Debts.Co.Uk Share Discussion Threads

[hamidahamida] 07/8/2007 22:32

SIGN OF THINGS TO COME IN THIS SECTOR

110million for Think Money
Exclusive Kevin Feddy/manchester evening news
7/ 8/2007


THINK Money Group, one of the country's leading debt management companies, has changed hands in a hush-hush £110m deal.

Venture capital outfit Alchemy has bought the Salford Quays business from another private equity firm, ECI Ventures, which acquired a 57 per cent stake when it backed a management buyout in 2002.

All parties have signed confidentiality agreements but a spokesman for Alchemy, which is headed by private equity grandee Jon Moulton, confirmed the buyout.

ECI had considered floating the business last year as its means of exit but decided against it amid turbulence in the debt advice sector.

Leading banks and other creditors became increasingly critical of individual voluntary arrangements because they were forced to write off large chunks of consumer debts in return for guaranteed monthly payments. Their stance prompted a decline in the number of IVAs being completed and sparked a series of profit warnings by listed debt advice companies.


It operates several subsidiaries, including Gregory Pennington, Freeman Jones, Wilson Andrews, Friendly Mortgages and Loans and Think Banking.

Range

Founded in 1993 by entrepreneur Nigel Warr, it has helped more than 100,000 people in financial difficulty. In 2002 it employed 250 staff and its core product was debt management.

Since then, the range has grown to include IVAs, loan brokering and mortgages and its workforce to more than 500.

Think Money is led by managing director Stephen Stylianou, 38.

According to the latest set of accounts filed at Companies House, the group turned over more than £27m in the year to January 31, 2006, and made pre-tax profits of more than £5.2m.

One source said: "It's a good business which enjoys excellent relationships with the banks and is trusted by its customers. Alchemy wants to grow it over the next few years and will then probably float it on the stock market."

Mr Stylianou is on first name terms with all staff and gives them a card and champagne on their birthday.

The Manchester office of investment bank Rothschild advised ECI on the sale.

[dasv] 07/8/2007 17:30

in retrospect yes. but back then things looked bleaker for the IVA industry. Lets hope the recovery in the share price continues.

[currypasty] 07/8/2007 16:53

i supose i should have averaged down at 85p !

[naeclue] 07/8/2007 14:09

The whole sector has been beaten up by the market, but I think the fact that an agreement of sorts is in place with the financial institutions is helping now.

Debts is a well run company, diversified via Scottish acquisition and expanding non-IVA products divisions.

[dasv] 07/8/2007 14:03

inkyrules: I suspect you will. This company will grow through further acquisitions and more organic growth, and is still massively undervalued.

[jtcod] 07/8/2007 14:00

That 7.5k was a buy not a sell.

[inkyrules] 07/8/2007 13:49

i bought in last year at 206p. gutted... will i ever get my money back

[jtcod] 07/8/2007 13:43

180p is still only a PE of 8.8x this years broker forecast net of cash CP. Maybe that won't look so bad in time.

[currypasty] 07/8/2007 13:33

Im still underwater, from 180 in the placing

[jtcod] 07/8/2007 13:31

I like the way the management think Yakin. I worked in consumer lending for 10yrs and I think they understand the mentality of the banks and the opportunities that still remain in this sector. There's more to come yet imo.

[yakin] 07/8/2007 12:31

JT you are right.it's looks promising.

[topgunns] 07/8/2007 10:28

JT, HB recommended these three months ago. I'll see if i can find the note for you.

[jtcod] 07/8/2007 10:10

Bought a few from 95p to 103p over last week or so.

I estimate they have approx. £3m cash around now. That's also allowing for a £1m expansion investment in the recent Scottish Acquisition. This was a clever move by the management imo.

Already 70% of the lenders have run with an IVA agreement on costs approx. 20% down on the industry average. This is fine imo as it should take the brakes off and the banks need companies like DETS imo.

As last weeks trading update showed, they continue to grow and hit targets regardless of competition and weakness in other players.

I calculate them to be on a PE (for this trading year) of just 4.5x net of cash. (Based upon the current broker forecast) That's half the rating of DFD. It's too low imo and I can see further meaningful growth with the interesting spread of business they already have and with an area that they would be fools not to take advantage of. More on that later.

As ever all IMHO and DYOR

[naeclue] 19/7/2007 09:40

Looks like an agreement between financial institutions and IVA providers has been reached:



20% reduction in fees, staged payments.

Less uncertainty now, hopefully will help the share price a little!

Dets year end is July, results around September, which should give the dust time to settle and a realistic forecast to be provided. Company looks cheap to me.

[aatw5295] 29/6/2007 19:14

Now that Debts have significantly increased their overheads via new larger offices, staffing levels and bringing their acquisitions into the picture, it will be very interesting to see if they have now succeeded in streamlining the whole business and are reaping the rewards.

Costs of completing existing and new IVA's are widely reported to be increasing, reducing profit, how will they mitigate this, as consolidation of their existing businesess is already complete.

They aquired a simular business and if we assume (i know thats dangerous) that their latest move into scotland was done in an attempt add some diversification within their business portfolio then is that to be see as positive? or should we factor in the negative sentiment surrounding the sector.

Should we expect to see a fall for IVA take up in 2008 as predicted and/or a reduction in revenue from them. However now they have the opportunity to 'spin' this has been offset by the benefits from their latest acquisition, which may indeed be the case?.

Its very early days but are we seeing a trend, if so we should expect another acquisition of sorts (if indeed possible) in early 2008 some time prior to results.

Having a holding in both Debts and Dfd i am worried with the sector and particularly with debts, I for one would have thought P Carter and others at Debts would be buying shares at current levels to show they are as 'cheap as chips', ........... it could only help.

without saying
IMHO

[naeclue] 29/6/2007 13:40

I'd be interested in the current run rate of IVAs at DFD, and also the failure rate of IVAs as supervised by DFD.

Couldn't see this on first look, is it there?

[dasv] 29/6/2007 11:50

indeed - dfd's statement is exemplary:-

[aatw5295] 26/6/2007 13:49

Statement from DFD today.
Paul Carter please note, real information, projections, factual statements, actual numbers and they have even stated their concerns ..... 2008

look and learn.

[dasv] 19/6/2007 11:08

Debtmatters released great results today. DETS market up a little by the MM's. This sleeper will come good:-



Debtmatters FY pretax profit jumps as turnover rises; IVA sales up


LONDON (Thomson Financial) - Debtmatters Group PLC, a provider of Individual Voluntary Agreements (IVAs), posted a jump in full-year pretax profit for the year ended March 31, boosted by significant growth in its IVA business and the successful integration of its secured loan brokerage.
The company's pretax profit more than trebled to 8.6 mln stg versus 2.6 mln last year while turnover jumped to 29.8 mln stg from 7.8 mln. Sales for the IVA business grew 141 pct to 18.1 mln stg from 7.8 mln last year and profits from continuing IVA operations for the same period rose to 7 mln stg from 2.6 mln stg.

In a statement, non-executive chairman Noel Guilford said the group is well positioned to continue its momentum and added that 'significant' opportunities exist for the group.

The company said it looks forward to continued progress for 2008 with both its major products and added that the IVA industry is settling after a period of upheaval while Loanmakers, which it acquired during the financial year, continues to exceed its initial expectations.

[naeclue] 12/6/2007 12:53

From earlier post, there was a trading update at the bottom of this RNS:




Issued towards the end of May. Sentiment is against this sector, but 10 months into the financial year Paul Carter has stated DETS are in line with market expectations. House broker forecast is EPS of 13p.

[aatw5295] 12/6/2007 11:58

I just wish this company would communicate more, they have improved a little admitted but we only seem to have odd updates from paul carter to bad news, be it on an acquisition, falling share price or market conditions. A more regular update even brief 'may' give those holdings or thinking of buying a little more confidence in this still very young company.

The saying 'no news is good news' is not always the case.

Andy

[dasv] 06/6/2007 19:34

yeah could be. hope so.

[twentyoneeleven] 06/6/2007 19:21

dasv ... perhaps it was to do with the MMs taking their stock off the system at the close? Sometimes that can cause fluctuations at the beginning and end of the day as prices are added/removed?

[dasv] 06/6/2007 18:46

twentyoneeleven - must have been a strange selftrade anomaly. I haven't got level2 with them yet. considering tdw protrade. drop was about 18% according to selftrade but has since vanished (?)