HELIOS UNDERWRITING PLC reported H123 EPS of 5.7p, a meaningful turnaround from a 4.4p loss in H122 and a 4.9p loss in FY22. It benefited from a much-improved combined ratio of 88% (H122: 95%) and a turnaround in syndicate investment income, supported by 28% growth in gross written premiums (GWP). It recorded a 4.8% increase in underwriting capacity, to £310.8m, thanks to acquisitions and new investment. Group investment income lagged in H123 but is forecast to deliver strongly in H223 and into FY24. This resulted in a small reduction in Edison Group's FY23 EPS forecast from 15.1p to 14.6p, but thanks to increases for FY24 and FY25, benefiting from share buybacks, Edison's valuation remains unchanged at 252p/share, a 46% premium to their FY23e net asset value (NAV) and double the current share price. As the forced sell-off by Odey Asset Management is completed, a more liberal dividend policy and further buybacks should be supportive.
10 October 2023