Lloyd’s capacity buyer Helios directs cash to dividend and £1.5bn buyback
LSE-listed investment vehicle Helios Underwriting, a buyer of insurance capacity at Lloyd’s, will double its dividend for investors and blow another £1.5 million in a share buyback to scoop up shares trading at prices below net asset value, management has declared.
Management justified the dividend on profit outlook and the buyback with reference to listed share prices below NAV, with no explicit suggestion that the M&A pipeline was too dry to support better capital allocation. But both the hiked dividend and bolstered share buyback will be financed via cash on hand.
Base dividend doubles from 3p per share to 6p per share to be paid in 2024 and subsequent years with supplemental dividends still a possibility along the way.
“The Board believes that the anticipated future profit stream, subject to any adverse conditions in 2023, will support the increased base dividend,” management said. “Further announcements on the implementation of this policy will be made later in the year when our underwriting portfolio for the 2024 underwriting year will have been finalised.”
The £1.5 million buyback follows hot on the heels of a similar £1 million buyback justified on similar reference to price below NAV. That programme, announced mid-August, picked up 790,313 shares at an average price of £1.265p.
“The Board believes that while the share price remains at these levels it is in shareholders' interests to continue to buy back shares in the market.”
Management currently has authority to buy up to a maximum of 7.73 million shares out of neighbourhood 77 million outstanding. That shareholder mandate includes price caps, both market-derived and at the net tangible asset value of the company, currently 154p per share.
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