Last checked at 29 Sep 2014 07:00
29 September 2014
Helios Underwriting plc
("Helios Underwriting" or the "Company")
Interim results for the six months ended 30 June 2014
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 2014.
Chairman's Statement
This has been another good period where we have utilised the capital released by the initial quota share and as a result have been able to continue to increase our underwriting capacity to £21.3 million at the period end through the acquisition of Nomina No 380 LLP on 16 January 2014 for £557,000, Bernul Limited on 27 March 2014 for £823,000 and Nomina No 372 LLP on 2 May 2014 for £480,000. The open years of HUW owned vehicles have improved to a degree that had been anticipated at the time of purchase. We have also seen an increase in the number of vehicles that are available for sale, which may lead to lower prices in due course and supports our ongoing strategy to increase underwriting capacity through acquisition.
The Parent Company's adjusted net assets plus Humphrey & Co valuation of the Group's underwriting subsidiaries at the period end is £14.3m or £1.69 per share based on current legislation.
Market conditions over the period continue to worsen. We have now opted for an increase to the quota share for the 2014 underwriting year of account from 50% to 70% as a result. We have included two further reinsurers thereby increasing our diversity.
Sir Michael Oliver
Non-executive Chairman
Condensed Consolidated Statement of Financial Position
At 30 June 2014
30 June 2014 | 30 June 2013 | 31 December 2013 | ||||
Unaudited | Unaudited | Audited | ||||
Note | £'000 | £'000 | £'000 | |||
Assets | ||||||
Intangible assets | 3,828 | 1,571 | 2,929 | |||
Deferred income tax assets | - | - | - | |||
Reinsurance share of insurance liabilities | ||||||
- Reinsurers' share of outstanding claims | 3 | 4,221 | 3,658 | 4,154 | ||
- Reinsurers' share of unearned premiums | 3 | 1,637 | 1,379 | 800 | ||
Other receivables, including insurance receivables | 14,438 | 9,285 | 11,554 | |||
Prepayments and accrued income | 2,307 | 1,577 | 1,569 | |||
Financial assets at fair value | 8 | 21,909 | 19,817 | 22,213 | ||
Cash and cash equivalents | 3,368 | 2,270 | 1,066 | |||
Total assets | 51,708 | 39,557 | 44,285 | |||
Liabilities | ||||||
Insurance liabilities: | ||||||
- Claims outstanding | 3 | 23,668 | 17,487 | 21,596 | ||
- Unearned premiums | 3 | 9,415 | 6,694 | 5,968 | ||
Deferred income tax liabilities | 1,603 | 978 | 1,656 | |||
Other payables, including insurance payables | 5,909 | 4,108 | 4,116 | |||
Accruals and deferred income | 1,515 | 733 | 1,123 | |||
Total liabilities | 42,110 | 30,000 | 34,459 | |||
Shareholders' equity | ||||||
Share capital | 9 | 853 | 853 | 853 | ||
Share premium | 9 | 6,996 | 6,996 | 6,996 | ||
Retained earnings | 10 | 1,749 | 1,708 | 1,977 | ||
Total shareholders' equity | 9,598 | 9,557 | 9,826 | |||
Total liabilities and shareholders' equity | 51,708 | 39,557 | 44,285 |
Condensed Consolidated Income Statement
Six months ended 30 June 2014
6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 12 months ended 31 December 2013 | ||||
Unaudited | Unaudited | Audited | ||||
Note | £'000 | £'000 | £'000 | |||
Gross premium written | 10,183 | 7,158 | 11,938 | |||
Reinsurance premium ceded | (2,008) | (1,634) | (2,251) | |||
Net premiums written | 8,175 | 5,524 | 9,687 | |||
Change in unearned gross premium provision | (2,435) | (1,626) | (29) | |||
Change in unearned reinsurance premium provision | 686 | 689 | 43 | |||
(1,749) | (937) | 14 | ||||
Net earned premium | 2 | 6,426 | 4,587 | 9,701 | ||
Net investment income | 4 | 268 | 24 | 208 | ||
Other underwriting income | - | - | - | |||
Other income | - | 110 | - | |||
Revenue | 6,694 | 4,721 | 9,909 | |||
Gross claims paid | (3,291) | (2,855) | (5,867) | |||
Reinsurance share of gross claims paid | 593 | 575 | 1,134 | |||
Claims paid, net of reinsurance | (2,698) | (2,280) | (4,733) | |||
Change in provision for gross claims | (464) | 4 | 1,148 | |||
