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Half-year Report

28 Sep 2018 07:00

RNS Number : 2423C
Helios Underwriting Plc
28 September 2018
 

Helios Underwriting plc

("Helios" or the "Company")

Interim results for the six months ended 30 June 2018

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 2018.

 

The highlights are as follows:

The operating profits before goodwill and impairment are £153,000 (30 June 2017 - £365,000)

The contributions from the open underwriting years have reduced as the forecast improvements for the profitability for the older underwriting years - 2016 and 2017 - are lower.

Two acquisitions have been completed in the post balance sheet period of these Financial Statements, with capacity of £1.4m. There is now a good flow of Limited Liability Vehicles (LLV's) for sale and we believe that we will be able to acquire a number of those currently available at prices that will be accretive to shareholder value. There have been 35 LLV's offered for sale so far in 2018 of which 15 remain unsold.

The value of Lloyds' syndicate capacity is 30% lower in 2018 than the previous year and this provides an opportunity to continue to build the capacity fund to create value for shareholders.

The first six months of 2018 experienced lower loss activity than 2017 which incurred significant losses from natural catastrophes.

Small premium rate increases were achieved by underwriters in the first six months of 2018 which together with greater discipline encouraged by the Franchise Board at Lloyds in underwriting profitable portfolios should allow a return to profitable underwriting.

Other income is in line with expectations and we continue to benefit from the fees and profit commissions payable by the quota share reinsurers. The investments held in Funds at Lloyds incurred a small negative return during the period.

Earnings per share is 1.25p per share (30 June 2017 - 2.03p)

The Adjusted Net Asset Value per share is £1.61 per share (31st December 2017 - £1.60p per share)

 

 

SUMMARY FINANCIAL INFORMATION

 

6 months to 30th June

31st December

 

2018

£000's

2017

£000's

2017

£000's

 

 

 

 

Underwriting profits

741

 1,070

 183

Other income

18

 391

 1,278

Costs

(606)

 (1,096)

 (1,867)

Operating profit/(loss) for the period before impairment and goodwill

153

 365

 (406)

Profit/(loss) after tax

182

 297

 (694)

 

 

 

 

Earnings (Loss) per share

1.25p

2.03p

(4.75p)

Adjusted Net Asset Value per Share

£1.61

£1.93

£1.6

 

The contribution from the older underwriting years (2016 and 2017) is lower than the same period last year. Although the loss activity has been muted in the first six months of 2018, the full effect of the actual loss activity will be reflected in the full year results.

 

Helios remains one of very few 'consolidators' of LLV's in the Lloyds market and the only one with a listing on an investment exchange. To date we have bought 30 such vehicles over a number of years. However, we are now seeing a significantly increased flow of attractive targets. The lack of buyers and increased supply is leading to prices that are more competitive. 

Smaller investors are finding their costs increasing combined with an expectation of lower returns which can partially explain the increased flow. There are no accurate statistics as to the age of the 'decision makers 'within the community of LLV owners but the directors feel that many are aged and executor sales are a common feature. The complexity inherent in the business of running an LLV, more onerous regulatory requirements, rising costs and falling profits is a powerful incentive to put a vehicle up for sale and we strongly feel that the flow will increase in the coming months and years until a new equilibrium is reached based around fewer, larger investors. A window of opportunity has been opened which is exciting for Helios. We intend to take advantage of this opportunity before it closes and the Board is considering options to source the funds to acquire further LLV's.

Capacity acquired

Since the beginning of 2018 two corporate members have been acquired that has increased the capacity for the 2016 to 2018 years of account as follows:

 

 

Year of account - £m

2016

2017

2018

 

Capacity at 1 January 2018

37.8

37.0

41.0

 

Acquired during 2018

1.3

1.3

1.4

 

Capacity at 28th September 2018

39.1

38.3

42.4

 

Helios Retained Capacity

19.5

13.0

12.7

 

Proportion of Capacity retained

50%

34%

30%

 

 

 

Our strategy of building the portfolio of syndicate capacity continues to rely on the flow of LLV's for sale at reasonable prices. The flow of companies put up for sale was late in starting as the full effect of the 2017 losses and lower capacity values had to be factored into the valuations. Since July, there has been a steady flow of vehicles being offered for sale. We have been active in assessing the potential acquisitions and would hope to be able to complete further acquisitions in the near future. We continue to remain selective on the vehicles acquired and several have been sold recently at prices that were unattractive to us.

 

We continue to reduce our exposure by 70% on the open underwriting year 2018 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 for the remaining 30% to limit the Group's exposure in the event of large underwriting losses. As the size of our capacity fund increases more reinsurance can be ceded which in turn should increase our flow of fees and profit commission. Our costs should not increase at the same pace.

The Adjusted Net Asset Value per share is £1.61 per share (Dec 2017 - £1.60 per share). It is expected that there will continue to be demand for the top syndicates that make up a significant proportion of the Helios Capacity Fund at the Lloyds Capacity Auctions that take place later this year.

 

The company has commenced a program of buying back its own shares and to date has acquired 136,778 shares at an average price of 125p a significant discount to Adjusted Net Asset Value. We expect to continue this share buyback program.

