Revision to Adjusted Net Asset Value

RNS Number : 2820P

Helios Underwriting Plc

16 February 2021

 

Helios Underwriting plc

("Helios" , "Company" or the "Group" )

Revision to Adjusted Net Asset Value

Helios, the unique investment vehicle which acquires and consolidates underwriting capacity at Lloyd's , announces an update on the Company's approach to determining the adjusted net asset value of the Company.

Adjusted net asset value

Helios has disclosed an adjusted net asset value to allow investors to assess the value of the underlying assets in the business.  Two adjustments have been made to the net asset value as disclosed in the Company's historic consolidated balance sheets to arrive at an adjusted net asset value.  The net asset value as disclosed in the Company's audited financial statements remains unaffected.

a)   In the consolidated balance sheets, the value of the capacity was included at "Fair Value", being that value at the time it was acquired with an LLV, as adjusted for any impairment.  A management adjustment was made to include in the adjusted net asset value the current value of the capacity as determined by reference to the weighted average prices from the last Lloyd's capacity auctions. This increased the value of capacity as at 30 ^th June 2020 from £21.6m to £26.8m.  This correctly reflected the value of the capacity portfolio.

b) A second management adjustment was made to include Group letters of credit relating to reinsurance policies of LLVs that has been acquired in the past.  As at 30 ^th June 2020, the value of these Group letters of credit was £2.9m.  These reinsurance policies provide third party funds at Lloyd's ("FAL") for certain LLVs which, as off-balance sheet items, are not included on the balance sheets of LLVs.  On acquisition of these LLVs, an assessment of the Fair Value of the assets acquired was made, including the assets provided by these reinsurance policies and a reserve at consolidation level was made to reflect the value of the third party FAL provided.  Following an internal review, the further management adjustment to reflect the value of these assets was unnecessary as the provision on consolidation properly reflected the value of the Group letters of credit and consequently the adjusted net asset value per share was overstated. 

The Board will be considering adopting an accounting policy to value assets at current fair value rather than using cost at the time of acquisition for both the capacity value and for the value of the Group letters of credit.

The table below shows the change to the calculation of the adjusted net asset value per share reflecting the capital raise as completed in November 2020, excluding the adjustment for the Group letters of credit.

	As at Jun 2020	Equity Raise (Nov 2020)	Pro forma Nov 20 20
	£'000's	£'000's	£'000's
Net tangible assets	6,397	13,268	19,665
Value of capacity (WAV)	26,827		30,826
Adjusted Net assets	33,224		50,491
Fully d iluted s hare in issue , thousands	17,978	15, 534	33, 512
Revised ANAV per share , £	1.85		1.5 1
Latest p ublished ANAV * f ully d iluted , £	2.01		1.55
Reduction	8.1 %		3.0 %

*As announced on 2 Nov ember 2020 and adjusted for the Company's Joint Share Ownership Plan shares nearing vesting, but before the effect of the weighted average price from the Lloyd's capacity auctions which was made available at the end of November 2020 and any subsequent acquisition of capacity.

Notes to the a djustments:

a)  The capital raise in November 2020, approximately 15.288 million new ordinary shares were issued increasing shareholders' funds (net of costs) by approximately £18.0m.  The increase in net tangible assets (excluding the value of capacity acquired with LLVs that were satisfied by the issue of new ordinary shares) was approximately £13.268m.

b)  The value of the capacity portfolio as at 31 ^st December 2020 reflecting the weighted average prices as at 4 ^th quarter 2020 and the enlarged capacity portfolio has been included.

For further information please contact:

Helios Underwriting plc

Nigel Hanbury - Chief Executive                                           [phone] / [e-mail]

Arthur Manners - Chief Financial Officer [phone]

Shore Capital (Nomad and Broker)

Robert Finlay                                                                           [phone]

David Coaten 

Henry Willcocks

Willis Re Securities (Financial Adviser)

Alastair Rodger                                                                       [phone]

Quentin Perrot                                                                         [phone]

Buchanan

Helen Tarbet / Henry Wilson / George Beale                     [phone]

                                                                                                    [phone]  

About Helios

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £110m of capacity for the 2021 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.

 

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