Reinsurance share of change in provision for gross claims | (328) | (95) | (478) | |||
Net change in provision for claims | (792) | (91) | 670 | |||
Net insurance claims and loss adjustment expenses | 2 | (3,490) | (2,371) | (4,063) | ||
Expenses incurred in insurance activities | 2 | (2,203) | (1,300) | (4,042) | ||
Other operating expenses | 2 | (477) | (222) | (524) | ||
Operating expenses | (2,680) | (1,522) | (4,566) | |||
Operating profit before goodwill | 2 | 524 | 828 | 1,280 | ||
Goodwill on bargain purchase | 11 | 115 | - | 133 | ||
Impairment of goodwill | 11 | (5) | - | (98) | ||
Amortisation of syndicate capacity | (438) | (226) | (462) | |||
Profit before tax | 196 | 602 | 853 | |||
Income tax charge | 5 | (40) | (140) | (122) | ||
Profit attributable to equity shareholders | 10 | 156 | 462 | 731 | ||
Earnings per share attributable to equity shareholders | ||||||
Basic and diluted | 6 | 1.83p | 5.42p | 8.57p |
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2014
6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 12 months ended 31 December 2013 | |||
Unaudited | Unaudited | Audited | |||
£'000 | £'000 | £'000 | |||
Cash flow from operating activities | |||||
Results of operating activities | 196 | 602 | 853 | ||
Interest received | (3) | - | (2) | ||
Investment income | (240) | (49) | (381) | ||
Goodwill on bargain purchase | (115) | - | (133) | ||
Impairment of goodwill | 5 | - | 98 | ||
Profit on sale of intangible assets | - | - | - | 8 | |
Amortisation of intangible assets | 438 | 226 | 462 | ||
Change in fair value of investments | 41 | 93 | 137 | ||
Changes in working capital: | |||||
(Increase)/decrease in other receivables | (1,214) | (303) | 2,687 | ||
Increase(Decrease) in other payables | 978 | (479) | (1,336) | ||
Net increase in technical provisions | 274 | (381) | (3,273) | ||
Income tax paid | (49) | (93) | (86) | ||
Net cash inflow/(outflow) from operating activities | 311 | (384) | (966) | ||
Cash flows from investing activities | |||||
Interest received | 3 | - | 2 | ||
Investment income | 240 | 49 | 381 | ||
Purchase of intangible assets | - | - | (3) | ||
Net inflow of financial assets at fair value | 3,749 | 1,161 | 3,276 | ||
Acquisition of subsidiary, net of cash acquired | (1,617) | - | (3,070) | ||
Proceeds from disposal of intangible assets | - | - | 2 | ||
Net cash used in investing activities | 2,375 | 1,210 | 588 | ||
Cash flows from financing activities | |||||
Dividends paid | (384) | - | - | ||
Net cash used in financing activities | (384) | - | - | ||
Net increase/(decrease) in cash and cash equivalents | 2,302 | 826 | (378) | ||
Cash and cash equivalents at beginning of period | 1,066 | 1,444 | 1,444 | ||
Cash, cash equivalents and bank overdrafts at end of period | 3,368 | 2,270 | 1,066 |
Condensed Statement of Changes in Shareholders' Equity
Six months ended 30 June 2014
For the six months ended 30 June 2014
Ordinary share capital | Share Premium | Retained Earnings | Total | ||
£'000 | £'000 | £'000 | £'000 | ||
At 1 January 2014 | 853 | 6,996 | 1,977 | 9,826 | |
Profit for the period attributable to equity shareholders | - | - | 156 | 156 | |
Dividends paid | - | - | (384) | (384) | |
At 30 June 2014 | 853 | 6,996 | 1,749 | 9,598 |
For the six months ended 30 June 2013
Ordinary share capital | Share Premium | Retained Earnings | Total | ||
£'000 | £'000 | £'000 | £'000 | ||
At 1 January 2013 | 853 | 6,996 | 1,246 | 9,095 | |
Profit for the period attributable to equity shareholders | - | - | 462 | 462 | |
At 30 June 2013 | 853 | 6,996 | 1,708 | 9,557 |
For the twelve months ended 31 December 2013
Ordinary share capital | Share Premium | Retained Earnings | Total | ||
£'000 | £'000 | £'000 | £'000 | ||
At 1 January 2013 | 853 | 6,996 | 1,246 | 9,095 | |
Profit for the year attributable to equity shareholders | - | - | 731 | 731 | |
At 31 December 2013 | 853 | 6,996 | 1,977 | 9,826 |
Notes to the Interim Financial Statements
Six months ended 30 June 2014
1. 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 2014.