 

Board currently expects that the syndicate results for the 2015 and 2016 underwriting years will exceed current mid-point forecasts published by the managing agents, which should make a meaningful contribution to the Helios full year result

 

For further information please contact:

Helios

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

Arthur Manners - Chief Financial Officer 07754 965 917

Stockdale Securities Limited

Robert Finlay 020 7601 6100

David Coaten

 

 

Financial results summary

Six months ended 30 June 2018

 

6 months to 30 June 2018

6 months to 30 June 2017

Year to 31 December 2017

 

 

 

 

Underwriting profits

741

1,070

183

Other Income

 

 

 

Fees from reinsurers

400

233

426

Corporate reinsurance recoveries

(179)

 

629

Goodwill on bargain purchase

-

 

65

Investment income

(203)

158

158

Total Other Income

18

391

1278

Costs

 

 

 

Pre - acquisition

-

(126)

38

Stop loss costs

(30)

(113)

(259)

Operating costs

(576)

(857)

(1646)

Total Costs

(606)

(1,096)

(1867)

Profit for the year

153

365

(406)

Impairment charge

82

8

(899)

Tax

(53)

(76)

611

Retained Profit

182

297

(694)

 

Period to 30th June 2018

Underwriting Year

Helios retained

 capacity at

30 June 2018

£m

Portfolio mid

point forecasts

Total profi/(loss)t

currently

estimated

£'000

% earned

in the 2018 half year

calendar

Helios

Profits

£'000

2016

17.8

5.40%

952

38%

366

2017

12

(7.4)%

(888)

(57)%

510

2018

12.3

N/A

 

 

(135)

 

 

 

 

 

741

Period to 30th June 2017

Underwriting Year

Helios retained

 capacity at

30 June 2017

£m

Portfolio mid

point forecasts

Total profit

currently

estimated

£'000

% earned

in the 2017 half year

calendar

Helios

Profits

£'000

2015

18.5

10.8%

2,002

26%

518

2016

13.3

3.8%

501

141%

707

2017

11.2

N/A

 

 

(155)

 

 

 

 

 

1,070

Year to 31 December 2017

Underwriting Year

Helios retained

 capacity at

 31 December

2017

£m

Portfolio mid

point forecasts

Total profit

currently

estimated

£'000

% earned

in the 2017 half year

calendar

Helios

Profits

£'000

2015

19.7

12.9%

2,547

51%

1,294

2016

18.3

3.5%

641

116%

741

2017

12.0

N/A

 

 

(1,852)

 

 

 

 

 

183

 

Summary Balance Sheet

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

 

6 Months to June 2018

£'000

 

6 Months to June 2017

£'000

Year to 31 December 2017

£'000

Intangible assets

12,257

12,495

12,175

Funds at Lloyd's

7,785

6,884

 10,489

Other cash

4,480

5,832

 1,078

Other assets

4,479

2,383

 6,669

Total assets

29,001

27,594

 30,411

Deferred tax

2,094

2,943

 2,963

Borrowings

-

-

1,094

Other liabilities

2,504

5,903

4,390

Total liabilities

4,598

8,846

8,447

Syndicate equity

(3,430)

3,253

(954)

Total equity

20,973

22,001

21,010

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 2018

£'000

6 months to 30 June 2017

£'000

Year to 31 December 2017

£'000

 

 

 

 

Opening Balance (free cash)

1,078

7,229

7,229

 

 

 

 

Income

 

 

 

Acquired on acquisition

-

237

420

Distribution of profits (net of tax retentions)

3,177

4,490

4,064

Transfers from Funds at Lloyds'

3,887

66

2,211

Investment income

8

25

300

Other income

-

-

-

Sale of investments

-

-

-

Borrowings

(1,094)

-

1,094

 

 

 

 

Expenditure

 

 

 

Operating costs (inc Hampden / Nomina fees)

(447)

(646)

(1,294)

Reinsurance Cost

(122)

(115)

(262)

Payments to QS reinsurers

(1,279)

-

(550)

Acquisition of LLV's

-

(4,080)

(4,858)

Transfers to Funds at Lloyds'

(728)

(560)

(5,818)

Tax

-

(2)

(655)

Dividends paid

-

(812)

(803)

Closing balance

4,480

5,832

1,078

 

Adjusted NAV

 

6 months to 30 June 2018

£'000

6 months to 30 June 2017

£'000

Year to 31 December 2017

£'000

Net tangible assets

8,716

9,506

8,835

Group letters of credit

1,711

2,160

1,532

Value of capacity (WAV)

13,046

16,484

13,046

 

23,473

28,150

23,413

Share in issue - basic & diluted

14,604

14,604

14,604

Adjusted net asset value per share £

1.61

1.93

1.60

 

 

Interim condensed consolidated statement of comprehensive income

Six months ended 30 June 2018

 

 

 

Note

6 months ended 30 June 2018

Unaudited

£'000

6 months ended 30 June 2017 Unaudited £'000

12 months ended 31 December 2017 Audited £'000

Gross premium written

4

20,647

17,061

34,701

Reinsurance premium ceded

 

(6,043)

(5,119)

(6,717)

Net premium written

4

14,604

11,942

27,984

Change in unearned gross premium provision

5

(3,793)

(432)

1,761

Change in unearned reinsurance premium provision

5

1,946

771

(319)

 

5

(1,847)

339

1,442

Net earned premium

3,4

12,757

12,281

29,426

Net investment income

6

(87)

581

1,010

Other underwriting income

 

-

-

267

Other income

 

344

255

(35)

Revenue

 

13,014

13,117

30,668

Gross claims paid

 

(10,543)

(8,108)

(19,204)

Reinsurers' share of gross claims paid

 

2,083

1,038

4,905

Claims paid, net of reinsurance

 

(8,460)

(7,070)

(14,299)

Change in provision for gross claims

5

4,255

(1,810)

(8,761)

Reinsurers' share of change in provision for gross claims

5

(4,320)

678

5,028

Net change in provision for claims

5

(65)

(1,132)

(3,733)

Net insurance claims and loss adjustment expenses

4

(8,525)

(8,202)

(18,032)

Expenses incurred in insurance activities

 

(3,992)

(3,967)

(11,819)

Other operating expenses

 

(344)

(583)

