Surprising that no existing thread on Debtmatters (DEBT). Big run up this year and Shares are expecting more to come. Been watching for a while but recent news of accelrating expansion has encouraged me on board.

DEBT is a relative newcomer to the market: revenue up 230% to 2.44 at interims to Sept 2005 and pbt up 530% to 818K. In comparison DFD turnover to October 2005 (interims) more than doubled to 6.4m with pbt of 1.86m. DEBT achieved 200 IVA's for the first time in September: this became 344 in January and 534 in March. DFD has approaching 20% of the market which appears to be expanding at about the rate achieved by DFD as their share is constant. From this I deduce that DEBT has a way to go at its exceptional current growth rate. OK a pe around 90 appears high but two years could bring it to 30 and then 10.

From the charts there is terrific momentum in the climb. It may be that we have had two legs of a three-legged climb. Best to be on board for the journey!

Eric

Bought in last August, this has had a steep climb ,and i have been tempted to sell many times ,but it does look like a good hold ,i'm not expecting too much short term but maybe another 100 points by xmas.

Have traded these - popular sector

Also check out DFD and ACG

Of the larger caps, I think KGN and CTT do similar stuf, but might be wrong. Not much of a fundie myself. ;-)

In their interims DFD claimed that they had held their share of the market at just under 20%. Yet their turnover more than doubled implying that the market itself had doubled in the year; in fact the March volume was up 155% on the previous March. Given the massive explosion in consumer debt the conclusion that the market has doubled is not surprising.

The figures from DEBT suggest that they have trebled volume in something over 6 months. Against the amrket increase this is not surprising as it is 50% ahead of the market and their share is still relatively small. Preliminary results will be announced for the year to 31st March will be announced on 11th June. But it will be the current year that should show the most dramatic increase in turnover and pbt. Results could show turnover of 6m and pbt of 2m+; that would bring pe down to about 40. Repeat that and you get a projected pe of 16, probably in range of 10 to 20. Suggest that DEBT will continue to catch DFD up in relationship to share price on lower volume of shares: who will get to 5 first?

Eric

Eric-I'm also watching and was on the point of buying several times but kept waiting for a pull back which hasn't happened!! I'm into CLEA though for the long term as I feel once they get going there should be rewards for the brave--check them out. MP

Hi moneyplus. Nice to meet up again! Have looked at CLEA and posted on that thread and on DFD. Happy that DEBT is better timed investment than DFD and preferable to CLEA at the moment on basis that it is through to profit. Will watch CLEA closely because, as soon as they promise profitability they could be up and away. How do you read the risk of them not making it?

Eric

I'm backing them as they are targeting the smaller value IVA's-going for volume I think. I also feel that that a finance company run by jewish gentlemen has good potential as they always look after money well and work hard. fingers crossed.

moneyplus: take your point as likely to have plenty of money behind them. John Charcol agency is useful too. A toe in the water could well be called for. Plus for DEBT is that they have achieved critical mass but still at higher percentage growth phase than DFD.

Eic

Quoting Shares last week: 'analysts expect profits to multiply from 380K last time to well over 2m to March and maybe 4.5m this year, dropping the pe to a still fulsome 25. A maiden dividend is likely.' In fact, shares isued at 30 Sept. were 24.6m (against 35.3m authorised). Thus the pe is projected at under 20 even at the increased sp from the Shares article. I wonder if Shares have used the authorised share capital in error: not aware of any significant issue since September. Something over a year behind DFD but growing more quickly from a smaller base. DEBT report first in June for year to March followed by DFD for year to April; could give a double boost.

Eric

So annoyed I've missed this whilst spending too much time regretting my premature exit from DFD. Some numbers to ponder . . .

