Helios Underwriting reports 'excellent' 2024 financial performance
Helios Underwriting reported an 11% increase in its net asset value in its preliminary results on Thursday, to 243p per share for 2024, alongside a recommended cash dividend of 10p per share and a total expected capital return of 20p.
The AIM-traded company, which has a stated aim to offer investors access to a diversified portfolio of Lloyd’s syndicates, posted a profit before tax of £20.9m for the year, reflecting gains from the revaluation of investments now accounted for under IFRS as an investment entity.
Retained underwriting profit was stable at £31.4m, while the firm’s total shareholder return stood at 16.8%.
Helios reduced its net debt ratio to 46% and said it expected to receive £40m in underwriting profits from the 2023 year of account in 2026.
The adoption of investment entity accounting aligned the firm’s valuation methodology more closely with market norms, eliminating deferred tax provisions on capacity revaluations and incorporating pipeline profits based on syndicate manager estimates.
“The excellent 2024 financial performance of Helios reflects the strength of our unique proposition, our continued strategic delivery and favourable underwriting conditions,” said interim executive chairman John Chambers.
“As a result, we have been able to continue to unlock shareholder returns, highlighted by an 11% increase in net asset value and a recommended dividend of 10p per share.
“Whilst our profit before tax was impacted by an expected rise in costs resulting from unsecured loan notes and stop-loss protection, as well as one-off operating costs incurred in 2024, we're delighted to be reporting our results as an investment entity under IFRS, to better reflect the company's business activities and its true performance.”
Chambers said the period had been characterised by an increasingly disciplined approach to the allocation of capital - prioritising established syndicates with profitable track records over new syndicates - while making headway in bringing the company’s operational leverage down to a more sustainable level going forward.
“We believe that the best years of this insurance cycle remain ahead of us from a returns perspective with the work done by the portfolio team in increasing the quality of the syndicate portfolio expected to show through in future years while the Lloyd's three-year accounting structure provides the company with good visibility for the next two years, where we expect to see a similar level of capital returned to shareholders.”
At 1217 BST, shares in Helios Underwriting were up 2.22% at 230p.
Reporting by Josh White for Sharecast.com.