Acg Metals Regulatory News (ACG)

12 Jul 2005 07:00

Accuma Group PLC12 July 2005 Press Release 12 July 2005 Accuma Group plc ("Accuma Group" or "the Group") Trading Update Accuma Group Plc, the provider of personal debt advice specialising inIndividual Voluntary Arrangements (IVAs), today releases a trading updatefollowing its successful listing on AIM in March 2005. The Market At the time of the Group's listing on AIM, the Board was confident that thescale of consumer indebtedness in the UK would provide significant growthprospects. That confidence continues to grow despite the prospect of lowerinterest rates. The Bank of England's Financial Stability Review (June 2005) indicates thathousehold debt now averages 150% of annual net income and that it is likely thatdebt will continue to grow more rapidly than income over the next few years. The housing market has cooled and the opportunities for equity release toconsolidate debt and/or fund lifestyles have diminished. Moreover, manyhomeowners are either experiencing or facing higher mortgage repayments ascheaper fixed rate deals end. Lenders are now tightening their criteria in themortgage and secured-loan sector, leaving thousands of households without aneffective solution to their debt problems. The record levels of consumer debt built up over the last decade, against abackdrop of low interest, inflation and strong house price growth that boostedconsumer confidence, has now resulted in many thousands of households strugglingto maintain monthly repayments. According to recent figures from the Department of Trade and Industry, personalinsolvencies grew by 28% in Q1 2005 to 13,229. Included in this total were 3,139Individual Voluntary Arrangements (IVAs), Accuma's key product, an increase ofjust over 40% year on year. These figures do not include informal debt repaymentschemes of which there are estimated to be many thousands. Resources Strengthened Accuma is in a strong position to benefit from increasing demand fromover-indebted consumers. The Group now employs four Licensed InsolvencyPractitioners, two of these having been appointed post-flotation. Theseappointments have increased capacity significantly beyond market expectationsfor the next financial year. In addition, a highly experienced Head of IT has been appointed in order toensure that the Group's systems are robust and scalable as our case volumesincrease and to enable further improvements and efficiencies to be made. Thenew appointment has considerable experience in the IT industry, including sevenyears at Motorola, where he served as European IT Infrastructure Manager. Overall, the Group has continued its trend of appointing individuals experiencedin personal insolvency or consumer debt. This reduces the training periodrequired and ensures that we are able to reach operational readiness withinweeks of most appointments. The total number of employees now stands at 70. New IVA Case Numbers Accuma is pleased to announce significant growth in case numbers as its monthlyrun rate increases. During the quarter to the end of April 2005 (Q3), the monthly run rate averaged46. This was a slight reduction on Q2 due to a planned reduction in marketingspend during October to December 2004. Since flotation, the run rate has increased month-on-month with 86 completionsin May, and 106 in June. There are also 160 creditor meetings scheduled forJuly, and based on projected conversion rates, this would produce a Q4 run ratethat is 146% higher than Q3, outperforming the market generally. This equatesto a projected annualised run rate of approximately 1,800 cases, which willrepresent 95% of market forecasts for full-year 2006. The Board is confidentthat the monthly run rate will continue to increase. Outlook The Board previously stated its intention to build strategic relationships inorder to broaden the Group's marketing channels and to ensure cost-effectiveclient acquisition. We have appointed a business development manager to workclosely with the Board to drive such initiatives. We are pleased to announce that we have made significant progress in this regardand a number of relationships are now being piloted. Early indications arepositive and we will report more at the time of our preliminary announcement inOctober. Accuma's business model is underpinned by the value of its future contractedrevenue which has grown from £3.1million at flotation to £4.7million(£3.3million off balance sheet) at the end of June, an increase of 52%. The Board is confident of performing comfortably in line with marketexpectations for 2004/5 and expects continued growth for 2005/6. Charles Howson, Chief Executive of Accuma Group, commented: "We are delightedwith our progress to date and, with all the indicators pointing to anticipatedgrowth in our sector, we are confident of meeting increased demand for ourservices. " For further information:Accuma Group plcCharles Howson, Chief Executive Tel: +44 (0) 0161 235 6460charles.howson@accumagroup.com www.accumagroup.com Daniel Stewart & Co.Alastair Cade Tel: +44 (0) 20 7374 6789alastair.cade@danielstewart.co.uk Media enquiries:AbchurchPeter Curtain / Chris Lane Tel: +44 (0) 20 7398 7700chris.lane@abchurch-group.com www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange