REG - Helios Underwriting - Final results for the year ended 31 December 2024
02/06/2025 07:00
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RNS Number : 9051K Helios Underwriting Plc 02 June 2025
2 June 2025
Helios Underwriting plc
("Helios" or the "Company")
Final results for the year ended 31 December 2024
Increased cash flow enhancing shareholder returns
Helios Underwriting, the only publicly traded company offering instant access
to a diverse portfolio of syndicates at Lloyd's of London, the world's largest
insurance market, announces its audited financial results for the year ended
31 December 2024.
As announced on 20 May, for the financial year ended 31st December 2024 Helios
has changed accounting framework from an insurance group under UK GAAP to an
investment entity under IFRS 10, with retrospective application.
Key financial highlights
· 11% increase in net asset value (NAV) to £2.43 per share (2023:
£2.19*)
· Dividend and total expected return of capital of 20 pence per
share in 2025 (2024: 12p per share)
· A total cash dividend of 10 pence per share recommended for
shareholder approval (2023:6p)
· Total shareholder return on opening shareholder funds of 16.8%
(2023: 34%*)
· Profit before tax of £20.9m (2023: £36.3m*), driven by material
revaluations of investments held at fair value, previously described as
capacity value revaluation
· Retained underwriting profit of £31.4m (2023: £31.6m)
· Capacity portfolio for 2025 £491m (2024: £519m)
· Retained capacity for 2025 £332.8m (2024: £403.5m)
· Sale of £16m of capacity during the year reducing the risk of
capacity value fluctuation
· Reduction in net debt by 11% to 46% (2023: 52%) as part of
ongoing deleveraging
· £40m of underwriting profits expected to be received in 2026
from the 2023 year of account.
John Chamber's, Interim Executive Chairman, commented:
"The excellent 2024 financial performance of Helios reflects the strength of
our unique proposition, our continued strategic delivery and favourable
underwriting conditions. As a result, we have been able to continue to unlock
shareholder returns, highlighted by an 11% increase in NAV and a recommended
dividend of 10 pence per share.
"Whilst our profit before tax was impacted by an expected rise in costs
resulting from unsecured loan notes and stop-loss protection, as well as
one-off operating costs incurred in 2024, we're delighted to be reporting our
results as an investment entity under IFRS, to better reflect the Company's
business activities and its true performance."
"The period has been characterised by an increasingly disciplined approach to
the allocation of capital - prioritising established syndicates with
profitable track records over new syndicates - while making headway in
bringing our operational leverage down to a more sustainable level going
forward.
"We believe that the best years of this insurance cycle remain ahead of us
from a returns perspective with the work done by the portfolio team in
increasing the quality of the syndicate portfolio expected to show through in
future years while the Lloyd's three-year accounting structure provides the
Company with good visibility for the next two years, where we expect to see a
similar level of capital returned to Shareholders."
For further information, please contact:
Helios Underwriting plc
John Chambers - Interim Executive Chairman +44 (0)203 965 6441
Arthur Manners - Chief Financial Officer
Deutsche Numis (Nomad and Broker)
Giles Rolls / Charles Farquhar +44 (0)20 7260 1000
FTI Consulting +44 (0)7703 330 199
Ed Berry / Nathan Hambrook-Skinner / Christian +44 (0)7977 817 092
Harte
+44 (0)7974 288 763
About Helios
Helios provides a limited liability direct investment into the Lloyd's
insurance market and is quoted on the London Stock Exchange's AIM market
(ticker: HUW). Helios trades within the Lloyd's insurance market. The
portfolio provides a broad spread of business primarily participating in the
US and other international wholesale and reinsurance markets. For further
information please visit www.huwplc.com (http://www.huwplc.com/)
Interim Executive Chairman's report 2024
I am delighted to announce another strong full year performance for Helios (or
the "Company") for my first set of results since becoming Interim Executive
Chairman. The significant improvement in underwriting conditions in the
insurance market over recent years continues to feed through to the
profitability of the Company and is reflected in our accelerated net asset
value ("NAV") growth. This robust underlying performance means we are very
well positioned going forward, with a continued strong pipeline and good
visibility of future cash flows, enabling us to increase our return of capital
to shareholders through the payment of a higher total dividend and a tender
offer which will take place later this year.
The increase in overall distributions to shareholders reflects the increase in
underwriting profits distributed from Lloyd's and from the sale of capacity in
the recent auctions. Furthermore, we have good visibility over the likely
underwriting profits that will be received from Lloyd's over the next two
years due to the Lloyd's three-year accounting methodology. These cash returns
will be generated from the 2023 & 2024 years of account. We therefore
expect, barring exceptional circumstances, to be able to maintain a similar
level of capital returned to shareholders for at least the next two years.
Review of performance
As a recent joiner to the Board and given my appointment as your interim
executive chairman after a period of change in the Company's leadership, this
has been a good opportunity for the Board to review the recent performance of
the company and reflect not only on what has gone well but what could have
been done differently.
The decision to grow the premium capacity deployed by the Company from 2021 to
2024 was a good one. During this period, insurance pricing improved rapidly,
and we were right to take advantage of these positive market dynamics. It was
also reasonable to utilise leverage in anticipation of the future strong
profits and cash flows that we are now seeing. Going forward, we are reducing
leverage to position ourselves more defensively. We outline later how and as
previously announced, our operational leverage will be maintained at a lower
level going forward while we will take a more disciplined approach to the
allocation of capacity into new syndicates.
Helios is not a venture capital business. We have therefore reduced the
proportion of the portfolio in new syndicates in 2025 and this will likely
reduce further for 2026. Some of the new syndicates have exciting prospects
and might become leading syndicates in the future; others have struggled or
have failed. In the future Helios will only consider new syndicates where
there is minimal execution risk and where we have a guarantee of being able to
maintain our share in the future, for example from a freehold capacity
arrangement. We will continue to allocate more of Helios' capital to
established syndicates with a profitable track record - fulfilling our mission
of delivering diversified uncorrelated returns with a high shareholder return.
Focus on costs
The growing scale of the business has helped to reduce the Company's operating
costs as a proportion of premium revenues. However, in absolute terms, the
cost of running the Company was too high in 2024. Operating costs will be
reduced in 2025 and maintained at a more sustainable level in future. In 2024
operating costs included the impact of previous plans to establish a new
Helios follow syndicate; this is no longer part of the Company's strategy.
Higher finance costs, reflecting the impact of increased leverage, have been
reduced in 2025 and will reduce further in future years as we replace these
arrangements with retained cash flow.
LLV and auction trading
Approximately 10% of the capacity of the Lloyd's market is backed by private
individuals ("Names") mostly through some 1,500 Limited Liability Vehicles
("LLVs"). Many of these individuals are mature in years and there is a steady
stream of LLVs that are available to purchase as Names seek to exit the market
or are sold by the estates of deceased Names. Helios is an active purchaser of
these LLVs as they come with freehold capacity on established syndicates and
have embedded pipeline profits from the open years of account. We use our
portfolio analytics to identify those LLVs with the best fit with our existing
portfolio and where we can purchase these LLVs at attractive terms that are
accretive to our own valuation.
Helios also creates and sells new LLVs to new investors through our Starter
Home initiative with Argenta Members Agency. This enables investors to rent
our capacity, for a fee, through their own new LLV. They can continue to do
this indefinitely or supplement our portfolio over time with their own
additional syndicate participations.
Helios, therefore, operates at all stages of the LLV cycle and works closely
with the Members' Agents.
There is an annual process for buying and selling freehold capacity in
syndicates through a Lloyd's managed series of auctions. Helios is often an
active participant in these auctions and, once again, made a good return from
these trades. This trading in both LLVs and auction capacity consistently
generates profits which supplement the core returns from our syndicate
portfolio.
Shareholder relations
Since joining the Board, I have had the pleasure of meeting many of our
shareholders. In my discussions with them there have been some common themes.
There is a desire for more regular communication on the progress of the
Company and a desire to see greater liquidity for our shares in the market and
a more stable share price reflecting our strong prospects.
We are refreshing our website to make it more accessible and with more timely
information. We encourage shareholders to register their email addresses on
the website to receive regular updates from the Company including financial
reports, announcements and quarterly factsheets.
We will also hold our first ever Capital Markets Event for shareholders and
other investors on 21 October. It will be an opportunity for shareholders to
meet Helios' full senior team and to learn more about our Company and the
capacity portfolio.
The volume of trading in Helios shares has increased significantly over the
past year but it remains difficult to trade in meaningful volumes. To improve
liquidity the Company plans to hold annual tender offers for a proportion of
the outstanding shares at close to net asset value. We expect to offer to
return £7m of capital in the current year and expect to return similar
amounts of capital for a further two years utilising the strong expected cash
flows from the 2022 and subsequent years of account profits. Equally, when the
shares are trading at a premium, we may issue new shares to the market when
there is demand and suitable opportunities to deploy the capital, such as for
LLV acquisitions.
Board changes
I would like to thank Michael Wade, my predecessor, for his careful
stewardship of the Company during a period of change in terms of strategy and
senior management. His wisdom and thoughtfulness were much appreciated by the
Board. The Board is undertaking a search for a new non-executive director to
help replace some of Michael's knowledge and skills and to rebalance the mix
independent non-executive and executive directors. Separately, the Board is
making good progress with our search for a Chief Executive Officer, and we
will update the market in due course. We will also bid a fond farewell to
Arthur Manners as Finance Director after our Annual General Meeting in June as
he retires after ten years, in which he has been a careful custodian of
Helios' financial health. I am delighted to announce that the Board has,
subject to regulatory due diligence, agreed to appoint Adhiraj Maitra as
Finance and Operations Director following the Annual General Meeting. Adhiraj
has been with Helios since 2024 and has a wealth of experience of the Lloyd's
market.
Future strategy and prospects
The work done by the portfolio team in increasing the quality of the syndicate
portfolio will show through in future years. We have one opportunity each year
to reshape our syndicate portfolio for the next year of account and we will
continue to focus on more established syndicates with profitable track
records. We aim to supplement the portfolio with acquisitions of LLVs as they
come onto the market at attractive prices. These LLVs generally have exposure
to some of the best quality syndicates in Lloyd's. We are fortunate in having
a highly experienced and well-connected Board which we can leverage to obtain
capacity on some syndicates that are not normally available to private
capital.
Where we can find opportunities to construct a strong portfolio that is larger
than Helios can support with its own balance sheet, we are able to share some
of that capacity with third party investors at attractive terms. These fees
and profit commissions generate revenues for the Company and help to defray a
significant proportion of our operating costs. Our capital partners include
traditional Lloyd's Names and other high net worth individuals, major
reinsurers and institutional funds. Helios provides an attractive opportunity
for such investors to deploy capital quickly and efficiently into the market
across a ready-made portfolio of many of the best syndicates. Given our scale
and flexible capital structure we are able to facilitate mid-year deployment
of capital and so investors are not tied into a fixed annual date to enter the
market.
We have a strong pipeline of results that will flow through from the 2023 and
subsequent years of account at Lloyd's in the coming years. Premium rates have
peaked but remain at good levels, sufficient to produce strong results in the
absence of abnormal loss events. The recent tragic wildfires in California
have produced manageable losses for the Company but these, along with the
major windstorm losses in 2024, will likely strengthen the resolve of
underwriters to maintain price adequacy.
Approximately half of the profits of the Lloyd's market come from the
investment returns on the syndicates' reserves, and the current bond yield
curve implies that these returns will be strong for some time to come despite
the recent volatility in the financial markets. Syndicates have taken
advantage of the recent profitable returns to strengthen their own reserving
margins and are well placed to weather any future turbulence from catastrophes
or adverse claims trends.
Overall, the Company remains very optimistic about the future and sees some
exciting opportunities ahead. We believe that, in terms of returns, the best
years of this insurance cycle remain ahead of us.
Financial Analysis
Highlights / summary
· Profit after tax of £18.5m (2023 - £38.6m restated)
· Net Asset value increases to 2.43p (2023 - 2.19p)
· Total capital returned to shareholders - in 2025 expected - 20p
per share (2024 - 12p per share)
· Proposed dividend - base dividend of 6p per share and special
dividend of 4p per share (2023 - 6p per share)
· Total shareholder return on opening shareholder funds - 16.8%
(2023 - 34.0%)
· Gross written premium increased by 40% to £431m (2023 - £308m)
· £40m of underwriting profit expected in June 2026
The following analysis provides information on the net gains/loss on financial
investment and provides continuity in the information that has been included
in previous commentary of financial statements.
Portfolio underwriting result
2024 2023
£000's (restated)
£000's
Profit on ordinary activities before tax 20,850 36,256
Total comprehensive income 18,575 38,543
Earnings per share - undiluted 25.56 50.57
Net Asset Value 173,116 162,701
Net Asset Value per share 2.43 2.19
Dividend per share 10p 6p
Total capital returned to shareholders per share 20p 12p
Total shareholder return on opening shareholder funds 12% 30%
Gross Written Premium 431,072 307,770
Portfolio Combined Ratio 92.3% 85.8%
The introduction of investment entity accounting will change the reporting of
the financial statements and introduce three changes to the preparation of the
results:
- Capacity revaluations - amounts included will now appear as part of the
pre-tax profits and the 2023 revaluation of £17m will increase the restated
2023 pre-tax profits.
- Provision for deferred taxation on capacity value - no provision on the
increase on capacity value will now be required, as the value will be included
in 2023 in the UK GAAP recognised profits for the open £20m.
-pipeline profits - a proportion of the profits based on the mid-point
estimates provided by the syndicate managers in excess of the GAAP recognised
profits for the open years of account are to be included.
These changes used in the valuation methodology for investment entity
accounting are more in line with the valuation methodology generally used in
the Lloyds' market.
The portfolio achieved a net combined ratio of 92% in comparison with the
combined ratio for the Lloyd's market of 87%. The portfolio's combined ratio
is affected by the early earning development of new syndicates and their
inherently cautious loss ratios. The growth of the capacity portfolio of 63%
to £519m in 2024 and the delay in the recognition of earned premiums in the
first 12 months has impacted the overall net combined ratio. In addition, the
new syndicates that are still in a stage of early development have created a
drag on the combined ratio. Over time, as these new syndicates mature and
their earnings grow, we expect the associated combined ratios to improve.
2024 2023
2024 Helios calendar year net combined ratio analysis Total Freehold Tenancy Total Freehold Tenancy
Capacity contribution to underwriting profits % - 32.7% 67.3% - 62.3% 37.7%
Net claims ratio 53.9% 52.8% 54.8% 49.4% 48.1% 51.4%
Acquisition cost ratio 25.4% 25.9% 24.9% 25.8% 26.6% 24.6%
Expenses ratio 13.0% 14.4% 11.8% 10.6% 11.2% 9.7%
Net combined ratio ("NCOR") 92.3% 93.2% 91.5% 85.8% 85.9% 85.6%
Result £m* 40.0 20.1 19.9 42.7 28.2 14.5
The contribution from the 2022, 2023 and 2024 years of account to the
underwriting result for the capacity portfolio in 2024 is as follows:
2022 2023 2024 2024 2023
Total Total
Portfolio capacity by underwriting year £m 251.6 318.0 518.7
Gross underwriting result £m 0.5 30.3 (4.8) 26.1 32.1
Investment income £m 6.6 4.8 2.6 13.9 10.6
Portfolio result by underwriting year £m 7.1 35.1 (2.2) 40.0 42.7
Gross result as % of capacity 2.8% 11.0% (0.4)% - -
2023 gross result as % of capacity 10.4% 2.3% - - -
Retained capacity £m 190.8 251.7 403.5 - -
Helios retained % 76% 79% 78% - -
Helios share of the portfolio result £m 5.3 27.7 (1.6) 31.4 31.6
The strategy to take advantage of the excellent underwriting conditions, to
grow the capacity portfolio over the last three years and to increase retained
Helios share of the capacity portfolio by 111% from £191m to £403m has
returned another excellent underwriting result to £40.0m (2023: £42.7m).
The development of the earned profits by year of account is shown below.
Year of account
As a % of capacity 2022 2023 2024
Portfolio profits earned in prior periods 6.5% 2.7% 0.0%
Portfolio profits earned in 2024 2.7% 11.0% (0.4)%
Final result/cumulative profits earned to date 9.2% 13.7% (0.4)%
Final result/mid-point estimates as at 31 December 2024 9.2% 14.3% -
During 2024, the improvement of the 2022 underwriting year result was lower
than expected as it increased by 2.7% (5.9% improvement for the development
last year) from profits brought forward as at 31 December 2023 of 6.5% to a
final result of 9.2%. The portfolio result was impacted in 2024 by the
additional reserves required for aviation losses in Ukraine and from general
reserve increases in the last 12 months of the year of account. There remains
uncertainty over the reserves required for the aviation losses incurred in
Ukraine. Syndicate 609 - Atrium - has kept the 2021 year of account open,
pending the ongoing discussions regarding the potential liability for the
aviation losses.
The 2023 year of account is the major contributor to the result in 2024 -
generating a result of 11% of capacity in the year. The underwriting year was
not materially impacted by catastrophe events. The cumulative profits earned
to date of 13.7% indicate that the underwriting year will be the most
profitable for a considerable time. The current mid-point result of 15% for
2023 and these future profits have now been recognised as part of the pipeline
profits. Distributable profits in excess of £40m are expected in relation to
2023 year of account.
Helios retained capacity for the 2024 underwriting year increased to £403m.
The underwriting year was impacted by two hurricanes and the Baltimore Bridge
loss. The year made a small loss in 2024 of £2.2m (2023: profit of £5.8m).
Distributable profits in excess of £40M are expected in relation to 2023 year
of account.
Pipeline profits
In addition to the profits recognised by the syndicates under UK GAAP, the
Board considers that the potential syndicate profits that the syndicate
managers are forecasting in addition to that recognised under GAAP can be
fairly recognised.. The incremental profits the syndicate management estimate
using the midpoint forecasts / YOA forecasts included in the QMRs submitted to
Lloyd's at each year end together with Helios's Management View of the likely
outturn of each year of account will be the basis for reviewing the additional
profits to be recognised.
A range of incremental profits for each of the two open years (as 31 Dec 24 -
the 2023 and 2024 YOAs) are assessed. The net present value of the net profits
due to Helios based on the retained capacity, net of corporation tax are
calculated.
The Board will use its judgement to include a proportion of the additional
profits to be recognised over that of the GAAP profits. The range currently
used is between 20% - 30% of the incremental profits for the most recent
underwriting year and 100% of the net discounted future profits for the most
developed year.
Gross Capacity Ult UW Results Ultimate % of capacity £m Future Profits % Recognised Gross Future Profits £m Net Discounted Profits £m Increase in Fair Value £m
£m
£m
£m
2021 150.8 3.6 2.4% 1.1 100% 1.1 0.8
2022 232.9 14.1 6.0% 17.8 25% 4.4 3.0
Total at 31st December 2022 5.5 3.8 3.8
2022 245.2 21.0 8.6% 4.2 100% 4.2 2.9
2023 310.8 37.8 12.1% 23.8 25% 5.9 4.0
Total at 31st December 2023 10.2 6.9 3.1
2023 318.7 49.2 15.4% 4.3 100% 4.3 2.9
2024 518.7 48.0 9.3% 41.0 25% 10.2 6.9
Total at 31st December 2024 14.5 9.8 2.9
Other income
Overall the Helios Group generates additional income from the following:
2024 2023
Trading LLVs HUW PLC Total Trading LLV's HUW PLC Total
£'000 £'000 £'000 £'000 £'000 £'000
FV on capacity and pipeline profits (2,398) - (2,398) 8,805 - 8,805
Fees from reinsurers 2,624 - 2,624 1,408 - 1,408
Other & investment income 3,876 1,485 5,361 2,038 65 2,103
Capacity sales and revaluation 16,088 - 16,088 17,987 - 17,987
Total Other income 20,190 1,485 21,676 30,238 - 30,303
Helios generates fees and profit commissions from Third Party capital
providers. These fees have increased as the capacity provided by third parties
has increased and as profit commission is accrued on the recognition of
profits by the syndicates.
The investment income is earned from the financial assets held in HUW PLC and
from the underwriting capital that is lodged at Lloyd's by the trading LLVs.
The overall return generated on group assets was 4.2% as the assets were
invested in short duration bonds and cash.
Helios took advantage of the buoyant demand in the capacity auctions in 2024
and realised value on certain higher value syndicates.
The investment returns on the assets managed by the supported syndicates are
included in the overall portfolio underwriting result.
Financial investments £'000 Investment return Yield
£'000
Syndicate investment assets 341,036 13,911 4.08%
Group investment assets 96,002 4,502 4.69%
Total financial investments 437,038 18,414 4.21%
Helios' share of the syndicate investments has generated an investment return
of 4.1% (2023: 4.7%) and the yields on our investment funds have also
improved. These investment funds are now fully invested in a short duration
bond portfolio. The share of the syndicate investments has increased by 57% in
the year and this is expected to continue to increase, reflecting the growth
of the capacity portfolio.
Total costs
The total costs comprise the cost of the Unsecured Loan Note issued in
December 2023, the stop loss protection bought to mitigate the downside from
large underwriting losses, the cost of providing recourse and non-recourse
debt to assist in the financing of the capital requirements of the retained
capacity and the operating expenses.
2024 2023
2025 Estimate Syndicate HUW PLC Total Syndicate HUW PLC Total
Participations £'000 Participations £'000
Unsecured Loan Note 5,892 - 6,063 6,063 - 1,720 494
Portfolio stop loss - 3,506 - 3,506 2,561 - 2,561
Portfolio funds at Lloyd's Financing 1,510 2,014 - 2,014 3,112 - 3,112
Operating costs 5,500 1,562 9,006 10,568 - 6,366 6,818
Total costs 12,902 7,082 15,068 22,151 5,673 8,086 12,985
The issue of $75m Unsecured Loan Note in December 2023 now incurs an
additional interest cost of £5.9m. This cash was used to re-finance an
existing bank facility of £15m with the balance of the proceeds used to
assist in the financing of the underwriting capital in 2024 and 2025. These
funds have also supplemented the cash resources prior to the release of
profits from the expected profitable underwriting years.
The stop loss reinsurance policy has not been renewed for 2025. The currently
surplus FAL arising from the recognised but undistributed syndicate profits
has reduced the requirement for the additional finance if a large event
occurs.
The net cost of this debt, having deducted the investment income earned on the
funds invested, was £4.2m.
The portfolio financing costs have reduced as the excess of loss reinsurance
arrangements were reduced in 2025 and are expected to be reduced again in
2026.
There is continued focus to manage the operating costs particularly as the
senior management team is in the process of being refreshed. An overall
reduction in costs in excess of 30% are expected during 2025.
Net asset value per share
The growth in the net asset value per share remains a key management metric
for determining growth in value to shareholders.
2024 2023
£'000 £'000
Net assets 104,728 88,541
Fair value on capacity ("WAV") 68,310 74,160
173,038 162,701
Shares in issue (Note **) 71,343 74,186
Net asset value per share (£) 2.43 2.19
Return of capital to shareholders
The Company returns capital to shareholders by way of dividends and share
buy-backs. The Board is committed to returning the surplus of the underwriting
profits to shareholders as they are received from Lloyd's and is proposing a
combination of buying back shares from shareholder either by way of a tender
offer or through market purchases and a dividend.
2025 (proposed) 2024
£m Pence £m Pence
per share per share
Tender offer/share buy-back: 7.1 10.0 4.3 6.0
- proposed
Dividend: - - 4.5 6.0
- actual
- proposed base dividend 4.3 6.0 - -
- proposed special dividend 2.8 4.0 - -
Total 14.2 20.0 8.8 12.0
In 2024 a total of £8.8m was returned to shareholders comprising a base
dividend of 6p per share and the buying back of shares totalling a value of
£4.3m at a discount to net asset enhancing shareholder value.
For 2025 it is proposed to increase the capital returned to shareholders by
60% to £14m (2024: £8.8m). A base and special dividend of 10p per share
(£7.1m) is proposed.
It is proposed to make a Tender Offer to shareholders pro-rata to their
shareholdings in due course to potentially return a further £7.1m (10p per
share). This increase in overall distributions to shareholders reflects the
increase in underwriting profits distributed from Lloyd's and from the sale of
capacity in the recent auctions. Furthermore, we have good visibility over the
likely underwriting profits received from Lloyd's over the next two years due
to the Lloyd's three-year accounting methodology. We therefore expect, barring
exceptional circumstances, to be able to maintain a similar level of
shareholder returns for at least the next two years.
The aggregate capital returned to shareholders, subject to shareholder
approval in 2025 will be £14.2m - 20p per share.
Capacity value
The value of the portfolio of the syndicate capacity remains the major asset
of Helios and an important factor in delivering overall returns to
shareholders. The growth in the net asset value ("NAV"), being the value of
the net tangible assets of the Company, together with the current value of the
portfolio capacity, is a key management metric in determining growth in value
to shareholders.
The Directors' approach to the valuation of capacity continues to rely on the
"market approach" whereby the average prices from the previous capacity
auctions are the primary basis for establishing the appropriate value. In
addition, a provision has been made to reflect the potential reduction in
overall capacity values in the 2025 capacity auctions in light of the capacity
available on new freehold syndicates which could reduce demand for the longer
established syndicates.
Freehold Value of Value
capacity capacity per £ of
£m £m capacity
Capacity value at 31 Dec 2023 175.9 82.4 47p
Opening capacity value provision - (8.24) -
Capacity acquired with LLVs in 2024 4.2 0.7 -
Mid Year start 7.0 - -
Value of pre-emption capacity 16 3.0 -
Net Disposal of capacity in the capacity auction (32.1) (13.8) -
Increase in portfolio value - 3.3 -
Movement in Capacity Value Provision - 0.6 -
Capacity value as at 31 Dec 2024 170.6 68.3 40.0
The value of the capacity fund has reduced reflecting the disposal of freehold
capacity on higher priced. The disposal of capacity generated net proceeds of
£16m which will bolster the tangible net assets of the Company. A combination
of a small increase in the average prices and the pre-emptions offered offset
by the capacity value provision has not impacted the overall value to
shareholders.
The Board recognises that the average prices derived from the annual capacity
auctions managed by the Corporation of Lloyd's could be subject to material
change if the level of demand for syndicate capacity reduces or if the supply
of capacity for sale should increase.
A sensitivity analysis of the potential change to the NAV per share from
changes to the value of the capacity portfolio is set out below:
Capacity Revised
value NTAV
£m per share
Current value - £m 68.3 2.43
Decrease of 10% 61.5 2.33
Increase of 10% 75.1 2.52
Each 10% reduction in the capacity values at the 2025 auctions will reduce the
NAV by approximately 10p per share (2023: 8p per share). The removal of the
provision of deferred tax on capacity value has marginally increased the
impact on NAV per share from changes in capacity value. Any reduction in the
value will be mitigated by any pre-emption capacity on syndicates that have a
value at auction.
Acquisition strategy
Helios acquired a single LLV in 2024 (2023: four), which reflected the
increased interest in the small numbers of LLVs for sale. We continue to
communicate with the owners of LLVs, which has the advantage of:
• raising the profile of Helios;
• allowing owners of LLVs who were potentially considering ceasing
underwriting at Lloyd's to have the opportunity to realise the value of their
investment quickly; and
• allowing vendors a tax-efficient exit if they wish to cease
underwriting.
Below is a summary of acquisitions made since 2022:
Summary of acquisitions
Total Capacity Humphrey Discount to HUW Fair value in
consideration £m value Humphrey excess of
£m £m consideration
£'000
2024 7.1 6.6 8.6 18% 1,378
2023 7.1 8.2 8.0 12% 364
2022 5.7 5.7 6.3 10% (374)
The single acquisition in 2024 was purchased for a total consideration of
£7.1m (2023: £7.1m), of which £6.2m was attributed to the Funds at Lloyd's
("FaL"). We continue to acquire LLVs at discount to Humphrey's, although the
availability of LLVs at reasonable value has diminished. As the prospect for
profitable underwriting has increased, there is greater interest in the LLVs
that are available for sale.
The excess of fair value over the consideration paid is recognised in the
Financial Statements in the year of acquisition. Previously amortised
recognised goodwill on acquisition has been adjusted in the IFRS statements.
Portfolio underwriting capital
Helios' share of the capacity portfolio has reduced to 68% (down from 77%),
underwriting £332m of capacity for the 2025 year of account. Helios took
advantage of the lower capital requirements and excellent market conditions in
2024 to underwrite a retained capacity of £403m. The reduction reflects the
evolution of the market cycle and the higher capital requirements in 2025.
The underwriting capital provided by third parties and quota share reinsurers
has increased to £158m (2024 £115.2m) an increase of 37%. Helios has used
quota share reinsurance for a number of years to provide access to the Lloyd's
underwriting exposures for reinsurers and for the 2025 year of account third
party members increased the support of the capacity portfolio by over 50%.
Year of account capacity - £m 2025 2024 2023
QS reinsurers 77.5 63.5 66.3
Third party capital 80.6 51.7 -
Total third party capital 158.2 115.2 66.3
Helios capacity fund - total capacity 490.9 518.7 318.0
Helios retained capacity 333.0 404.0 251.0
Helios' share of capacity fund 68% 78% 79%
Third party capital has successfully reduced the exposure of Helios
shareholders and assists in the financing of the underwriting capital of the
capacity fund. Helios has increased the third party capacity support for the
capacity portfolio in 2025 by £42m. It is expected that the support from
third party capital will further increase for the 2026 year of account.
For the 2024 year of account, a new and innovative structure of participation
was offered to existing private capital participants. In conjunction with
Argenta Private Capital Limited, their clients were offered the opportunity to
participate on the Helios Capacity Portfolio Members' Agent Pooling
Arrangement ("MAPA"), including participations on freehold syndicates without
having to fund the upfront cost of the freehold capacity rights. Helios is
renting the freehold capacity rights to these capital providers with the
intention of improving the return on capital for these investors. All ten LLVs
established in 2024 with capacity of £25m have now been sold and the Funds at
Lloyd's provided by Helios have been returned to Helios.
This concept of offering private capital participations on the Helios capacity
portfolio has been continued for the 2025 year of account and a further 15 new
LLVs have been set up with an allocation on the Helios capacity portfolio that
has been, again, initially funded by Helios. These new LLVs are being offered
for sale by Argenta Private Capital Limited.
Capital position
The underwriting capital required by Lloyd's to support the Helios portfolio
are as follows:
Underwriting year capital 2025 2024 2023
£m £m £m
Third party capital 35.1 32.8 27.8
Excess of loss Funds at Lloyd's 23.2 25.8 41.2
Helios' own funds 72.2 69.9 60.4
Solvency credits 82.5 47.0 0.7
Total 213.0 175.5 130.1
Capacity as at 490.9 518.7 319.0
Economic capital assessment (ECA) 183.9 172.0 127.8
Surplus FAL 29.0 3.5 2.3
Capital ratio 37% 33% 40%
Balance Sheet Analysis
The analysis of the composition of the equity investments at fair value and
amounts due from related parties is as follows:
2024 2023
£m £m
Equity investments at FVTPL 151.0 114.1
Due from related parties 55.2 64.5
Total 206.2 178.6
Funds at Lloyd's 72.2 69.9
Capacity value 68.3 74.2
Recognised subsidiary profits 64.8 34.9
206.2 178.6
The subsidiary recognised profits include the profits from underwriting, the
gains on capacity value less expenses and tax attributable to each subsidiary.
Reduction in Operational Gearing
Helios has taken advantage of the insurance cycle and grew the capacity
portfolio and retained capacity. This required the gearing of the company to
be increased. The measures identified by the Board where action needed to be
taken to reduce the risk are set out below:
2024 2023 Reduction
Ratio of capacity value to net tangible assets 65% 85% 23%
Ratio of retained capacity to net tangible assets 3.18 4.60 31%
Ratio of total debt to net assets 46% 52% 11%
• The risk of the capacity value fluctuating had been identified and
the sale of £16m of capacity during the year has reduced this risk.