The Condensed Consolidated Interim Financial Statements incorporate the results of Helios Underwriting plc, 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 Limited, Bernul Limited, Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 380 LLP, Nomina No 372 LLP and Helios UTG Partner Limited.
The Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2014 and 2013 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 2013.
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 2013. The new standards and amendments to standards and interpretations effective after 1 January 2014, as disclosed in the Annual Report for the year ended 31 December 2013, have not had a significant impact on the Condensed Consolidated Interim Financial Statements at 30 June 2014.
2. Segmental information
The Group has three primary segments which represent the primary way in which the Group is managed:
· Syndicate participation;
· Investment management;
· Other corporate activities.
6 months ended 30 June 2014 Unaudited | Syndicate participation | Investment management | Other corporate activities | Total |
£'000 | £'000 | £'000 | £'000 | |
Net earned premium | 6,502 | - | (76) | 6,426 |
Net investment income | 244 | 24 | - | 268 |
Other income | - | - | - | - |
Net insurance claims and loss adjustment expenses | (3,490) | - | - | (3,490) |
Expenses incurred in insurance activities | (2,030) | - | (173) | (2,203) |
Other operating expenses | - | - | (477) | (477) |
Goodwill on bargain purchase | - | - | 115 | 115 |
Impairment of goodwill | - | - | (5) | (5) |
Amortisation of syndicate capacity | - | - | (438) | (438) |
Profit before tax | 1,226 | 24 | (1,054) | 196 |
6 months ended 30 June 2013 Unaudited | Syndicate participation | Investment management | Other corporate activities | Total |
£'000 | £'000 | £'000 | £'000 | |
Net earned premium | 4,587 | - | - | 4,587 |
Net investment income | 21 | 3 | - | 24 |
Other income | - | - | 110 | 110 |
Net insurance claims and loss adjustment expenses | (2,397) | - | 26 | (2,371) |
Expenses incurred in insurance activities | (1,300) | - | - | (1,300) |
Other operating expenses | (139) | - | (83) | (222) |
Goodwill on bargain purchase | - | - | - | - |
Impairment of goodwill | - | - | - | - |
Amortisation of syndicate capacity | - | - | (226) | (226) |
Profit before tax | 772 | 3 | (173) | 602 |
12 months ended 31 December 2013 Audited | Syndicate participation | Investment management | Other corporate activities | Total |
£'000 | £'000 | £'000 | £'000 | |
Net earned premium | 9,723 | - | (22) | 9,701 |
Net investment income | 247 | (39) | - | 208 |
Other income | - | - | - | - |
Net insurance claims and loss adjustment expenses | (4,063) | - | - | (4,063) |
Expenses incurred in insurance activities | (4,042) | - | - | (4,042) |
Other operating expenses | 51 | - | (575) | (524) |
Goodwill on bargain purchase | - | - | 133 | 133 |
Impairment of goodwill | - | - | (98) | (98) |
Amortisation of syndicate capacity | - | - | (462) | (462) |
Profit before tax | 1,916 | (39) | (1,024) | 853 |
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 2014 other corporate activities totalling (£76,000) (2013: (£22,000) includes the net Group quota share reinsurance premium payable to Hampden Insurance PCC (Guernsey) Limited - Cell 6 for the 2013 and 2014 underwriting years of accounts of (£26,000) (2013: £22,000) and the Stop loss premium payable to Hampden Insurance PCC (Guernsey) Limited - Cell 7 for the 2014 underwriting year of account of (£50,000) (2013: £nil).
Syndicate participation represents the Groups direct share of the underlying syndicate's results for the period.
