Cash plan provider Sovereign Health Care has announced an “excellent set” of results for 2014.
The Bradford-based organisation recorded a healthy pre-tax surplus, increased its turnover and reserves, paid out another record amount in claims to customers and generated significant charitable donations during the year.
Sovereign’s cash plans help to make everyday health care more affordable and accessible by paying money back towards expenses such as dental treatment, optical bills, prescription charges and physiotherapy costs.
The organisation recorded an unchanged pre-tax surplus of £1.3m and a turnover increase of £200,000 to £11.6m during 2014. In addition, its reserves continued to significantly exceed solvency capital requirements, with its investment portfolio and cash deposits worth about £53m at the year-end, compared to £50.5m in 2013.
In 2014, the amount paid out to customers in claims also increased to over £7m, compared to £6.8m during the previous year – the highest amount since Sovereign was founded as Bradford Hospital Fund in 1873.
The organisation does not have shareholders and any surplus it makes is reinvested in the business or given by Gift Aid to Sovereign Health Care Charitable Trust.
The charitable trust made donations totalling almost £783,000 to local good causes in 2014, equating to 6.7 per cent of the company’s turnover, an increase from 6.5 per cent in 2013.
Commenting on the results, Dr Bob Dugdale, Sovereign’s chairman, said: “I’m delighted that my first full year in post has been another successful one for the commercial business and saw continued significant donations made by the charitable trust.
“Our executive and management team have been tasked with making an annual trading surplus and continue using dividend income to help fund the charitable trust. I’m pleased to report that not only were these objectives achieved during the 12 months but we exceeded our targets for sales growth and surplus.”
Russ Piper, Sovereign’s chief executive, said 2014 had been a positive year for the economy and this had been supported by a significant increase in the usage of its cash plans.
He said: “As we entered the final full year of a pricing cycle, an increase in claims was to be expected. However, the level of that increase was unprecedented, compared to previous years.
“Our charitable giving continues to be very important to us, so it’s essential that our business operates in a manner that sustains our ability to make these donations.
“Being there for our customers and local communities when they need us most remains a key priority for us and I’m pleased to say that we certainly achieved that in 2014.”
Sovereign Health Care Charitable Trust made 188 grants to good causes in Bradford and the surrounding area during 2014, an increase of more than £50,000 on the previous year’s figure.
Marie Curie Cancer Care’s Bradford hospice received the trust’s largest single donation of over £302,000 during the 12 months, enabling it to complete the £1m refurbishment of the Sovereign Wing.
New facilities there, including en-suite bathrooms and modern ventilation, are aimed at maintaining the dignity of patients and service users in difficult times, including the final weeks of their lives.
Reflecting on other highlights of 2014, Mr Piper said Sovereign had reached the final stages of implementing its new IT system.
He said once the software development was complete and the new system launched, they would review its processes and structure, to establish how best to deliver the advantages the new system can offer which will benefit the business and its customers.
On another key development during the year, Mr Piper said: “Our campaign to persuade key decision makers, such as MPs, that employer-paid cash plans should no longer be treated as benefits-in-kind developed impressive momentum.
“Currently businesses have to undertake the onerous task of completing and submitting P11D forms to HM Revenue & Customs annually on behalf of the staff they cover.
“We believe this should be abolished and I am delighted that our standpoint has already gained the support of the Association of Financial Mutuals, among others.”
Sovereign Health Care is one of the UK’s longest established providers of health care cash plans to individuals and businesses. Based in Manningham Lane, Bradford, it is a company limited by guarantee.