Denplan, the dental capitation plan provider, said it had enjoyed another profitable year in 2017 after operating profit rose almost 16% to £6.2m.
The Simplyhealth-owned company, which rebranded Simplyhealth Professionals at the start of 2017, is the UK’s leading provider of dental capitation plans, with 2017 revenue of £39.5m – up almost 4% on the previous year. Despite increased sales, it kept a tight lid on costs, which increased just 1.6% to £33.2m in the year ended 31 December 2017. Together with a £1m dividend from its sister company, The Animal Healthcare Company (2016: £1.5m), pre-tax profit came in at £7.3m against £7m the previous year.
There are signs that demand for dental capitation plans is beginning to recover following a sharp decline in the aftermath of the 2007/08 global economic crash. Following years of falling numbers, the market began to pick up in 2015 and, according to the latest figures from LaingBuisson, the number of lives covered grew by 0.3% in 2016 to reach 2.53 million people by the end of the year. This remains below the 2007 cyclical peak of 2.75m lives but continued marginal decreases in NHS dental activity are likely to drive increased demand going forward.
Despite this nascent growth, Denplan has diversified into the veterinary insurance business in recent years, acquiring the Practice Plan for Vets Limited and The Animal Healthcare Company Limited, a market leader in providing payment plan administration services to vet practices.
Looking ahead, SimplyHealth CEO Romana Abdin said the company would continue to build on its investments in partnerships with individual dental practices as well as grow its pet insurance business.
‘The NHS is piloting a new dental contract prototype based on the clinical pathway approach for funding the service. Depending on the results, the pilot scheme may be extended and if successful this could become the prevalent approach to funding NHS dental care. However, given the uncertainty at this early stage over the test results, we are not expecting any major changes in our dental markets within the next three years.
‘The opportunity for pet health plans continues to grow as more vets and corporate groups consider the beneficial effect of a health plan on their practices and the health of pets. The company remains well positioned to benefit from this growth and will continue to explore new opportunities with our customers,’ she said.