3. Insurance liabilities and reinsurance balances
Movement in claims outstanding
Gross | Reinsurance | Net | |||
| £'000 | £'000 | £'000 | ||
At 1 January 2014 | 21,596 | 4,154 | 17,442 | ||
Increase in reserves arising from acquisition of subsidiary undertaking | 4,198 | (818) | 5,016 | ||
Movement of reserves | 464 | (328) | 792 | ||
Other movements | (2,590) | 1,213 | (3,803) | ||
At 30 June 2014 | 23,668 | 4,221 | 19,447 |
Movement in unearned premium
Gross | Reinsurance | Net | |||
£'000 | £'000 | £'000 | |||
At 1 January 2014 | 5,968 | 800 | 5,168 | ||
Increase in reserves arising from acquisition of subsidiary undertaking | 1,108 | (147) | 1,255 | ||
Movement of reserves | 2,435 | 686 | 1,749 | ||
Other movements | (96) | 298 | (394) | ||
At 30 June 2014 | 9,415 | 1,637 | 7,778 |
Included within other movements are the 2011 and prior years' reinsured into the 2012 year of account on which the Group does not participate and currency exchange differences.
4. Net investment income
6 months ended 30 June | 6 months ended 30 June | 12 months ended 31 December | |||
2014 | 2013 | 2013 | |||
Unaudited | Unaudited | Audited | |||
£'000 | £'000 | £'000 | |||
Investment income | 240 | 49 | 381 | ||
Realised gains on financial investments at fair value through income statement | 2 | 129 | 5 | ||
Unrealised gains/(losses) on financial investments at fair value through income statement | 23 | (144) | (137) | ||
Investment management expenses | - | (10) | (43) | ||
Bank interest | 3 | - | 2 | ||
Net investment income | 268 | 24 | 208 |
5. Income tax expense
6 months ended 30 June | 6 months ended 30 June | 12 months ended 31 December | |||
2014 | 2013 | 2013 | |||
Unaudited | Unaudited | Audited | |||
£'000 | £'000 | £'000 | |||
Income tax expense | (40) | (140) | (122) |
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% (2013: 23.25%). Material disallowed terms have been adjusted for in the income tax calculation.
6. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
The Group has no dilutive potential ordinary shares.
Earnings per share have been calculated in accordance with IAS 33.
Reconciliation of the earnings and weighted average number of shares used in the calculation is set out below.
6 months ended 30 June | 6 months ended 30 June | 12 months ended 31 December | |||
2014 | 2013 | 2013 | |||
Unaudited | Unaudited | Audited | |||
Profit for the period | £156,000 | £462,000 | £731,000 | ||
Weighted average number of shares in issue | 8,526,948 | 8,526,948 | 8,526,948 | ||
Basic and diluted earnings per share (p) | 1.83p | 5.42p | 8.57p |
7. Dividends
During the period dividends of 4.5p per share (2013 - Nil) were paid, totalling £384,000 (see note 10).
8. Financial assets at fair value
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
As at 30 June 2014, the Group held £18,408,000 (31 December 2013: £17,709,000) Level 1 Financial Assets and £3,501,000 (31 December 2013: £2,108,000) Level 2 Financial Assets. The Group has no level 3 investments (31 December 2013 £Nil).
9. Share capital and share premium
| Allotted, called up and fully paid | Ordinary Share Capital £'000 | Share Premium £'000 | Total £'000 | |
| 8,526,948 ordinary shares of 10p each and share premium at 30 June 2013 | 853 | 6,996 | 7,849 | |
| 8,526,948 ordinary shares of 10p each and share premium at 31 December 2013 | 853 | 6,996 | 7,849 | |
8,526,948 ordinary shares of 10p each and share premium at 30 June 2014 | 853 | 6,996 | 7,849 | |
10. Retained earnings
30 June | 30 June | 31 December | |||
2014 | 2013 | 2013 | |||
Unaudited | Unaudited | Audited | |||
£'000 | £'000 | £'000 | |||
Group | |||||
At 1 January 2014 | 1,977 | 1,246 | 1,246 | ||
Profit attributable to equity shareholders | 156 | 462 | 731 | ||
Dividends paid | (384) | - | - | ||
At 30 June 2014 | 1,749 | 1,708 | 1,977 |
11. Acquisition of limited liability vehicles
In order to increase the Group's underwriting capacity, the Company has, since the balance sheet date, acquired 100% of the voting rights (either directly or indirectly) of the following Limited Liability Vehicles:
Nomina No 380 LLP
On 16 January 2014 Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Nomina No 380 LLP for a total consideration of £557,000. Nomina No 380 LLP is incorporated in England and Wales and is a member of Lloyd's.