• The level of retained capacity in relation to net tangible assets
(excluding capacity value) was increased for 2024 year of account and now has
been reduced with the reduction in retained capacity for 2025 year of account.
• The total debt - including the Unsecured Loan Notes and the Excess
of Loss financing arrangements has assisted Helios prior to the distribution
of the profits form the increased retained capacity. It is expected that the
total debt will reduce during 2025.
Change in Accounting Framework
The Board, in collaboration with its professional advisor, reviews its
accounting framework and concludes that it is more appropriate for Helios to
report as an investment entity under IFRS rather than as an insurance group
under UK GAAP. This approach more accurately reflects the Company's business
activities, complies with the AIM Rule reporting requirements, and will also
support investment in Helios from international investors.
For the financial year ended 31st December 2023 the Company reported under UK
GAAP, including FRS 102 and FRS 103. For the financial year ended 31st
December 2024 Helios will be reporting as an investment entity under IFRS 10,
with retrospective application. This determination by the Directors of
reporting its financial statements as an investment entity required
significant judgement to be exercised.
IFRS 10 describes an investment entity as an entity that:
• Obtains funds from one or more investors for the purpose of
providing those investors with investment management services.
• Commits to its investors that its business purpose is to invest
funds solely for returns from capital appreciation, investment income or both;
and
• Measures and evaluates the performance of substantially all its
investments on a fair value basis.
The Board believes Helios should be classified as an investment entity for
accounting under IFRS because it obtains funds from one or more investors for
the purpose of providing them with investment management services, such as
syndicate research, advice on syndicate selections and portfolio curations.
The funds are invested solely for capital appreciation and investment income,
and the Company measures and evaluates the performance of substantially all
its investments at fair value.
Consequently, the financial statements for the year to 31st December 2024
together with the comparative year 2023 have been prepared presenting Helios
as an investment entity rather than an insurance group. The business model of
the Company itself has not changed.
The approach taken using the new accounting treatment of investment entity
accounting will be to value the underwriting subsidiaries of Helios whose
assets / liabilities mainly comprise capacity value, funds at Lloyd's,
recognised but undistributed underwriting profits less expenses of those
companies. The value of the subsidiaries will be disclosed as an aggregate
value as "Equity Investments at Fair Value"
The revised Net Assets (unaudited) as at 31 December 2023 reflecting the
proposed change of accounting together with Fair Value adjustments are:
£m Pence per share
Net Assets as previously reported at 31/12/ 2023 under UK GAAP 140.1 1.89
Fair Value adjustments - -
Capacity Value (8.2) -
Pipeline Underwriting profits 7.6 -
Deferred tax on capacity value 20.1 -
Other movements 3.1 -
22.6 0.30
Revised Net Assets - Fair Value 31/12/2023 162.7 2.19
The Fair Value adjustments comprise the following:
Capacity Value - The Directors' approach to the valuation of capacity
continues to rely on the "market approach" whereby the average prices from the
previous capacity auctions are the primary basis for establishing the
appropriate value. In addition, a provision has been made to reflect the
potential future reductions in overall capacity values considering the
capacity available on new freehold syndicates which could reduce demand for
the longer established syndicates.
Pipeline Underwriting profits - the Board considers that the potential
syndicate profits that the syndicate managers are forecasting in addition to
that recognised under GAAP should be reflected in the fair value estimates as
a market participant would. The incremental profits the syndicate managers
estimate using the midpoint forecasts / YOA forecasts included in the
quarterly returns submitted to Lloyd's together with Helios's Management View
of the likely outturn of each year of account will be the basis for reviewing
the additional profits to be reflected in the fair value estimates.
Deferred tax on capacity value - under Fair Value accounting there is no
requirement to provide for deferred tax on the capacity owned by Helios'
trading LLV's. The Directors have been advised Helios is eligible for
Substantial Shareholding Exemption on its investments, hence no deferred tax
provision on the uplift fair value of investments is required.
Other movements include adjustments to revaluations on subsidiaries not held
at fair value at prior year ends.
The Directors have been advised that this change will not change the trading
business of underwriting at Lloyd's nor will it change the legal structure of
the business.
The Directors have also been advised that the ordinary shares of Helios will
remain eligible for Business Relief for Inheritance Tax.
Portfolio Management Report
Smart Alignment, Strategic Selection: How Helios Builds a Better Lloyd's
Portfolio
Financial and Portfolio Performance
Helios has consistently delivered superior returns on capital compared to the
broader Lloyd's market. Since 2013, it has significantly outperformed Lloyd's
through efficient capital deployment across a diversified portfolio. For the
2023 year of account, Helios is estimated to achieve a return on capital of
33.5%, compared to 26.5% estimated for the Lloyd's market. On average, Helios
has outperformed the Lloyd's market by 8.4% annually between 2013 and 2022.
Helios vs Lloyd's Market Return on Capital
YOA Helios ROC Lloyd's ROC
2013 25.5% 14.6%
2014 24.5% 18.9%
2015 19.7% 10.3%
2016 12.3% (4.8)%
2017 (5.8)% (11.1)%
2018 (0.5)% (7.8)%
2019 4.5% (3.6)%
2020 5.9% 1.1%
2021 11.0% 9.0%
2022 24.0% 15.8%
2023E 33.5% 24.3%
Return on capital is calculated as:
• Helios: The underwriting year's return (including prior-year
movements) on opening capacity, expressed as a percentage of the previous
calendar year's closing Funds at Lloyd's, including reinsurance and solvency
credit.
• Lloyd's: The underwriting year's return (including prior-year
movements), expressed as a percentage of calendar year closing Members' Funds
at Lloyd's (FAL).
Note: Calendar year-end FAL has been used as a proxy for the capital
supporting each underwriting year.
The Return for Lloyd's 2023 underwriting year has been estimated using Lloyd's
published mid-point as Q4 2024.
Return on Capital is the most meaningful measure of performance for the Helios
portfolio, as the aggregate capital (Funds at Lloyd's) benefits from
diversification benefit achieved through portfolio optimisation.
Net
Combined Ratio
Calendar Year Helios NCR Lloyd's NCR
2015 83% 90%
2016 95% 98%
2017 107% 114%
2018 99% 105%
2019 96% 102%
2020 103% 110%
2021 94% 94%
2022 93% 92%
2023 86% 84%
2024 92% 87%
Helios outperformed the Lloyd's market in calendar year net combined ratios
("NCORs") from 2015 to 2020 and was in line with the market in 2021. In 2022
and 2023, Helios' NCORs were 1% and 2% higher than the market respectively.
The 2022 result was impacted by the significant expansion in underwriting
capacity for that year, which temporarily distorted performance. The
relatively higher NCOR in 2023 was primarily driven by increased exposure to
newly established syndicates and a strategic decision to reduce natural
catastrophe risk. While Helios delivered a strong NCOR of 86% in 2023, the
market benefited from a benign catastrophe environment, and our underweight
position in Property Catastrophe business resulted in a slight relative
underperformance.
In 2024, Helios increased its underwriting capacity from £318m to £519m,
resulting in a significantly larger and more diversified portfolio. The
calendar year profit has been largely contributed to the 2022 and 2023 years
of account, while the 2024 year of account has a limited contribution, due to
premium earning patterns. The increased exposure to new syndicates still in
early development and the income drag from the larger 2024 portfolio have
contributed to a higher NCOR compared to the Lloyd's market. As the portfolio
matures, Helios expects improved earned premium and a stronger contribution
from the 2024 year of account in the next financial year.
In the 2024 year of account, our portfolio was impacted by several notable
industry losses, including Hurricane Milton (2.0% loss per capacity),
Hurricane Helene (1.8% loss per capacity), and the Baltimore Bridge incident
(0.8% loss per capacity). Our reported net exposure to Russia's invasion of
Ukraine stands at 4.3% of capacity, covering both direct and indirect impacts.
For the 2025 California wildfires, Lloyd's has estimated market-wide net
losses of $2.3bn. Although we have yet to receive loss estimates from all our
syndicates for this event, the anticipated impact on Helios remains within
budgeted levels.
Despite these events, the 2024 and 2025 years of account are currently
projecting healthy profits, demonstrating the resilience of our portfolio, the
benefits of proactive portfolio management, and the continued strength of
market conditions.
2025 Portfolio
With a gross capacity of £491m for the 2025 underwriting year (down from
£519m in 2024), we have taken meaningful steps to rebalance our 2025
portfolio's exposure and optimise capital deployment. This reflects our
activity in the 2024 auctions, where we sold £37.8m and purchased £5.8m of
capacity, exited nine syndicates and added two top-quartile syndicates. We
continue to maintain a highly diversified portfolio - across classes of
business, syndicate types, and geographic exposures - to enhance resilience
and optimise returns.
New vs Established Syndicates by YOA
Capacity %
YOA Established New (No closed year
of account)
2021 100%
2022 93% 7%
2023 80% 20%
2024 63% 37%
2025 81% 19%
Whilst we expect some of the new syndicates to be star performers of the
future, these syndicates typically incur start-up costs from day one, but
premiums take significant time to earn through, resulting in a drag on
reported profitability. Furthermore, there is minimal investment return in the
early years as it takes time to build up a reserve float.
As illustrated in the chart above, our approach to new syndicates has evolved
considerably over the past five years. For the 2025 year of account, we
recalibrated our position, reducing exposure to new syndicates (those with no
closed year of account) significantly from 37% to 19%, and we expect to reduce
this further in 2026. This adjustment reflects our focus on improving
near-term earnings quality.
Planning for 2026 is already underway, with a sharper focus on supporting
established syndicates and selectively backing new entrants with minimal
execution risk. For example, we have taken a modest line on Convex, a new
Lloyd's syndicate launched in 2025. Convex is a highly credible platform,
having grown from its inception in 2019 to $5.2bn in gross written premium by
2024, with a reported net combined ratio of 87.6%. Unlike a typical start-up,
Convex enters the Lloyd's market with significant scale, mature operations,
and an experienced team, enabling a lower-risk transition.
Looking ahead, we will continue to shape our portfolio around syndicates with
a proven track record and leadership, low execution risk, and the ability to
deliver both stability and long-term value.
The 2025 portfolio also represents a class-of-business rebalancing, aligning
more closely with Lloyd's market benchmarks. We have, however, modestly
increased our allocation to Property Treaty, where favourable market
conditions, compounded rate rises and improved terms justify the incremental
risk. Conversely, we have slightly reduced our exposure to Cyber closer to
market neutral, reducing aggregation risk in this class. We have also scaled
back on US Casualty which has faced reserve deterioration due to increased
court awards.
2025 Portfolio by Class of Business
Property (D&F), 18%
Casualty Other, 18%
Casualty FinPro, 16%
Property Treaty, 14%
Marine, 9%
Accident & Health, 6%
Specialty Other, 8%
Energy, 5%
Aviation, 4%
Casualty Treaty, 1%
2025 Portfolio by Syndicate
Blenhiem 5886, 37.5m
Beazley 623, 28.9m
Beazley 5623, 26.8m
Dale 1729, 25.1m
Nephila 2358, 25.0m
Apollo 1971, 25.0m
Arch 1955, 24.6m
Mosaic 1609, 20.0m
Ariel Re 1910, 20.0m
ERS 218, 19.4m
Atrium 609, 18.8m
Beat 4242, 16.5m
MAPL 2791, 16.2m
TMK 510, 15.3m
Hiscox 33, 15.1m
Fidelis 3123, 14.1m
Flux 1985, 12.7m
MCI 1902, 12.6m
Agile 2427, 15.0m
MCI 2 1966, 12.6m
NormanMax 3939, 12.0m
Envelop 1925, 7.5m
HRP 2689, 14.8m
Hiscox 6104, 12.0m
Other syndicates totalling 53.4m
Portfolio management process
Following our strong growth trajectory, Helios further enhanced its portfolio
management capabilities in 2024. Our analytical tools and sophisticated
syndicate selection framework position us to optimise the portfolio and
maximise returns within our defined risk appetite.
Our objective is to build a portfolio that delivers superior risk-adjusted
returns while remaining aligned with Lloyd's overall portfolio mix.
Central to this is a whole-of-market approach grounded in deep research and
analysis, qualitative judgement, and robust cycle management.
1. Whole-of-market evaluation
2. Syndicate evaluation
3. Strategic partnership
4. Portfolio optimisation
5. Continuous monitoring
1. Whole-of-Market Evaluation
We begin by evaluating the entire Lloyd's market.
Our first screen involves analysing the historical underwriting performance of
every Lloyd's syndicate across multiple market cycles.
This ensures we identify syndicates with a long-term track record of
underwriting profitability, particularly those that have performed well during
soft or stressed market environments.
This step serves as a quantitative triage, allowing us to focus only on
syndicates with proven underwriting capability.
2. Syndicate Evaluation
Quantitative review
Each syndicate undergoes a comprehensive evaluation, encompassing business
plan review, historical and projected performance analysis, and assessment of
its impact on the overall portfolio.
Our analytical toolkit, including stochastic modelling and scenario analysis,
enables us to make informed, risk-adjusted decisions within the context of
evolving market dynamics.
Qualitative review
In addition to quantitative evaluation, we conduct in-depth qualitative
assessments.
We evaluate underwriting leadership, strategic direction and corporate
governance standards.
Qualitative insight is used to refine and validate the selections identified
through our data-driven triage.
Syndicate scoring
Each syndicate is assessed through a comprehensive, multi-factor scoring
framework that includes:
• historical profitability;
• capital efficiency;
• volatility and peak peril exposure;
• portfolio diversification benefits;
• quality and stability of underwriting leadership;
• operational efficiency; and
• future outlook.
Syndicates are graded, and only those in the top quartiles are considered for
inclusion.
This system provides an objective basis for ranking performance and guides our
capital allocation decisions.
3. Strategic partnerships
We actively seek to partner with high-performing syndicates, including those
that typically do not offer capacity to third party capital providers.
Our goal is to secure exclusive access for Helios and to position ourselves as
a long-term, value-adding partner of choice.
By aligning ourselves with leading underwriting talent, we enhance our ability
to deliver superior returns sustainably.
4. Portfolio optimisation
We optimise our portfolio by selecting high quality Lloyd's syndicates with
strong track records, with an objective to build a balanced, diversified
portfolio that enhances return on capital while maintaining disciplined
exposure to risks. As part of our portfolio construction, we apply an
allocation framework that sets maximum capacity limits by the age of each
syndicate, avoiding overexposure to any syndicate.
Our portfolio is designed to broadly mirror Lloyd's class of business mix,
ensuring diversification and mitigating systemic or class-specific risk.
However, we selectively overweight outperforming segments and underweight
areas facing challenges, creating a smart, risk-aware tilt that enhances
performance potential.
We are developing an efficient frontier model, a data-driven framework to
model the trade-off between risk and return across our syndicates. This
approach allows us to construct a portfolio that maximises expected return for
Helios' defined risk appetite and tolerance, forming our strategic allocation
baseline.
5. Continuous monitoring and cycle management
Selected syndicates are subject to ongoing oversight.
We conduct:
• quarterly underwriting and claims reviews against business plans;
and
• regular engagement with managing agents and active underwriters.
Resilience through the cycle is fundamental to our strategy.
We favour syndicates that demonstrate:
• tactical pre-emptions in hardening market conditions; and
• strong rate adequacy discipline in challenging market conditions.
We monitor rate momentum and pricing adequacy at the risk code level to ensure
our portfolio remains dynamically aligned with evolving market conditions.
6. Risk management
Risk management is integral to how we select, build and monitor our Lloyd's
portfolio.
Our risk management framework encompasses:
• diversification across classes of business, geographies and perils;
• stress and scenario testing of portfolio resilience to adverse
events;
• ongoing capital adequacy review relative to projected exposures; and
• monitoring of syndicate-specific developments and Lloyd's
market-wide trends.
Our focus is on ensuring that our portfolio remains resilient through market
volatility while concentrating capital in the most compelling underwriting
opportunities.
Risk Management
At Helios, the effective management of risk is central to our business. We are
committed to maintaining a robust risk management framework, which includes
comprehensive strategies, policies and procedures to manage risk across all
levels of our operations.
Our team has regular communication with syndicates to understand how they
manage a wide range of risks, including underwriting, operational, market,
credit and liquidity risks. We also understand the importance of stress
testing and scenario analysis in managing risk. We regularly conduct these
exercises to assess the resilience of the Helios capacity portfolio under
different conditions. The risk framework for portfolio curation is integral to
our portfolio management process. More details can be found in the Portfolio
Management section.
Designing and implementing an effective risk management framework is a
continuous process, and we are committed to its ongoing development to ensure
that it remains fit for purpose as our business evolves. We are confident that
our approach to risk management positions us well to mitigate potential risks
and capitalise on opportunities as they arise.
Liquidity risk
Liquidity risk is the risk that a company may not be able to meet short-term
financial demands. Liquidity risk for an insurance capital provider like
Helios can arise from numerous factors. Large claim payouts following a
significant loss event which requires further funding of funds at Lloyd's to
cover expected syndicate losses can strain cash reserves. Helios financial
demands might necessitate asset liquidation, potentially leading to losses in
unfavourable market conditions. Large losses could cause breaches of loan
covenants, triggering further liquidity pressure. An inability to promptly
payout claims could harm reputation and potentially lead to future business
losses.
To mitigate these risks, Helios maintains a robust liquidity risk management
framework, which includes maintaining sufficient cash reserves, diversifying
our portfolio, implementing a comprehensive reinsurance programme, regularly
stress testing for large loss scenarios and maintaining strong relationships
with reinsurers, lenders and investors.
Underwriting risk
Underwriting risk can arise from inaccurate risk assessment by our syndicates
leading to insufficient premiums, more frequent or severe claims than
expected, inadequate pricing due to outdated models or market pressure and
changes in claim trends post-underwriting due to legal, societal or economic
shifts. These can cause a mismatch between premiums charged and claims made.
When assessing a syndicate, it is essential for us that they have effective
risk management in place to mitigate underwriting risks. This includes setting
appropriate underwriting guidelines, using updated and accurate pricing models
and diversifying the risks underwritten to avoid concentration in high-risk
areas. Furthermore, syndicates will need to prove to us that prudent
underwriting practices and rigorous claims management are in place to control
underwriting risk. Helios will also need to be satisfied that adequate
reinsurance has been arranged by the syndicates.
At Helios, we are proactive in monitoring the rating environment for each
class of our business. We understand that in the dynamic market conditions of
today, pricing adequacy can vary significantly across different business
classes. Therefore, we use advanced analytical tools and techniques to keep a
close eye on the pricing environment across all our business classes. If we
identify a class with low pricing adequacy, we are quick to respond, reducing
our participation in that class to manage risk and protect our portfolio. This
approach allows us to ensure that we maintain a healthy balance in our
portfolio, optimising our returns while managing risk effectively. Helios
continues to ensure that the portfolio is well diversified across classes of
businesses and managing agents at Lloyd's.
The biggest single risk faced by insurers arises from the possibility of
mispricing insurance on a large scale. The recent correction in terms and
conditions and the actions of Lloyd's to force syndicates to remediate
underperforming areas of their books demonstrate the mispricing that has
prevailed over the past few years. The results of this remediation work by
Lloyd's are starting to be reflected in the results announced by the
syndicates supported.
These management teams have weathered multiple market cycles and the risk
management skills employed should reduce the possibility of substantial
under-reserving of previous year underwriting. There is acceptance that
catastrophe exposures were generally under-priced and hence the syndicate
managers have been reducing their catastrophe exposures. The broad reinsurance
market correction is a fundamental shift in risk versus return metrics
presenting opportunities to pivot the portfolio in the future.
We assess the downside risk in the event of a major loss through the
monitoring of the aggregate net losses estimated by managing agents to the
realistic disaster scenarios ("RDS") prescribed by Lloyd's.
The individual syndicate net exposures will depend on the business
underwritten during the year and the reinsurance protections purchased at
syndicate level.
The aggregate exceedance probability ("AEP") assesses the potential impact on
the balance sheet across the portfolio from either single or multiple large
losses with a probability of occurring greater than once in a 30-year period.
In 2025 the stop loss policy was not renewed as the surplus funds at Lloyd's
of £29m will provide an alternative source of short term financing.The impact
on the net asset value of Helios from the disclosed large loss scenarios is as
follows:
It should be noted the Helios estimate for these losses is conservative as it
is a weighted average of the individual syndicate estimates without allowing
for any diversification.
The assessment of the impact of the specified events is net of all applicable
quota share and corporation tax but before the likely profits to be generated
from the balance of the portfolio in any year.
Environmental, Social and Governance ("ESG") responsibility
Strategy
Helios offers investors exposure to a diversified portfolio of syndicates at
Lloyd's of London. As a consequence, Helios is inexorably aligned to the
approach Lloyd's takes with regard to the society as a whole in addition to
those adopted by the various managing agencies.
Helios currently does not underwrite any risk. We participate in risks written
by the syndicates operating in the market, providing private capital support.
However, we recognise our responsibility to all our stakeholders and the wider
communities in which we do business, and we choose to hold ourselves to high
standards of humanity, respect, honesty, individuality and empowerment.
As a key principle, we aim to take a balanced and reasonable approach to
assessing ESG risks as the legal and regulatory frameworks evolve globally.
Complying with its regulatory obligations in the UK is of utmost importance,
while also recognising its fiduciary duty to its investors to provide
investment management services within this evolving framework.
Other areas to highlight are:
Governance practices
The Board is committed to a high standard of corporate governance and is
compliant with the principles of the Quoted Companies Alliance's Corporate
Governance Code (the "QCA Code"). The Directors have complied with their
responsibilities under Section 172 of the Companies Act 2006 which requires
them to act in the way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its members as a whole.
Further information is provided on page 21 in this report and accounts.
Social responsibility initiatives
• Community engagement activities and philanthropic endeavours form a
key area of focus for Helios. A new charity policy was developed in 2023 and
we have sponsored several projects that ranged from supporting local
communities to collaborating on projects aimed at addressing societal and
local issues.
• Diversity and inclusion initiatives are essential for fostering an
environment where everyone feels valued, respected and empowered. This is a
key metric for our success. While Helios' workforce is small and growing, we
aim to organically promote and provide equitable opportunities for growth and
success to not only employees but also external partners, where possible.
To summarise, as an organisation that is evolving, we recognise responsibility
to our stakeholders and the wider community and are committed to taking a
balanced and sustainable approach to developing and implementing our ESG
strategy that is aligned with the regulatory expectations in the jurisdictions
we operate in.
Summary Financial Information
The information set out below is a summary of the key items that the Board
assesses in estimating the financial position of the Group. Given the Board
has no active role in the management of the syndicates within the portfolio
and presents the financial position reporting as an investment entity, the
following approach has been taken:
a) The contribution to the Net Gains / Losses on the Financial Investments
has been assessed from the gains and losses incurred by the trading
subsidiaries of Helios. These gains and losses include the underwriting
profits, the gains on capacity, the pipeline profits recognised as well as
direct costs of the LLV's.
b) The increase in Fair Value of the Investments is the aggregate of the
net profits of the LLV's having deducted the charge for corporation tax.
c) The direct income and costs of HUW are separately disclosed and
aggregated with the Increase in the Fair Value of the Investments.
Year to 31st December 2024 Year to 31st December 2023
LLVs HUW Total LLVs HUW Total
FV on capacity and pipeline profits (2,398) (2,398) 8,805 8,805
Fees from reinsurers 2,624 2,624 1,408 1,408
Other & Investment income 3,876 1,485 5,361 2,038 65 2,103
Capacity sales and revaluation 16,088 16,088 17,987 17,987
Total Other Income 20,190 1,485 21,676 30,238 65 30,303
Costs
Stop loss costs (5,520) (5,718)
Loan Note Interest (6,063) (6,063)
Operating costs (1,562) (9,005) (9,005) (4,292) (8,098) (8,098)
Total Costs (7,082) (15,068) (15,068) (10,010) (8,086) (8,098)
Profit for the year 44,509 (13,583) 51,787 (8,021)
Tax at LLV level (9,997) (7,498)
Pre tax Profits attributable to HUW 34,512 (13,583) 20,929 44,287 (8,021) 36,256
Tax attributable to HUW (2,354) (2,354) 2,287 2,287
Total Comprehensive Income (18,315) 18,575 21,046 38,543
Underwriting results by year of account
2022 and prior 2023 2024 Total Corporate Other Total
Reinsurance corporate
Gross premium written 2,265 46,964 381,843 431,072 - - 431,072
Reinsurance ceded (986) (5,961) (84,135) (91,082) (8,687) (5,520) (105,290)
Net premiums written 1,279 41,003 297,708 339,989 (8,687) (5,520) 325,781
Net earned premium 13,145 131,795 147,763 292,702 (8,797) (5,520) 278,385
Other income 8,304 4,547 2,667 15,518 2,624 21,883 40,025
Net insurance claims & loss adjustment expenses (6,054) (57,262) (92,552) (155,868) - - (155,868)
Operating expenses (8,321) (43,992) (60,061) (112,374) - (16,807) (129,181)
Taxation in subsidiaries - (9,997) (9,997)
Movement in FV on capacity and pipeline profits - (2,398) (2,398)
Operating profits/(loss) before goodwill and amortisation 7,074 35,088 (2,184) 39,978 (6,173) (12,840) 20,966
QS (profit share only - excludes PC and overider) (1,980) (7,399) 581 (8,797) 8,797
Total 5,094 27,689 (1,603) 31,181 2,624 (12,840) 20,966
Summary balance sheet (excluding assets and liabilities held by syndicates)
See Note 28 for further information.
2024 2023
Assets
Financial investments 898 898
Equity investments at FVTPL 151,019 114,987
Due from related parties 55,167 64,533
Deferred tax assets - 2,177
Other assets 110 287
Cash and cash equivalents 28,935 40,596
Total assets 236,128 223,478
Liabilities
Deferred tax - -
Borrowings 58,457 57,461
Other Liabilities 4,555 3,317
Total liabilities 63,012 60,777
Total Equity 173,116 162,701
Cash flow
Analysis of free working capital 2024 2023
£'000 £'000
Opening Balance 40,913 10,254
Distribution of profits (net of tax retentions & QS Payments ) 8,808 2,530
Transfers from Funds at Lloyd's 38,391 9,984
Other income 4,263 2,727
Sale / Purchase of capacity 15,328 (500)
Operating costs (inc Hampden / Nomina fees) (10,085) (7,716)
Reinsurance costs (8,044) (3,520)
Tax 0 (236)
Return of capital to shareholders (8,845) (5,181)
Transfers to Funds at Lloyd's (44,182) (4,331)
Free cash Flow (4,367) (6,243)
Senior debt principal 0 59,055
Repayment of Borrowings 0 (15,000)
Proceeds from issue of shares 0 0
Acquisitions (7,009) (7,153)
Net cash flow in the year (11,377) 30,659
Balance carried forward 29,536 40,913
Asset value calculation 2024 2023
Net Assets 173,116 140,101
Add Total Debt 58,457 59,055
Add Deferred Tax on Intangible Asset - 20,136
Asset Value 231,573 219,292
Debt ratio 23% 27%
Financial Statements
Statement of income - Year ended 31 December 2024
Note 31 Dec'24 31 Dec'23
£'000 £'000
(Restated)
Income
Interest income 1,273 87
Dividend income - 21
Net gains on financial assets at FVTPL 6 34,512 44,387
Other income 212 (143)
Total income 35,997 44,352
Expenses
Operating expenses 7 (7,756) (4,933)
Interest expense (6,063) (1,720)
Other expenses (1,249) (1,443)
Total expenses (15,068) (8,096)
Net profit before income tax 20,929 36,256
Income tax (charge)/credit 12,13 (2,354) 2,287
Net profit for the year after tax 18,575 38,543
Basic EPS 15 25.6 50.8
Diluted EPS 15 24.5 49.1
The notes are an integral part of these Financial Statements.
Statement of financial position - At 31 December 2024
Company number: 05892671
Note 31 Dec'24 31 Dec'23 1 January
£'000 £'000 2023
(Restated) £'000
(Restated)
Assets
Equity investments at FVTPL 8 151,917 115,885 65,036
Due from related parties 16 62,048 70,065 73,506
Deferred tax - 2,177 -
Other debtors 110 287 1,277
Cash and cash equivalents 9 28,935 40,596 9,348
Total assets 243,010 229,010 149,167
Liabilities
Borrowings 12 58,457 57,461 15,000
Due to related parties 6,881 5,532 3,128
Other creditors 106 94 -
Accruals and other payables 4,450 3,222 2,000
Total liabilities 69,894 66,309 20,128
Equity
Share capital 13 7,811 7,795 7,774
Treasury shares 13 (8,265) (3,736) (526)
Share premium 13 98,882 98,596 98,268
Other reserves 14 786 300 -
Retained earnings 73,902 59,746 23,523
Total equity 173,116 162,701 129,039
Total liabilities and equity 243,010 229,010 149,167
The notes are an integral part of these Financial Statements.
Statement of changes in equity - Year ended 31 December 2024
Company number: 05892671
Note Share Treasury Share Other Retained Total
capital shares premium reserves earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2024 - restated 7,795 (3,736) 98,596 300 59,746 162,701
Company buy back of ordinary shares - (4,529) - - - (4,529)
Share issue net of transaction costs 16 - 286 486 - 788
Net profit/(loss) for the year - - - - 18,575 18,575
Dividends paid - - - - (4,419) (4,419)
At 31 December 2024 7,811 (8,265) 98,882 786 73,902 173,116
At 1 January 2023 7,774 (526) 98,268 - 24,762 130,278
Restatement of prior period error 18 - - - - (1,239) (1,239)
At 1 January 2023 - restated 7,774 (526) 98,268 23,523 129,039
Company buy back of ordinary shares - (3,210) - - - (3,210)
Share issue net of transaction costs 21 - 328 300 - 649
Net profit/(loss) for the year - - - - 38,543 38,543
Dividends paid - - - - (2,320) (2,320)
At 31 December 2023 - restated 7,795 (3,736) 98,596 300 59,746 162,701
The notes are an integral part of these Financial Statements.
Statement of cash flows - Year ended 31 December 2024
Note 31 Dec'24 31 Dec'23
£'000 £'000
(Restated)
Cash flows from operating activities
Profit before tax 20,929 36,256
Adjustments for:
- Net gain on financial assets at FVTPL 8 (34,511) (44,388)
- Purchase of equity investments 8 (1,520) (6,395)
Changes in operating assets and liabilities:
- Decrease in due from related parties 8,017 3,442
- Increase in due to related parties 1,349 2,404
- Decrease in other debtors 176 990
- (Decrease)/increase in accruals and other payables 1,883 63
- Proceeds from sale of equity/debt investments 8 - -
Net cash used in operating activities (3,677) (7,628)
Cash flows from financing activities
New shares issued 13 - 349
Share buy-back 13 (4,529) (3,209)
Net proceeds from borrowings - 59,055
Repayment of borrowings (203) (15,000)
Foreign exchange on net borrowings 942 -
Debt raise expense releases 225 -
Dividends paid 13 (4,419) (2,319)
Net cash (used in)/provided by financing activities (7,984) 38,876
Net (decrease)/increase in cash and cash equivalents (11,661) 31,248
Cash and cash equivalents at beginning of year 40,596 9,348
Cash and cash equivalents at end of year 28,935 40,596
Analysis of changes in net debt At 1 January Cashflows 31 December
2024 £'000 2024
£'000 £'000
Cash and cash equivalents 40,596 (11,661) 28,935
Unsecured debt (59,055) (738) (59,793)
Total (18,459) (12,399) (30,858)
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 - Year ended 31 December 2024
1. General information
Helios Underwriting plc (the "Company") is an investment company with variable
capital incorporated on 1 September 2007, organised under the laws of the
United Kingdom. The Company is quoted on AIM and was incorporated in England,
domiciled in the UK. The Company's registered office is 1st Floor, 33
Cornhill, London EC3V 3ND. The principal purpose of the Company is to provide
investors with exposure to the Lloyd's insurance market through an actively
managed portfolio of syndicates, who participates in insurance business as an
underwriting member of Lloyd's, which are fully owned undertakings of the
Company. The Company prepares separate Financial Statements as its only
Financial Statements, and its subsidiaries are not consolidated in line with
IFRS 10. See Note 3 below.
