Invocas Share Discussion Threads

[gac100] 11/10/2007 18:35

Diogenes - after 6 months like that, you deserve a break (edit: your post 97)

battlebus - if your hunch is proved right, that's some timing; bang on the nail.

I tried to post on the ACG board this afternoon, to say that it may not be completely ridiculous to suggest INVO as one of the interested parties - but something fupped up and only half the message arrived on the Board. Anyway, it was along the lines of the following:

On the news that Accuma has received "a number of approaches", I thought I recalled that in Invocas's AIM Admission Document (March 2006), the Board had expressed an intention to extend the business beyond Scotland. On checking I found that it had indeed - stating that one of its future strategies would be "vertical and horizontal integration through the acquisition of ---UK--- [my emphasis] and Scottish based debt solutions providers and related businesses, including establishing formal introducer agreements with mortgage and loan brokers." At that time Invocas already had "good business relationships" with debt management organisations in England, and was receiving "referrals from a number of the English based debt management companies." As far as I remember, none of this has been mentioned since in Interim/Annual Reports etc. (perhaps not surprising, given the turmoil in the English IVA sector), but who knows, the strategy the Board proposed in Marh 2006, could possibly be back on the agenda ... As an aside, its curious to note (but possibly foolish to read too much into), that yesterday, in my long post (93), which attempted to dissected INVO's pre-close statement, I finished on acquisitions, suggesting that the Board were offering a slightly firmer statement on the subject, than they had in the past.

[diogenesj] 11/10/2007 18:30

I rather hope it's not Invocas bidding for Accuma, BB. Accuma has serious problems. Invocas would probably do best to stay in Scotland imo.

[battlebus] 11/10/2007 17:48

My hunch could just prove right!

[diogenesj] 11/10/2007 16:56

Bid approach to Accuma today - explains the bounce in all of these companies.

[diogenesj] 11/10/2007 11:32

Moving up nicely: could I have made my first correct decision in six months?

[diogenesj] 10/10/2007 12:11

Lol, that's what Thomson says - let's hope it's the other way round. I think they mean 'given the recent weakness in the IVA sector' too, rather than 'given the recent IVA weakness in the sector.' :-)

[alexacj] 10/10/2007 12:08

LOL! DJ....hopefully Ben Archer didn't UPGRADE from "Buy" to "Add"!.....also bought a few over the last couple of days......looks like they are due a re-rating but don't think it will happen until the IVA market in England and Wales comes to some firm agreement on charges. Would have thought now really is the time for Invo to be the consolidator with premiums on any company in the debt market at all time lows.....so they should be able to get some real value for money on any purchase.

[diogenesj] 10/10/2007 11:21

Looks slightly encouraging - bought a few at much less than half the price I last sold them at.

Fwiw, the house brokers Charles Stanley have upgraded to buy from add (but slightly reduced their profit forecast for the current year) according to Thomson Financial today:

Ben Archer, an analyst at Charles Stanley, wrote in a note to investors that the slow progress of referral arrangements means that he is reducing his
pretax profit forecast for the company by 6 pct, but upgrading the shares from
'Buy' to 'Add' given the recent IVA weakness in the sector.

[gac100] 10/10/2007 10:43

Dissection of, and thoughts about, the RNS - no claim I've interpreted things correctly (DYOR etc).

INVO continues to be "largely immune" from the problems in the IVA sector. Fees have not been challenged "to the same extent" as IVA fees. This suggests to me that there has been SOME knock-on effect. That seems to be borne out by the fact that "The numbers of Trust Deed leads passed to us in the first half are ... behind those achieved for the same period last year." How far behind we don't know. In fact on the bare face of the RNS there are other unknowns, principally:
(1) Is the reduced number of leads a result of the IVA knock-on effect, and being suffered by all PTD companies? and,
(2) Is INVO loosing market share to its rivals? Or is it gaining market share, with its rivals suffering an even greater reduction?

The following article is useful for considering those questions:

Q2 figures on debt released in August showed "a surprise drop in the number of Scots signing up to a protected trust deed ... a drop of 15.5 per cent compared with last year." The answer to question (1) then is that the fall has been across the board. The answer to question (2) is tougher. The evidence is suggestive rather than definitive that INVO is performing at least as well as and possibly better than its rivals.

The RNS reaffirms that its "business model and strategy remain valid":
"not suffered ... increased lead costs" as work is secured by referrals rather than advertising
"low rejection rates"
"low case failure rates"
"good relationship with TIX and have already agreed an ongoing fee basis for Trust Deeds which should have no material impact on our margins."
[From the business.scotsman.com article: "Until this year, individual creditors made their own decisions but a new body, the Insolvency Exchange (TIX), now does the negotiation for a number of large organisation. Since January it has started to represent a number of well-known names: HSBC, HBOS, Royal Bank of Scotland, M&S Money, First Direct, Intelligent Finance and Santander credit cards."]
Some new information in the RNS is also very positive:
"we are in the process of putting in place revised software and operational procedures to enable us to deliver Protected Trust Deeds more effectively and efficiently."
"we have made considerable progress in reducing our reliance on a small number of referrers"
"we have also established new affinity and referral relationships with significant creditors" [note that the benefits of these are already "beginning to result in an upturn in new leads and we expect this trend will continue across the remainder of the current year."]

Q2 will probably prove to have been the toughest period for PTD providers, with the situation much improved going forward:
"Martin Prigent, head of insolvency relations at TIX, said: 'From the information we have to date, the objection rates are probably slightly higher than we expected. I think there are genuine reasons behind that, WITH ONE OF THE BIG ONES BEING A SETTLING-IN PERIOD FOR US BEING IN OPERATION [my emphasis].' ... this is already starting to change, with TIX saying its objection rates on PTDs fell from 41 per cent in April to 25 per cent in July." (From the business.scotsman.com article)

In conclusion then during a period of adverse conditions INVO has continued "to be cash generative" and has increased its net cash position from £3.4m to "in excess of £4.0m". If it can perform like that during such a period, then we have very little to worry about, and the outlook appears very good with the environment already improving.

One final point: while acquisitions have been on the agenda since the AIM admission document with INVO seeking to be a consolidator in a fragmented market, little progress has been made in that direction so far. The current RNS includes the oft-repeated refrain that "Invocas continues to be well-positioned to acquire quality debt solutions providers in complementary areas" ... however, for the first time a time-frame is mentioned "the opportunities for consolidation and acquisition which the sector is likely to generate OVER THE COMING YEAR."

[gac100] 10/10/2007 09:14

Charles Stanley upgrades Invocas Group to buy from add (Citywire)

[gac100] 10/10/2007 07:40

Trading Update:



I do find INVO's RNS updates a little opaque. Probably take me half the morning to really weigh it up.

[naeclue] 09/10/2007 14:45

Good enough for me, maybe an update this month, or else interims are in December. Invocas looks solid, damaged by difficulties with the IVA market in England, which do not appear to be affecting them.

[gac100] 09/10/2007 07:19

Yet further affirmation that Scotland is largely immune from the problems facing English IVA companies, in debts.co.uk's results this morning:

"HIGHLIGHTS
...
• Acquisition of Adie Financial Solutions Limited provides entry into the
Scottish Trust Deed market place which has been largely unaffected by the
recent changes in the IVA market ..."

...and in further detail:

"The acquisition ... which we announced on 25 May 2007, has performed well and we expect this to continue. The results to 31 July 2007 include trading from AFS for only 2 months. The Scottish market has been unaffected by all the issues that are currently being headlined within the rest of the United Kingdom and the Group's fee levels remain steady and the percentage of acceptances of proposals high."

[battlebus] 08/10/2007 18:30

Just a hunch.

[gac100] 08/10/2007 09:11

The difference between Scotland and England continues to be trumpeted:



"Trouble within the debt advisory sector in England and Wales last week has prompted outrage among Scottish practitioners in the field."

... and the protestations continue to fall on deaf ears.

Quite remarkable.

battlebus - acquisition a hunch or have you heard something?

[battlebus] 05/10/2007 19:00

Think we might see an aquisition shortly.

[nobel2005] 04/10/2007 23:18

thanks, v.weird.

[battlebus] 04/10/2007 22:15

Yes,the market seems unable to distinguish between Scottish and English versions.Holding tight infact might top up if bottom has settled.

[nobel2005] 04/10/2007 20:10

does anyone know why this has been falling?is it in sympathy with iva companies?

[battlebus] 01/10/2007 20:08

Yep ,long term will pay eventually.Still holding tight.

[gac100] 01/10/2007 08:50

Continuing to suffer from the uncertainties in the English IVA market. share price fall this morning presumably due to Debtmatters trading update



INVO doesn't seem to be being judged on its own merits and on the very different personal insolvency system in Scotland.

One day the market will wake up!

[battlebus] 15/9/2007 16:13

Hope to be atleast 2.50 a share in 2/3 years .

[gac100] 15/9/2007 01:27

Disappointing to see the share price back down so low, but I'm sitting tight for the long term. IMO the longer it languishes at this level, the bigger will be the rise when it does come. Perhaps delivering on the long-talked about acquisitions, and evidence that it can be a consolidator in a fragmented market, would kick-start a rise. As it is credibility gets lower with the more time that passes.

[battlebus] 09/8/2007 20:30

Holding up extremely well given the markets,will add if we slip to 115 as lots of debt to come for a few years ahead! Reposessions up 30% already on last year.

[gac100] 26/7/2007 18:20

:-) Quite right battlebus. I do think patience will be rewarded in the long run with Invocas.