The acquisition has been accounted for using the purchase 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 £622,000. Negative goodwill of £65,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. 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 | 442 | 82 | 524 |
Reinsurance assets: | |||
- reinsurers' share of claims outstanding | 279 | - | 279 |
- reinsurers' share of unearned premium | 109 | - | 109 |
Other receivables, including insurance receivables | 724 | - | 724 |
Prepayments and accrued income | 104 | - | 104 |
Financial assets at fair value | 1,228 | - | 1,228 |
Cash and cash equivalents | 81 | - | 81 |
Insurance liabilities: | |||
- claims outstanding | (1,451) | - | (1,451) |
- unearned premiums | (579) | - | (579) |
Deferred income tax liabilities | - | (55) | (55) |
Other payables, including insurance payables | (293) | - | (293) |
Accruals and deferred income | (49) | - | (49) |
Net assets acquired | 595 | 27 | 622 |
Satisfied by: | |||
Cash and cash equivalents | 557 | - | 557 |
Negative goodwill | (38) | (27) | (65) |
Bernul Limited
On 27 March 2014 Helios Underwriting plc acquired 100% of the issued share capital of Bernul Limited for a total consideration of £823,000. Bernul Limited is incorporated in England and Wales and is a corporate member of Lloyd's.
The acquisition has been accounted for using the purchase 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 £818,000. Goodwill of £5,000 arose 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 | 1 | 322 | 323 |
Reinsurance assets: | |||
- reinsurers' share of claims outstanding | 147 | - | 147 |
- reinsurers' share of unearned premium | 59 | - | 59 |
Other receivables, including insurance receivables | 768 | - | 768 |
Prepayments and accrued income | 80 | - | 80 |
Financial assets at fair value | 1,056 | - | 1,056 |
Cash and cash equivalents | 79 | - | 79 |
Insurance liabilities: | |||
- claims outstanding | (970) | - | (970) |
- unearned premiums | (358) | - | (358) |
Deferred income tax liabilities | (52) | (64) | (116) |
Other payables, including insurance payables | (215) | - | (215) |
Accruals and deferred income | (35) | - | (35) |
Net assets acquired | 560 | 258 | 818 |
Satisfied by: | |||
Cash and cash equivalents | 823 | - | 823 |
Goodwill | 263 | 258 | 5 |
Nomina No 372 LLP
On 2 May 2014 Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Nomina No 372 LLP for £480,000. Nomina No 372 LLP is incorporated in England and Wales and is a member of Lloyd's.
The acquisition has been accounted for using the purchase 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 £530,000. Negative goodwill of £50,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. 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 | 380 | 62 | 442 |
Reinsurance assets: | |||
- reinsurers' share of claims outstanding | 231 | 231 | |
- reinsurers' share of unearned premium | 80 | 80 | |
Other receivables, including insurance receivables | 521 | 521 | |
Prepayments and accrued income | 95 | 95 | |
Financial assets at fair value | 1,007 | 1,007 | |
Cash and cash equivalents | 84 | 84 | |
Insurance liabilities: | |||
- claims outstanding | (1,173) | (1,173) | |
- unearned premiums | (457) | (457) | |
Deferred income tax liabilities | - | (40) | (40) |
Other payables, including insurance payables | (213) | (213) | |
Accruals and deferred income | (47) | (47) | |