The Company has aggregated its investments in similar entities in line with
IFRS12.
Material accounting policies
The material accounting policies adopted in the preparation of the Financial
Statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
2.1 Basis of preparation
The Financial Statements have been prepared in accordance with UK adopted
International Accounting Standards ("IAS") and interpretations issued by the
IFRS Interpretations Committee ("IFRIC") as adopted by the UK IAS, and those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The 31 December 2023 Financial Statements were prepared in accordance with
United Kingdom Accounting Standards ("UK GAAP"), including FRS 102 "The
Financial Reporting Standard applicable in the UK and Republic of Ireland" and
FRS 103 "Insurance Contracts". The prior year comparative amounts were amended
to reflect the change in the reporting framework from UK GAAP to IFRS (see
Note 18).
The Financial Statements have been prepared under the historical cost
convention as modified by the revaluation of financial assets and financial
liabilities at fair value through profit or loss. They are presented in pounds
sterling, the functional currency of the Company, and rounded to the nearest
thousand pounds (£'000), except where otherwise indicated.
2.2 Going concern
The Company has net assets at the end of the reporting period of £173m. The
Company's subsidiaries participate as underwriting members at Lloyd's on the
2022, 2023 and 2024 years of account, as well as any prior run-off years.
This underwriting is supported by Funds at Lloyd's totalling £184m (2023:
£174m), letters of credit provided through reinsurance agreements totalling
£27m (2023: £31m) and solvency credits issued by Lloyd's totalling £52m
(2023: £47m).
The Directors have a reasonable expectation that the Company has adequate
resources to meet its underwriting and other operational obligations for the
foreseeable future. Accordingly, they continue to adopt the going concern
basis of accounting in preparing the annual Financial Statements.
2.3 Restatement
The Financial Statements provide comparative information in respect of the
previous period. In addition, the Company presents an additional statement of
financial position at the beginning of the preceding period when there is a
retrospective application of an accounting policy, a retrospective
restatement, or a reclassification of items in financial statements.
An additional statement of financial position as at 1 January 2023 is
presented in these Financial Statements due to the retrospective correction of
a prior period error. See Note 18.
2.4 Changes in accounting policies and disclosures
2.4.1 New accounting standards, interpretations and amendments to
published standards
The following amendments to existing IFRS accounting standards became
effective for annual periods beginning on 1 January 2024:
• Classification of liabilities as current or non-current and
non-current liabilities with covenants - Amendments to IAS 1.
• Lease Liability in a Sale and Leaseback - Amendments to IFRS 16.
• Disclosures: Supplier Finance Arrangements - Amendments to IAS 7 and
IFRS 7.
None of the amendments will have an impact on the Financial Statements at 31
December 2024.
2.4.2 Standards issued but not effective
New and amended standards and interpretations that are issued but not yet
effective are being assessed by the Company to determine the impact on the
Financial Statements. As explained above, this would include standards and
amendments that would already be effective based on the new standard or
amendment, but the UK endorsement is still in progress or has resulted in a
later effective date.
2.4.3 Amendments to the classification and measurement of financial
instruments - Amendments to IFRS 9 and IFRS 7
On 30 May 2024, the IASB issued Amendments to the Classification and
Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 (the
"Amendments"). The Amendments include:
• a clarification that a financial liability is derecognised on the
"settlement date" and introduce an accounting policy choice (if specific
conditions are met) to derecognise financial liabilities settled using an
electronic payment system before the settlement date;
• additional guidance on how the contractual cash flows for financial
assets with environmental, social and corporate governance ("ESG") and similar
features should be assessed;
• clarifications on what constitute "non-recourse features" and what
are the characteristics of contractually linked instruments; and
• the introduction of disclosures for financial instruments with
contingent features and additional disclosure requirements for equity
instruments classified at fair value through other comprehensive income
("OCI").
The Amendments are effective for annual periods starting on or after 1 January
2026. Early adoption is permitted, with an option to early adopt the
Amendments for classification of financial assets and related disclosures
only. The Company is currently not intending to early adopt the Amendments.
2.4.4 IFRS 18 "Presentation and Disclosure in Financial Statements"
In April 2024, the IASB issued IFRS 18 "Presentation and Disclosure in
Financial Statements", which replaces IAS 1 "Presentation of Financial
Statements". IFRS 18 introduces new requirements for presentation within the
statement of profit or loss, including specified totals and subtotals.
Furthermore, entities are required to classify all income and expenses within
the statement of profit or loss into one of five categories: operating,
investing, financing, income taxes and discontinued operations, whereof the
first three are new. There are specific presentation requirements and options
for entities that have specified main business activities (either providing
finance to customers or investing in specific type of assets, or both).
It also requires disclosure of newly defined management-defined performance
measures, which are subtotals of income and expenses, and includes new
requirements for aggregation and disaggregation of financial information based
on the identified "roles" of the primary Financial Statements and the notes.
Narrow-scope amendments have been made to IAS 7 "Statement of Cash Flows",
which include changing the starting point for determining cash flows from
operations under the indirect method, from "profit or loss" to "operating
profit or loss", and removing the optionality around classification of cash
flows from dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, are effective for
reporting periods beginning on or after 1 January 2027, but earlier
application is permitted and must be disclosed. IFRS 18 will apply
retrospectively.
The Company is currently working to identify all impacts IFRS 18 will have on
the primary Financial Statements and the notes to the Financial Statements and
will adopt IFRS 18 when it becomes effective.
2.4.5 IFRS 19 "Subsidiaries without Public Accountability:
Disclosures"
Issued in May 2024, IFRS 19 allows for certain eligible subsidiaries of parent
entities that report under IFRS accounting standards to apply reduced
disclosure requirements. The Company does not expect this standard to have an
impact on its operations or Financial Statements.
2.5 Foreign currency translation
Functional currency
Items included in the Financial Statements are measured using the currency of
the primary economic environment in which the entity operates (the "functional
currency"). The Financial Statements are presented in thousands of pounds
sterling, which is the Company's functional and presentational currency. All
amounts have been rounded to the nearest thousand, unless otherwise indicated.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using annual average rates of exchange prevailing at the time of the
transaction as a proxy for the transactional rates. Monetary items are
translated at period-end rates; any exchange differences arising from the
change in rates of exchange are recognised in the statement of income of the
year.
2.6 Financial assets
Classification
The classification of financial assets on initial recognition depends on both
the Company's business model for managing the financial assets and the asset's
contractual cash flow characteristics. The Company may irrevocably designate a
financial asset as measured at fair value through profit or loss if doing so
eliminates or significantly reduces a measurement or recognition inconsistency
(sometimes referred to as an "accounting mismatch") that would otherwise arise
from measuring assets or liabilities or recognising the gains and losses on
them on different bases.
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the
contractual provisions of the instruments. Regular purchases and sales of
financial assets are recognised on the trade date, being the date on which the
Company commits to the purchase or sale of the asset.
Equity investments at fair value through profit or loss
The Company measures all equity instruments at fair value with changes in the
fair value recognised in the statement of income.
Due from related parties
Amounts due from related parties are designated at fair value through profit
or loss upon initial recognition because they are managed, and their
performance is evaluated, on a fair value basis in accordance with the
Company's documented investment strategy.
Derecognition
Financial assets are derecognised when the right to receive cash flows from
the financial assets has expired or is transferred and the Company has
transferred substantially all its risks and rewards of ownership.
Fair value estimation
The fair value of financial assets at fair value through profit or loss which
are traded in active markets is based on quoted market prices at the end of
the reporting period. A market is regarded as active if quoted prices are
readily and regularly available from an exchange, dealer, broker, industry
group, pricing service or regulatory agency and those prices represent actual
and regular occurring market transactions on an arm's length basis. The quoted
market price used for financial assets at fair value through profit or loss
held by the Company is the current bid price.
The fair value of financial assets at fair value through profit or loss that
are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market
data where it is available and rely as little as possible on entity-specific
estimates, see note 5.
Unrealised gains and losses arising from changes in the fair value of the
financial assets at fair value through profit or loss are presented in the
statement of income.
2.7 Cash and cash equivalents
Cash represents cash deposits held at financial institutions. Cash equivalents
include short-term highly liquid investments of sufficient credit quality that
are readily convertible to known amounts of cash and have original maturities
of three months or less. Cash equivalents are held for meeting short-term
liquidity requirements, rather than for investment purposes. Cash and cash
equivalents are held at major financial institutions.
2.8 Borrowings
Borrowings are initially recognised at fair value and subsequently measured at
amortised cost using the net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount is recognised in profit
or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred
until the drawdown occurs. To the extent that there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is
capitalised as a prepayment for liquidity services and amortised over the
period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in
the contract is discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid is recognised in
profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
2.9 Other payables
These present liabilities for services provided to the Company prior to the
end of the financial year which are unpaid. These are classified as current
liabilities, unless payment is not due within 12 months after the reporting
date.
2.10 Interest and dividend income
The investment income of the Company is based on the income earned on the
securities, less expenses incurred. Therefore, the Company's investment income
may be expected to fluctuate in response to changes in such expenses or
income.
Dividends, gross of foreign withholding taxes, where applicable, are included
as income when the security is declared
ex-dividend. Bank interest is accounted for on an effective yield basis.
2.11 Net gains on financial assets at FVTPL
Realised gains or losses on disposal of investments during the period and
unrealised gains and losses on valuation of investments held at the period end
are dealt with in the statement of income.
2.12 Operating expenses
All expenses are accounted for on an accruals basis.
2.13 Current and deferred tax
The tax expense for the period comprises current and deferred tax. Tax is
recognised in the statement of income, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity, in which
case tax is also recognised in other comprehensive income or directly in
equity, respectively.
Current tax
The current income tax charge is calculated on the basis of the tax laws of
the UK enacted at the balance sheet date. Management establishes provisions
when appropriate, on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax
Deferred tax is provided in full, using the balance sheet liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the Financial Statements. Deferred tax is
determined using tax rates (and laws) that have been enacted or substantively
enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised, or the deferred income tax
liability is settled. Deferred tax assets are recognised to the extent that it
is probable that future taxable profits will be available against which the
temporary differences can be utilised.
2.14 Share capital and share premium
Ordinary shares are classified as equity. The difference between the fair
value of the consideration received and the nominal value of the share capital
issued is taken to the share premium account. Incremental costs directly
attributable to the issue of shares or options are shown in equity as a
deduction, net of tax, from proceeds. Where the Company buys back its own
ordinary shares on the market, and these are held in treasury, the purchase is
made out of distributable profits and hence shown as a deduction from the
Company's retained earnings.
Dividend and distribution policy
Dividend distribution to the Company's shareholders is recognised in the
Financial Statements in the period in which the dividends are approved by the
Company's shareholders.
2.15 Share options
The new ordinary shares have been issued into the respective joint beneficial
ownership of (i) each of the participating Executive Directors as shown in
Note 14 and (ii) the Trustee of JTC Employee Solutions Limited (the "Trust")
and are subject to the terms of joint ownership agreements ("JOAs")
respectively entered into between the Director, the Company and the Trustee.
The nominal value of the new ordinary shares has been paid by the Trust out of
funds advanced to it by the Company with the additional consideration of 145p
left outstanding until such time as new ordinary shares are sold. The Company
has waived its lien on the shares such that there are no restrictions on their
transfer.
The terms of the JOAs provide, inter alia, that if jointly owned shares become
vested and are sold, the proceeds of sale will be divided between the joint
owners so that the participating Director receives an amount equal to the
amount initially provided by the participating Director plus any growth in the
market value of the jointly owned ordinary shares above a target share price
(so that the participating Director will only ever receive value if the share
sale price exceeds this).
The percentage of jointly owned shares that vest shall be dependent on the
average growth in net tangible asset value per share during the three
financial years ending 31 December 2024. The vesting percentage shall be
determined on the average growth in net tangible asset value per share. If the
average growth in net tangible asset value does not exceed 5%, then no awards
vest, and if the average growth in net tangible asset value exceeds 20% or
above, then 100% of the awards vest.
The Plan was established and approved by resolution of the Remuneration
Committee of the Company on 13 December 2017 and provides for the acquisition
by employees, including Executive Directors, of beneficial interests as joint
owners (with the Trust) of ordinary shares in the Company upon the terms of a
JOA. The terms of the JOA provide that if the jointly owned shares become
vested and are sold, the proceeds of sale will be divided between the joint
owners on the terms set out above.
2.16 Share based payment
The Company operates an equity settled share-based employee compensation plan.
This includes the Long Term Incentive Plan ("LTIP"). Awards under the LTIP are
granted in the form of a nil-cost option (see Note 14).
The awards' performance conditions set threshold (30%) to stretch (60%)
targets in respect of the Company's total shareholder return ("TSR") over the
three-year period following the grant of the awards. No portion of the awards
shall vest unless the Company's TSR at the end of the performance period
reaches the threshold target, for which one quarter of the awards would vest,
rising on a straight-line basis to full vesting of the awards for the
Company's TSR over the performance period being equal to the stretch target or
better.
In 2024, the Company granted 703,217 awards under the LTIP in the form of
nil-cost options. The vesting period for the awards is three years subject to
continued service and the achievement of specific performance conditions. If
the options remain unexercised after a period of ten years from the date of
grant, the options expire. In the case of Executive Directors, any vested
shares will be subject to a two-year holding period.
The fair value of the LTIP awards is calculated using a Monte Carlo
(Stochastic) model considering the terms and conditions of the awards
granted.
No options were exercised during the year.
3. Significant accounting judgements, estimates and
assumptions
In applying the Company's accounting policies, the Directors are required to
make judgements, estimates and assumptions in determining the carrying amounts
of assets and liabilities. These judgements, estimates and assumptions are
based on the best and most reliable evidence available at the time when the
decisions are made and are based on historical experience and other factors
that are considered to be applicable.
Due to the inherent subjectivity involved in making such judgements, estimates
and assumptions, the actual results and outcomes may differ. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is
revised, if the revision affects only that period, or in the period of the
revision and future periods, if the revision affects both current and future
periods.
Assessment as an investment entity
Entities that meet the definition of an investment entity within IFRS 10
"Consolidated Financial Statements" ("IFRS 10") are required to account for
their investments in controlled entities at fair value through profit or loss.
The criteria which define an investment entity are currently as follows:
• an entity that obtains funds from one or more investors for the
purpose of providing those investors with investment services;
• an entity that commits to its investors that its business purpose is
to invest funds solely for returns from capital appreciation, investment
income or both; and
• an entity that measures and evaluates the performance of
substantially all of its investments on a fair value basis.
Helios provides its investors with investment management services such as
syndicate research, advice on syndicate selections and portfolio curations.
The Company's core business purpose is to participate in a portfolio of
syndicates via its investment in Limited Liability Vehicles ("LLVs") for the
purpose of returns in the form of investment income (dividends) and capital
appreciation (increase in the NAV per share resulting in increased share
price).
The Company records substantially all of its investments at fair value through
profit and loss ("FVTPL").
An investment in a Lloyd's syndicate year of account has a fixed duration of
three years, and a new year of account opens every year. As such, the funds
invested by Helios in a particular syndicate and year of account are returned
after three years, at which point Helios can decide whether to invest in a new
year of account in the same syndicate, reinvest elsewhere or distribute the
returns to shareholders. The finite life of each investment in a Lloyd's
syndicate therefore provides a natural exit strategy.
