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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Debtmatters | LSE:DEBT | London | Ordinary Share | GB00B09HB648 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.26 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:8031U Debtmatters Group PLC 29 November 2005 DEBTMATTERS GROUP PLC ("the Company") Interim results for the Six Months Ended 30 September 2005 Financial Highlights * Strong growth delivered across business * Revenues up 230% to #2.44million (2004: #0.74million) * Profit before tax up 530% to #818,000 (2004: #130,000) * Strong balance sheet with #1million cash at bank and no debt * "Approved" IVA cases exceed 200 for first time in September (ahead of schedule) * Cost of case acquisition reducing alongside rapid expansion in case numbers * 2 additional Insolvency Practitioners recruited to support business growth * Staff numbers up since float by over 50% to 75 * Agreement with established money advice organisation for exclusive supply of IVAs * Acquisition of Unique Business Finance Limited broadens range of services offered * New software system purchased enhancing operating efficiency * Directors confident of continued growth Ges Ratcliffe, Chief Executive of Debtmatters, commented, "I am delighted to announce a strong set of results, which reflects growth across the entire business, particularly as it has been achieved with an improvement in operating profit margin. We processed 230 IVAs in September which represents a 78% increase over our numbers in April 2005. We have recruited additional staff to support this growth as well as making an acquisition which will enable us to offer complimentary insolvency services. Whilst we are concentrating on organic growth through direct marketing channels, we are also pursuing third party relationships in order to develop further IVA referral streams. The Board is confident of steady and sustained growth" Enquiries: Ges Ratcliffe CEO, Debtmatters Group plc 01204 845 700 Dugald Carlean / Freddy Crossley Charles Stanley & Co. Ltd 020 7739 8200 Shane Dolan Biddicks 020 7448 1000 Debtmatters Group plc Interim results for the six months ended 30 September 2005 Chairman's Statement I am delighted to report Debtmatters' maiden interim financial results for the six months ended 30th September 2005. During the period under review, the Company, which provides permanent solutions to consumers in debt via Individual Voluntary Arrangements (IVAs) has made rapid progress in pursuit of its growth strategy. Key achievements during the period include a successful AIM flotation in June 2005 via an oversubscribed institutional placing which raised #3m. These funds are enabling our business to widen its geographic reach and accelerate its growth within a market place which offers significant opportunities for both organic growth and consolidation. In April 2005 we processed 129 IVA cases and in September 2005 we processed 230 IVAs, a 78% increase in five months. This sustained growth has been underpinned by the appointment of two additional Insolvency Practitioners in July, which has significantly enhanced our IVA processing capability as well as secured our reputation for offering industry leading service levels. Since the period end, we have consolidated our organic growth by entering into an exclusive agreement with a South East based money advice organisation to process their IVA cases, which currently number in the region of 50 per month. The Board will examine the opportunities for similar relationships in the short to medium term. In addition, we have acquired Unique Business Finance Limited, which brings on board complementary insolvency services broadening Debtmatters' offering in its key markets. In the New Year, I intend to strengthen our Board further with the appointment of a non-executive director with substantial industry experience who will play a significant role during the next phase of our planned growth. The Board is confident of further progress in the current year and beyond and strongly believes that Debtmatters is well placed to deliver steady and sustained growth in a growing market. I look forward to updating shareholders with further progress in due course. Noel Guilford BA FCA MSI Non Executive Chairman Debtmatters Group plc Interim results for the six months ended 30 September 2005 Chief Executive's Statement Business Following the flotation of Debtmatters Group plc on AIM in June 2005, I am delighted to present our first set of interim results for the six months to 30 September 2005. I would also like to take this opportunity to welcome new shareholders to the Company. Results for the period under review are very encouraging. The business, which was profitable pre float has accelerated its profitability with the benefit of the #3m proceeds from our flotation. Revenues were up 230% to #2.44million (2004: #0.74million) and profit before tax increased by 530% to #818,000 (2004: #130,000). In addition, this performance is underpinned by a strong balance sheet with #1million of cash. These numbers reflect the strength of our business model as well as the solid foundations in place from which we will drive further growth. We have dramatically increased