Net assets acquired | 508 | 22 | 530 |
Satisfied by: | |||
Cash and cash equivalents | 480 | - | 480 |
Negative goodwill | (28) | 22 | (50) |
12. Related party transactions
Helios Underwriting plc has provided inter-company loans to its subsidiaries which are repayable on three months' notice provided it does not jeopardise each subsidiary'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 2014 are set out below:
30 June | 30 June | 31 December | |||
2014 | 2013 | 2013 | |||
Unaudited | Unaudited | Audited | |||
Company | £'000 | £'000 | £'000 | ||
Balances due from/(to) Group companies at the period end: | |||||
Hampden Corporate Member Limited | 807 | 3,109 | 1,257 | ||
Nameco (No. 365) Limited | 65 | 330 | 136 | ||
Nameco (No. 605) Limited | 210 | 1,092 | 362 | ||
Nameco (No. 321) Limited | 74 | 321 | 134 | ||
Nameco (No. 917) Limited | 569 | 1,449 | 573 | ||
Nameco (No. 229) Limited | 42 | 355 | 110 | ||
Nameco (No. 518) Limited | (17) | (163) | 34 | ||
Nameco (No. 804) Limited | 298 | - | 1,429 | ||
Halperin Limited | (184) | - | - | ||
Nomina No 035 LLP | - | - | - | ||
Nomina No 342 LLP | - | - | - | ||
Nomina No 380 LLP | - | - | - | ||
Bernul Limited | (263) | - | - | ||
Nomina No 372 LLP | - | - | - | ||
Helios UTG Partner Limited | 2,143 | - | 1,238 | ||
Total | 3,744 | 6,493 | 5,273 |
The Limited Liability Vehicles are 100% subsidiaries of the Company (either directly or indirectly) and 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 £66,250 (2013: £42,750).
The Limited Liability Vehicles have entered into a member's 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, plus a fee which will vary depending upon the total level of Group underwriting capacity. In addition, some 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 2014 and 2013 are set out below:
30 June | 30 June | 31 December | ||
2014 | 2013 | 2013 | ||
Unaudited | Unaudited | Audited | ||
Company | £'000 | £'000 | £'000 | |
Hampden Corporate Member Limited | 38 | 20 | 20 | |
Nameco (No. 365) Limited | 7 | 5 | 5 | |
Nameco (No. 605) Limited | 18 | 15 | 15 | |
Nameco (No. 321) Limited | 7 | 6 | 6 | |
Nameco (No. 917) Limited | 6 | 10 | 10 | |
Nameco (No. 229) Limited | 7 | 6 | 6 | |
Nameco (No. 518) Limited | 10 | 7 | 7 | |
Nameco (No. 804) Limited | 24 | - | 8 | |
Halperin Limited | 9 | - | 7 | |
Nomina No 035 LLP | 9 | - | 7 | |
Nomina No 342 LLP | 9 | - | 6 | |
Nomina No 380 LLP | 14 | - | - | |
Bernul Limited | 10 | - | - | |
Nomina No 372 LLP | 12 | - | - | |
Helios UTG Partner Limited | - | - | - | |
Total | 180 | 69 | 97 |
The Group has entered into a 50% quota share reinsurance contract for the 2013 underwriting year of account and a 70% quota share reinsurance contact for the 2014 underwriting year of account with Hampden Insurance PCC (Guernsey) Limited, a company registered in Guernsey.
Nigel Hanbury, a Director of Helios Underwriting plc and its subsidiary companies, is also a director and majority shareholder in Hampden Insurance PCC (Guernsey) Limited. Hampden Capital Plc, a substantial shareholder in Helios Underwriting plc is also a substantial shareholder in Hampden Insurance PCC (Guernsey) Limited. Under the agreements, the Group accrued a net reinsurance premium payable of £26,000 during the period. A total cumulative amount owed to Hampden Insurance PCC (Guernsey) Limited of £49,000 (2013: £22,000) has been recognised in the balance sheet.
