Debtmatters Share Discussion Threads

[ihavenoclue] 08/10/2007 19:33

Sure ya do

[diogenesj] 08/10/2007 17:41

Good question, hamida. They've actually just paid the first instalment: £1m plus 3.83m shares. We don't know what value they placed on the shares - let's say 17p, so £651,000. The vendors of Loanmakers now have 12.3% of the company (at least, if they haven't sold).

That leaves about £7.35m to pay. At today's price of 15.5p, the company is worth £4.80m. Can someone tell me how this money can be found?

[hamidahamida] 08/10/2007 17:26

big debt WAS TAKEN WITH RBS
AND WHAT ABOUT THE EARNOUTS OF 9 MILLION TO BE PAID WHERE IS THAT MONEY COMING FROM
THIS IS A DEAD DUCK


Debtmatters to accelerate growth via acquisition of consumer loans business


The Board of Debtmatters is pleased to announce that it is acquiring the entire
issued share capital of LoanmakersHoldings Limited ("Loanmakers"). Loanmakers is
a fast growing, FSA registered master broker and packager of secured loans based
in Bolton. The initial cash consideration for the acquisition is #10 million
which will be funded by debt facilities provided by the Royal Bank of Scotland.
In addition there will be a deferred consideration of both Ordinary Shares and
cash based on an ...earn... out ...multiple ...over the...
next ..24 ...months... which is anticipated
to be in the region... of #9m.

[welshwiz] 08/10/2007 16:29

Ihnc
Its even funnier that Thomson Financial had reported Debt down this a.m even before the market had opened and that on the back of one Sunday Times article.no big sells either. Dark Forces at play i suspect now the fsa have been alerted they will be monitoring
Took the opportunity to top-up this morning and ill do for the next couple of days if i have the chance.

[ihavenoclue] 08/10/2007 11:11

If it was so grave how come Blackrock didn't get out completely and how come the bank gave DEBT a £1m+ loan ? Hmmmmm

[welshwiz] 08/10/2007 08:17

Porky:
Seems my first impression of you was right then.

[smashingguy] 08/10/2007 07:55

opening doown

[pork belly] 08/10/2007 05:30

The Times says:

"Any investor foolish enough to have hung on should get out swiftly."

[pork belly] 08/10/2007 05:30

The Times
October 7, 2007


DebtMatters

LAST week was a bloodbath for shares in debt-adviser groups. DebtMatters put itself on the block after it warned that competition and the hardening attitude of banks to individual voluntary arrangements (IVAs) had in effect scuppered its business model.

DebtMatters shares dived 73% on Monday. Shares in the rival Accuma plummeted 23%, those of market leader Debt Free Direct 29% and Debts.co.uk's stock fell 21%. Debt Free Direct shares are down 65% from a year ago. Accuma has lost over 92%.

Debt Free Direct tried to put on a brave face, arguing it did not share concerns that IVAs were becoming unprofitable.

IVAs, where borrowers can write off a substantial portion of debt in return for set repayments, have boomed in recent years. They do have a role, but right now the industry looks decidedly shaky.

Some banks have refused to use IVAs. The Insolvency Exchange has made big changes to the criteria used by practitioners when they recommend IVAs. The British Bankers' Association is screwing down the costs that IVA providers can charge.

There are similarities with the showdown a few years ago between accident-management groups and insurers. The IVA industry will be hoping that it, too, can reach a compromise, regroup and rebuild, but it will be a long slog.

I have warned before that shares in debt advisers are hugely risky. Last week underlined that the IVA market is toxic. Any investor foolish enough to have hung on should get out swiftly.