the levels of business undertaken in recent months and have successfully supported this growth by ongoing investment in infrastructure and capacity. It is worth highlighting that Debtmatters delivered 100 "approved" cases per month for the first time in March 2005 and during September 2005 this rose to 230 cases. This significant growth has been made possible by the effective business processes already in place and further growth has been facilitated by the appointment of two additional Insolvency Practitioners ("IPs") in July. I am pleased to report that this growth, which includes a 50% increase in staff numbers to 75 has been achieved without impacting negatively on profitability. Strategy Our continued growth will be derived from a number of sources: Our direct marketing channels, which attract new clients will be strengthened over the next six months. This has been the most significant contributor to the increased activity levels since flotation and will continue to be our main source of business. Additional funds for advertising have enabled us to negotiate better discounts with various media resulting in a decreasing cost of case acquisition as we had anticipated at the time of flotation. The Board continues to review a variety of advertising media and will take advantage of these when appropriate but not at over inflated costs. We will continue to invest time and effort in developing new strategic alliances with various organisations. One such deal has already been successfully concluded with an established "money advice organisation" in the South East from whom we are already receiving around 50 new clients each month. There are several other parties with whom we are in early stage negotiations and we anticipate that a few will develop into beneficial relationships in due course. Another notable development since flotation is the acquisition of Unique Business Finance Limited. This business brings with it certain experienced staff, who will be of considerable benefit to Debtmatters and enable the company to undertake a broader range of insolvency activities. Whilst the core business will remain IVAs, an ability to undertake other types of work will enable Debtmatters to provide a wider range of services which will be particularly useful when negotiating strategic alliances with various sources of work. In addition, the acquisition also provides our IPs with exposure to a broader insolvency remit which in turn develops their wider commercial experience. Such experience will provide an attractive incentive in future recruitment campaigns for IPs. People Our business is growing and has developed a leading reputation for excellent client service. This has been achieved as a result of the dedication of our people who have invested significant time and effort to make our business a success. I am especially pleased therefore that so many staff, several of whom have been with the Company for many years, decided to invest in the initial float and have added to their holdings subsequently. This continues to reflect the high commitment levels and loyalty shown by our staff and results in very low staff turnover, all of which is important in a "people business." I would like to thank all our staff for their commitment to date and look forward to further shared successes in the short to medium term. Outlook We will continue to strengthen and develop our established business as well as pursue strategic relationships with third parties in order to secure referrals of IVA business. This strategy has begun and we anticipate in the years ahead it will develop into a solid revenue stream. We have also strengthened our insolvency services via a recent acquisition and as a result are well placed to capitalise on significant market opportunities. In addition, we have invested in our IT infrastructure since float, which will consolidate our position in the market place as a provider of fast and effective debt advice to clients and where appropriate the quick delivery of a concluded IVA solution. Such service levels differentiate our business from many of our competitors and will help to grow our market share over the short to medium term. The Directors are confident of continued progress and look forward to updating shareholders in due course. Ges Ratcliffe Chief Executive Debtmatters Group plc Interim results for the six months ended 30 September 2005 Group Profit and Loss Account Notes Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Turnover 3 2,439,143 741,238 2,553,843 Cost of sales (955,018) (340,989) (1,208,894) -------- ------- -------- Gross Profit 1,484,125 400,249 1,344,949 Administrative expenses (671,084) (257,653) (805,460) -------- ------- -------- Operating Profit 813,041 142,596 539,489 Net interest (payable)/receivable 4,830 (12,386) (34,954) -------- ------- -------- Profit on ordinary activities before taxation 817,871 130,210 504,535 -------- ------- -------- Taxation 4 (245,361) (38,599) (133,761) -------- ------- -------- Retained profit on ordinary activities 572,510 91,611 370,774 -------- ------- -------- Earnings per share Basic 5 2.54p 0.46p 1.85p -------- ------- -------- Diluted 5 2.51p 0.46p 1.85p -------- ------- -------- There were no recognised gains