,556 | 9,902 | - | 9,901 |
Other reserves | 337 | - | 337 | - | - | - | - | 121 | 121 |
Retained earnings | 1,128 | 4,368 | 5,496 | 1,403 | 3,409 | 4,812 | (677) | 6,028 | 5,351 |
Total equity | 12,416 | 4,368 | 16,784 | 9,855 | 3,409 | 13,264 | 10,274 | 6,149 | 16,424 |
Total liabilities and equity | 20,140 | 78,852 | 98,992 | 14,674 | 53,066 | 67,740 | 16,609 | 57,988 | 74,597 |
16. Events after the financial reporting period
A dividend of 5.0p per share was agreed at the AGM and has been accrued at the period end. The dividend payment was settled on 6th July 2016.
A placing of new ordinary shares in the Company is being announced on 30th September 2016 expected to raise up to approximately £5m (net), together with a proposed open offer of new ordinary shares to shareholders to raise up to a further £3.2 million.
Independent Review Report to Helios Underwriting plc for the six months ended 30 June 2016
Introduction
We have been engaged by the Company to review the condensed consolidated interim financial information in the half yearly financial report for the six months ended 30 June 2016 which comprises the condensed consolidated income statement, condensed consolidated statement of financial position, condensed consolidated statement of cash flows, condensed consolidated statement of changes in shareholder' equity 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 consolidated interim financial information.
Directors' Responsibilities
The half yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34"), as adopted by the European Union and the AIM Rules for Companies. The annual Financial Statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated interim financial information included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial information in the half yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board 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 Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information in the half yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.
PKF Littlejohn LLP
Chartered Accountants
1 Westferry Circus
Canary Wharf
London E14 4HD
29 September 2016
The Interim Report will be made available in electronic format on the Company's website, www.huwplc.com.