Helios Underwriting - Increasing asset base to attract higher yields
Helios Underwriting’s financial assets grew 21% from FY21 and could reach £235m by year-end, benefiting from the 111% increase in Lloyd’s of London (Lloyd’s) underwriting capacity (capacity) in FY21. Rising gilt yields drove short-term losses on fixed interest assets and an H122 EPS loss of 5.4p, but we forecast much higher investment returns. Ukraine claims provisions muted the results, but normalised recovery continued. The hard Lloyd’s premium rate environment bodes well for strong underwriting results in the FY23 and thereafter. We upgrade our FY23 EPS forecast by 18.5%, followed by 6.5% in FY24e and 7% in FY25e, resulting in a 6.7% increase in our valuation to 240p/share.Helios Underwriting is engaged in providing a limited liability investment for its shareholders in the Lloyd's insurance market. Co. participates in the Lloyd's insurance market through its participation in a portfolio of Lloyd's syndicates. Co. has three segments that represent the primary way in which Co. is managed, as follows: syndicate participation; investment management; and other corporate activities.
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