Heritage has raised £14.6m to fund new capacity opportunities...
Heritage has placed 16 million ordinary shares of 10p each at a price of 91p per share to raise £14.6m.
The capital raising is to fund an opportunity to underwrite an additional £30m of capacity in its world wide property unit (Syndicate 1200).
Heritage believes that rates on world wide property catastrophe will remain at the high levels that have been achieved in 2006, and that the investment will generate an attractive over-the-cycle return on capital, subject to normal catastrophe conditions.
This additional capacity requires capital of some £12m, which Heritage plans to finance through the placing.
Heritage also provided a trading update in which it reported that it remains optimistic about the 2006 year and expects favourable conditions to continue in 2007.
Written premium income, net of brokerage for the 2006 year of account to 30 September 2006 was £121.1m, compared to £81.7m at the same stage in 2005, an increase of 48%.
Syndicate 1200's return on premium capacity forecast as at Q3 for the 2004 underwriting year has increased to a mid-point of 5% (2.5% as at Q2 2006) and the 2005 underwriting year remains at minus 5%.