(1,288)

Operating expenses

 

(4,336)

(4,550)

(13,107)

Operating profit before goodwill and impairment

4

153

365

(471)

Goodwill on bargain purchase

 

-

-

65

Impairment of goodwill

 

-

-

-

Impairment of syndicate capacity

 

82

8

(899)

Profit before tax

 

235

373

(1,305)

Income tax charge

7

(53)

(76)

611

Profit for the period

 

182

297

(694)

Other comprehensive income

 

 

 

 

Foreign currency translation differences

 

-

-

-

Income tax relating to the components of other comprehensive income

 

-

-

 

Other comprehensive income for the period, net of tax

 

-

-

-

Total other comprehensive income for the period

 

182

297

(694)

 

 

 

 

 

 

 

 

 

 

Profit for the period attributable to owners of the Parent

 

182

297

(694)

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

 

182

297

(694)

Earnings per share attributable to owners of the Parent

 

 

 

 

Basic

8

1.25p

2.03p

(4.75)p

Diluted

8

1.20p

2.03p

(4.74)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 2018

 

 

 

Note

6 months ended 30 June 2018

Unaudited

£'000

6 months ended 30 June 2017 Unaudited £'000

12 months ended 31 December 2017 Audited £'000

Assets

 

 

 

 

Intangible assets

 

12,257

12,495

12,175

Financial assets at fair value through profit or loss

 

41,711

43,886

48,074

Reinsurance assets:

 

 

 

 

- reinsurers' share of claims outstanding

5

14,164

8,840

14,836

- reinsurers' share of unearned premium

5

4,791

3,976

2,354

Other receivables, including insurance and reinsurance receivables

 

36,179

28,967

32,949

Deferred acquisition costs

 

4,382

4,218

4,420

Prepayments and accrued income

 

642

364

268

Cash and cash equivalents

 

8,039

6,853

2,844

Total assets

 

122,165

109,599

117,920

Liabilities

 

 

 

 

Insurance liabilities:

 

 

 

 

- claims outstanding

5

55,685

45,772

59,833

- unearned premium

5

20,773

19,193

15,916

Deferred income tax liabilities

 

2,094

2,943

2,963

Borrowings

 

-

-

1,094

Other payables, including insurance and reinsurance payables

 

21,509

15,273

15,558

Accruals and deferred income

 

1,131

4,417

1,546

Total liabilities

 

101,192

87,598

96,910

Equity

 

 

 

 

Equity attributable to owners of the Parent:

 

 

 

 

Share capital

11

1,510

1,460

1,510

Share premium

11

15,387

15,387

15,387

Other reserves - treasury shares

11

(50)

-

(50)

Retained earnings

 

4,126

5,154

4,163

Total equity

 

20,973

22,001

21,010

Total liabilities and equity

 

122,165

109,599

117,920

 

The Financial Statements were approved and authorised for issue by the Board of Directors on 27 September 2018, and were signed on its behalf by:

Nigel Hanbury

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 2018

 

 

 

 

Attributable to owners of the Parent

Consolidated

 

 

Note

Share

 capital

£'000

 Share

 premium

£'000

 Other reserves

£'000

Retained

earnings

£'000

Total

£'000

At 1 January 2018

 

1,510

15,387

(50)

4,163

21,010

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

182

182

Other comprehensive income, net of tax

 

-

-

-

-

-

Total comprehensive income for the year

 

-

-

-

182

182

Transactions with owners:

 

 

 

 

 

 

Dividends paid

9

-

-

-

(219)

(219)

Other

 

-

-

-

-

-

Total transactions with owners

 

-

-

-

(219)

(219)

At 30 June 2018

 

1,510

15,387

(50)

4,126

20,973

At 1 January 2017

 

1,460

15,399

-

5,660

22,519

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

297

297

Other comprehensive income, net of tax

 

-

-

 

 

 

Total comprehensive income for the year

 

-

-

-

297

297

Transactions with owners:

 

 

 

 

 

 

Dividends paid

 

-

-

-

(803)

(803)

Share issue

 

-

(12)

-

-

(12)

Total transactions with owners

 

-

(12)

-

(803)

(815)

At 30 June 2017

 

1,460

15,387

-

5,154

22,001

At 1 January 2017

 

1,460

15,399

-

5,660

22,519

Total comprehensive income for the year:

 

 

 

 

 

 

Profit for the year

 

-

-

-

(694)

(694)

Other comprehensive income, net of tax

 

-

-

-

-

-

Total comprehensive income for the year

 

-

-

-

(694)

(694)

Transactions with owners:

 

 

 

 

 

 

Dividends paid

 

-

-

-

(803)

(803)

Treasury shares (JSOP)

11

-

-

(50)

-

(50)

Share issue

11

50

(12)

 

-

38

Total transactions with owners

 

50

(12)

(50)

(803)

(815)

At 31 December 2017

 

1,510

15,387

(50)

4,163

21,010

        

 

The notes are an integral part of these Financial Statements.