The Board has also concluded that the Company meets the additional
characteristics of an investment entity, in that it has more than one
investment; the investments are in the form of equities; it has more than one
investor; and the majority of its investors are not related parties.
Equity investments at FVTPL
The fair value of equity investments that are not traded in an active market
is determined using an internally developed valuations model. Assumptions used
in this model are validated and reviewed periodically internally by qualified
personnel. Changes in assumptions used can affect the reported fair value of
the equity investments. The impact on the profit and loss and equity as a
result of changes in key assumptions is disclosed in Note 5.
4. Risk management
4.1 Risk management framework
A review of the Company's objectives, policies and processes for managing and
monitoring risks is set out in the Risk Management section of the Company's
Strategic Report page 4 of the Annual Report.
Whilst risk is inherent in the Company's operations, it is managed through an
integrated risk management framework, including ongoing identification,
measurement and monitoring subject to risk limits and other controls. This
process of risk identification is critical to the Company's continuing
profitability and each individual within the Company is accountable for the
risk exposures relating to his or her responsibilities.
The Company is exposed to market risks, liquidity risks, interest rate risks,
credit risks, operational risks and concentration risks.
The Board of Directors is responsible for the overall risk management approach
and for approving the risk management strategies and principles.
4.2 Market risk
Market risk is the risk that the fair values or future cash flows of a
financial instrument will fluctuate because of changes in market variables
such as interest rates, exchange risks and equity prices.
The Company's assets consist primarily of equity investments, which are a
portfolio of syndicates that participate in insurance business as an
underwriting member of Lloyd's. The values of the investments are determined
by market forces and there is, accordingly, a risk that market prices can
change in a way that is adverse to the Company's performance.
4.2.1 Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. Longer-term obligations are usually more sensitive to interest rate
changes.
The Company's interest-bearing financial assets and liabilities expose it to
risks associated with the effects of fluctuations in the prevailing levels of
market interest rates on its financial position and cash flows. Any excess
cash and cash equivalents are invested at short-term market interest rates.
Exposure is managed largely by the use of natural hedges that arise by
matching interest sensitive assets with liabilities of similar nature.
The table in note 4.4 Liquidity risk summarises the Company's exposure to
interest rate risks on financial assets and liabilities. The Company's assets
and liabilities are included at carrying amount and categorised by the earlier
of contractual repricing or maturity dates.
Interest rate risk sensitivity
The company has accessed the impact of a 25 bps increase or decrease in
interest rates might have on the assets and liabilities of the Company. As
the company's borrowings are on a fixed term basis and related party asset are
repayable on demand and non-interest bearing. The overall interest rate risk
has been accessed as immaterial.
4.2.2 Currency risk
Currency risk is the risk which arises due to the assets and liabilities of
the Company held in foreign currencies, which will be affected by fluctuations
in foreign exchange rates.
The Company holds assets denominated in currencies other than pounds sterling,
the functional currency. The table below analyses the Company's exposure to
currency risk:
31 December 2024 GBP USD Total
£'000 £'000 £'000
Total assets 241,611 1,399 243,010
Total liabilities (11,437) (58,457) (69,894)
230,174 (57,058) 173,116
31 December 2023 GBP USD Total
£'000 £'000 £'000
Total assets 228,412 598 229,010
Total liabilities (8,848) (57,461) (66,309)
219,564 (56,863) 162,701
The analysis below is performed for reasonably possible movements in foreign
exchange rates with all other variables held constant, showing the impact on
the statement of income and equity at the reporting date.
Impact on equity
31 December 2024 10% increase 10% decrease
£'000 £'000
Impact on statement of income 5,187 (6,340)
Impact on equity 5,187 (6,340)
Impact on statement of income 5,169 (6,318)
Impact on equity 5,169 (6,318)
The Company's strategy for dealing with foreign currency risks is to offset,
as far as possible, foreign currency liabilities with assets denominated in
the same currency.
The analysis is based on a change in assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in
some of the assumptions might be correlated.
4.2.3 Other price risks
Price risk is the risk that the value of financial instruments will fluctuate
as a result of changes in market prices (other than those arising from
interest rate risk or currency risk), whether caused by factors specific to an
individual investment, its Company or all factors affecting all instruments
traded in the market.
Other price risks may include risks such as equity price risk, commodity price
risk, prepayment risk (i.e. the risk that one party to a financial asset will
incur a financial loss because the other party repays earlier or later than
expected), and residual value risk.
The Company is not exposed to other price risk as at 31 December 2024 and 31
December 2023.
4.3 Credit risk
Credit risk is the risk that the Company will incur a loss because an
individual, counterparty or issuer fails to discharge their contractual
obligations. The Company manages and controls credit risk by setting limits on
the amount of risk it is willing to accept for individual counterparties and
by monitoring exposures in relation to such limits.
Below is an analysis of assets bearing credit risks.
Gross exposure Net carrying amount
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Due from related parties 62,048 70,065 62,048 70,065
Cash and cash equivalents 28,935 40,596 28,935 40,596
90,983 110,661 90,983 110,661
4.3.1 Credit quality of financial assets
The credit quality of financial assets can be assessed by reference to
external credit ratings, if available using an approach consistent with that
used by Credit reference agency.
AAA
An obligation rated "AAA" has the highest rating assigned by Standard and
Poor's. The obligor's capacity to meet its financial obligation is extremely
strong.
AA
An obligation rated "AA" differs from the highest rated obligation only to a
small degree. The obligor's capacity to meet its financial obligation is very
strong.
A
An obligation rated "A" is somewhat more susceptible to the adverse effects of
changes in and economic conditions that obligations in higher rated
categories. However, the obligor's capacity to meet its financial commitment
on the obligation is still strong.
BBB
An obligation rated "BBB" exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Below BBB
Obligations rated "Below BBB" are regarded as having significant speculative
characteristics. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.
Not rated
This indicates there is insufficient information on which to base a credit
rating.
The following table sets out the credit quality for financial assets
(excluding equity instruments) measured at fair value through profit and loss.
As at 31 December 2024 AAA AA A BBB Below BBB Not rated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Due from related parties - - - - - 62,048 62,048
Cash and cash equivalents 28,935 - - - - - 28,935
28,935 - - - - 62,048 90,983
As at 31 December 2023 AAA AA A BBB Below BBB Not rated Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Due from related parties - - - - - 70,065 70,065
Cash and cash equivalents 40,596 - - - - - 40,596
40,596 - - - - 70,065 110,661
4.4 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset and, thus, the Company
will not be able to meet its financial obligations as they fall due.
To mitigate these risks, Helios maintains a robust liquidity risk management
framework, which includes maintaining sufficient cash reserves, diversifying
our portfolio, regularly stress testing and maintaining strong relationships
with lenders and investors.
The following are the contractual maturities of financial assets and
liabilities including undiscounted interest payments and excluding the impact
of netting agreements.
Analysis of assets and liabilities by remaining contractual maturity
As at 31 December 2024 On demand Less than 3 to 12 months 1 to 5 years Over 5 years Total
£'000 3 months £'000 £'000 £'000 £'000
£'000
Financial assets
Due from related parties 62,048 - - - - 62,048
Other debtors - - - 110 - 110
Cash and cash equivalents 28,935 - - - - 28,935
Total assets 90,983 - - 110 - 91,093
Financial liabilities
Borrowings - - - - (58,457) (58,457)
Due to related parties (6,881) - - - - (6,881)
Accruals and other payables - - (4,556) - - (4,556)
Total liabilities (6,881) - (4,556) - (58,457) (69,894)
Net liquidity position 84,102 - (4,556) 110 (58,457) 21,199
Analysis of assets and liabilities by remaining contractual maturity
As at 31 December 2023 On demand Less than 3 to 12 months 1 to 5 years Over 5 years Total
£'000 3 months £'000 £'000 £'000 £'000
£'000
Financial assets
Due from related parties 70,065 - - - - 70,065
Other debtors - - - 2,464 - 2,464
Cash and cash equivalents 40,596 - - - - 40,596
Total assets 110,661 - - 2,464 - 113,125
Financial liabilities
Borrowings - - - - (57,461) (57,461)
Due to related parties (5,532) - - - - (5,532)
Accruals and other payables - - (3,316) - - (3,316)
Total liabilities (5,532) - (3,316) - (57,461) (66,309)
Net liquidity position 105,129 - (3,316) 2,464 (57,461) 48,816
The company has access to a sterling revolving loan facility ("RLF") with
Barclays Bank Plc to the value of £10m.
On 15 December 2023 the Company secured an A - / stable rating from Kroll Bond
Rating Agency LLC, (KBRA) for up to US$100m seven-year unsecured debt at a
fixed coupon of 9.5%. An initial tranche of US75m of the debt was drawn down
on 15 December 2023.
4.5 Operational risks
Operational risk is the risk of direct or indirect loss arising from a wide
variety of causes associated with the Company's processes, personnel and
infrastructure, and from external factors other than credit, market and
liquidity risks such as those arising from legal and regulatory requirements
and generally accepted standards of corporate behaviour.
Operational risk arises from all of the Company's operations. The Company was
incorporated with the purpose of engaging in those activities outlined in Note
1.
4.6 Concentration risk
Although the Company invests mainly in Lloyd's of London Vehicles ("LLVs"),
the Company has a wealth of experience in this specific sector. It seeks to
manage concentration risk by in-depth evaluation of each LLV prior to the
acquisition, declining opportunities not in line with the strategic direction
of the Company, reviewing projected financial performance and ensuring a
diversified portfolio of LLVs to limit exposure to specific insurance risks
faced by the syndicates.
The following table breaks down the Company's equity investments at FVTPL as
categorised by industry sector:
2024 2023
£'000 £'000
Equity investments - Lloyd's of London Vehicles 151,019 114,987
Equity investments - other 898 898
Total exposure 151,917 115,885
4.7 Capital management
For the purpose of the Company's capital management, capital includes issued
capital, share premium and all other equity reserves attributable to the
equity holders of the Company. The primary objective of the Company's capital
management is to maximise the shareholder value.
The Company manages its capital structure and adjusts in light of changes in
economic conditions. To maintain or adjust the capital structure, the Company
may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. The Company is not subject to externally
imposed capital requirement during the year (2023: none).
5. Fair value measurement
The Company's fair value methodology and the governance over its models
includes a number of controls and other procedures to ensure appropriate
safeguards are in place to ensure its quality and adequacy. All new valuation
methodologies are subject to approvals by the Board. The responsibility of
ongoing measurement resides with the finance and risk functions.
Financial instruments recorded at fair value are analysed based on the levels
below:
• Level 1: The fair value of financial instruments traded in active
markets (such as publicly traded securities) is based on quoted market prices
(unadjusted) at the end of the reporting period. The quoted market price used
for financial assets held by the Company is the current bid price.
• Level 2: The fair value of financial instruments that are not traded
in an active market is determined using valuation techniques which maximise
the use of observable market data inputs, either directly or indirectly (other
than quoted prices included within Level 1), and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an
instrument are observable.
• Level 3: If one or more of the significant inputs is not based on
observable market data, the instrument is included in Level 3. This is the
case for unlisted equity securities.
The following table analyses within the fair value hierarchy the Company's
assets and liabilities measured at fair value at 31 December 2024.
As at 31 December 2024 Level 1 Level 2 Level3 Total
£'000 £'000 £'000 £'000
Assets measured at fair value on a recurring basis
Equity investments at FVTPL - - 151,917 151,917
Cash and cash equivalents 28,935 - - 28,935
Total 28,935 - 151,917 180,852
The following table analyses within the fair value hierarchy the Company's
assets measured at fair value at 31 December 2023.
As at 31 December 2023 Level 1 Level 2 Level3 Total
£'000 £'000 £'000 £'000
Assets measured at fair value on a recurring basis
Equity investments at FVTPL - - 115,885 115,885
Cash and cash equivalents 40,596 - - 40,596
Total 40,596 - 180,418 156,481
There were no transfers between Levels 1 and 2 during the period.
5.1 Valuation techniques
Equity investments at FVTPL
The valuation of the equity investments at FVTPL include several key
components which are set out below:
Syndicate capacity
The Market Approach is the primary approach in estimating the FV of the right
to participate on a syndicate in future years, based on the weighted average
price of Lloyd's syndicate capacity auction results. This approach is most
appropriate in determining the FV of the syndicate capacity where the auction
pricing is reliable, and this approach is widely adopted in practice.
Consideration is also given to observable data from recent market
transactions. In addition, the board has applied a 10% reduction to the
holding value of capacity to reduce the value of capacity held in the balance
sheet. This provision will be reviewed for report revises in the future.
Funds at Lloyd's
Each asset included in the FAL is valued at its current market price. FAL can
consist of a variety of assets, including cash, bonds, letter of credit
("LoC") and other approved financial instruments. As such, the FV would be
based on quoted market prices and face value of the assets held in the FAL.
The Market Approach is preferred for determining the FV of FAL because it uses
observable values for each component asset.
Open year results
In accordance with Lloyd's requirements, each managing agent prepares
syndicate level information and allocates each corporate member's share of
their best estimate results based on their capacity participation for each
YoA. The Schedule 3 returns are submitted to Lloyd's and subject to review.
Schedule 3 UK GAAP results are considered to be a reasonable and supportable
proxy in determining the FV of open year results.
Pipeline Profits
In addition to the profits recognised under Schedule 3 UK GAAP, the Board
considers the potential syndicate profits that the syndicate management are
forecasting in addition to those recognised under GAAP. The incremental
profits the syndicate managers estimate using the midpoint forecasts / YOA
forecasts included in the QMRs submitted to Lloyd's at each year end together
with Helios's management view of the likely outturn of each year of account
form the basis for determining the additional profits to be recognised. A
haircut is applied to the latest year of account to reflect the inherent
uncertainty in those forecasts which are subject to material changes in the
ultimate outcome.
The proportion of pipeline profits that have been recognized is as follows:
a) For the oldest underwriting year with 12 months to run - 100% of the
potential future profits on the mid point ultimates.
b) For the underwriting year with 24 months left, 25% of the potential
future profits have been recognized.
Cash and cash equivalents
Cash represents cash deposits held at financial institutions. Cash equivalents
include short-term highly liquid investments of sufficient credit quality that
are readily convertible to known amounts of cash and have original maturities
of three months or less. Cash equivalents are held for meeting short-term
liquidity requirements, rather than for investment purposes. Cash and cash
equivalents are held at major financial institutions.
Borrowings
For borrowings a discounted cash flow model is used based on current interest
rate yield curve appropriate for the
remaining term to maturity adjusted for market liquidity and credit spreads
based on observable inputs. There were no
material adjustments made to the net borrowing figures at the year end.
5.2 Movements in Level 3 financial instruments
The following table presents the movement in Level 3 instruments for the year
ended 31 December 2024:
As at 31 December 2024 Equity
investments
£'000
Opening balance 115,885
Purchases 1,520
Sales -
Net gains/(losses) 34,512
Total 151,917
The following table presents the movement in Level 3 instruments for the year
ended 31 December 2023:
As at 31 December 2023 Equity
investments
£'000
Opening balance 65,036
Purchases 6,462
Sales -
Net gains/(losses) 44,387
Total 115,885
5.3 Impact on the fair value of Level 3 financial instruments to
changes in key assumptions
The following table summarises the valuation techniques together with the
significant unobservable inputs used to calculate the fair value of the
Company's Level 3 assets.
As at 31 December 2023 Amount £'000 Valuation technique Significant unobservable inputs
Equity investments 151,019 Discounted projected cash flows *Projected cash flows of syndicates
*Auction prices and syndicate capacity
*Discount rate
5.4 Quantitative analysis of significant unobservable inputs
The significant unobservable inputs are sensitive to assumptions made when
ascertaining fair value. Setting the valuation policy is the responsibility of
the Board. The policy is to value investments at fair value by applying a
consistent approach. The valuations are performed twice a year and the half
year valuations are subject to the same level of scrutiny and approach as the
audited final year accounts.
