Legal business and ATE contribute to satisfactory performance
DAS UK Holdings has recorded another profitable year in a fast-changing and challenging market. Profit before tax in 2006 was £5.7 million (2005: £12.1 million. This included an exceptional credit of £8.9 million that arose in respect of changes in the design of the Group's defined benefits pension scheme).
Year-end consolidated income was £100.2 million (2005: £101.1 million)
The company's principal subsidiary, DAS Legal Expenses Insurance, maintained its 'A' credit rating from Standard & Poors. Shortly after the end of the year, the paid-up capital was increased by £2m to strengthen the solvency of the company. At 31 December 2006, regulatory capital reserves amounted to 3.85 times the minimum capital requirement set by the rules of the Financial Services Authority (2005: 3.64 times).
Paul Asplin, Chief Executive Officer said:"Our core legal expenses business in the UK continued to operate on a satisfactory basis and we made further progress in the Republic of Ireland. We were also successful in attracting new business in the after the event (ATE) and insured assistance sectors.
"The success we have had in establishing a branch in Ireland - which celebrated its 10th anniversary last year has led us to examine the prospects for business expansion in other English-speaking countries and we anticipate further progress during the course of the year".
Prospects for 2007 are positive. The acquisition of Amicus Legal will increase the DAS UK income, especially with new ATE products targeted at smaller legal firms to be offered and a deferred premium funding facility. Furthermore, DAS Legal Services has been established in readiness for liberalisation of the current laws surrounding the ownership of legal firms. This is the ninth company within the DAS UK Group.
Asplin added: "Looking forward, we believe that there will be an intense period of activity within our market, driven by consolidation both within the legal expenses and legal services sectors.
"We are taking every step to ensure that we take full advantage of the opportunities that will inevitably arise, both in terms of further acquisitions and in the provision of a wider range of legal services".