[welshwiz] 08/10/2007 02:57

P.b
"The market normally gets valuaton right"
Shares i bought that the big boy's sold for peanuts:
corus,ashtead,spirent,sportingbet,stagecoach from the abyss these have been my best ever buy's.As is the case with most investors i have also held a couple of duds but have been fortunate that i got out quickly enough not to suffer major losses.
I havent been as excited for the fundamentals of a stock to be so out so kilter with its share price for some time.Whether its a quick sale for anything between 40-70p or a total re-organisation of the company for far higher gains i am not sure at this stage.
Other skeleton's in the cupboard?Directors buying recently and the general good management record to date leads me to believe very unlikely.
Future cash flow and the strength and main asset of Loanmakers mean's that Debt can re-brand and re-organise fairly swiftly and if debt managment only generates a small amount of profit Debt will be producing profits of at least 3mil without the iva business which isnt proven to be un-workable as yet.
My hope it is the former(at the moment) as i hope to re-invest the proceeds into Ros(a stock that i have held for approx 3 years that i would recommend to no one other than believers in the management)who are a totally different kettle of fish and require more than the average amount of patience.
If my posts have maligned you un-fairly then i apologise.I would hope in future though that you think before you post otherwise you are perceived as being un-truthfull and misleading.
w.w
Note:merrill Lynch(Blackrock) have been the only notifiable seller.
Their track record especially of late hasnt exactly been exactly convincing.
rsi of 10 or below is way oversold and is begging to be bought ;-)
siesta time....

[johndee] 08/10/2007 00:56

I have advised directors to stay private................

[welshwiz] 08/10/2007 00:54

Well if its making buckets of money you will of course be offering your advfn mates a hefty discount pre-ipo :-)

[johndee] 08/10/2007 00:43

our informal debt management scheme gets all clients interest frozen and gets a percentage of the debt written off. No need for IVA's.............

Its the only scheme of its kind in the UK. Growing very fast and still private, not a PLC.

[welshwiz] 08/10/2007 00:32

Porky
I was beaten to it r.e p.e calcs which you provided either misleadingly or incompetantly.
I was conservative in my valuation with a p.e on Loanmakers of 5 and i stand by my take out price over 4 times its current value.
When investing my hard-earned cash i always check and double check my figures,but first calculate a rough figure in my head.Experience makes it easy.Referring to text-books and not being able to make simple snap calcs can result in basic mistakes.
Decimal points in the wrong place is a feeble excuse for a schoolboy mistake.
You have ridiculed yourself on this board.

[pork belly] 08/10/2007 00:07

Daily Mail
07 Oct 07
Why won't lender let me pay my debt?
Helen Loveless, Mail on Sunday
7 October 2007

Tom Rose is up to his eyes in debt. But unlike some in the same nightmare situation, he wants to pay back every penny.

The problem is, he cannot afford to do that unless he enters into an agreement to freeze the debt, but his lenders will not let him. He now faces the real possibility of bankruptcy.
Retailer Tom (not his real name) owes more than £55,000 in loans and credit card debts.

His problems began when a change of job led to a big pay cut. At first he borrowed more money with the intention of consolidating his debt. But then, like so many people slipping into the red, he could not afford more than the minimum repayments. His debt continued to grow.

After taking advice from an insolvency practitioner, Tom applied to enter into an individual voluntary arrangement. Under the terms of an IVA, those owing more than £15,000 agree to pay back a percentage, or all, of the money owed, typically over five years.

The practitioner's role is to negotiate with lenders to freeze interest payments so the debt does not keep growing. Despite offering to pay back 100% of his debt in return for a freezing of his interest payments, Tom was knocked back by one of his largest creditors, Marks & Spencer Money. It refused to agree to the IVA - as is its right.

Tom, who lives in Surrey, is not alone in seeking the refuge of an IVA. In the first quarter of this year, 11,300 people entered into such arrangements - an increase of nearly 50% on 2006.

But experts say that banks and credit card companies that used to accept IVAs if borrowers agreed to repay as little as 25% of the sum owed, are increasingly taking a hard line, leaving those with severe debt problems to flounder.

HSBC bank now accepts IVAs only if at least 40p in every pound is repaid, while Student Loans Company insists on at least 80p in the pound.

Crisis-hit Northern Rock rejects most IVA applications, say insolvency practitioners. Abbey, Barclays and credit card giant MBNA reject proposed IVAs from customers on benefits. Some refuse IVAs where borrowers are thought to be too old. Ronan Duffy of national insolvency practitioner McCambridge Duffy says: 'Lenders are increasingly rejecting IVAs even for people who genuinely want to repay their debts.