or losses other than the profit for the period Debtmatters Group plc Interim results for the six months ended 30 September 2005 Group Balance Sheet Notes Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Fixed assets Tangible assets 186,603 76,423 102,483 Intangible assets 28,098 21,542 19,532 -------- -------- -------- 214,701 97,965 122,015 Current assets Work in progress 443,336 54,911 94,519 Debtors 2,384,400 848,925 1,368,620 Cash at bank and in hand 1,534,081 13,897 20,456 -------- -------- -------- 4,361,817 917,733 1,483,595 Creditors: amounts falling due within one year (1,044,524) (909,753) (1,191,728) -------- -------- -------- Net current assets 3,317,293 7,980 291,867 -------- -------- -------- Total assets less current liabilities 3,531,994 105,945 413,882 Creditors: amounts falling due after more than one year (180,234) (33,521) (57,636) Provisions for liabilities and charges Deferred taxation (6,369) (1,710) (6,369) -------- -------- -------- Net assets 3,345,391 70,714 349,877 -------- -------- -------- Capital and reserves Called up share capital 6 2,461,539 2,000,000 2,000,000 Share premium account 6 1,961,465 - - Merger reserve 6 (1,999,996) (1,999,996) (1,999,996) Profit and loss account 6 922,383 70,710 349,873 -------- -------- -------- Total shareholders' funds 3,345,391 70,714 349,877 -------- -------- -------- Debtmatters Group plc Interim results for the six months ended 30 September 2005 Group Cash Flow Statement Notes Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Net cash inflow from operating activities 8 (439,473) (73,675) (51,243) Returns on investments and servicing of finance Interest received 16,686 - - Interest paid (9,344) (11,380) (30,731) Interest element of hire purchase (2,512) (1,006) (4,223) --------- ------- ------- 4,830 (12,386) (34,954) --------- ------- ------- Taxation - - - Capital expenditure Payments to acquire intangible fixed assets (11,610) (9,610) (9,610) Payments to acquire tangible fixed assets (101,833) (20,010) (59,575) Sale of tangible fixed assets - 2,900 6,775 --------- ------- ------- (113,443) (26,720) (62,410) --------- ------- ------- Financing Proceeds on issue of ordinary shares 3,000,000 - - Share issue costs (576,996) - - Capital element of hire purchase (25,967) (9,721) 15,561 --------- ------- ------- 2,397,037 (9,721) 15,561 --------- ------- ------- --------- ------- ------- Increase/(decrease) in cash 1,848,951 (122,502) (133,046) --------- ------- ------- Debtmatters Group plc Interim results for the six months ended 30 September 2005 Reconciliation of Net Cash Flow to Movement in Net Funds Notes Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Increase/(decrease) in cash 1,848,951 (122,502) (133,046) Cash outflow/(inflow) in respect of hire purchase 25,967 9,721 (15,561) -------- -------- -------- Change in net debt 1,874,918 (112,781) (148,607) Other non cash movements: Hire purchase contracts - (54,886) (31,712) Net funds/(debt) at start of the period (552,008) (371,689) (371,689) -------- -------- -------- Net funds/(debt) at end of the period 1,322,910 (539,356) (552,008) -------- -------- -------- Debtmatters Group plc Interim results for the six months ended 30 September 2005 Notes to the Interim Financial Statements 1. Interim accounts The interim financial information contained in this statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. It has been prepared on the basis of the accounting policies set out in the statutory accounts for the year ended 31 March 2005. The financial information for the full preceding year is based upon the financial statements for the year ended 31 March 2005. These accounts, upon which the auditors issued an unqualified opinion and which did not contain a statement under s237 (2) or (3) Companies Act 1985, have been delivered to the Registrar of Companies. 2. Basis of consolidation Under a group reconstruction on the 8 June 2005, the Company acquired the whole of the issued share capital of Debtmatters Limited and Debtmatters Commercial Limited in exchange for shares. The reconstruction has been accounted for in accordance with the principles of merger accounting set out in the Financial Reporting Standard No 6 (FRS 6) and in accordance with Schedule 4a of the Companies Act 1985. The Interim Results have been prepared as if Debtmatters Limited and Debtmatters Commercial Limited had been owned and controlled by the company throughout the periods ended 30 September 2005, 30 September 2004 and 31 March 2005. 3. Turnover Turnover in the profit and loss account represents amounts billed or to be billed in respect of services performed on behalf of clients. The amounts taken to turnover are calculated as follows: Nominee fees: on approval of a proposal in a formal creditors meeting the full amount of the nominee fee is taken less a provision for cases on which the full fee may not be recoverable. Supervisory fees: on a monthly basis as billed following the creditors' meeting 4. Taxation Taxation is provided for at an estimated effective rate of 30%, being the standard rate of corporation tax for UK companies. 