 

Interim condensed consolidated statement of cash flows

Six months ended 30 June 2018

 

 

 

 

 

Note

6 months ended 30 June 2018 Unaudited

£'000

6 months ended 30 June 2017 Unaudited £'000

12 months ended 31 December 2017 Audited

£'000

Cash flows from operating activities

 

 

 

 

Profit before tax

 

235

373

(1,305)

Adjustments for:

 

 

 

 

- Other comprehensive income, gross of tax

 

-

-

-

- Interest received

 

(6)

(2)

(126)

- Investment income

6

(100)

(526)

(731)

- Goodwill on bargain purchase

 

-

-

65

- Impairment of goodwill

 

-

-

-

- (Profit)/loss on sale of intangible assets

 

-

-

(4)

- Impairment of intangible assets

 

(82)

(8)

899

- Goodwill on acquisition

 

-

(134)

-

Changes in working capital:

 

 

 

 

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

 

(46)

(105)

426

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

 

7,248

5,835

2,314

- (increase)/decrease in other receivables

 

(3,566)

5,636

2,920

- (increase)/decrease in other payables

 

3,775

(463)

(1,790)

- net (increase)/decrease in technical provisions

 

(1,056)

(7,017)

(2,801)

Cash generated/(utilised) from operations

 

6,402

3,589

(262)

Income tax paid

 

-

2

(630)

Net cash inflow from operating activities

 

6,402

3,591

(893)

Cash flows from investing activities

 

 

 

 

Interest received

 

6

2

126

Investment income

 

100

526

731

Purchase of intangible assets

 

-

-

(180)

Proceeds from disposal of intangible assets

 

-

-

28

Acquisition of subsidiaries, net of cash acquired

 

-

(3,478)

(3,471)

Net cash inflow from investing activities

 

106

(2,950)

(2,766)

Cash flows from financing activities

 

 

 

 

Net proceeds from issue of ordinary share capital

 

-

-

-

Borrowings

 

(1,094)

-

1,094

Dividends paid to owners of the Parent

 

(219)

-

(803)

Net cash outflow from financing activities

 

(1,313)

-

291

Net increase in cash and cash equivalents

 

5,195

641

(3,368)

Cash and cash equivalents at beginning of period

 

2,844

6,212

6,212

Cash and cash equivalents at end of period

 

8,039

6,853

2,844

 

Cash held within the syndicates' accounts is £3,900,000 (2017: £4,439,000 ) of the total cash and cash equivalents held at the end of the period £8,039,000 (2017: £6,853,000). 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 2018

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 2018.

 

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

The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2018 and 2017 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 2017.

 

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 2017. The new standards and amendments to standards and interpretations effective after 1 January 2018, as disclosed in the Annual Report for the year ended 31 December 2017, have not had a significant impact on the Condensed Consolidated Interim Financial Statements at 30 June 2018.

 

New standards effective from 1 January 2018:-

• IFRS 9 "Financial Instruments", issued on 24 July 2014 (effective 1 January 2018).

• IFRS 15 "Revenue from Contracts with Customers", issued on 27 May 2014, including amendments to IFRS 15, issued on 11 September 2015 (effective 1 January 2018).]

• IFRS 16 "Leases", issued on 13 January 2016 (effective 1 January 2019).

• Clarifications to IFRS 15 "Revenue from Contracts with Customers", issued on 12 April 2014 (effective 1 January 2018).

• Amendments to IFRS 12: Classification and Measurement of Share-based Payment Transactions, issued on 20 June 2016 (effective 1 January 2018).

• Amendments to IFRS 4: Applying IFRS 9 "Financial Instruments" with IFRS 4 "Insurance Contracts", issued on 12 September 2016 (effective 1 January 2018).

• IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration, issued on 8 December 2016 (effective 1 January 2018).

• Amendments to IAS 40: Transfers of Investment Property, issued on 8 December 2016 (effective 1 January 2018).

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 2018 Unaudited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

14,012

-

(1,255)

12,757

Net investment income

(102)

15

-

(87)

Other income

-

-

344

344

Net insurance claims and loss adjustment expenses

(8,525)

-

-

(8,525)

Expenses incurred in insurance activities

(2,851)

-

(1,141)

(3,992)

Other operating expenses

-

-

(344)

(344)

Goodwill on bargain purchase

-

-

-

-

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

82

82

Profit before tax

2,534

15

(2,314)

235

 

6 months ended 30 June 2017 Unaudited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

13,738

-

(1,457)

12,281

Net investment income

446

135

-

581

Other income

-

-

255

255

Net insurance claims and loss adjustment expenses

(8,203)

-

1

(8,202)

Expenses incurred in insurance activities

(2,987)

-

(980)

(3,967)

Other operating expenses

-

-

(583)

(583)

Goodwill on bargain purchase

-

-

-

-

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

8

8

Profit before tax

2,994

135

(2,756)

373

 

12 months ended 31 December 2017 Audited

Syndicate

participation

£'000

Investment

management

£'000

Other

corporate

activities

£'000

Total

£'000

Net earned premium

29,426

-

-

29,426

Net investment income

909

101

-

1,010

Other income

(169)

-

401

232

Net insurance claims and loss adjustment expenses

(19,621)

-

1,589

(18,032)

Expenses incurred in insurance activities

(11,543)

-

(276)

(11,819)

Other operating expenses

30

-

(1,318)

(1,288)

Goodwill on bargain purchase

-

-

65

65

Impairment of goodwill

-

-

-

-

Impairment of syndicate capacity (see Note 13)

-

-

(899)

(899)

Profit before tax

(968)

101

(4,38)

(1,305)

 

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 2018 other corporate activities totalling £1,255,000 (2017:1,457,000 - 2015, 2016 and 2017 years of account) represents the 2016, 2017 and 2018 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 Statement of Comprehensive Income of the period.