'We have had cases when there is an offer to pay 45p in the pound, only for the banks to then sell on the debt for less than 10p in the pound.'

This clampdown is creating big problems for some customers, says David Rankin of insolvency practitioner One Advice in Sale, Manchester.

'The tough line that providers are taking means many people will either be forced into bankruptcy or informal debt management plans where interest payments are not frozen. For some, it will take up to 40 years to clear their debts,' he says.

[pork belly] 08/10/2007 00:05

Daily Mail
05 Oct 07


Lifeline in prospect for debt casualties
Alan O'Sullivan, This is Money
5 October 2007

A dispute in the debt management industry could help those teetering on the brink of bankruptcy who are willing to work hard to free themselves of debt, according to banks.

There will be a shift in the Individual Voluntary Arrangements (IVA) industry over the next few years towards helping those who can live on a tight budget to escape bankruptcy and a corresponding move away from those in unsalvageable situations who should file for bankruptcy outright.
IVAs are an alternative to bankruptcy in that they allow people with debts to agree a five-year deal of fixed repayments with their creditors, in return for paying less than their original loans. However, banks have been paying IVA providers lower fees for these arrangements recently, as they are eager to clamp down on their bad debts following the recent credit crunch.

A raft of debt management companies suffered a dramatic fall in their share prices earlier this week as a result, after a leading player in the industry said that it could not make enough money from IVAs to remain profitable.

The company, Debtmatters, saw its share price fall 73% on Monday after it announced a profit warning. The shares of several companies followed suit: Accuma and Debts.co.uk fell 23% and 21% respectively.

Some of these providers have lashed out at banks for scuppering a valuable lifeline for those hoping to avoid bankruptcy. But the banks have now hit back by saying the IVA industry has become 'inefficent' and needs to refocus on those customers that have a chance of recovering at least some of their debts.

The director of the British Banking Association, Eric Leenders, has said many inefficient providers will be pushed out of the market, which he pointed out is good news for those struggling to overcome bankruptcy.

These providers will be replaced by competitors that can survive on lower bank fees because they will only take on customers that are willing to work hard to restructure their debt, instead of those who are unwilling to stick to an IVA's five-year budget.

Customers will benefit because more time will be spent advising those that are genuinely willing to work hard to become debt free; providers will benefit from the increased revenue from banks for completed deals.

IVA providers have been criticised in the past for extensive advertising aimed at coaxing people that would often be more suited to filing for bankruptcy into an IVA with promises of reducing their debt by up to 75%. This has allowed some providers to remain in the market by earning fees of up to £7,000 from these cases before eventually passing them on into bankruptcy after the arrangements fail, said Leenders.

He said: 'IVAs are being provided at different costs, but they are essentially the same product, so the more expensive players will be driven from the market. There is no doubt that the apocalyptic view being expounded by some is down to the fact they can't provide the service at the right price.

'There is a plethora of providers and some can produce the IVA more efficiently than others. We are now moving to a market where those who recover more debt, get more out of the transaction. The more efficient providers out there will win out and their customers will be the better for it.'

The government's Insolvency Service does not have any figures on the most popular IVAs or those that have the least amount of customers who are unable to stick to their IVA budget. However, Leenders recommended the Consumer Credit Counselling Service (CCCS) and Paypal to customers as they are likely to survive the current IVA squeeze.

Another IVA provider, Debt Free Direct, ended Monday down 29%. But it has a significant base of 11,000 IVA customers for which fees have already been paid, which it believes will help it to ride out the IVA crisis. Over the past year it has seen its income move away from upfront fees paid by banks to performance-related bonuses.

[pork belly] 08/10/2007 00:01

The Times
October 7, 2007


DebtMatters

LAST week was a bloodbath for shares in debt-adviser groups. DebtMatters put itself on the block after it warned that competition and the hardening attitude of banks to individual voluntary arrangements (IVAs) had in effect scuppered its business model.

