Helios Underwriting Plc Acquisition of Chapman Underwriting Limited (0304X)

TIDMHUW

RNS Number : 0304X

Helios Underwriting Plc

21 November 2017

Helios Underwriting plc

("Helios" or the "Company")

Acquisition of Chapman Underwriting Limited

Helios is pleased to announce that, in line with its strategy of increasing underwriting capacity through acquisition, on 20th November 2017, following approval of change of control by Lloyd's of London ("Lloyd's"), it has acquired Chapman Underwriting Limited ("Chapman"), a limited liability member of Lloyd's for a consideration of GBP540,000 in cash.

Information in respect of Chapman

The 2017 underwriting capacity of Chapman is GBP670,000 (this compares with Helios's 2017 capacity of GBP35.7m prior to this acquisition). Chapman participates in a spread of Lloyd's syndicates that broadly matches the existing portfolio of Helios and this transaction enables Helios to continue to build its participations on the better syndicates at Lloyd's.

The capacity acquired, together with the capacity Helios expects to retain for the 2018 underwriting year, is as follows:

 
     Chapman            Year of Account 
----------------  -------------------------- 
                   2015   2016   2017   2018 
----------------  -----  -----  -----  ----- 
                   GBPm   GBPm   GBPm   GBPm 
----------------  -----  -----  -----  ----- 
 Retained          0.62   0.63   0.67   0.33 
----------------  -----  -----  -----  ----- 
 Reinsured          -      -            0.77 
----------------  -----  -----  -----  ----- 
 Total Capacity    0.65   0.63   0.67   1.10 
----------------  -----  -----  -----  ----- 
 

The planned capacity for Chapman for 2018 includes pre-emption offers taken up and the re-allocation of some Group capacity.

The total value acquired compared to the consideration paid is as follows:

 
 All in GBP'000's    At Humphrey    Value using   Split of actual 
                       Valuation     2017 WAV -    Consideration 
                      - July 2017     Nov 2017 
------------------  -------------  ------------  ---------------- 
 Tangible Net 
  Assets                 429            404             404 
------------------  -------------  ------------  ---------------- 
 Capacity Value          342            267             136 
------------------  -------------  ------------  ---------------- 
 Total Value             771            671             540 
------------------  -------------  ------------  ---------------- 
 Discount of 
  consideration 
  to Total Value         43%            24% 
------------------  -------------  ------------  ---------------- 
 

The net assets acquired of GBP404,000 include a provision for a loss on the 2017 year of account of 5% at 36 months.

Additional information

Chapman is a limited liability member of Lloyd's. In the year ended 31 December 2016, Chapman made a profit before tax of GBP48,619 on gross premiums written of GBP0.63m.

Set out below are Chapman's 2015 and 2016 open years of account forecasts:

 
  YOA     Chapman                     Forecast of 
          syndicate                 syndicate profit 
          capacity                   (30 September 
          (GBP'000)                      2017) 
------  -----------  -----------  ------------------  ------------- 
                      Mid-point      Mid-point (%)      Range (%) 
                       (GBP'000) 
------  -----------  -----------  ------------------  ------------- 
 2015       624           62             9.86          6.51 - 13.22 
------  -----------  -----------  ------------------  ------------- 
                                                         (1.84) - 
 2016       635           16             2.52              6.88 
------  -----------  -----------  ------------------  ------------- 
 

Source: Syndicate data and Helios analysis (before early release)

For further information please contact:

Helios

Nigel Hanbury - Chief Executive 020 7863 6655 / [e-mail]

   Arthur Manners - Chief Financial Officer                                              07754 965 917 

Stockdale

Robert Finlay 020 7601 6100

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 GBP36.3m of capacity for the 2017 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 21, 2017 02:00 ET (07:00 GMT)