4. Operating profit before goodwill and impairment

 

Underwriting year of account*

 

 

 

 

6 months ended 30 June 2018

2016 and prior

£'000

 

2017

£'000

 

2018

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

337

2,940

17,370

20,647

-

-

-

20,647

Reinsurance ceded

103

(542)

(4,319)

(4,758)

-

(1,255)

(30)

(6,043)

Net premium written

440

2,398

13,051

15,888

-

(1,255)

(30)

14,604

Net earned premium

1,764

8,511

3,767

14,042

-

(1,255)

(30)

12,757

Other income

195

(139)

3

59

-

400

(202)

257

Net insurance claims and loss adjustment expenses

(333)

(4,581)

(3,432)

(8,346)

-

-

(179)

(8,525)

Operating expenses

(608)

(2,362)

(790)

(3,760)

-

-

(576)

(4,336)

Operating profit before goodwill and impairment

1,017

1,430

(452)

1,995

-

(855)

(987)

153

Quota share adjustment

(651)

(920)

317

(1,254)

-

1,254

-

-

Operating profit before goodwill and impairment after quota share adjustment

366

510

(135)

741

-

399

(987)

153

 

Underwriting year of account*

 

 

 

 

6 months ended 30 June 2017

2015 and prior

£'000

 

2016

£'000

 

2017

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

(61)

3,374

14,513

17,826

(765)

-

-

17,061

Reinsurance ceded

164

(663)

(3,232)

(3,731)

182

(1,457)

(113)

(5,119)

Net premium written

103

2,711

11,281

14,095

(583)

(1,457)

(113)

11,942

Net earned premium

1,393

9,849

3,190

14,432

(581)

(1,457)

(113)

12,281

Other income

311

199

5

515

(70)

233

158

836

Net insurance claims and loss adjustment expenses

(95)

(5,389)

(3,059)

(8,543)

341

-

-

(8,202)

Operating expenses

(557)

(2,668)

(652)

(3,877)

184

-

(857)

(4,550)

Operating profit before goodwill and impairment

1,052

1,991

(516)

2,527

(126)

(1,224)

(812)

365

Quota share adjustment

(534)

(1,284)

361

(1,457)

-

1,457

-

-

-Operating profit before goodwill and impairment after quota share adjustment

518

707

(155)

1,070

(126)

233

(812)

365

 

 

Underwriting year of account*

 

 

 

 

12 months ended 31 December 2017

2015

and prior

£'000

 

2016

£'000

 

2017

£'000

 

Sub-total

£'000

Pre-

acquisition

£'000

Corporate

 reinsurance

£'000

Other

 corporate

£'000

Total

£'000

Gross premium written

15

4,688

32,021

36,724

(2,023)

-

-

34,701

Reinsurance ceded

128

(789)

(6,244)

(6,905)

447

-

(259)

(6,717)

Net premium written

143

3,899

25,777

29,819

(1,576)

-

(259)

27,984

Net earned premium

1,974

15,063

14,151

31,188

(1,503)

-

(259)

29,426

Other income

211

313

233

757

(98)

425

158

1,242

Net insurance claims and loss adjustment expenses

1,742

(8,524)

(14,458)

(21,240)

990

1,589

629

(18,032)

Operating expenses

(1,588)

(4,825)

(5,697)

(12,110)

649

-

(1,646)

(13,107)

Operating profit before goodwill and impairment

2,339

2,027

(5,771)

(1,405)

38

2,014

(1,118)

(471)

Quota share adjustment

(1,004)

(1,287)

3,920

1,589

-

(1,589)

-

-

-Operating profit before goodwill and impairment after quota share adjustment

1,294

741

(1,852)

183

38

425

(1,118)

(471)

 

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 2018

59,833

14,836

44,997

Increase in reserves arising from acquisition of subsidiary undertakings

-

-

-

Movement of reserves

(4,255)

(4,320)

65

Other movements

107

3,648

(3,541)

At 30 June 2018

55,685

14,164

41,521

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2018

15,916

2,354

13,562

Increase in reserves arising from acquisition of subsidiary undertakings

-

-

-

Movement of reserves

3,793

1,946

1,847

Other movements

1,064

491

573

At 30 June 2018

20,773

4,791

15,982

 

Included within other movements are the 2015 and prior years' claims reserves reinsured into the 2016 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 2017

50,087

9,674

40,413

Increase in reserves arising from acquisition of subsidiary undertakings

4,114

(1,458)

5,573

Movement of reserves

1,810

678

1,132

Other movements

(10,239)

(54)

(10,186)

At 30 June 2017

45,772

8,840

36,932

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2017

16,821

2,548

14,273

Increase in reserves arising from acquisition of subsidiary undertakings

(886)

87

(974)

Movement of reserves

432

771

(339)

Other movements

2,826

570

2,257

At 30 June 2017

19,193

3,976

15,217

 

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

 

Movement in claims outstanding

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2017

50,087

9,674

40,413

Increase in reserves arising from acquisition of subsidiary undertakings

6,390

1,467

4,923

Movement of reserves

8,761

5,028

3,733

Other movements

(5,405)

(1,333)

(4,072)

At 31 December 2017

59,833

14,836

44,997

 

Movement in unearned premium 

 

Gross

£'000

Reinsurance

£'000

Net

£'000

At 1 January 2017

16,821

2,548

14,273

Increase in reserves arising from acquisition of subsidiary undertakings

2,909

291

2,617

Movement of reserves

(1,761)

(319)

(1,442)

Other movements

(2,053)

(166)

(1,886)

At 31 December 2017

15,916

2,354

13,562

 

Included within other movements are the 2014 and prior years' claims reserves reinsured into the 2015 year of account on which the Group does not participate and currency exchange differences.

