Helios Underwriting shares rise after value update

Lloyd’s market investment vehicle Helios Underwriting updated the market on the value of its capacity portfolio on Wednesday, following the recent capacity auctions at Lloyd’s.

The AIM-traded company said the value of its capacity fund, calculated as of 31 December 2023 using the weighted average prices of capacity from the 2023 auctions, was expected to increase significantly.

Specifically, it was projected to reach £82.4m - a notable rise from the £60m value recorded on 31 December 2022.

The board attributed the increase in the value of the capacity portfolio to several key developments, with the first being Helios’ acquisition of four limited liability vehicles (LLVs) during 2023, which collectively possessed a capacity worth £8.2m.

Notably, the LLVs were initially valued at 2022 capacity prices, amounting to £3.5m.

Secondly, the syndicates supported by Helios extended preemptions, offering free capacity worth £14.7m.

That, the company said, was part of its efforts to bolster the underwriting market, albeit lower than the £21.7m offered in 2022.

The value of the preemptions that were taken up contributed to an increase of £7m in the portfolio’s overall value.

Additionally, Helios said it had strategically acquired capacity during the 2023 auctions on syndicates 2121 and 2689, further enhancing its positions within those syndicates.

The average price per pound sterling of capacity with value after the 2023 auctions was 47p, marking an increase from the 41p recorded in 2022.

That reflected the overall rise in auction prices during the year.

Helios said the resulting increment in the capacity portfolio’s value, totalling £13.9m net of a provision for deferred tax, was expected to translate to an 18.2p increase in the tangible net asset value.

That would represent an impressive 11.9% growth over the tangible net asset value recorded on 30 June, which stood at 154p.

As a result of the developments, the pro-forma tangible net asset value per share as of 30 June, adjusted for the increased value of the capacity fund, now stood at 172p.

Helios Underwriting said it intended to publish an updated net asset value per share as of 30 September in early December.

“I am delighted that the value of the freehold capacity has increased to £82m, representing an increase in the net asset value per share of 18.2p,” said chief executive officer Martin Reith.

“This is an increase of 11.9% over the reported net asset value as at 30 June, and demonstrates the strength of our portfolio and acquisition strategy.”

At 1142 GMT, shares in Helios Underwriting were up 2.88% at 157.4p.

Reporting by Josh White for Sharecast.com.