5. Earnings per share Earnings and the number of shares used in the calculations of earnings per share are set out below: Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Profit for the period 572,510 91,611 370,774 Weighted average number of shares in issue: No. No. No. For basic earnings per share 22,547,289 20,000,000 20,000,000 For diluted earnings per share 22,835,585 20,000,000 20,000,000 For adjusted earnings per share 24,615,385 20,000,000 20,000,000 Earnings per share: Basic 2.54p 0.46p 1.85p Diluted 2.51p 0.46p 1.85p Adjusted 2.33p 0.46p 1.85p The diluted earnings per share for the period includes 288,296 shares arising from the dilutive effect of share options. The adjusted earnings per share for the period has been calculated on the basis that Debtmatters Group plc had in issue throughout the period, the 4,615,385 shares which were issued on admission to AIM on 22 June 2005. 6. Reconciliation of Shareholders funds and movement on reserves Share capital Share Merger reserve Profit and loss Total premium account # # # # # At 1 April 2004 as previously reported: Debtmatters Limited 2 - - (20,901) (20,899) Debtmatters Commercial Limited 2 - - - 2 Merger adjustment 1,999,996 - (1,999,996) - - ------- ------- -------- ------- ------- At 1 April 2004 restated 2,000,000 - (1,999,996) (20,901) (20,897) Profit for the year - - - 370,774 370,774 -------- ------- -------- ------- ------- As at 31 March 2005 2,000,000 - (1,999,996) 349,873 349,877 Share issue 461,539 2,538,461 - - 3,000,000 Share issue costs - (576,996) - - (576,996) Profit for the period - - - 572,510 572,510 -------- -------- -------- ------- -------- As at 30 September 2005 2,461,539 1,961,465 (1,999,996) 922,383 3,345,391 -------- -------- -------- ------- -------- 7. Called up share capital No # Authorised Ordinary shares of 10p each 35,200,000 3,520,000 --------- --------- Allocated, called up and full paid Issued subscriber shares 2 2 Subdivision of ordinary shares 18 - Issued to former shareholders of Debtmatters Limited 15,999,980 1,599,998 Issued to former shareholders of Debtmatters Commercial 4,000,000 400,000 Issued on admission to Alternative Investment Market 4,615,385 461,539 --------- --------- At 30 September 2005 24,615,385 2,461,539 --------- --------- On 4 February 2005 the Company was incorporated with an authorised share capital of #1,000 divided into 1,000 ordinary shares of #1 each of which two were issued fully paid. On 8 June 2005 the authorised share capital was increased to #3,520,000 and each ordinary share was sub divided into 10p ordinary shares. On 8 June 2005 the Company entered into an agreement, as disclosed in the admission document, to acquire the entire share capital of Debtmatters Limited and Debtmatters Commercial Limited, satisfied by the issue of 15,999,980 ordinary shares of 10p each together with the 20 issued ordinary shares of 10p each, and 4,000,000 ordinary shares of 10p each respectively each credited as fully paid. On 22 June 2005 following admission to the Alternative Investment Market of the London Stock Exchange, 4,615,385 ordinary shares of 10p each were issued at a price of 65p per ordinary share. 8. Reconciliation of operating profit to net cash inflow from operating activities Unaudited 6 Unaudited 6 Year ended 31 months ended 30 months ended 30 March 2005 September 2005 September 2004 # # # Operating profit 813,041 142,596 539,489 Depreciation on tangible fixed assets 17,713 10,125 23,070 Amortisation on intangible fixed assets 3,044 1,710 4,020 Increase in work in progress (348,817) (33,236) (72,844) Increase in debtors (1,109,589) (469,505) (989,196) Increase/(Decrease) in creditors 185,135 274,635 444,218 -------- ------- ------- Net cash outflow from operating activities (439,473) (73,675) (51,243) -------- ------- ------- 9. Post balance sheet events On 31 October 2005 the Company acquired the entire issued share capital of Unique Business Finance Limited for a cash consideration of #400,000. Debtmatters Group plc Interim results for the six months ended 30 September 2005 INDEPENDENT REVIEW REPORT TO DEBTMATTERS GROUP PLC Introduction We have been instructed by the Company to review the financial information for the six months ended 30 September 2005, which comprises the Group Profit and Loss Account, Group Balance Sheet, Group Cash Flow Statement and the related notes and we have read the other information contained in the interim statement and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for the Company for the purpose of their interim report and for no other purpose. We do not, therefore in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Directors' Responsibilities The interim statement, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Interim Statement in accordance with the AIM Rules which require that the accounting policies and presentation applied to the interim figures must be consistent with those that will be adopted in the company's annual accounts. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board as if that Bulletin applied. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2005. BAKER TILLY Chartered Accountants Brazennose House Lincoln Square Manchester M2 5BL 28 November 2005 This information is provided by RNS The company news service from the London Stock Exchange END IR PKFKPCBDDBDB
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