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See ACG share news
LAST week was a bloodbath for shares in debt-adviser groups. DebtMatters put itself on the block after it warned that competition and the hardening attitude of banks to individual voluntary arrangements (IVAs) had in effect scuppered its business model. DebtMatters shares dived 73% on Monday. Shares in the rival Accuma plummeted 23%, those of market leader Debt Free Direct 29% and Debts.co.uk’s stock fell 21%. Debt Free Direct shares are down 65% from a year ago. Accuma has lost over 92%. Debt Free Direct tried to put on a brave face, arguing it did not share concerns that IVAs were becoming unprofitable. IVAs, where borrowers can write off a substantial portion of debt in return for set repayments, have boomed in recent years. They do have a role, but right now the industry looks decidedly shaky. Some banks have refused to use IVAs. The Insolvency Exchange has made big changes to the criteria used by practitioners when they recommend IVAs. The British Bankers’ Association is screwing down the costs that IVA providers can charge. There are similarities with the showdown a few years ago between accident-management groups and insurers. The IVA industry will be hoping that it, too, can reach a compromise, regroup and rebuild, but it will be a long slog. I have warned before that shares in debt advisers are hugely risky. Last week underlined that the IVA market is toxic. Any investor foolish enough to have hung on should get out swiftly.
According to the report the Debt Resolution Forum plans to challenge fees that are charged by the Insolvency Exchange, which represents a number of lenders, which are resulting in IVAs becoming an unviable option due to related costs and are driving some IVA advisors out of business altogether. One officials from the body stated: 'Unless an effective new deal is reached, an explosion in bankruptcies is likely.' According to the Insolvency Service, which is part of the Department for Business and Enterprise, creditors are often 'effectively refusing to vote in favour of IVAs where the fee is above a certain level'. The agency added: 'The longer-term effect could be to push more people into bankruptcy, where creditors would get an even lower return.'
According to a recent report a number of IVA companies are looking into suing UK banks for hindering the IVA process and therefore promoting an increase in the number of bankruptcies within the UK. IVAs, or Individual Voluntary Arrangements, are designed to try and help struggling borrowers that are swamped in debt to deal with their debt problems without having to resort of bankruptcy. The IVA firms state that banks in the UK are aiding an explosion in the number of bankruptcies by doing their best to hinder those trying to sort out their debt problems through an IVA. Banks are accused of placing barriers and problems in the way of borrowers that are trying to address their debt issues through an IVA, leaving them with no other choice than to opt for bankruptcy. Legal action may be taken by the Debt Resolution Forum, which is an industry body that represents a number of debt management and IVA firms.
I've been following ACG with great interest since I first bought shares in May. I've been buying more since, as the price spiralled down to 17p. Today has seen some good news with a possible agreement to reduce fees by only 20%, compared to the expected 40% as mentioned by ihavenoclue. ACG share price up approx 40% today alone, surely the start of a strong recovery. My logic is this - interest rates in the UK are heading upwards, house prices are still rising leading to bigger mortgage commitments, suggestions of a recession very soon will lead to rising unemployment and the knock-on effect, in theory, must be a rise in IVA related business. IVA are approx 60% of ACG business so they look to be well placed for a significant recovery in the share price.
There are a lot more opinions about ACG on there but take a lot of it with a pinch of salt as a lot of ramper on there too "Most of the industry was expecting a 35-40% reduction in fees. 21% is actually pretty good and factored in already. The business is worth substantially more than it is valued at. Accuma is not just IVAs. They have a loans and mortgage business with 3 acquisitions last year. The y have no debt and have some money in the bank. Remember with IVAs the revenue stream is for 5 years - all those clients already paying into an IVA will keep paying for 5 years providing a good income stream. The worm has turned imo."
i think you are right mate it started to pick up,i hope it rise more coz i am in stress i want to get my money back good luck to you as well,if get any info about acg pls let me know
I had been watching ACG for a few months now and decided to jump in buying mine at 17.5p as i consider them a good long term recovery play. I was thinking about buying ACE instead but i feel this has been more oversold than ACE. Yes ACG have issues but i feel they can work through them in my honest opinion ... if you have patience ... a LOT of it .. you may even make your loss back. A company making £2.4 million profit with a market cap of £6 million was a good buy ... time will tell if i am right or not.
when this sp will rise i am allready lost 12k
debts sector under spotlight cos banks are looking to reduce IVA fees and make fees payable in installment. Cannot comment on Accuma, but have a small amount of DETS shares. A similar story in both companies. http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=420505&in_page_id=3
what is happening to this share its going down down and down i lost 10k has anybody got any idea
check this out for some background:- http://www.manchestereveningnews.co.uk/lifestyle/personal_finance/s/1004/1004821_north_west_iva_firms_rapped.html
DETS also showing weakness recently - also fell from grace at the same time. Assume the fall was legislation driven as banks seaked prevent uptake of IVA's whose success had a negative impact on banking revenues. I wonder if the recent weakness is due to further changes in legislation, or legal moves by the banking sector. More research needed before dipping one's toes I believe.
DFD and DEBT have similar drop times as this one.However in the case of both competitors the sp has "only" halved,whilst ACG has shown a 77% drop off.Unless I am missing something this one has got to have reached its bottom unless they are holding back further bad news
They touched 260p in January, and are falling again today on moderate selling. However, the broker target of 50p is well above the current SP of 33-37 (actual trades offer 33.04-35.6p). The interim results in April were in line and brokers had a 'buy' recommendation with 115p target price. The latest profit warning caused the first recent fall and the broker downgrading dropped them further still, to 40p. Probably a good share to tuck away for recovery after the spectacular fall.
Anyone else think the fall was overdone?
Looks like accuma sp will rise after the news on profits and director deals. Does anyone feel the same way?