Frp Advisory Group Regulatory News (FRP)

3 May 2005 07:01

Debt Free Direct Group PLC03 May 2005 3 May 2005 DEBT FREE DIRECT GROUP PLC TRADING UPDATE DEBT FREE DIRECT PREDICTS CONTINUED GROWTH IN ITS MARKET There has been much recent commentary on the consumer downturn, as portrayed bythe Financial Times on 28 April 2005 when it wrote "Property gloom hits consumerspending" and "Higher interest rates have tipped some households into a debtcrisis". With house prices flat, or modestly falling, home owners have less capacity tore-mortgage and release equity. At the same time, lenders are tightening theircriteria, further reducing consumers' capacity to release house equity. The result is that an increasing number of consumers are finding it impossibleto sustain the record levels of debt that they have built up over the last 5 -10 years. The signs of consumer debt fatigue are already showing. Personalinsolvencies in the final quarter of 2004 were up by nearly 35 per cent on thesame period in the previous year, and in the first quarter of 2005 there hasbeen a 20 per cent rise in court orders against people failing to meet mortgagepayments. Debt Free Direct is likely to benefit from this consumer downturn and predictscontinued growth in its market. Trading update Debt Free Direct's run-rate trends have continued to increase in the second halfof the financial year, as shown below: Average monthly Employee Completed IVA turnover numbers monthly case £K (period end) run-rate - 6 months to 31 October 2003 309 57 72 - 6 months to 30 April 2004 392 88 95 - 6 months to 31 October 2004 515 117 110 - 6 months to 30 April 2005 858 153 208 Turnover in the second half of the financial year grew by 119 per cent, comparedto the same period last year, which is consistent with a corresponding increaseof 119 per cent in the monthly IVA case run-rate. The run-rate of completed IVA cases in the fourth quarter of our financial yearwas in excess of 250 per month, ahead of market expectations. We anticipate that the above will translate into profits in line with marketexpectations for the financial year. The preliminary results announcement will be made during the week commencing 27June 2005. Andrew Redmond, Chief Executive Officer, commented: "The weakness of the housing market is having a significant impact on consumers'ability to use equity to keep their finances afloat. The IVA market grew by 41 per cent last year and continued double digit growthis predicted. We are delighted to have significantly grown our market share in this rapidlyexpanding market. Debt Free Direct have put in place the resources necessary to increasinglypromote its free advice services and continue to expand its capacity so that wecan further grow market share." Enquiries: Debt Free Direct Group plcAndrew Redmond, Chief Executive Officer 01257 240599Paul Latham, Finance Director 01257 240529 Teather & Greenwood 020 7426 9000Mark DickensonJon Drage Citigate Dewe Rogerson 0207 638 9571Michael BerkeleySarah GestetnerFiona Mulcahy Note to Editors Debt Free Direct helps individuals find the best solution to their debtproblems, based upon an analysis of their particular financial circumstances.Financial information on an individual is process through a computer model (TheBest Advice Model) developed by Debt Free Direct in order to recommend asolution suitable for that individual's particular financial circumstances. Thesolutions offered range from basis advice, such as simply destroying creditcards and curbing unnecessary expenditure, to the following solutions: • consolidation loan• re-mortgage• informal arrangement• individual voluntary arrangement (IVA)• bankruptcy Debt Free Direct is unique in the marketplace in that, unlike most of itscompetitors who sell specific products, Debt Free Direct looks to provide thebest advice to the consumer and recommends them the most appropriate service. Debt Free Direct is based in Chorley, Lancashire, and was admitted to AIM inDecember 2002. This information is provided by RNS The company news service from the London Stock Exchange