 

6. Net investment income

 

6 months ended 30 June 2018 Unaudited

£'000

 

6 months ended 30 June 2017 Unaudited £'000

12 months ended 31 December

2017 Audited

£'000

Investment income

100

526

731

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

(38)

193

652

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

(155)

(139)

(426)

Investment management expenses

-

(1)

(73)

Bank interest

6

2

126

Net investment income

(87)

581

1,010

 

7. Income tax charge

Analysis of tax charge/(credit) in the period

 

6 months ended 30 June 2018 Unaudited

£'000

 

 

6 months ended 30 June 2017 Unaudited £'000

12 months ended 31 December 2017 Audited

£'000

Income tax charge

53

179

(611)

 

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 19.25% (2017: 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 2018 Unaudited

 

 

6 months ended 30 June 2017 Unaudited

 

12 months ended 31 December 2017 Audited

 

Profit for the period after tax attributable to ordinary shareholders

£182,000

£297,000

£(694,000)

Weighted average number of shares in issue

14,604,240

14,604,240

14,604,240

Basic earnings per share

1.25p

2.03p

(4.75)p

Diluted earnings per share

1.20p

2.03p

(4.74)p

 

9. Dividends paid or proposed

A final dividend of 1.5p per share was proposed and agreed at the AGM on 27 June 2018 (2017: 5.5p), amounting to a total of £219,000. The dividend payment was settled on 6 July 2018.

10. Investments in subsidiaries

 

30 June

2018

£'000

30 June

2017

£'000

31 December

2017

£'000

Total

15,456

23,015

15,456

 

At 30 June 2018 the Company owned 100% of the following companies and limited liability partnerships, either directly or indirectly. All subsidiaries are incorporated in England and Wales.

Company or partnership

Direct/indirect interest

30 June 2018

ownership

30 June 2017

 ownership

31 December 2017

 ownership

Principal activity

Hampden Corporate Member Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 365) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 605) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 321) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 917) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 229) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 518) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 804) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Halperin Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Bernul Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Dumasco Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 311) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 402) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Updown Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 507) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No. 76) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Kempton Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Devon Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nameco (No 346) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Pooks Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Charmac Underwriting Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nottus (No 51) Limited

Direct

100%

100%

100%

Lloyd's of London corporate vehicle

 

Chapman Underwriting Limited

Direct

100%

-

100%

Lloyd's of London corporate vehicle

 

RBC CEES Trustees Limited

Direct

100%

-

100%

Joint Share Ownership Plan

 

Nomina No 035 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 342 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 380 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Nomina No 372 LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Salviscount LLP

Indirect

100%

100%

100%

Lloyd's of London corporate vehicle

 

Inversanda LLP

Indirect

100%

-

100%

Lloyd's of London corporate vehicle

 

Helios UTG Partner Limited

Direct

100%

100%

100%

Corporate partner

 

 

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

There were no acquisitions during this period.

For details of all new acquisitions made during the post balance sheet period refer to note 17.

11. Share capital and share premium

Allotted, called up and fully paid

 

 

Number of shares

Ordinary share

capital

£'000

Partly paid ordinary share capital

£'000

Share

premium

£'000

Total

£'000

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

14,604,240

1,460

-

15,387

16,847

Ordinary shares of 10p each and share premium at 31 December 2017

15,104,240

1,460

50

15,387

16,897

Ordinary shares of 10p each and share premium at 30 June 2018

15,104,240

1,460

50

15,387

16,897

 

The party paid ordinary shares are not entitled to dividend distribution rights during the period.

12. 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 2018 are set out below:

Company

30 June 2018 Unaudited

£'000

30 June 2017 Unaudited £'000

31 December 2017

£'000

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

 

 

 

Hampden Corporate Member Limited

(103)

(363)

136

Nameco (No. 365) Limited

(61)

(54)

(50)

Nameco (No. 605) Limited

(153)

(282)

(64)

Nameco (No. 321) Limited

(9)

(73)

(10)

Nameco (No. 917) Limited

6,483

3,989

7,647

Nameco (No. 229) Limited

(10)

(4)

(7)

Nameco (No. 518) Limited

(40)

(81)

(9)

Nameco (No. 804) Limited

11

(69)

188

Halperin Underwriting Limited

(29)

(43)

(18)

Bernul Limited

13

2

10

Dumasco Limited

(43)

(194)

(44)

Nameco (No. 311) Limited

(37)

(115)

(34)

Nameco (No. 402) Limited

(194)

(275)

(191)

Updown Underwriting Limited

53

525

80

Nameco (No. 507) Limited

32

(252)

(4)

Nameco (No. 76) Limited

(41)

(90)

55

Kempton Underwriting Limited

62

18

154

Devon Underwriting Limited

220

105

47

Nameco (No 346) Limited

(93)

(703)

(321)

Pooks Limited

464

-

346

Charmac Underwriting Limited

(378)

511

(513)

Nottus (No 51) Limited

232

(316)

230

Chapman /underwriting Limited

590

-

358

Nomina No 035 LLP

-

-

-

Nomina No 342 LLP

-

-

-

Nomina No 380 LLP

-

-

-

Nomina No 372 LLP

-

-

-

Salviscount LLP

-

-

-

Inversanda LLP

-

-

-

Helios UTG Partner Limited

1,113

735

1,241

RBC CEES Trustee Limited

50

-

50

Total (note 15)

8,132

2,971

9,285

 

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 £160,000 (2017: £154,000 ).