As at 31 December 2024 the value of the level three financial instruments was
£152 million and were valued using the following criteria:
• Projected cash flows of the syndicates are ascertained using the
data supplied by the syndicate managers on a quarterly basis. For each
underwriting year the syndicate managers supply information on the likely
profits to be distributed to or losses to be collected from capital
providers. The aggregate result from the underwriting year of the capacity
portfolio is used to estimate future profits/losses to be recognised. In
addition to the underwriting profits recognised and recorded in the quarterly
reports, the Board assesses the extent that the ultimate profits, that is the
excess expected profits over that currently recognised under GAAP, can be
recognised as pipeline profits. The syndicate manages estimates of future
profits and losses are subject to uncertainty and reserving risk. The
Company's fair value methodology reflects 25% of the pipeline profits at the
midpoint estimates for the latest year of account and 100% for earlier years
of accounts.
• Auction prices and syndicate capacity: the market valuation of
syndicate capacity is primarily based upon the average prices of the Lloyds
capacity auctions that are held in the final quarter of each year. These
average prices is the prime source of information to ascertain the value of
each syndicate capacity holding. In addition, the The board reviews the recent
transactions on the buying and selling of LLV's to establish a trend of
pricing comparative to the prime source of auction prices. Also the Board
assesses the potential future supply and demand of capacity for sale in the
following auction process to assess the likely movement in prices at the
auctions. Based on the Company's knowledge and experience of the syndicate
capacity market which is further informed by observable market transactions,
some of which might be below the auction prices, the fair value methodology
reflects approximately a 10% haircut on capacity values in consideration of
inherent uncertainty in the valuation.
• Discount rate: the discount rate applied to the projected
syndicate profits from the date of valuation to the date of final
determination of the profits to be distributed is based on the coupon
negotiated on the unsecured loan note 2030, 9 1/2% being a proxy for the
Helios cost of debt.
5.5 Sensitivity of fair value measurements to changes in
unobservable market data
The table below describes the effect of changing the significant unobservable
inputs to reasonably possible alternatives.
Change in 31 December 31 December
variable 2024 2023
£'000 £'000
*Pipeline profits - a range of recognised profit of 0% - 50% - For the newest +25% 9.282 6,275
UW year
-25% (9,282) (6,275)
*Auction Prices of syndicate capacity - a 12 month development year +10% 7,575 8,243
-10% (7,575) (8,243)
*Discount rate +100 Bps (134) (101)
-100 BPS 137 103
6. Net gains on financial assets at FVTPL
31 December 31 December
2024 2023
£'000 £'000
Unrealised gains on investments 34,512 44,387
Realised gains on investments and currencies - -
Net gains on financial assets at FVTPL 34,512 44,387
7. Operating expenses
31 December 31 December
2024 2023
£'000 £'000
Staff costs 3,111 2,732
Office expenses 1,026 417
Professional fees 3,284 1,734
Other fees 334 50
Total operating costs 7,756 4,933
The auditors, PKF Littlejohn LLP, charged total fees to the company and its
subsidiaries of £183,000 (2023: £137,000) for audit services. Further fees
of £27,000 (2023: £25,000) were charged by PKF Littlejohn LLP for audit
related assurance services.
8. Equity investments at FVTPL
Equity investments at FVTPL consist of investments in companies and Limited
Liability Partnerships which the Company has 100% direct or indirect interest
in. All of the subsidiaries are incorporated in England and Wales and their
registered office address is at 40 Gracechurch Street, London EC3V 0BT, apart
from RBC CEES Trustee Limited, which is incorporated in Jersey and its
registered office address is Gaspé House, 66-72 Esplanade, Jersey JE2 3QT,
and Gould Scottish Partnership, which is incorporated in Scotland and its
registered office is 9 Haymarket Square, Edinburgh EH3 8RY.
Company or partnership Direct/indirect 2024 2023 Principal activity
interest ownership ownership
Nameco (No. 917) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 346) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Charmac Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
RBC CEES Trustee Limited Direct 100% 100% Joint Share Ownership Plan
Chapman Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Advantage DCP Limited Direct 100% 100% Lloyd's of London corporate vehicle
Romsey Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios UTG Partner Limited(i) Direct 100% 100% Corporate partner
Salviscount LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Inversanda LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Fyshe Underwriting LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Nomina No 505 LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Nomina No 321 LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 409) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1113) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Catbang 926 Limited Direct 100% 100% Lloyd's of London corporate vehicle
Whittle Martin Underwriting Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 408) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No 084 LLP Indirect 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 510) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 544) Limited Direct 100% 100% Lloyd's of London corporate vehicle
N J Hanbury Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1011) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1111) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No 533 LLP Indirect 100% 100% Corporate partner
NorthBreache Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
G T C Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Hillnameco Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 2012) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1095) Limited Direct 100% 100% Lloyd's of London corporate vehicle
New Filcom Limited Direct 100% 100% Lloyd's of London corporate vehicle
Kemah Lime Street Capital Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1130) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No 070 LLP Indirect 100% 100% Corporate partner
Nameco (No. 389) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No. 469 LLP Indirect 100% 100% Corporate partner
Nomina No. 536 LLP Indirect 100% 100% Corporate partner
Nameco (No. 301) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1232) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Shaw Lodge Limited Direct 100% 100% Lloyd's of London corporate vehicle
Queensberry Underwriting Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No 472 LLP Indirect 100% 100% Corporate partner
Nomina No 110 LLP Indirect 100% 100% Corporate partner
Chanterelle Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Kunduz LLP Indirect 100% 100% Corporate partner
Exalt Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1110) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Clifton 2011 Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nomina No 378 LLP Indirect 100% 100% Corporate partner
Gould Scottish Limited Partnership Indirect 100% 100% Corporate partner
Harris Family UTG Limited Direct 100% 100% Lloyd's of London corporate vehicle
Whitehouse Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Risk Capital UTG Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 606) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Nameco (No. 1208) Limited Direct 100% 100% Lloyd's of London corporate vehicle
Chorlton Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Park Farm Underwriting Limited Direct 100% 100% Lloyd's of London corporate vehicle
Hyde Park Capital Limited Direct 100% - Lloyd's of London corporate vehicle
Helios LLV One Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Two Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Three Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Four Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Five Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Six Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Seven Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Eight Limited Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Nine LLP Indirect 100% 100% Corporate partner
Helios LLV Ten LLP Indirect 100% 100% Corporate partner
Helios LLV Eleven Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twelve Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Thirteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Fourteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Fifteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Sixteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Seventeen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Eighteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Nineteen Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty One Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Two Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Three Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Four Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Five Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Six Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Seven Ltd Direct 100% 100% Lloyd's of London corporate vehicle
Helios LLV Twenty Eight LLP Indirect 100% 100% Corporate partner
Helios LLV Twenty Nine LLP Indirect 100% 100% Corporate partner
Helios LLV Thirty LLP Indirect 100% 100% Corporate partner
The movement in the equity portfolio is as follows:
2024 2023
LLVs Other LLVs Other
£'000 £'000 £'000 £'000
At valuation
Opening balance at 1 January 2024 114,987 898 64,305 731
Additions 1,520 - 6,395 67
Disposals - - - -
Unrealised gains 34,512 - 44,287 100
Closing balance at 31 December 2024 151,019 898 114,987 898
At costs
Opening balance at 1 January 2024 80,005 898 73,610 661
Additions 1,520 - 6,395 67
Disposals - - - -
Unrealised gains 69,494 - 34,982 170
Closing balance at 31 December 2024 151,019 898 114,987 898
The additions relate to the following transactions in the year:
• Acquisition of subsidiary Hyde Park Capital Limited
9. Cash and cash equivalents
31 December 31 December
2024 2023
£'000 £'000
Cash at bank - GBP current account 7,188 630
Cash at bank - USD current account 1,399 598
Fixed-term deposit 20,348 39,369
Total 28,935 40,597
10. Income tax (charge)/credit
Analysis of tax charge in the year is shown below.
31 December 31 December
2024 2023
£'000 £'000
Current tax: - -
- current year - 177
- prior year adjustment (177) (67)
Total current tax (177) 110
Deferred tax:
- current year - 2,177
- prior year adjustment (2,177) -
Total deferred tax (2,177) 2,177
Income tax charge (2,354) 2,287
Factors affecting the tax charge for the year and the differences are
explained below. The tax rate for the year is 25% (2023: 25%).
31 December 31 December
2024 2023
£'000 £'000
Profit before tax 20,929 36,256
Tax calculated as profit before tax multiplied by the standard rate of 5,232 9,064
corporation tax in the UK
Tax effects of:
- prior year adjustments (2,354) 110
- rate change and other adjustments - -
- permanent disallowances (8,603) (11,072)
- Group relief 3,371 2,008
- other - 2,177
Tax (charge)/credit for the year (2,354) 2,287
11. Deferred tax expense
Deferred tax is calculated in full on temporary differences using a tax rate
of 25% (2023: 25%).
The following amounts are shown in the statement of financial position:
2024 2023
£'000 £'000
Deferred tax liabilities
Crystallising after more than 12 months - -
Crystallising within 12 months - 2,177
- 2,177
The movements in the deferred tax liabilities are as follows:
Charged to
31 December 2024 Balance at Statement of Other Balance at end
beginning of income comprehensive of year
year £'000 income £'000
£'000 £'000
Other 2,177 (2,177) - -
2,177 (2,177) - -
Charged to
31 December 2023 Balance at Statement of Other Balance at end
beginning of income comprehensive of year
year £'000 income £'000
£'000 £'000
Equity investments at FVTPL
Other - 2,177 - 2,177
- 2,177 - 2,177
The company has not provided deferred tax on its gains on investments in
subsidiaries due to the Substantial Shareholding Exemption ("SSE") rules in
Taxation of Chargeable Gains Act 1992 Sch. 7AC which applied to share
disposals on or after 1 April 2017. In general terms, the rule changes relaxed
the conditions for the Group to qualify for SSE on a share disposal.
The company owns 100% of the share capital in all of its subsidiaries, and all
are registered in the United Kingdom. A continual assessment of investments
is carried out to test whether the SSE conditions continue to be met based
upon information that is available to the Group and that there is no change to
the accounting treatment in this regard under UK-adopted international
accounting standards.
12. Borrowings
31 December 31 December
2024 2023
£'000 £'000
Secured borrowings 58,457 57,461
Total 57,447 57,461
The company has access to a sterling revolving loan facility ("RLF") with
Barclays Bank Plc to the value of £15m. The interest is 4.2% per annum. On 21
March 2022, the full £15m was drawn down and on the 18 December 2023 the loan
was repaid in full. No further draw downs on the RLF have been made during
2024.
On 15 December 2023 the Company secured an A - stable rating from Kroll Bond
Rating Agency LLC ("KBRA") for up to US$100m seven-year unsecured debt at a
fixed coupon of 9.5%.
This borrowing is subject to various covenants. During the year, as a result
of share buy-backs there was a penalty payment made.
The fair value of borrowings is shown in note 5.1.
13. Share capital
In addition to voluntary disposal of shares by the shareholders, the Company
may elect to perform share buy-backs from time to time at an agreed upon
price. Such share buy-backs are entirely at the discretion of the management
of the Company.
The ordinary shares are entitled to all benefits of, and bear all the risk of,
the Company's investments in accordance with their terms. Each ordinary share
carries the right to one vote on any resolution of the members as to the
management of the Company.
The Directors may redeem any share issued by the Company at a premium.
For the year ended 31 December 2024 and 31 December 2023, the number of
ordinary shares outstanding which were issued and redeemed were as follows:
31 December 2024 Number of Ordinary Partly paid Share Ending
shares share ordinary premium balance
capital share capital £'000 £'000
£'000 £'000
Ordinary shares of 10p each and share premium 78,110 7,701 110 98,882 106,693
31 December 2023 Number of Ordinary Partly paid Share Ending
shares share ordinary premium Balance
capital share capital £'000 £'000
£'000 £'000
Ordinary shares of 10p each and share premium 77,946 7,685 110 98,596 106,391
Number of shares 2024 2023
Allotted, called up and fully paid ordinary shares:
- on the market 71,342,967 74,186,068
- Company buy-back of ordinary shares 5,667,335 2,659,765
77,010,302 76,845,833
Uncalled and partly paid ordinary shares under the JSOP scheme 1,100,000 1,100,000
78,110,302 77,945,833
Dividend paid or proposed
A dividend of £4,419,000 was paid during the year (2023: £2,319,000).
A final dividend of 10p is being proposed in respect of the financial year
ended 31 December 2024.
Treasury shares
The Company has in previous years bought back some of its own ordinary shares
on the market and these are held in treasury. During 2024, the Company has
bought back a further 3,007,570 shares for a total consideration of
£4,529,000. The average price per share was 151p.
The retained earnings have been reduced by a further £4,529,000, being the
consideration paid on the market for these shares, as shown in the statement
of changes in equity.
The Company cannot exercise any rights over these bought back and held in
treasury shares and has no voting rights. No dividend or other distribution of
the Company's assets can be paid to the Company in respect of the treasury
shares that it holds.
As at 31 December 2024, the 5,667,335 own shares bought back for a total of
£8,265,000 represent 7.36% of the total allotted, called up and fully paid
ordinary shares of the Company of 77,010,302.
14. Share options
Joint Share Ownership Plan ("JSOP")
500,000 shares have been vested as at 31 December 2021.
On 16 August 2021, a further 600,000 shares were issued.
Effect of the transaction
The beneficial interests of the Executives are as follows:
2024 2023
Interests Other Total Interests Other Total
in jointly interests in shareholding in jointly interests in shareholding
owned ordinary owned ordinary
ordinary shares ordinary shares
shares issued shares issued
under JSOP under JSOP
Arthur Manners 477,500 720,009 1,197,509 477,500 720,009 1,197,509
Nigel Hanbury 622,500 8,872,225 9,494,725 622,500 8,939,858 9,562,358
The JSOP is to be accounted for as if it were a premium priced option, and,
therefore, Black Scholes model has been applied to determine the fair value.
As the performance condition will eventually be trued up, a calculation of the
fair value based on an algebraic Black Scholes calculation of the value of the
"as if" option discounted for the risk of forfeiture or non-vesting is
reasonable. The discount factors are for the risk that an employee leaves and
forfeits the award or the failure to meet the performance condition with the
result the JSOP awards do not vest in full or at all.
The basic Black Scholes calculation for the new awards is based on the
following six basic assumptions:
(a) market value of a share at the date of grant (155p);
(b) expected premium or threshold price of a share (174.8p);
(c) expected life of the JSOP award (three years);
(d) risk-free rate of capital (1%);
(e) expected dividend yield (1.9%); and
(f) expected future volatility of a Helios share (20%).
Share-based payments
In 2022, the Company operated the Helios Underwriting plc Long Term Incentive
Plan ("LTIP").
On 16 December 2022, the Company granted 571,427 awards under the LTIP in the
form of nil-cost options. Under the same plan, the Company granted 491,227 on
30 May 2023, 520,717 on 14 June 2024 and 112,500 on 27 September 2024.
The awards' performance conditions set threshold (30%) to stretch (60%)
targets in respect of the Company's total shareholder return ("TSR") over the
three-year period following the grant of the awards. No portion of the awards
shall vest unless the Company's TSR at the end of the performance period
reaches the threshold target, for which one quarter of the awards would vest,
rising on a straight-line basis to full vesting of the awards for the
Company's TSR over the performance period being equal to the stretch target or
better. In the case of Executive Directors, any vested shares will be subject
to a two-year holding period.
On 5 April 2023 a further 875,000 awards were made under the Company's LTIP,
with the terms set out below. Of these awards, 525,000 have now lapsed,
leaving 350,000 options subject to the performance conditions below.
The awards' performance conditions set threshold (50%) to stretch (100%)
targets in respect of the Company's total shareholder return ("TSR") over the
five-year period following the grant of the awards. No portion of the awards
shall vest unless the Company's TSR at the end of the performance period
reaches the threshold target, for which one quarter of the awards would vest,
rising on a straight-line basis to full vesting of the awards for the
Company's TSR over the performance period being equal to the stretch target or
better. In the case of Executive Directors, any vested shares will be subject
to a two-year holding period.
Finally and award of 70,000 LTIP awards were granted on 27 September with no
performance conditions attached to facilitate a senior executive buyout. These
awards vest on 5 March 2025 subject to continued service.
The awards for the Executive Directors are set out in the Directors'
Remuneration Report.
The fair value of the LTIP awards is calculated using a Monte Carlo
(Stochastic) model taking into account the terms and conditions of the awards
granted. The inputs into the model were based on specific details at the date
of grant and therefore ranged across 2024 valuations as follows:
• share price at date of grant: 172.5p - 183.0p;
• exercise price: 0p;
• risk-free rate of interest: 3.88% - 4.32%;
• expected dividend yield: 0%;
• expected volatility: 27.39% - 27.48%; and
• expected life: 0.44 -3.00 years.
The resulting fair value of 65.44p includes the impact of the holding period.
No options were exercised during the year. The weighted average remaining life
of the options is 9.96 years.
The expected volatility is based on the movement in the share price over a
certain period prior to the grant date.
A total fair value amount of £1,859,000 has been/will be charged as an
expense over the vesting period in the statement of income as follows:
Total expense
£'000
2022 5
2023 275
2024 506
2025 556
2026 313
2027 177
2028 27
Total 1,859
15. Earnings per share
Basic earnings per share is calculated by dividing the net profit attributable
to ordinary equity holders of the Company 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 year, 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 earnings per share and weighted average number of shares used in the
calculation are set out below:
31 December 31 December
2024 2023
Profit/(loss) for the year after tax attributable to ordinary equity holders £18,75,000 £38,543,000
of the Parent
Basic - weighted average number of ordinary shares 72,672,057 75,933,065
Adjustment for Long Term Incentive Plan 2,049,969 1,500,554
Adjustment for JSOP scheme 1,100,100 1,100,000
Diluted - weighted average number of ordinary shares 75,822,026 78,533,619
Basic profit/(loss) per share 25.56p 50.76p
Diluted profit/(loss) per share 24.50p 49.08p
16. 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
from/(to) subsidiaries exceeding £1m as at 31 December 2024 are set out
below:
31 December 31 December
2024 2023
£'000 £'000
Nameco (No. 917) Limited 5,133 9,355
Helios UTG Partner Limited 14,119 13,618
Chapman Underwriting Limited 7,284 9,663
Romsey Underwriting Limited 3,928 7,001
Advantage DCP Limited (2,371) (1,699)
Catbang 926 Limited 4,623 6,378
N J Hanbury Limited 2,403 2,759
Queensberry Underwriting Limited 3,508 3,164
Chanterelle Underwriting Limited 2,485 1,892
Clifton 2011 Limited 2,147 2,089
Exalt Underwriting Limited 2,159 2,132
Harris Family UTG Limited 1,986 1,479
Whitehouse Underwriting Limited 1,018 -
Risk Capital UTG Limited 2,577 2,282
Nameco (No. 1208) Limited 1,258 1,261
Park Farm Underwriting Limited (1,398) (1,578)
Hyde Park Capital Limited 5,532 -
Subsidiaries below £1,000,000 1,184 4,737
Due from related parties 55,167 64,533
During 2024, the following Directors received dividends in line with their
shareholding held:
Director Shareholding at date Dividend received
dividend declared 19 July 2024
29 June 2024 £
£
Nigel Hanbury (either personally or has an interest in) 9,386,032 563,162
Andrew Christie 34,451 2,067
Arthur Manners (either personally or has an interest in) 1,197,509 71,850
Tom Libassi (has an interest in) 13,413,500 804,810
Michael Wade 116,470 6,988
Edward Fitzalan-Howard 382,864 22,972
Martin Reith 257,727 15,464
Directors' remuneration
Director 31 December 31 December
2024 2023
£ £
Arthur Manners 460,000 490,000
Edward William Fitzalan-Howard (resigned 19 April 2024) 8,000 30,000
Michael Cunningham (resigned 29 June 2023) - 20,000
Andrew Christie 33,000 33,000
Nigel Hanbury 135,000 450,000
Martin Reith (resigned June 2024) 872,000 840,000
Tom Libassi 25,000 25,000
Michael Wade (resigned 28 February 2025) 218,000 50,000
John Chambers (appointed 28 June 2024) 27,000 -
Katherine Wade (appointed 29 August 2024) 13,000 -
1,791,000 1,938,000
All related party transactions were made on terms equivalent to those that
prevail in arm's length transactions.
17. Conversion from UK GAAP to IFRS
The 31 December 2022 Financial Statements and prior were prepared in
accordance with International Financial Reporting Standards ("IFRSs").
The 31 December 2023 Financial Statements were prepared in accordance with
United Kingdom Accounting Standards ("UK GAAP"), including FRS 102 "The
Financial Reporting Standard applicable in the UK and Republic of Ireland" and
FRS 103 "Insurance Contracts".
The reason for the change in accounting framework in 2023 is that it was not
possible for the Directors to obtain financial information in respect of the
underlying syndicate participations that would be required to comply with IFRS
17 "Insurance Contracts", which took effect for accounting periods beginning
on or after 1 January 2023. Helios received a special exemption from AIM to
report under UK GAAP.
In order to align to the accounting framework applied by its peers and to
allow for greater comparability of financial results in the market, the
Company converted back to IFRS for the financial year ended 31 December 2024.
The change was applied retrospectively in accordance with IAS 8.
The comparative figures have been adjusted to reflect the changes in the
accounting framework below:
£'000
Value reported under UK GAAP 80,005
Impact of conversion from UK GAAP to IFRS 34,982
Value reported under IFRS 114,987
18. Restatement
The prior year Financial Statements were restated for the correction of a
prior period error as follows:
Statement of financial position As previously reported Restatement Restated balances
31 December 2023 (Note 1) 31 December 2023
£'000 £'000 £'000
Assets
Investment in subsidiaries 80,005 (80,005) -
Equity investments at FVTPL - 115,885 115,885
Financial assets at FVTPL 898 (898) -
Other debtors 1,878 (71,656) 287
Due from related parties 70,065 - 70,065
Deferred tax assets 2,177 - 2,177
Cash and cash equivalents 40,596 - 40,596
Total assets 195,619 27,859 229,010
Liabilities
Deferred tax liabilities - - -
Borrowings 59,055 (1,594) 57,461
Due to related parties 5,532 - 5,532
Other creditors - 94 94
Accruals and other payables 3,315 3,222
Total liabilities 67,902 (7,125) 66,309
Equity
Share capital 7,795 - 7,795
Treasury shares - (3,736) (3,736)
Share premium 98,596 - 98,596
Retained earnings 21,026 38,720 59,746
Other reserves 300 - 300
Total equity 127,717 34,984 162,701
Total liabilities and equity 195,619 27,859 229,010
As previously Restatement Restated
reported (Note 1) balances
Statement of financial position 1 January 2023 £'000 1 January 2023
£'000 £'000
Assets
Investment in subsidiaries 65,546 (65,546) -
Equity investments at FVTPL - 65,036 65,036
Financial assets at FVTPL 731 (731) -
Due from related parties 73,506 - 73,506
Other debtors 1,277 (73,506) 1,277
Cash and cash equivalents 9,348 - 9,348
Total assets 150,408 (1,241) 149,167
Liabilities
Deferred tax liabilities - - -
Borrowings 15,000 - 15,000
Due to related parties 3,128 - 3,128
Accruals and other payables 2,002 (2) 2,000
Total liabilities 20,130 (2) 20,128
Equity 7,774 - 7,774
Share capital - (526) (526)
Share premium 98,268 - 98,268
Retained earnings 24,236 (713) 23,523
Other reserves - - -
Total equity 130,278 (1,239) 129,039
Total liabilities and equity 150,408 (1,241) 149,167
Amounts due from related parties under UKGAAP were included within other
debtors and other payables. Under IFRS and the change in accounting
framework they are disclosed separately under 'Due from/to related parties'.
Treasury shares under UKGAAP were held within retained earnings. Under IFRS
and the change in accounting framework they are now shown separately under
'Treasury Shares'.
Note 1: Investment in subsidiaries
In 2022 and prior the requirements of IFRS 10 were not appropriately applied
to the Company and as such the investment in subsidiaries was recorded at cost
less impairment in the Financial Statements.
In the current financial year ended 31 December 2024, the requirements of IFRS
10 - paragraph 27 were reassessed in consideration of Helios' business purpose
and model. Based on the requirements of IFRS, Helios meets the definition of
an investment entity under IFRS 10 - paragraph 27. The incorrect application
of IFRS 10 in the 2022 and prior Financial Statements in relation to the
definition of an investment entity represents a prior period error.
As an investment entity, the investment in subsidiaries will be measured at
FVTPL. The error in the prior period Financial Statements was corrected in the
current year and the opening balance sheet restated accordingly.
On application of investment entity accounting the fair value of the
subsidiaries was £64.3m. There was a gain of £44.3m and this was recognised
in the statement of income within net gains on financial assets at FVTPL.
Statement of income As previously Restatement Restated
reported £'000 balances
31 December 31 December
2023 2023
£'000 £'000
Income
Interest income 87 - 87
Dividend income 21 - 21
Net gains on financial assets at FVTPL - 44,387 44,387
Other income (44) (100) (143)
Total income 64 44,288 44,352
Expenses
Professional fees (4,933) - (4,933)
Interest expense (1,720) - (1,720)
Other expenses (1,443) - (1,443)
Impairment of subsidiaries 8,063 (8,063) -
Total expenses (33) (8,063) (8,096)
Net profit before income tax 31 36,225 36,256
Income tax expense 2,287 - 2,287
Net profit for the year after tax 2,318 36,225 38,543
Basic EPS 3.05 47.71 50.76
Diluted EPS 2.95 6.13 49.08
Statement of cash flow As previously reported Restatement Restated balances
31 December 2023 Note 2 31 December 2023
£'000 £'000 £'000
Cash flows from operating activities
Profit before tax 2,318 33,938 36,256
Adjustments for:
- investment income 65 (65) -
- interest paid on borrowings 1,622 (1,622) -
- impairment of investment in subsidiaries (8,063) 8,063 -
- net gains on financial asset at FVTPL - (44,388) (44,388)
Changes in working capital:
- decrease in due from related parties - 5,846 5,846
- decrease in other debtors - 990 990
- decrease in accruals and other payables - 63 63
- increase in financial assets at fair value through profit or loss (167) 167 -
- decrease in other receivables (5,184) 5,184 -
- increase in other payables 4,041 (4,041) -
- purchase of financial assets - (6,395) (6,395)
Net cash used in operating activities (5,368) (2,260) (7,628)
Cash flows from investing activities
Investment income (65) 65 -
Acquisition of subsidiaries (7,268) 7,268 -
Amounts owed by subsidiaries 6,695 (6,695) -
Net cash used in investing activities (638) 638 -
Cash flows from financing activities
Net proceeds from the issue of ordinary share capital 349 - 349
Payment for Company buy-back of shares (3,209) - (3,209)
Proceeds from borrowings 59,055 - 59,055
Repayment of borrowings (15,000) - (15,000)
Interest paid on borrowings (1,622) 1,622 -
Dividends paid to owners of the Parent (2,319) - (2,319)
Net cash from financing activities 37,254 1,622 38,876
Net increase in cash and cash equivalents 31,248 - 31,248
Cash and cash equivalents at beginning of year 9,348 - 9,348
Cash and cash equivalents at end of year 40,596 - 40,596
Note 2: Impairment of subsidiaries
Due to the fair valuation of the investments in subsidiaries in accordance
with IFRS 9, the impairment of subsidiaries expense in the prior year cash
flow has been adjusted for as it is no longer required to be calculated.
Earnings per share As previously reported Restatement Restated balances
31 December 2023 £'000 31 December 2023
£'000 £'000
Basic 21.56 29.20 50.76
Diluted 20.85 28.23 49.08
19. Reconciliation to US GAAP
The below disclosures reconcile to those that would have been reported under
US GAAP.
31 December 2024 31 December 2023
Earnings per share 21.56 50.76
Book value per share 2.43 2.19
20. Contingencies
As at 31 December 2024 and 31 December 2023, the Company did not have any
contingencies.
21. Subsequent events
In respect of the year ended 31 December 2024, a final dividend of 10p per
fully paid ordinary share amounting to a total dividend of £7,244,000 is to
be proposed at the Annual General Meeting on 27 June 2025. These Financial
Statements do not reflect this dividend payable.
22. Syndicate participations
The syndicates in which the Company's subsidiaries participate as corporate
members of Lloyd's either directly or through MAPAs are as follows:
Allocated capacity per year of account
Syndicate number Syndicate 2025 2024 2023 2022
33 Hiscox Syndicates Limited 15,108 15,358 15,358 15,357
218 ERS Syndicate Management Limited 19,399 18,438 18,438 8,246
318 Cincinnati Global Underwriting Agency Limited 1,082 1,082 862 993
386 QBE Underwriting Limited 2,889 3,139 3,139 3,067
510 Tokio Marine Kiln Syndicates Limited 15,307 31,807 29,591 35,379
557 Tokio Marine Kiln Syndicates Limited - - - 3,509
609 Atrium Underwriters Limited 18,794 19,527 18,421 13,714
623 Beazley Furlonge Limited 28,866 32,686 28,909 23,293
727 S A Meacock & Company Limited 2,956 2,956 2,956 2,423
1176 Chaucer Syndicates Limited 2,575 2,875 2,875 2,875
1200 Argo Managing Agency Limited - - 55 10,050
1609 Mosaic Insurance 20,000 - - -
1699 Volante Global - 5,000 - -
1729 Dale Partners (Asta) 25,117 25,117 21,694 11,690
1796 Parsyl - 7,000 - -
1902 Medical & Commercial Insurance 12,635 12,635 10,688 10,000
1910 Ariel Re 20,000 - - -
1925 Envelop Risk 7,500 12,500 - -
1955 Arch Managing Agency Limited 24,640 20,000 12,500 -
1966 Medical & Commercial Insurance 12,600 15,000 - -
1969 Apollo Syndicate Management Limited - 25,498 12,171 5,675
1971 Apollo Syndicate Management Limited 25,000 25,000 10,000 6,467
1984 Convex Insurance 6,980 - - -
1985 Flux Syndicate 12,693 20,108 16,946 -
1988 CFC Syndicate - 15,125 15,000 -
1996 Wildfire Defense Syndicate - 9,523 5,988 -
2010 Lancashire Syndicates Limited - 7,338 7,338 10,642
2024 AdA Special Purpose Arrangement 6,712 8,522 - -
2121 Argenta Syndicate Management Limited 5,206 5,206 272 10,267
2358 Nephila Follow syndicate 25,000 20,000 - -
2427 Agile Underwriting Services 15,000 15,000 - -
2454 Africa Specialty Risks 7,500 5,800 - -
2525 Secure Liability Solutions (Asta) 2,412 2,612 2,311 1,856
2689 Hampden Risk Partners (HRP) 14,755 6,428 3,359 10,771
2791 Managing Agency Partners Limited 16,172 16,422 12,001 10,123
3123 Fidelis Insurance Group 14,060 5,239 - -
3939 NormanMax Insurance Solutions 12,000 12,000 - -
4242 Beat Capital 16,523 16,662 12,607 14,747
4444 Canopius Syndicate - 24 21 20
5183 Micro Insurance Digital Solutions - 1,727 5,000 -
5623 Beazley Furlonge Limited 26,843 27,877 18,422 7,100
5886 Blenheim Underwriting Limited 37,478 30,840 27,132 23,165
6103 Managing Agency Partners Limited 4,615 4,150 3,301 3,480
6104 Hiscox Syndicates Limited 12,008 10,000 32 1,774
6107 Beazley Furlonge Limited - 1,550 164 1,682
6117 Ariel Re Managing Agency Limited 570 947 491 3,189
Total 490,995 518,718 318,042 251,554
* Including the new acquisitions in 2024.
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. END FR UPUMGQUPAGBGRecent news on Helios Underwriting
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