Helios Underwriting - Interim results deliver long-awaited upswing
Helios Underwriting reported H123 EPS of 5.7p, a meaningful turnaround from a 4.4p loss in H122 and a 4.9p loss in FY22. It benefited from a much-improved combined ratio of 88% (H122: 95%) and a turnaround in syndicate investment income, supported by 28% growth in gross written premiums (GWP). It recorded a 4.8% increase in underwriting capacity, to £310.8m, thanks to acquisitions and new investment. Group investment income lagged in H123 but is forecast to deliver strongly in H223 and into FY24. This resulted in a small reduction in our FY23 EPS forecast from 15.1p to 14.6p, but thanks to increases for FY24 and FY25, benefiting from share buybacks, our valuation remains unchanged at 252p/share, a 46% premium to our FY23e net asset value (NAV) and double the current share price. As the forced sell-off by Odey Asset Management is completed, a more liberal dividend policy and further buybacks should be supportive.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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