The underwriting year of account quota share reinsurance contract that each group subsidiary participates in is detailed below:
Company | ||
Hampden Corporate Member Limited | 2013 | 2014 |
Nameco (No. 365) Limited | 2013 | 2014 |
Nameco (No. 605) Limited | 2013 | 2014 |
Nameco (No. 321) Limited | 2013 | 2014 |
Nameco (No. 917) Limited | 2013 | 2014 |
Nameco (No. 229) Limited | 2013 | 2014 |
Nameco (No. 518) Limited | 2013 | 2014 |
Nameco (No. 804) Limited | - | 2014 |
Halperin Limited | - | 2014 |
Nomina No 035 LLP | - | 2014 |
Nomina No 342 LLP | - | 2014 |
Nomina No 380 LLP | - | 2014 |
Bernul Limited | - | 2014 |
Nomina No 372 LLP | - | 2014 |
13. Syndicate participations
The syndicates and members' agent pooling arrangements ("MAPA") in which the Company's subsidiaries participate as corporate members of Lloyd's are as follows:
Allocated capacity Year of account | |||||||||
Syndicate or | |||||||||
MAPA Number | Managing or Members' Agent | 2012 | 2013 | 2014 | |||||
33 | Hiscox Syndicates Limited | 754,377 | 754,377 | 1,524,940 | |||||
218 | Equity Syndicates Management Limited | 359,400 | 438,285 | 824,344 | |||||
308 | R.J. Kiln & Co Limited | 73,125 | 70,000 | 84,528 | |||||
386 | QBE Underwriting Limited | 179,894 | 179,894 | 493,385 | |||||
510 | RJ Kiln & Co. Limited | 1,265,425 | 1,240,770 | 2,548,439 | |||||
557 | RJ Kiln & Co. Limited | 767,556 | 308,582 | 446,063 | |||||
609 | Atrium Underwriters Limited | 1,098,065 | 1,047,455 | 1,947,561 | |||||
623 | Beazley Furlonge Limited | 727,450 | 859,870 | 2,103,700 | |||||
727 | S.A. Meacock & Company Limited | 375,222 | 375,222 | 457,055 | |||||
779 | ANV Syndicate Management Limited | 20,000 | 20,000 | - | |||||
958 | Canopius Managing Agency Limited | 416,434 | 327,200 | 466,880 | |||||
1176 | Chaucer Syndicates Limited | 214,874 | 261,818 | 327,712 | |||||
1200 | Argo Managing Agency Limited | 240,542 | 63,551 | 64,252 | |||||
1729 | Asta Managing Agency Limited | - | - | 35,685 | |||||
2010 | Cathedral Underwriting Limited | 249,769 | 249,769 | 510,544 | |||||
2014 | Pembroke Managing Agency Limited | - | - | 925,079 | |||||
2121 | Argenta Syndicate Management Limited | 156,969 | 11,691 | - | |||||
2525 | Asta Managing Agency Limited | 17,206 | - | 96,690 | |||||
2791 | Managing Agency Partners Limited | 1,415,120 | 1,471,095 | 2,430,679 | |||||
5820 | ANV Syndicate Management Limited | - | 107,754 | 60,000 | |||||
6103 | Managing Agency Partners Limited | 332,500 | 405,307 | 392,320 | |||||
6104 | Hiscox Syndicates Limited | 345,000 | 415,730 | 810,730 | |||||
6105 | Ark Syndicate Management Limited | 116,569 | 64,724 | 314,592 | |||||
6106 | Amlin Underwriting Limited | 308,251 | 271,170 | - | |||||
6107 | Beazley Furlonge Limited | 135,000 | 10,000 | 350,000 | |||||
6110 | Pembroke Managing Agency Limited | 393,302 | 879,892 | - | |||||
6111 | Catlin Underwriting Agencies Limited | 428,894 | 589,808 | 1,066,267 | |||||
6113 | Barbican Managing Agency Limited | - | 30,000 | 20,000 | |||||
6117 | Asta Managing Agency Limited | - | - | 963,112 | |||||
7200 | Members' Agents Pooling Arrangement | 455,323 | 455,302 | 151,688 | |||||
7201 | Members' Agents Pooling Arrangement | 2,318,974 | 2,318,948 | 762,204 | |||||
7202 | Members' Agents Pooling Arrangement | 828,123 | 828,098 | 275,470 | |||||
7203 | Members' Agents Pooling Arrangement | 108,289 | 108,262 | 47,678 | |||||
7211 | Members' Agents Pooling Arrangement | 5,439,354 | 5,439,337 | 687,749 | |||||
7217 | Members' Agents Pooling Arrangement | 95,912 | 95,911 | 95,913 | |||||
Total | 19,636,919 | 19,699,822 | 21,285,259 | ||||||
14. Group owned net assets
The Group balance sheet includes the following assets and liabilities held by the syndicates on which the Group participates. The syndicate assets are subject to trust deeds for the benefit of the relevant syndicates' insurance creditors. The table below shows the split of the Group balance sheet between Group and syndicate assets and liabilities.