DebtMatters shares dived 73% on Monday. Shares in the rival Accuma plummeted 23%, those of market leader Debt Free Direct 29% and Debts.co.uk's stock fell 21%. Debt Free Direct shares are down 65% from a year ago. Accuma has lost over 92%.

Debt Free Direct tried to put on a brave face, arguing it did not share concerns that IVAs were becoming unprofitable.

IVAs, where borrowers can write off a substantial portion of debt in return for set repayments, have boomed in recent years. They do have a role, but right now the industry looks decidedly shaky.

Some banks have refused to use IVAs. The Insolvency Exchange has made big changes to the criteria used by practitioners when they recommend IVAs. The British Bankers' Association is screwing down the costs that IVA providers can charge.

There are similarities with the showdown a few years ago between accident-management groups and insurers. The IVA industry will be hoping that it, too, can reach a compromise, regroup and rebuild, but it will be a long slog.

I have warned before that shares in debt advisers are hugely risky. Last week underlined that the IVA market is toxic. Any investor foolish enough to have hung on should get out swiftly.

[pork belly] 07/10/2007 23:53

But, as the Times said today:

"Any investor foolish enough to have hung on should get out swiftly."


This is still very risky but there *could* be big rewards for those with balls. Worth a small gamble with money that you can afford to lose imho.

Don't invest too much in this as the market has clearly seen something that others haven't to get the share price to where it is today.

The market normally gets the valuation right so something is not quite right here.

[pork belly] 07/10/2007 23:51

A P/E of 16 equates to a valuation of 108p based on a £2.1m profit. This may help explain last weeks Analysts buy-out valuation of 100p.

[pork belly] 07/10/2007 23:43

Yet another way to confirm the above figs are accurate is to look at ADVFN's financials page for DEBT at


Using their figs based on the last results to 31 Mar 07, they have an EPS basic of 24.69. At the current share price of 18p then my above formula calculates a P/E of 0.73 (18/24.69).

If you look at their calculated P/E you will see its the same ie 0.73. Thus proving my calcs are accurate.

Please remember though, their calcs were for 31 Mar 07 so their EPS is now inaccurate as there are more shares in issue and less profit due to the IVA write-off. They used 24.62 m shares and a £6.08m profit. There are now 31m shares and a circa £2.1m profit.

[pork belly] 07/10/2007 23:19

21st Century Media Company

Your calcs are wrong. The Mkt Cap has no part in P/E calcs.

My calcs were totally correct however, all i did wrong was put the decimal point in the wrong place. Instead of 11p it should have read 110p. But as i didn't use all the decimal places then a true fig of 108p at a P/E of 16 is obtained assuming a profit of £2.1m and 31m shares.

-------------

To calculate P/E ratio, divide the stock price by the post-tax earnings per share (EPS). To calculate earnings per share, divide a company's 12-month earnings by the number of outstanding shares.

If a company's earnings are £2 million and the number of outstanding shares is 1 million, it has an earnings-per-share figure of £2.

Now you can work out the P/E ratio by dividing the stock price by the EPS. So if the stock price is £30 and the EPS is £2, then the P/E ratio is 15.

P/E = price per share / EPS basic (trailing 12 month profit/amount of shares in issue)

--------------

For DEBT (using a £2.1m profit, 18p share price and 31.071499m shares in issue) then:

Current P/E = 2.66.....[18p/(£2.1m/31.071499)]
P/E of 09 = 60.8p......(£2.1m/31.071499 x 9)
P/E of 16 = 108p.......(£2.1m/31.071499 x 16)

--------------

As "ihavenoclue" states above, the £2.1m may be slighly improved and warrant a slightly higher calculation than above.

I was not trying to de-ramp, i simply put the decimal point in the wrong place.

Hope that clarifies matters.


porky

[ihavenoclue] 07/10/2007 22:38

21st Century ... actually will be more than £2 million profit. DEBT said Loanmakers had made £2.1 million in 9.5 months and was increasing well. So yearly profit will be £2.65 million+ ... so on your calcs would give an share price of 42.4p+