Frp Advisory Group Regulatory News (FRP)

4 May 2006 07:01

Debt Free Direct Group PLC04 May 2006 4 May 2006 DEBT FREE DIRECT GROUP PLC TRADING UPDATE Debt Free Direct Group (DFD), the leading debt advice and solutions company,today releases a trading update ahead of its preliminary results announcement,which will be made during the week commencing 26 June 2006. Highlights • The IVA market has again shown dramatic growth of over 130% during the first quarter of 2006, compared to the same period last year. DFD has grown even faster and expects that its market share exceeded 20% in April. • DFD's annualised new IVA case run-rate has again more than doubled in the last 12 months and has increased by 59% during the last 6 months. • DFD's average monthly turnover has nearly doubled in the last 12 months and has increased by 50% during the last 6 months. • Turnover per employee increased by 35% during the last 12 months, which represents a significant increase in operational efficiency. • Anticipated profits for the financial year ended 30 April 2006 will comfortably meet market expectations. • We- anticipate that profits for the financial year ending 30 April 2007 will be around 20% ahead of the current market consensus (of £8.0m Adjusted PBT). Andrew Redmond, Chief Executive Officer, commented: "The Board of Debt Free Direct strongly believes that its ethical approach toproviding debt advice and appropriate solutions has been, and remains,fundamental to building a strong and sustainable business. We have alwaysfocused on providing the customer with best advice, rather than maximising shortterm profits. We are now just beginning to see the start of the rewards of thatlong term policy and remain confident that this policy will deliver even greaterrewards going forward." Market share The IVA market has again shown dramatic growth of over 130% during the firstquarter of 2006, compared to the same period last year. DFD has grown evenfaster, with market share growing to 19.8% during the first quarter of 2006 andwe expect to have exceeded 20% in April. 2004 2005 2006 (Q1 annualised) Market size 10,800 20,292 30,588 DFD cases 1,577 3,693 6,056 DFD market share 14.6% 18.2% 19.8% The trend market growth compared to DFD's growing market share can beillustrated on the graph via the following link: http://www.rns-pdf.londonstockexchange.com/rns/4092c_1-2006-5-3.pdf Trading update Debt Free Direct's run-rate and associated trends have continued to increase asshown below. New IVAs Average Average turnover average monthly monthly per employee case run-rate turnover per month Joint cases Joint cases £K £K = 1 = 2 FY 2004 83 113 351 4.0 FY 2005 159 216 701 4.6 FY 2006 347 477 1,328 6.2 ------------------------------------------------------- 6 months to 30 April 2004 95 130 392 4.4 6 months to 30 April 2005 208 285 858 5.6 6 months to 30 April 2006 422 581 1,586 7.4 ------------------------------------------------------- The above growth and labour efficiency improvements can be illustrated on thegraph via the following link: http://www.rns-pdf.londonstockexchange.com/rns/4092c_2-2006-5-3.pdf Current trading and prospects The company's results for the financial year ended 30 April 2006 will reflectits success in generating increasing numbers of IVAs cost effectively, togetherwith increased efficiency in processing those IVAs. The combined effect willtranslate into reported profits for the full year which will comfortably meetmarket expectations. As a result of increasing new IVA run rates, lower acquisition costs and higherlevels of efficiency, we have entered the new financial year in a strongerposition than anticipated and now expect that profits for the financial yearending 30 April 2007 will be around 20% ahead of the current market consensus(of £8.0m Adjusted PBT). Enquiries: Debt Free Direct Group plc Andrew Redmond, Chief Executive Officer 01257 240599Paul Latham, Finance Director 01257 240529 Numis Securities Iain McDonald 020 7776 1500Lee Aston Financial Dynamics 020 7831 3113 Ed Gascoigne-PeesNick Henderson Notes The new IVA average monthly case run-rate has been calculated consistently withprevious announcements. An IVA is recognised on issue of a finalised IVAproposal to the debtor which, based on historic experience and case data, issubject to a provision for those cases that may not be approved by the meetingof creditors. In addition, the total includes referred IVA cases. 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 processed through a computer model(the Best Advice Model) developed by Debt Free Direct in order to recommend asolution suitable for that individual's particular financial circumstances. Thesolutions offered range from basic 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