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LONDON (Alliance News) - Fairpoint Group PLC Tuesday said its 2014 adjusted pretax profit is expected to be in line with market expectations, including double-digit growth in both revenue and profitability as it made progress in diversifying its revenue base.
In a trading statement, the provider of debt resolution and claims management services to consumers, said the Simpson Millar LLP business it acquired last June performed strongly in the second half of 2014, growing both profit margin and revenue, while its debt management division also grew strongly, boosted by acquisitions.
It continued to experience tough market conditions in its Individual Voluntary Arrangement business, although it said it had managed to maintain margins in the business despite a drop in sales in 2014.
Fairpoint's claims business also experienced a sales decline, as "claims levels from existing IVA clients have reached maturity, whilst those from our growing number of debt management clients are still under development".
The company has been trying to diversify its services given the recent tough conditions in the IVA market, and has started offering legal services to its financially stressed customers.
"Our entry into the legal services market has started well and has enhanced profitability. In the second half, this new segment represented over forty percent of Fairpoint's revenues and going forward, is a strong platform for further growth," Chief Executive Chris Moat said in the statement.
"We remain well placed to pursue our strategy of selectively consolidating in our chosen markets, where we can deploy our core skill of applying process to professional services," he added.
Shore Capital expects Fairpoint to report a pretax profit of GBP9.3 million for 2014, while Equity Development is forecasting GBP9.1 million, according to data on Morningstar. Fairpoint reported an adjusted pretax profit of GBP8.1 million in 2013, up from GBP7.6 million in 2012. Its adjusted figure excludes exceptional items and amortisation.
Fairpoint Group shares were down 0.1% at 113.35 pence Tuesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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