Acg Metals Regulatory News (ACG)

1 Feb 2007 07:01

Accuma Group PLC01 February 2007 Press Release 1 February 2007 Accuma Group Plc ("Accuma" or "the Company" or "the Group") Trading Update Following our announcement on Friday 26 January 2007 the Group is now able toupdate the market more fully on its current trading and future prospects. IVA Business In the first half of the financial year, our IVA business has suffered from apoorly executed marketing strategy, together with a more competitive environmentand lower approval rates from creditors. We have made changes to our marketing strategy and, in particular, haveimplemented more robust reporting systems. In addition, as explained later, wehave strengthened our marketing department with the appointment of StuartGitsham as Marketing Director. Given the lead time from point of advertising toacceptance of cases at creditor meetings, however, the full impact of thesechanges will not be felt until the final quarter of the financial year and intothe 2007/2008 financial year. With regard to approval rates, historically, 92 per cent. to 94 per cent. ofAccuma cases have been accepted at creditor meetings but due to creditorpressure this dropped to 78 per cent. towards the end of 2006. We have notedthat since December approval rates have returned to 85 per cent. The lower approval rates, referred to above, together with lower call volumesgenerated from our marketing campaigns have resulted in our quarterly run rateof new IVA cases falling from 271 average per month (August to October 2006) to221 average per month (November 2006 to January 2007). We are confident that,with the actions we have now taken, our run rates will recover later thisfinancial year. We can also report that future contracted revenue in our IVA business stood at£15.2m at 31 December 2006. Commenting more generally, The British Bankers Association and The InsolvencyService are working with the industry to ensure the IVA process is administeredfairly and from the providers perspective that an IVA is only recommended whenit is the most appropriate solution for the consumer. The Group is confident ofits profiling and verification processes and we would extend an open invitationto creditor organisations to visit our premises to see at first hand thestringent systems we adopt in determining whether an IVA is suitable for anapplicant. It is worth noting that only 4 per cent. of our enquiries become IVAs and, wherewe offer an IVA, the average dividend return to creditors is 42p in the £. Management Changes We have taken, and intend to take, a number of steps to add strength and depthto our senior management team. Following a lengthy search and as announced on 26 January 2007, we appointed anew Finance Director and Company Secretary, Ian Campbell. We are in the courseof hiring a Group financial controller for the Group, to support Ian in hisactivities and to enable him to focus on the improvement of our reportingsystems. We appointed a new marketing director for Accuma in November of last year,Stuart Gitsham, to improve the effectiveness of our marketing programmes and webelieve that we will begin to see the benefits of a more structured and targetedmarketing plan in the second quarter of 2007. Stuart has held a number ofsenior positions within the financial services sector. We have, this month, appointed an operational development director, GrahameCrofton, whose role is to improve the efficiency of our operational processes. Whilst being cognisant of our cost base, we will continue to invest in people asnecessary. Acquired Businesses Since we joined AIM, we have acquired a number of consumer financial solutionsbusinesses in order to broaden our product offering to our customers, so that weare able to offer the most appropriate advice to the consumer, to maximise thereturn on marketing expenditure and from our referral base, and to reduce ourdependence on the IVA market. As previously reported, the performance of the companies we have acquired hasbeen in line with our expectations in the first half of the current financialyear. For the second half of the financial year, in light of lower referral volumesand in view of a tighter lending environment, we have revised our expectationsdownwards for our lending business, Loan Line; however, we are in discussionswith a number of new sources of referrals to address this. Byrom Keeley, our debt management business, is performing very well and ahead ofour expectations, and we anticipate that the outturn for the year will exceedour estimates for this business. We expect Thomas Charles and Wilson Phillips to continue to perform in line inthe second half of the financial year. Our strategy to broaden our product offering is delivering the higherconversions we anticipated across all solutions and we are confident that ourplatform now enables us to increase conversions upwards to approximately 30 percent. of all enquiries. We would expect more than half of our revenues and profits in the currentfinancial year to come from acquired businesses. Balance sheet and deferred consideration Our balance sheet is strong and our current net cash stands at £5.5m. We were careful in structuring our acquisitions to ensure that any deferredconsideration payable in cash would be principally financed out of cash flow.It is too early to determine the dilutive effect of deferred considerationpayable in shares for the acquisitions we have made, but, in view of the factthat the majority of earn out payments are satisfied in cash, we believedilutive effects will be modest. Announcement of interim results We intend to announce our interim results for the six months ending 31 January2007 on 11 April 2007. - ends - For further information:Accuma Group plcCharles Howson, Chief Executive Tel: +44 (0) 845 202 6787charles.howson@accumagroup.com www.accumagroup.com Daniel Stewart & Company plcLindsay Mair Tel: +44 (0) 20 7776 6550 www.danielstewart.co.uk Media enquiries:AbchurchChris Lane / Louise Thornhill Tel: +44 (0) 207 398 7700chris.lane@abchurch-group.com www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange