LONDON (Reuters) – Bermuda-registered reinsurance broker Benfield Group Ltd. plans to pay a special dividend and will buy back up to ?40 million ($71 million) of its shares after posting a rise in first-half profit.

The company, which listed on the London Stock Exchange last year, said on Wednesday its trading profit for the six months to June 30 was ?97.3 million, up 1.4 percent from a restated ?96 million a year earlier.

The trading profit from continuing operations excludes goodwill, depreciation of fixed assets and exceptional items.

Benfield declared a special dividend of 10 pence a share.

The firm also said it would buy back up to ?40 million of its stock in the next 18 months after generating surplus cash and making 26 million pounds selling warrants in Bermudan reinsurer Montpelier Re in March.

At constant exchange rates, the trading profit was up 12.8 percent. Growth was fuelled by the United States, where revenue increased 15 percent at constant exchange rates, Benfield said.

“Selling down stock in Montpelier and good trading has left us with a very strong balance sheet,” chief executive Grahame Chilton told reporters on a conference call.

“It has been our aim over time to ensure that we return excess funds to shareholders.”

Chilton said the return of cash was probably more than investors had expected. After returning the cash, the company will still have a strong balance sheet that can be invested in hiring new teams or making small acquisitions, he added.

Insurers use reinsurance to pass on some of their risk to other insurers. Benfield structures and arranges reinsurance programmes without taking risk on its own account.

Losses from Hurricanes Charley and Frances should support catastrophe reinsurance prices, benefiting Benfield, Chilton said.

He added that the company would perform in line with its expectations and those of the market in the second half of the year.

Pretax profit before exceptional items rose 9.5 percent in the first half to ?86.9 million.

The interim dividend increased to 3.5 pence a share from 2 pence a year earlier.