30 June 2014 | 30 June 2013 | 31 December 2013 | |||||||
Group | Syndicate | Total | Group | Syndicate | Total | Group | Syndicate | Total | |
Unaudited | Unaudited | Audited | |||||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Assets | |||||||||
Intangible assets | 3,828 | - | 3,828 | 1,571 | - | 1,571 | 2,929 | - | 2,929 |
Deferred income tax assets | - | - | - | - | - | - | - | - | - |
Reinsurance share of insurance liabilities | |||||||||
- Reinsurers' share of outstanding claims | - | 4,221 | 4,221 | - | 3,658 | 3,658 | - | 4,154 | 4,154 |
- Reinsurers' share of unearned premiums | - | 1,637 | 1,637 | - | 1,379 | 1,379 | - | 800 | 800 |
Other receivables, including insurance receivables | 774 | 13,664 | 14,438 | 386 | 8,899 | 9,285 | 793 | 10,761 | 11,554 |
Prepayments and accrued income | 16 | 2,291 | 2,307 | 34 | 1,543 | 1,577 | 36 | 1,533 | 1,569 |
Financial assets at fair value | 4,226 | 17,683 | 21,909 | 7,881 | 11,936 | 19,817 | 5,932 | 16,281 | 22,213 |
Cash and cash equivalents | 1,055 | 2,313 | 3,368 | 296 | 1,974 | 2,270 | 86 | 980 | 1,066 |
Total assets | 9,899 | 41,809 | 51,708 | 10,168 | 29,389 | 39,557 | 9,776 | 34,509 | 44,285 |
Liabilities | |||||||||
Insurance liabilities | |||||||||
- Claims outstanding | - | 23,668 | 23,668 | - | 17,487 | 17,487 | - | 21,596 | 21,596 |
- Unearned premiums | - | 9,415 | 9,415 | - | 6,694 | 6,694 | - | 5,968 | 5,968 |
Deferred income tax liabilities | 1,603 | - | 1,603 | 978 | - | 978 | 1,656 | - | 1,656 |
Other payables, including insurance payables | 349 | 5,560 | 5,909 | 233 | 3,875 | 4,108 | 34 | 4,082 | 4,116 |
Accruals and deferred income | 1,165 | 350 | 1,515 | 487 | 246 | 733 | 866 | 257 | 1,123 |
Current income tax liabilities | - | - | - | - | - | - | - | - | - |
Total liabilities | 3,117 | 38,993 | 42,110 | 1,698 | 28,302 | 30,000 | 2,556 | 31,903 | 34,459 |
Shareholders' equity | |||||||||
Share capital | 853 | - | 853 | 853 | - | 853 | 853 | - | 853 |
Share premium | 6,996 | - | 6,996 | 6,996 | - | 6,996 | 6,996 | - | 6,996 |
Retained earnings | (1,066) | 2,815 | 1,749 | 621 | 1,087 | 1,708 | (629) | 2,606 | 1,977 |
Total shareholders' equity | 6,783 | 2,815 | 9,598 | 8,470 | 1,087 | 9,557 | 7,220 | 2,606 | 9,826 |
Total liabilities and shareholders' equity | 9,900 | 41,808 | 51,708 | 10,168 | 29,389 | 39,557 | 9,776 | 34,509 | 44,285 |
15. Events after the reporting period
Dumasco Limited
On 16 September 2014 Helios Underwriting plc acquired 100% of the issued share capital of Dumasco Limited for a total consideration of £2,500,000. No information is available at present to accurately determine the fair value of the net assets acquired. Dumasco Limited is incorporated in England and Wales and is a corporate member of Lloyd's.
For further information please contact:
Helios Underwriting
| Nigel Hanbury | nigel.hanbury@hampdenplc.com |
Smith & Williamson Corporate Finance
| David Jones | 020 7131 4000 |
Westhouse Securities | Robert Finlay Darren Vickers | 020 7601 6100 |
|
About HUW
HUW provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). HUW's subsidiary underwriting vehicles trade within the Lloyd's insurance market as corporate members of Lloyd's writing £23 million of capacity for the 2014 account. The portfolio provides a good spread of classes of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.