Debtmatters Share Discussion Threads

[mrphil] 19/10/2007 10:35

hosede - Agree they may need to revise the way they generate their new business, but once established there will be a certain amount of referral business from satisfied (hopefully!) clients and other word of mouth. I'm sure you are right that we will see consolidation in the sector, but there actually aren't that many "established" businesses considering the potential growth of the industry. Lots of the smaller start-ups jumping on the bandwagon are likely to disappear, but I would have thought DEBT is well placed to survive as a successful business in some format, but all imho of course!

[hosede] 19/10/2007 10:18

Phil
The difficulty in making a profit lies in the advertising cost - ie too much competition. There is no doubt that the number of potential customers is going to increase in the next year or two, but consolidation in the sector and elimination of the weakest should hopefully reduce this cost in future.

[ihavenoclue] 19/10/2007 08:35

10p ? Another deramper who hasn't got a clue. These jumped on false hope of a bid coming after ACG made their announcement and have dropped back. They only dropped to 15.5p after The Times basically trashed the shares as junk and to get out straight away.

IF these get to 10p there will only be one reason and that will be that they are going bust. And you can buy all my shares that i will have sold at just sub 15p that being the case.

Try doing a bit more research.

Regards
IHNC

[jim_m_007] 18/10/2007 18:24

I didn't buy here yet. Waiting to see how low these go. I reckon 10p should do it.

[mrphil] 18/10/2007 17:10

"Despite the uncertainty over fee levels, he added, IVAs as an instrument for debt management are here to stay. "IVAs remain a useful halfway house between bankruptcy and an informal debt management plan. Plus, they are part of the Government plan, as the Government has chosen not to change this."

Having invested heavily to service this fast growing demand, I must admit I was pretty amazed at the statement made by DEBT suggesting they would walk away from iva's. Maybe it was meant as a threatening shot across the bows of the BBA but I just hope it doesn't totally backfire on them if that's the case. Can't believe the final fee figure would be too low for any well run company to make a profit. That said, the sooner we know which way we are going the better.

[ihavenoclue] 18/10/2007 16:57

pork ... are you in favour or IVA businesses or against ? To be honest i felt that the IVA companies were painting a very bad picture to speed up the process - the BBA would be left with bankruptcy if they had forced all IVA companies to the wall. The news about the BBA is MASSIVE to IVA companies and once it has all been sorted out and the waters clear then it should be full steam ahead IMHO

Regards
IHNC

[pork belly] 18/10/2007 15:57

"Yesterday, the BBA would only say that it was "tidying up the protocol and getting it signed off"


looks like the long awaited BBA news is now very imminent.

could cause a big re-rating of this sector once the uncertainty is out of the way.

[pork belly] 18/10/2007 15:54

18 Oct 07


Debtmatter's Problems Signals Possible End For IVAs

Debtmatters, the debt advice company announced that it may not generate a profit from its key Individual Voluntary Arrangement division, following a cautious comment on the sector in the Sunday Times. While some are heralding this as the demise of the IVA, the industry as a whole is holding its breath, according to more than 10 UK reports.


Debtmatters said: "During September we started to see certain creditors seeking to modify IVA proposals, such that on Debtmatters' cases average nominee and supervisory fees would be reduced. Should these fee modifications become the norm, we may no longer be able to deliver IVAs profitably."

The change of attitude by creditors has undermined investor confidence in the sector, which is waiting for a ruling from a committee led by the British Bankers Association (BBA). Yesterday, the BBA would only say that it was "tidying up the protocol and getting it signed off", stated a report in The Independent.

Gerald Farr of Seymour Pierce said the industry suffers from a "lack of visibility on revenues".

"The BBA and Insolvency Service have set up a working group, but have not yet come out with a full-level agreement over fees and practices," Mr Farr said. "The group was set up back in the spring, and we were expecting an outcome by the summer, but things seem to be taking longer than this."

Despite the uncertainty over fee levels, he added, IVAs as an instrument for debt management are here to stay. "IVAs remain a useful halfway house between bankruptcy and an informal debt management plan. Plus, they are part of the Government plan, as the Government has chosen not to change this."

If Debtmatter's goes under, as is evident by a 73% drop in their stocks, the IVA industry will once again slip into the back, and IVAs will lose their power to force banks and financial companies to create debt management programs for people who cannot repay their mortgage and loan debts.

Some financial advisors are suggesting that banks should take a second look at IVAs, as the alternative is bankruptcy which results in bigger losses by the banks.

[hosede] 18/10/2007 15:09

IHNC
Agreed, but with at least one division profitable I doubt these will end up valueless i.e go bankrupt. Someone must surely be able to make a profit from 30m in turnover! The worst scenario (IMO) is that the three divisions will be split up and sold separately for say 10-12p total - a 50% loss on todays share price The best scenario is sale as a whole and eventual recovery at a price of 40p or over. That looks a good risk reward ratio to me so I've trebbled my holding, buying 40k at 17.7p. It's only money!
Edit - I already hold a few ACG so perhaps I should buy some DETS to even out my position -

[pork belly] 18/10/2007 14:32

Debts.co.uk
Hoodless Brennan - "HOLD" Research Note
15 Oct 07


interesting read and relevant.

[pork belly] 18/10/2007 14:17

LONDON (Thomson Financial) - Accuma Group PLC, the debt advice group, said that full-year pretax profits fell as the group's Individual Voluntary Agreement division struggled.

Full year pretax profits for the year to end-July fell to 888,538 stg from 1.594 mln stg the year.

