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Chris Moat gave an interview with some slides - I found it very interesting http://www.brrmedia.co.uk/event/104554/chris-moat-chief-executive-officer
Looking ahead to the second half of 2012 Fairpoint said it expects to continue the momentum seen in the first half. An interim dividend of 1.95p has been declared, up 11% from 2011.
Debt advisor Fairpoint Group reported a first half profit compared to a loss the same half a year earlier helped by a strong recovery at its IVA services division and as it continued to diversify its income streams. The group reported a pre-tax profit of £2.1m in the six months ended June 30th 2012 compared to a £2.1m loss the same period a year before. Revenue for the period rose 19% to £14.1m after a £2m increase in financial services revenues, mostly from its claims management services after strong growth for PPI claims. Debt management revenues grew by 11% to £2.8m. At its IVA services division the group posted adjusted pre-tax profits of £1.4m versus a £700,000 loss previously following cost cuts and robust demand. IVA revenues were unchanged at £8.7m. "Fairpoint has continued its strategy of growth through diversification with strong financial, operating and cash flow improvements during the first half of 2012. Early progress in the development of claims management services has been strong and additional products are under development to ensure continuing momentum in this area," the group said in a company statement. "We are also well positioned to continue to play a leading role in the ongoing consolidation of the debt solutions market, as and when value-enhancing opportunities emerge to consolidate our market position and diversify our income streams."
Amid less than ideal IVA conditions, Fairpoint has done well to reduce its reliance on that business and to cut costs. While the IVA operation looks well placed for growth once interest rates begin rising again. Adjust for last year's one-off charges and broker Shore Capital expects earnings to rise over 80 per cent in 2012 to 12.8p. The shares are still rated on a mere five times that earnings forecast and trade below the group's reported net asset value. Add that to a hefty prospective dividend yield of nearly 8 per cent, and the fast-diminishing debt pile, and such a rating is too low..........good luck all.....
Fairpoint also offers debt management plans (DMP) – for people who can make repayments in some form, but need flexibility on the repayment schedule and the interest that accrues on the borrowings. Revenue here grew by a robust 29 per cent last year, to £5.3m, and the division has also received a boost after Fairpoint made four DMP back book acquisitions, taking the total number of schemes under management up to 15,838. Tight cost control has helped the group to bring down borrowings rapidly – they've fallen from £6.4m at end-December to £1.6m last month. And that's before the receipt of proceeds from a successful effort to reclaim VAT – management reckons that could be worth around £4.5m. Moreover, the group's £8m debt facility with Royal Bank of Scotland, originally due to expire in December, has now been increased to £13m and extended to 2016.
In fact, Fairpoint's attempts to diversify away from IVAs is progressing well and, last year, income from the financial services arm more than doubled to £2.4m. Much of the improvement came from commencing a programme of payment protection insurance reclaim activity with the existing IVA customer base. The financial services business also includes a venture into pay-day lending under the group's Loanextra banner – a potentially promising source of growth. Although the weaker credit profiles of borrowers in this market makes this a risky area for newcomers and any credit control glitches could mean bad news for bad debts. Fairpoint's background in the IVA sector, however, should help it avoid such pitfalls.
Recessionary conditions usually mean good news for Fairpoint because its core business involves the provision of debt management solutions for people that can't repay borrowers. Admittedly, today's very low interest rates, and a more accommodative stance by creditors, has meant that the usual increase in distressed borrowers associated with an economic downturn hasn't yet materialised. But investors should be patient – while management reckons that interest rates are unlikely to rise before 2104, when they do start rising, the resulting squeeze should see more consumers seeking financial help. Fairpoint has also been successfully adjusting to current conditions by cutting costs – annualised savings of £1m were made in 2011 – and through diversifying its revenue stream. Revenue generated from activities unconnected to individual voluntary arrangements (IVAs) rose from 17 per cent of group revenue in 2010 to 30 per cent last year. That's just as well – new IVAs written last year fell by 30 per cent to 5,840, and fees per customer dropped a little to £2,083.
Chris Moat, Chief Executive Officer of the Group, said: "The new facility, together with the proceeds of the VAT reclaim, provides the Group with significant liquidity and a longer term financing structure, which will enable us to continue our strategy of both organic and acquisition investments in order to consolidate our market position and diversify into related activities."
More coverage Financial difficulties consultant Fairpoint Group (FRP) has signed a deal to increase its 8 million pound asset backed credit facility with PNC Financial Services to 13 million pounds. The new facility, which has a four year maturity - the existing agreement was due expire in December 2012 - is secured against the group's book of Individual Voluntary Arrangements and Debt Management Plans. In addition to this the firm reported it had received 9 million pounds from HMRC in respect of VAT wrongly charged which has being returned to a client account. Management commented that this would result in additional distributions to creditors and see Fairpoint receive additional exceptional fee income. Fairpoint shares surged 7.75p to 72.25p.
Fairpoint Group, a provider of advice and solutions to 'financially stressed' consumers, has signed a new enlarged £13m asset-based revolving credit facility, replacing its existing facility of £8m, which was due to expire in December of this year. The facility has a four year maturity, and draws down £4.5m against the existing facility. Annual financing costs under the new facility are expected to be around £0.2m higher than those of the old facility.
Fairpoint Group Buy 20-Apr-12 £32,500.00 John Allkins 50,000 @ 65.00p
Fairpoint has warned of a temporary one-off drop in earnings per share of, say, 3p (probably less) and its share price has declined by 31p, which I can safely say is excessive; ClearDebt has issued no warning, but its share price fell by one-eighth, which I think is irrational. We think that ClearDebt’s current share price should be at least 3.6p, and preferably 4.5p, which is double the current price. http://www.cleardebtgroup.co.uk/download/Equity_Development_Research_27_May_2011.pdf
Shore Capital commented on consumer financial services group Fairpoint (FRP). While the macro-economic environment looks relatively benign for the consumer at present, the broker believes the combined effect of rate rises, public sector unemployment and sluggish credit supply is likely to keep demand for Individual Voluntary Arrangements (IVAs) high. Shore also expects the business to benefit from further consolidation in the debt management plan sector once a regulatory framework is in place. That said, taking into account the prospect of solid organic and acquisitive earnings growth in the medium term, the broker views the present rating as "undemanding."
Woth a look at CLEA but I am sure you know that
How about that? 2% against current price. :-)
Business is making good progress. What a pleasant surprise. Any takers?
Just found this on http://www.digitallook.com/companyresearch/51386/Fairpoint_Group/company_research.html Looking good and looks like the new management have turned this around permanently. Fairpoint Group Forecasts Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield 31-Dec- 09 31.70 6.10 9.60p 6.1 0.0 +536% 3.00p 5.1% 31-Dec-10 35.40 7.00 11.00p 5.4 0.4 +15% 4.00p 6.8%
nice to see matthew peacock director buying in gives a little more faith to us pi's about a share that i thought would b booming nw!!!
This doesn't explain why FRP is up, though...
"City" Rumours ... http://www.londonstockexchange.com/LSECWS/IFSPages/MarketNewsPopup.aspx?id=830581&source=NEWS
INVO doing rather well on the back of FRP interested takeover plans being re-ignited...
still havn't averaed down. you would have thought in the current econony this would be doing very well. they have just reported losses!. keep thinking I should average down but not 100% sure yet. any thoughts anyone?
IMO without news this share will very slowly climb to 80-85p, with several plateaus in between most likely now and again at around 70p with any number of others in between. i would(and did) average down on this but dyor, this is just speculation!
Thanks. what is its true value? Like I said I bought in at 96p and waiting to recover that back at least. are you in on this one?
IMO recent rises were due to corrections since the share price was hit far to hard by news of lower than expected results, its simply returning to its true value, not news based.