December 2008 the Group had around six times the minimum required eligible
assets available.
Treasury policy
The Company has adopted a prudent treasury policy for its cash and investments.
Counterparty exposure is limited and credit quality monitored to ensure a low
risk of default. During the year, the average duration of the investment
portfolio was shortened in response to the perceived risks presented by the
money markets.
A successful growth story
The table below demonstrates the growth and consistent profitability of the
business over the last four years:
+------------------+------------+------------+------------+------------+
| | 2005 | 2006 | 2007 | 2008 |
| | | | | |
+------------------+------------+------------+------------+------------+
| Revenue | GBP21.787m | GBP24.568m | GBP27.349m | GBP30.251m |
| | | | | |
+------------------+------------+------------+------------+------------+
| Profit before | GBP6.530m | GBP6.716m | GBP7.339m | GBP8.267m |
| taxation | | | | |
| | | | | |
+------------------+------------+------------+------------+------------+
| Profit after | GBP4.556m | GBP4.887m | GBP5.327m | GBP6.040m |
| taxation | | | | |
| | | | | |
+------------------+------------+------------+------------+------------+
| Incurred claims | 68.30% | 67.90% | 69.70% | 63.92% |
| ratio | | | | |
| | | | | |
+------------------+------------+------------+------------+------------+
| Cash & | GBP22.383m | GBP28.977m | GBP33.901m | GBP33.631m |
| investments | | | | |
| | | | | |
+------------------+------------+------------+------------+------------+
| Shareholders' | GBP7.165m | GBP12.001m | GBP14.661m | GBP19.368m |
| funds | | | | |
| | | | | |
+------------------+------------+------------+------------+------------+
Despite the economic backdrop, the business remains well placed to continue to
deliver positive returns for shareholders and to take advantage of opportunities
as they present themselves.
Adrian Green
Group Finance Director
Consolidated income statement
+----------------+--------+----------+----------+--------------------------------+----------------+----------+
| For the year ended 31 December 2008 |
+------------------------------------------------------------------------------------------------------------+
| | Note | 2008 | 2007 |
+ +--------+------------------------------------------------------+---------------------------+
| | | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Revenue |
| |
+------------------------------------------------------------------------------------------------------------+
| Intermediary, | 7 | | 16,294 | | 14,803 |
| advisory and | | | | | |
| other income | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Gross | 6 | 12,365 | | 11,945 | |
| premiums | | | | | |
| written | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Outward | 6 | - | | (321) | |
| reinsurance | | | | | |
| premiums | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Net | 6 | (326) | | (703) | |
| change | | | | | |
| in | | | | | |
| provision | | | | | |
| for | | | | | |
| unearned | | | | | |
| premiums | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Net | 6 | | 12,039 | | 10,921 |
| premiums | | | | | |
| earned | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Net | 8 | | 1,918 | | 1,625 |
| investment | | | | | |
| return | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Total | | | 30,251 | | 27,349 |
| revenue | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Expenses | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Claims | 9 | (7,695) | | (7,617) | |
| and | | | | | |
| change | | | | | |
| in | | | | | |
| insurance | | | | | |
| liabilities | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Acquisition | 10 | (1,111) | | (683) | |
| costs | | | | | |
+----------------+--------+----------+----------+-------------------------------------------------+----------+
| Other | 11 | (13,178) | | (11,710) | |
| operating | | | | | | |