Lloyd’s Building

Helios Underwriting

LN: HUW

Market Cap£109m

Last Close 157.5p

Helios Underwriting was established in 2007 primarily to provide investors with a limited liability direct investment to the Lloyd’s insurance market. It is an AIM-quoted company, providing underwriting exposure to a diversified portfolio of syndicates.

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Investment summary

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.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 52.6 (0.9) (0.9) 1.6 98.4 N/A
2021A 70.6 (1.9) (1.9) (0.7) N/A N/A
2022E 136.6 (1.0) (1.0) (1.1) N/A N/A
2023E 191.7 18.6 18.6 21.5 7.3 4.5
Industry outlook

The outlook for Lloyd’s has improved meaningfully with cumulative premium increases of 30% since 2018. The Ukraine war may affect loss ratios for the aviation sector in particular but the greater impact will be from rising inflation, which could increase losses, but could also benefit investment income.

Last updated on 29/09/2022
Content on Helios Underwriting
Helios Underwriting – Increasing asset base to attract higher yields
Financials | research Update | 29 September 2022
wooden scale balancing spheres with the message RISK, REWARD and ? - 3d illustration
Helios Underwriting – Increased Lloyd’s participation at the right time
Financials | research Initiation | 24 February 2022
wooden scale balancing spheres with the message RISK, REWARD and ? - 3d illustration
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Share price graph
Balance sheet
Forecast net debt (£m) 4
Forecast gearing ratio (%) 4
Price performance
%
1m
3m
12m
Actual 5.0 (2.2) 1.6
Relative* 12.0 3.3 7.3
52-week high/low 195.0p/143.5p
*% relative to local index
Key management
Nigel Hanbury CEO