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Financial Summary

The information set out below is a summary of the key items that the Board assesses in estimating the financial position of the Group. Given the Board has no active role in the management of the syndicates within the portfolio, the following approach is taken.

  1. It relies on the quarterly syndicate forecasts to assess its share of the underlying profitability of the syndicates within the portfolio.
  2. It calculates the amounts due to / from the quota share reinsurers in respect of their share of the profits/losses as well as fees and commissions due.
  3. An adjustment is made to exclude pre-acquisition profits on companies bought in the year.
  4. Costs relating to stop loss reinsurance and operating costs are deducted.

Year to 31 December

2017
£’000
2016
£’000
Underwriting profit 183 2,208
Other income:
– fees from reinsurers 426 557
– corporate reinsurance recoveries 629
– goodwill on bargain purchase 65
– investment income 158 347
Total other income 1,278 904
Costs:
– pre-acquisition 38 (63)
– stop loss costs (259) (248)
– operating costs (1,646) (1,467)
Total costs (1,867) (1,778)
Operating profit before goodwill and impairment (406) 1,334
Impairment charge (899) (555)
Tax 611 (66)
Profit for the year (694) 713

Year to 31 December 2017

Underwriting Year Helios retained capacity at 31 December 2017 £m Portfolio mid point forecasts Total profit currently estimated £’000 % earned in the 2017 calendar year Helios profits £’000
2015 19.7 12.9% 2,547 51% 1,294
2016 18.3 3.5% 641 116% 741
2017 12.0 N/A (1,852)
183

Year to 31 December 2016

Underwriting Year Helios retained capacity at 31 December 2016 £m Portfolio mid point forecasts Total profit currently estimated £’000 % earned in the 2016 calendar year Helios profits £’000
2014 20.6 15.5% 3,193 52% 1,661
2015 16.1 8.2% 1,314 79% 1,031
2016 10.8 N/A (484)
2,208

Summary Balance Sheet

2017
£’000
2016
£’000
Intangible assets 12,175 10,732
Funds at Lloyd’s 10,489 4,083
Other cash 1,078 7,229
Other assets 6,669 3,480
Total assets 30,411 25,524
Deferred tax 2,963 3,581
Borrowings 1,094
Other liabilities 4,390 4,618
Total liabilities 8,447 8,199
Total syndicate equity (954) 5,194
Total equity 21,010 22,519
Cash flow

Helios has generated £1.3m of cash in 2018 from the distribution of the profits from the 2015 underwriting year.

Analysis of free working capital Year to 31 December 2017 £’000 Year to 31 December 2016 £’000
Opening balance (free cash) 7,229 2,973
Income
Cash acquired on acquisition 420 413
Distribution of pro ts (net of tax retentions) 4,064 3,378
Transfers from Funds at Lloyd’s 2,211 3,775
Other income 300 271
Proceeds from the issue of shares 5,722
Transfers from PTF accounts (early release) 1,081
Expenditure
Operating costs (1,281) (815)
Reinsurance cost (262) (237)
Payments to QS reinsurers (550) (741)
Acquisition of LLVs (4,858) (5,592)
Transfers to Funds at Lloyd’s (5,818) (1,524)
Tax (655) (95)
Dividends paid (803) (299)
Closing balance 1,078 7,229