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 65% since 2018. This should continue supporting lower combined ratios, with higher interest rates boosting investment income. The Ukraine war may still affect loss ratios, but natural catastrophe claims and the hurricane season present the greatest risks.
Financials |
Update
Financials |
Update
Financials |
Update
Financials |
Outlook
Martin Reith
CEO
Arthur Manners
FD
Forecast net debt (£m)
17.9
Forecast gearing ratio (%)
13
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (7.7) | 10.2 | 0.0 |
Relative | (8.5) | 6.9 | 0.4 |
52 week high/low | 182.5p/115.0p |
On 22 March, Helios Underwriting reported NAV for 31 December 2023 of 185p/share. This is broadly in line with our expectations and has not affected the forecasts in our update note published on 16 January. We maintain our valuation of 280p/share, which is at a 51% premium to the 31 December 2023 NAV. Since our last publication, Helios’s share price has risen by 22% (up 33% in the last month). This strong performance is well supported by the underlying fundamentals and outlook (as highlighted in our research) and was delivered despite the conclusion of Helios’s share buyback in January. Share overhang pressure appears to have subsided, although one of Helios’s key shareholders, Hudson Structured Capital Management (HSCM), may still be a natural seller of Helios shares due to internal issues.
Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 70.6 | (1.9) | (1.9) | (0.8) | N/A | N/A |
2022A | 148.3 | (5.2) | (5.2) | (4.9) | N/A | N/A |
2023E | 213.0 | 14.9 | 14.9 | 14.5 | 11.2 | 9.3 |
2024E | 332.1 | 25.8 | 25.8 | 25.7 | 6.3 | 10.3 |