13. Related party transactions

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 2018 are set out below:

Company

30 June 2018 Unaudited

£'000

30 June 2017 Unaudited £'000

31 December

2017

£'000

Hampden Corporate Member Limited

-

-

-

Nameco (No. 365) Limited

-

-

-

Nameco (No. 605) Limited

-

-

-

Nameco (No. 321) Limited

-

-

-

Nameco (No. 917) Limited

58

70

70

Nameco (No. 229) Limited

-

-

-

Nameco (No. 518) Limited

-

-

-

Nameco (No. 804) Limited

-

-

-

Halperin Underwriting Limited

-

-

-

Bernul Limited

-

-

-

Dumasco Limited

-

-

-

Nameco (No. 311) Limited

10

13

13

Nameco (No. 402) Limited

11

14

14

Updown Underwriting Limited

-

-

-

Nameco (No. 507) Limited

15

24

24

Nameco (No. 76) Limited

2

13

13

Kempton Underwriting Limited

2

3

3

Devon Underwriting Limited

7

8

8

Nameco (No 346) Limited

44

49

49

Pooks Limited

6

1

1

Charmac Underwriting Limited

22

25

25

Nottus (No 51) Limited

13

14

14

Chapman Underwriting Limited

-

-

15

Nomina No 035 LLP

-

-

-

Nomina No 342 LLP

-

-

-

Nomina No 380 LLP

-

19

19

Nomina No 372 LLP

-

15

15

Salviscount LLP

18

21

21

Inversanda LLP

-

-

9

Total

208

289

313

 

The Group entered into quota share reinsurance contracts for the 2016, 2017 and 2018 years of account with protected cell companies of Hampden Insurance PCC (Guernsey) Limited. The Limited Liability Vehicles' underwriting year of account quota share participations are set out below:

Company or partnership

2016

2017

2018

Hampden Corporate Member Limited

-

-

-

Nameco (No. 365) Limited

-

-

-

Nameco (No. 605) Limited

-

-

-

Nameco (No. 321) Limited

-

-

-

Nameco (No. 917) Limited

70%

70%

70%

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

70%

70%

70%

Nameco (No. 346) Limited

70%

70%

70%

Pooks Limited

-

70%

70%

Charmac Underwriting Limited

-

70%

70%

Nottus (No 51) Limited

-

70%

70%

Chapman Underwriting Limited

-

-

70%

Helios UTG Partner Limited

-

-

-

Nomina No 035 LLP

-

-

-

Nomina No 342 LLP

-

-

-

Nomina No 380 LLP

-

-

-

Nomina No 372 LLP

-

-

-

Salviscount LLP

-

70%

70%

Inversanda 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. 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 £1,474,000 (2017: £2,910,000) 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

2015

£

2016]

£

2017

£

2018

£

33

Hiscox Syndicates Limited

2,871,019

3,064,799

3,580,867

5,297,171

218

ERS Syndicate Management Limited

1,428,916

1,546,728

2,035,707

3,620,710

308

Tokio Marine Kiln Syndicates Limited

184,528

100,000

100,000

-

386

QBE Underwriting Limited

796,734

885,658

672,969

747,513

510

Tokio Marine Kiln Syndicates Limited

5,087,827

5,362,274

5,809,920

6,116,592

557

Tokio Marine Kiln Syndicates Limited

553,433

575,567

580,415

600,201

609

Atrium Underwriters Limited

3,142,475

3,365,822

3,422,705

3,905,698

623

Beazley Furlonge Limited

3,460,226

4,167,460

5,013,065

6,147,506

727

S A Meacock & Company Limited

1,011,479

1,038,878

1,046,360

1,070,909

958

Canopius Managing Agents Limited

268,646

-

-

-

1176

Chaucer Syndicates Limited

556,986

661,905

722,837

949,535

1200

Argo Managing Agency Limited

293,819

267,554

77,143

-

1729

Asta Managing Agency Limited

123,314

65,468

24,334

-

1884

Charles Taylor Managing Agency Limited

25,000

-

-

-

1910

Asta Managing Agency Limited

-

1,257,270

-

-

1991

R&O Managing Agency Limited

89,245

26,001

-

-

2010

Cathedral Underwriting Limited

891,939

971,014

991,475

1,068,231

2014

Pembroke Managing Agency Limited

1,600,287

1,632,349

1,027,113

-

2121

Argenta Syndicate Management Limited

260,341

-

-

-

2525

Asta Managing Agency Limited

173,799

217,715

219,859

301,196

2689

Asta Managing Agency Limited

-

-

835,100

-

2791

Managing Agency Partners Limited

3,923,678

4,128,424

4,179,131

4,390,188

2988

Brit Syndicates Limited

-

-

47,511

-

4444

Canopius Managing Agents Limited

-

101,429

-

548,447

5820

ANV Syndicates Limited

331,535

154,479

-

-

5886

Asta Managing Agency Limited

-

-

-

33,211

6103

Managing Agency Partners Limited

237,410

265,895

299,357

1,168,071

6104

Hiscox Syndicates Limited

1,357,666

1,324,201

950,646

954,481

6105

Ark Syndicate Management Limited

695,838

-

-

-

6107

Beazley Furlonge Limited

453,737

453,737

635,222

950,004

6111

Catlin Underwriting Agencies Limited

1,659,850

1,902,876

-

-

6117

Argo Managing Agency Limited

948,091

1,885,281

2,649,897

2,810,000

7200

Members' agent pooling arrangement

372,157

204,504

163,920

-

7201

Members' agent pooling arrangement

1,896,583

1,046,079

866,838

-

7202

Members' agent pooling arrangement

674,602

378,539

313,269

-

7203

Members' agent pooling arrangement

218,791

101,811

97,098

-

7211

Members' agent pooling arrangement

272,262

175,265

192,184

-

7215

Members' agent pooling arrangement

150,468

150,917

164,129

-

7217

Members' agent pooling arrangement

246,987

260,707

274,428

332,876

7227

Members' agent pooling arrangement

42,705

80,070

3,613

4,817

Total

 

36,302,373

37,820,676

36,997,112

41,017,357

 

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 2018

30 June 2017

31 December 2017

Group

£'000

Syndicate

£'000

Total

£'000

Group

£'000

Syndicate

£'000

Total

£'000

Group

£'000

Syndicate

£'000

Total

£'000

Assets

 

 

 

 

 

 

 

 

 

Intangible assets

12,257

-

12,257

12,495

-

12,495

12,175

-

12,175

Financial assets at fair value through profit or loss

8,124

33,587

41,711

10,302

33,584

43,886

10,489

37,585

48,074

Reinsurance assets:

 

 

 

 

 

 

 

 

 

- reinsurers' share of claims outstanding

449

13,715

14,164

-

8,840

8,840

-

14,836

14,836

- reinsurers' share of unearned premium

-

4,791

4,791

-

3,976

3,976

-

2,354

2,354

Other receivables, including insurance and reinsurance receivables

3,772

32,407

36,179

2,315

26,652

28,967

6,669

26,280

32,949

Deferred acquisition costs

-

4,382

4,382

-

4,218

4,218

-

4,420

4,420

Prepayments and accrued income

260

382

642

68

296

364

-

268

268

Cash and cash equivalents

4,139

3,900

8,039

2,414

4,439

6,853

1,078

1,766

2,844

Total assets

29,001

93,164

122,165

27,594

82,005

109,597

30,411

87,509

117,920

Liabilities

 

 

 

 

 

 

 

 

 

Insurance liabilities:

 

 

 

 

 

 

 

 

 

- claims outstanding

-

55,685

55,685

-

45,772

45,772

-

59,833

59,833

- unearned premium

-

20,773

20,773

-

19,193

19,193

-

15,916

15,916

Deferred income tax liabilities

2,094

-

2,094

2,943

-

2,943

2,963

-

2,963

Borrowings

-

-

-

-

-

-

1,094

-

1,094

Other payables, including insurance and reinsurance payables

1,678

19,831

21,509

1,915

13,358

15,273

3,397

12,161

15,558

Accruals and deferred income

826

305

1,131

3,988

429

4,417

993

553

1,546

Total liabilities

4,598

96,594

101,192

8,846

78,752

87,598

8,447

88,436

96,910

Equity attributable to owners of the Parent

 

 

 

 

 

 

 

 

 

Share capital

1,510

-

1,510

1,460

-

1,460

1,510

-

1,510

Share premium

15,387

-

15,387

15,387

-

15,387

15,387

-

15,387

Other reserves

(50)

-

(50)

-

-

-

(50)

-

(50)

Retained earnings

7,556

(3,430)

4,126

1,901

3,253

5,154

5,117

(954)

4,163

Total equity

24,403

(3,430)

20,973

18,748

3,253

22,001

21,964

(954)

21,010

Total liabilities and equity

29,001

93,164

122,165

27,594

82,005

109,599

30,412

87,509

117,920

 

17. Events after the financial reporting period

 

Fyshe Underwriting LLP

 

On 31 August 2018, Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Fyshe Underwriting LLP for a total consideration of £69,000. Fyshe Underwriting LLP is incorporated in England and Wales and is a corporate member of Lloyds.

After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the provisional fair value of the net assets at the date of acquistion was £92,000 giving rise to Negative Goodwill of £23,000 on acquisition. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

-

154

154

Financial assets at fair value through profit or loss

506

-

506

Reinsurance assets:

 

 

 

- reinsurers' share of claims outstanding

249

-

249

- reinsurers' share of unearned premium

36

-

36

Other receivables, including insurance and reinsurance receivables

320

-

320

Deferred acquisition costs

64

-

64

Prepayments and accrued income

2

-

2

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

89

-

89

Insurance liabilities:

 

 

 

- claims outstanding

(916)

-

(916)

- unearned premium

(221)

-

(221)

Deferred income tax liabilities

-

(29)

(29)

Other payables, including insurance and reinsurance payables

(142)

-

(142)

Accruals and deferred income

(20)

-

(20)

Net assets acquired

(33)

(125)

92

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

69

-

69

Total consideration

69

-

69

 

 

 

 

Goodwill

102

-

(23)

 

 

 

2016 year of account

2017 year of account

2018 year of account

Capacity acquired

495,450

486,041

500,150

 

 

Nomina No 505 LLP

 

On 25 September 2018, Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Nomina No 505 LLP for a total consideration of £318,000. Nomina No 505 LLP is incorporated in England and Wales and is a corporate member of Lloyds.

After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the provisional fair value of the net assets at the date of acquistion was £254,000 giving rise to positive Goodwill of £64,000 on acquisition. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

 

Carrying value

£'000

Adjustments

£'000

Fair value

£'000

Intangible assets

4

214

218

Financial assets at fair value through profit or loss

815

-

815

Reinsurance assets:

-

-

-

- reinsurers' share of claims outstanding

388

-

388

- reinsurers' share of unearned premium

53

-

53

Other receivables, including insurance and reinsurance receivables

515

217

732

Deferred acquisition costs

118

-

118

Prepayments and accrued income

6

-

6

Financial assets at fair value through profit or loss

 

 

 

Cash and cash equivalents

116

-

116

Insurance liabilities:

 

 

 

- claims outstanding

(1,427)

-

(1,427)

- unearned premium

(395)

-

(395)

Deferred income tax liabilities

-

(82)

(82)

Other payables, including insurance and reinsurance payables

(263)

-

(263)

Accruals and deferred income

(25)

-

(25)

Net assets acquired

(95)

349

254

 

 

 

 

Satisfied by:

 

 

 

Cash and cash equivalents

318

-

318

Total consideration

318

-

318

 

 

 

 

Goodwill

413

-

64

 

 

 

2016 year of account

2017 year of account

2018 year of account

Capacity acquired

796,755

852,255

922,937

 

Share buy back

 

Since the balance sheet date, the Company has started a share buyback programme. The Company has purchased 136,778 shares for a total consideration of £171,000 as the time of these Financial Statements being signed. These shares will be held in Treasury. This brings the total shares in issue at (excluding Treasury shares) to 14,467,462 (note 11).

 

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR QDLFLVKFZBBF
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