Accuma blamed creditor pressure and a more competitive environment for a small increase in IVA cases - a less onerous form of bankruptcy. IVA cases set up increased by "only" 8 pct to 2,646 from 2,640, the group reported.

He added that Accuma has reduced staff headcount to 206 from 251 at the end of 2006, with particular reductions coming in the IVA division.

"The past year has been a testing time for both the group and the sector as a whole and conditions remain difficult," said Charles Howson, Accuma's chief executive in a statement.

Earlier this year rival Debtmatters said that it may not be able to generate a profit from its key IVA division, while Cleardebt has struggled in recent months as UK banks have become increasingly less willing to approve IVAs in an effort to curb their own bad debt problems.

However, he added that prospects for Accuma's IVA division and the group as a whole "remain positive".

Turnover for Accuma more than doubled to 20.5 mln stg, up from 10 mln stg a year before.

Yesterday, Accuma shares closed up 1-1/2 pence at 30 pence.

[deeiche] 18/10/2007 14:01

I realize the original post was related to UK homes and lending but I thought I'd post my very devalued US$.02 worth.
It sickens me greatly when I hear my government taking measures to bail out the sub prime market. My belief is if there was illegal activity, either civil or criminal, related to predatory lending then the individuals involved should proceed against the lendors.
I remember well the current president of the US proclaiming in a State of the Union address home ownership was at an all time high level. It is very obvious to me the reason this occurred was the "lend to anyone no matter what" attitude.
Fortunately for me I can now take advantage of a weak housing market to purchase a home on acreage that can be subdvided in the future.
g.day

[ihavenoclue] 18/10/2007 13:11

hose ... the complete uncertainty of where the company is heading and the mention of possibly closing the IVA division is why this had dropped way below what it should have done IMHO

Just need things to be cleared up just a little before any start of a recovery gets underway.

Regards
IHNC

[hosede] 18/10/2007 13:04

Would have expected these to creep up a little this morning in "sympathy" with ACG. With DEBT's turnover at nearly 30m ( to March 2007) compared to ACG's 20 (just announced) the market cap of 4.8m (half ACG's) seems crazy

[mrphil] 18/10/2007 12:26

Bid rumours at ACG seem to be having a positive effect on them, maybe we'll see some action here before too long?

[energyi] 18/10/2007 12:07

Could this be the ruin of the buy-to-letters?

17.10.2007 by Merryn Somerset Webb

I appeared on BBC Breakfast last week with a buy to let investor who was convinced he was very rich. He had, he said, made £8m out of the buy to let boom. Further chat revealed that he had properties valued at £8m but £5.5m worth of debt. So he is on paper 'worth' £2.5m. You might think that sounds like a reasonable margin of error but I'm not sure its enough: property can turn nasty fast. Many of the reasons not to invest now (the main one being the fact that yields are lower than interest rates) have been widely discussed but here's one more reason to steer clear. Buy to let mortgages deals tend to contain little read covenants regarding the loan-to-value ratio of the mortgage. In a rising market this isn't the kind of thing borrowers take notice of but in a falling market they may find that it is the ruin of them.

It works like this. The loans allow lenders to periodically revalue properties (at the borrowers expense naturally). If the value has fallen and the loan to value ratio has, as a result, risen above the level required by the mortgage (say from 80% to 85%) the lender can then ask the borrower to come up with more cash to get it back down. The result, says my lawyer friend, will be that as capital values drop, buy-to-let investors will start to receive letters from the lenders along the lines of "Dear Mr Bloggs, I should be grateful if you would restore your loan to value ratio by sending us a cheque for £25,000".

This, most mortgaged-up-to-hilt investors will be utterly unable to do. The result? Panic selling and not just from the market's new entrants. People who have been in the market for more than a few years are keen to suggest that they will be immune from any drop in prices thanks to the equity they have built up. But most of them – the man I met on the BBC sofa included - have also bought new properties in the last year. If margin calls – for this is what they are - start coming in on these how are they going to come up with the cash? No one's immune.

/more:

[pork belly] 18/10/2007 10:07

as i half expected, ACG profits FELL!

yet again proves how much the "ANALysts" know.

[mrphil] 18/10/2007 10:06

So, ACG in a whole year managed to make just over a third of the profit DEBT made from Loanmakers alone in just nine months, yet market cap of ACG is twice that of DEBT....Ummmm!

From last DEBT accounts:
* #11.8m of turnover and #2.1m operating profit from acquisition
generated in 9 1/2 months.

To be fair, the Loanmakers figure was operating profit, but I suspect a large chunk went through to the bottom line.

[ihavenoclue] 17/10/2007 22:19

thats one word for it .. till tomorrow ....

[pork belly] 17/10/2007 22:15

Times Text :-

"Accuma, the debt management group, is to report its full-year results on Thursday, with analysts forecasting widened pre-tax profits of £2.4 million, up from £1.78 million last year."

will be interesting tomorrow

[ihavenoclue] 17/10/2007 22:08

the 10% drop today was on very small sells .. just the MMs making a market i feel

[ihavenoclue] 17/10/2007 22:07

mrphil ... i am thinking holding for another 4 - 5 weeks till results will do that IMHO

Regards
IHNC

[mrphil] 17/10/2007 16:49

ihavenoclue - all a bit naughty really as many holders are already concerned and the last thing needed is somebody playing tricks with their nerves!

As you say, it is utter cr4p, but could still do with some good news! I think we deserve a bit of good luck for our loyalty!