Beware - better plays out there1 Oct 2007 13:33
Extract from RNS:
In contrast, the continued uncertainty surrounding the IVA markets has been well
documented. IVA case acquisition costs have risen sharply in the face of rising
competition, and IVA conversion rates have worsened due to hardening creditor
attitudes which have impacted on margins.
During the period, discussions hosted by the British Bankers Association and the
Insolvency Service have continued. However, the process did not provide any
firm conclusions on the issue of fees charged by insolvency practitioners and
this has led to well publicised concerns over the future of the industry. These
concerns have precipitated the continued share price weakness in the sector from
which Debtmatters has not been immune.
During September we started to see certain creditors seeking to modify IVA
proposals such that on Debtmatters' cases, average nominee and supervisory fees
would be reduced. The impact of these additional changes on the IVA business
could be significant. Should these fee modifications become the norm then we
may no longer be able to deliver IVAs profitably. Consequently, for the moment
the Board has decided to suspend all direct advertising on TV, radio and through
the press. In addition, the IVA division, which has built a significant
infrastructure over the last two years since flotation, will be scaled back,
with staff being redeployed into other areas of the business as appropriate.