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Currency in GBP
Last close As at 09/06/2023
GBP1.75
▲ 3.00 (1.74%)
Market capitalisation
GBP135m
Helios Underwriting was established in 2007 primarily to provide investors with a limited liability direct investment into the Lloyd’s insurance market. It is an AIM-quoted holding company, providing underwriting exposure across a diversified portfolio of selected Lloyd’s syndicates.
The outlook for Lloyd’s has improved meaningfully with cumulative premium increases of 30% since 2018. The war in Ukraine may affect loss ratios, for the aviation sector in particular, but the greater impact will be from rising inflation and interest rates, which could increase near-term losses but should also meaningfully boost investment income.
Analyst
Nigel Hanbury
CEO
Forecast net debt (£m)
11.5
Forecast gearing ratio (%)
10
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | 10.4 | 7.7 | 4.2 |
| Relative | 12.8 | 12.3 | 5.2 |
| 52 week high/low | 175.0p/143.5p |
Helios Underwriting is a successful aggregator of Lloyd’s of London (Lloyd’s) syndicate capacity, delivering a ninefold increase since FY16 and a 27% increase reported for 2023. This was supported by a capital raise in 2022, reinsurance utilisation and strong syndicate growth. Its larger portfolio, alongside a hardening underwriting cycle and higher interest rates, should fuel strong earnings growth into FY24 and FY25. Capacity growth is expected to moderate until this growth is delivered, unless Helios can raise further capital. The large £3bn pool of limited liability vehicle capacity remains an attractive growth opportunity to then pursue.
| 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 | 109.4 | N/A |
| 2021A | 70.6 | (1.9) | (1.9) | (0.7) | N/A | N/A |
| 2022E | 137.6 | (1.6) | (1.6) | (1.2) | N/A | N/A |
| 2023E | 218.7 | 20.8 | 20.8 | 21.5 | 8.1 | 5.5 |
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