Interpolating the variously reported monthly/quarterly figures from Apr05 to Mar06, we get an IVA count of 3,254 for the year at an average of 2,265 (as per interims) = turnover of 7.37m. Allow gross margin increased from 60.85% (interims) to 62.5% and administrative expenses of 1.5m (interims 671k) and nil interest, we get profit before tax of 3.1m taxed at 30% = after tax profit of 2.17m. EPS = 8.834p. PE (SP= 350p) = 40. PEG = 0.11. Operating Margin = 42%. ROCE = 63% on year end capital.

For 2007, I can hardly bring myself to believe the figures as follows. Growth in IVA's grew from 830 in Q4 '05 to 1,347 in Q1 '06 = 62.5%. Allow diminishing continued growth for each successive quarter of 50%, 37.5%, 25% and 12.5% respectively (arbitrary but realistic), we get total IVA's for the year of 12,178 X 2,265 = turnover of 27.6m!!! An increased margin of 65% less admin exp of 3m(??) and tax of 30% leaves net profits after tax of 10.45m. EPS = 42.45p. PE = 8.24. PEG = 0.02. Operating Margin = 54%. ROCE = 147% on average capital for year (capital at 31/3/05 + 50% of annual after tax profit). (All appropximate due to assuming no dividend).

There will surely be a dividend declared at the 2006 finals, and I expect one each half year therafter, growing in line with earnings growth.

Someone tell me what's wrong with my figures which tell me this is a screaming buy.

Yes, alright, I know you all got there months ago, but allow me to get there in my own dogged fashion!

sd

Well done, sd for doggedly good figures. Shows there is an advantage in studying the Shares plays. The growth rate is significantly greater than DFD but one should question, I suppose, whether there is good reason for that remaining the case. There may be a good reason for March being out of line with the trend figures, typically the case with the last month of a financial year. But my ball-park figuring above gave two years of triple growth in pe, somewhat less than your figures. DFD claim aproaching 20% of the market on turnover presumably around 15m giving a market of 75m. DFDs market share is stable so that market as a whole is doubling right now giving 150m for next year (year just started). DFDs 20% would mean 30m turnover. With growth still ahead of the market, DEBT could be 20m, nearly 150% growth, giving them a 12.5% market share. That figure feels more likely than yours. It still implies a pe around 12 whereas it should be not less than 30 even with growth slowing, say, to 100%. I suspect the market will still be near doubling, partly due to the still growing debt problem but also that debtors will become more savvy realising there is a way out of their debt trap. That gives a price target of around 9 by June 2007.

The amazing thing is that no one on this Investors Room was there in any public way with DEBT. When I did my own research, my immediate reaction was to check up these threads only to find there wasn't one. jimmy B and big al have obviously discovered DEBT although the latter refers to having traded them: this is really a share to hold at least until the market has caught up with their potential value or the first sign that they are running out of steam. Once again, I have discovered the share a bit late so it will probably only be a 3-bagger for us.

Eric

Eric - spent a little longer on the figures today (whilst sitting in the middle of the Thames Barrier as it happens! great view of London).

From the interims and the two updates in Feb and Apr, the number of IVA's is pretty clear. I may have got Apr-Sep slightly overstated, but that is compensated for by a consequential reduction in per IVA revenue, since I divided the actual revenues for H1 by my estimated number of IVA's to get 2,265 - From the placing doc " The Company's fees of approximately 4,250 per domestic IVA are recovered from the trust account." Can't tie this in with my figs, but it makes my other estimates conservative to say the least. Anyway, I took Apr 129 and Sep 230 and took an average of the two X 6 months = 1077 for H1. We are told in Feb that Oct-Dec was 830 IVA's and in Apr that Jan was 344 and Mar 554. That leaves Feb alone which I took as 449 (midway). But let's say it was only 195. That makes 3,000 for FY X 2,265 = 6,795,000 revenue. Leaving margin slightly worse at 60% less admin costgs inflated by another 250k for the new staff and building of 1,750,000 and a 30% tax rate leaves net profits after tax of 1,628,900. EPS = 6.62 - 258% growth over 1.85 for 2004/5. PE = 53. PEG = 0.21. Margin = 34% and ROCE = 46% on year end capital (allowing a large part of creditors as interest bearing capital just to be safe).

For 2006/7, let's limit growth to just doubling = 6,000 IVA's at 2,265 = 13,590,000 at the same margin (although we are told more than once they are improving) and a hefty increase in admin expenses to 3.25m, after tax at 30% leaves a net profit of 3,432,800. EPS = 13.95. Growth = 111%. PE = 25. PEG = 0.23. Margin = 36%. ROCE (v. average capital for year) = 65%.

With no urgent need to invest any capital in acquiring quite possibly earnings dilutive appendages, and a reasonable cover of, say, 3.5 tims, we could see dividends of about 1.89p for 2005/6 and 3.98p for 2006/7 - a very respectable yield for a rampant (ramped - lol!) growth share which has the advantage of allowing institutions to buy in to support/re-rate the SP. Where will the SP go? Could be 3 times over 5 years, or 5 times over 3 - who knows, but it should be good whilst such effortless earnings growth into a rapidly growing market continues.

So on much more conservative assumptions (don't forget, there is no debt whatsoever to speak of since share placing and strong operating cashflow, maybe a couple of HP leases) I still get a massive buy which is what I did this morning, staking my "even-weight" 5% of my funds for openers. It's funny how you can only really get to know a share if you're in it. Why is that?

BTW - DFD claim a steady 20%of a growing market, whereas DEBT claim 7% has grown to 12% - so you are right on that basis that DEBT will grow faster from here. I think they are in almost exactly the same price strate of the market, whereas CLEA are looking at much smaller clients and per transaction fees and will thus have to work that much harder to make so much money - why go there when there are two clear leaders with plenty of scope left.

Sorry for another numerical ramble, but I love these simple-to-understand businesses with transparent P/L and B/S and great numbers - DGT, ASC, GME, COH - also watching HMS as a twin to GME which looks v. interesting too.

sd

sd: That is really excellent. You have surpassed yourself, even though you were sitting on the Thames Barrier - I thought you were a dog, not a bird! Hadn't picked up the Trust Fund bit, but it explains how they can take the profit on an IVA at completion; nice idea.

I'll just wander through your numbers: (a) your figures for H1 tie up with interim revenue so it looks as though the placing document was optimistic: I'm surprised it is as high as 2,265 per client although they might justify charges of 20% or so; (b) Your 2005/6 figures may be somewhat pessimistic though none the worse for that: Feb is certainly low; why should admin expenses rise unless they land us with staff bonuses as for DGT; (c) tax is 10% at half-time so it seems likely that they have allowances to bring forward. Still, lets say the pe is 50. Two questions then to ask. First, what are likely figures for 2006/7. It seems clear that the market is still in its early stages and that it should double in the year. In that case,it does seem likely that DEBT will still grow ahead of the market. A projected pe of 20 would correspond to a market share growing to 14% or so.

The second question is what the likely effect of figures like yours is on the sp in June when known. I think it would be quite cautious to assume a projected pe of 30 and this means a 50% uplift on current price, lets say to 5. I am assuming that analysts will be able to re-calculate 2006/7 as you have done.

Finally, I think we need to rephrase 'one man and his dog' to 'one dog and his man': lucky to sit at the feet of such a demi-DOG.

Eric

Don't forget the Barrier is pretty much oppposite the Isle of Dogs - hence my inspiration.

b) admin expenses rising because they have doubled the staff and taken on 15,000 sq ft new premises as from beginning April.

c) tax may have been 10% at half way stage, due to low profit and capital allowances, but no losses to bring forward. At level of profit I predict they will be exposed to the full 30% and timing differences on capital allowances will not be material.

Wish I'd paid attention to this at 175p when the Feb trading update was available and most of my numbers could have been extrapolated from there - ah well, learning all the time.

sd

OK. Your estimates should be a boost to sp anyway. Feel the same way because my interest was increasing following Shares write-ups, certainly in DFD a DEBT had appeared on my radar. But it was essentially the recent post-close statement that convinced me plus Shares comments that analysts projections would be exceeded. Don't the dogs eat the scraps from under the rich man's table anyway?

Eric

You rich man, me dog. Thank you for the scraps! Should have mentioned this before.

sd

Eric

Re question a) your post 15 above. I think I read somewhere that they only take on case where debt exceeds 15,000. So 2,265 is only 15% max of the deal value - quite modest compared to what liquidators take. I assume like liquidators it comes up front, but unlike them it is paid by the creditors, not the debtor in the first instance.

Anyway 5% down today - must have seen me coming as usual.

sd

sd: As I understand it, the IVA is managed by the Insolvency firm over a five year period. The leading firms seem to have an entry point of 15K but one of the advertisers on CEEFAX says 5000. The client needs to put in 30% min. of the debt part of which goes to the advisor. Interested in DEBT's reference to a Trust Fund. It may be that this enables them to take credit up-front; but then who bears the cost of administering the scheme: most should be straight-froward as each will have its own bank account, but there will be annual reviews and revisions if circumstances change. Doing a search on Debtmatters throws up plenty of competition using the term 'debtmatters' as an advertising slogan so there are probably unscrupulous operators in the market. However, it is clearly best to use an established practitioner as they will have established rules with the creditors who will normally be represented anyway by a leading accountancy firm. I draw the conclusion that success breeds success so it will not be that easy for a new provider to enter the market. Suspect there should be a run-up to the June results with a profit-taking opportunity then (before or after depends on the figures which I suspect will be ahead of market expectations, based on sd's calculations).

Eric

sd: Have a look at the Note from DFD this morning. DEBT up in sympathy (should that be empathy?). Significant that market is up overall by 130% in first quarter. Obviously this is bringing in competition, e.g. from the banks - even though they are a major part of the problem! lol! How do these figures effect your calculations? I expect that current year's figires will need to be raised. DEBT report before DFD so should start a further run up to the results, which I think are 10th June.

Eric

A first look shows that DFD's view of the market and their share (20%+) of it fits roughly with DEBT's respective view and share (12%+). DEBT is growing faster than DFD rising from 7 to 12% over the last year compared to DFD's 18 to 21% market share.

Looking at Operating Margin, Return on Capital, PE and PEG from Digital Look for DFD and my own calcs fo DEBT, they are very level pegging (can't be sure if we've used the same basis of calculation). DFD has a lower 2006 PE (47 v. 53) but level pegging for 2007 (25 each), but DEBT has a lower PEG (because it is growing EPS faster) and is therefore better value. DEBT's margin seems higher as does its return on capital - again better value. Growth alone is not the crictical parameter, value is. All of which seems to suggest your inital appraisal that DEBT had further left to grow from a lower base is right. Maybe being last in a bog is good for DEBT since DFD have paved the way (at some cost?).

Received a great little email recently about the difference between growth and value using IBM and Exxon as examples.

ANNUAL GROWTH RATES, 1950-2003
IBM Exxon Advantage
Revenue per Share 12.19% 8.04% IBM
Dividends per Share 9.19% 7.11% IBM
Earnings per Share 10.94% 7.47% IBM
Sector Growth 14.65% -14.22% IBM

AVERAGE VALUATION MEASURES, 1950-2003
IBM Exxon Advantage
Average P/E 26.76 12.97 Exxon
Ave. Dividend Yield 2.18% 5.19% Exxon

Dividends are a critical factor. Those who bought
Exxon's stock and reinvested the oil companys dividends
accumulated almost 15 times the number of shares they
started out with. Investors in IBM who reinvested their
dividends got only three times their original
shareholding.

Yes, both stocks have done well. But investors in
ExxonMobile earned 14.42% per year on their shares from
1950-2003. That's more than half a percentage point
ahead of IBMs 13.83% annual return. So although the
difference is small, $1,000 invested in the US oil giant
would be worth over $1,260,000 today. If you put $1,000
into IBM, you would have $961,000...some 24% less.

In the short term DEBT will grow faster and its SP may rise faster. But over the longer term who ever pays the best dividends will also be a crucial factor.

If I had the money to allocate enought to both shares I'd be laughing - come to think of it I did, but sold DFD far too early. Hopefully won't do that again in a hurry.

sd

Thanks, sd, for prompt and thorough reply - deserve extra bone and walkies. Both shares are still an excellent investment given the growth of the market and growth of there relative shares. Clearly this sort of growth rate won't last for that long although the total market must be pretty large. It appears that the banks are trying to jump on the bandwagon; the cost of entry must be quite low; you wonder how the lenders will react in the medium term as the cumulative cost of IVAs must be pretty high. I'll see how the sp of DEBT moves through June before deciding whether to hold longer term.

Interesting analysis of IBM and Exxon; I woner how HSBC or Tesco would compare. I did have some 1500 of IBM shares purchased at a discount as an IBM employee around 1961: talk about DFD but its those who buy young and tuck away who are the biggest winners. Still trying to make up for lost time - yes, and that costly wife!

Eric

sd I wonder how you rate the relative capitalisation of DEBT and DFD. If I have the up-to-date figures, DFD is capitalised at about 163m (37m shares @ 440p) whereas DEBT is cap'd at 83m (24.6m shares at 340p). There certainly should be a differential but surely not 2:1; perhaps 3:2 is better. Picture should resolve after respective results in June. Nominal price should be about the same given ratio of shares in issue is 3:2.

Eric

the respective caps are relative to EPS which relationship is reflected in the PE. as noted above this is pretty much level pegging prospectively, so the cap differential is about right with DEBT likely to grow faster than DFD.

sd: thanks again. How do you see ACG in comparison? Growth appears even quicker than DEBT. One advantage for ACG is that they seem to have a wider range of offerings whereas DEBT appear to concentrate on IVAs. Thus they will attract people who just want their debt managed better than they can do themselves. Whereas DEBT appear to take credit up front with a Trust Fund invovled, ACG have a forward flow of payments. Do you agree this analysis? cap somewhat lower although recent rise even stronger than DFD and DEBT.

Eric

eric - difficult to tell at first glance from first profitable interims compared to full year for DFD and DEBT. However, it seems their PE, margins and ROCE are not as favourable as DEBT, although they seem to have the same markjet share (12%). They could be growing even faster than DEBT - difficult to tell from a loss-making 2005 year to a first profitable year. Full year revenues could be 11.4m up 300% on 2005.

Their different business model - more services than just IVA's and referral as a means of acquiring clients instead of just advertising - is not so easy tom compare without a full set of accounts to go on. I suspect their other activities are much lower margined than IVA business whcih they claim is 60% gross margin. However their overall gross margin is only 35% H1 2006.

Their chart shows an interesting comparison between all three. Starting at 0% 1 year ago, DFD ends up at 200%, ACG at 300% and DEBT at 550%. So DEBT clearly has the greatest momentum and relative strength. By contrast AIM-allshare index ends at 30% and General Financial sector at about 80%. Over 2 years the respective figures are 180%, 180%, 370%, 10% and 60% - again DEBT the outright winner.

I remain happy with DEBT especially as it regained my purchase price after a somewhat sulky performance immedaitely after I bought!

sd

This sector particularly hard hit in market fall-out, presumably because of previous increases and therefore nuimber of investors who want to pocket their profits. Will have to consider reducing my holding if market doesn't recover tomorrow - I suspect many are in same position, partic ularly those who utilise derivatives.

Eric

One word of caution ,these are a high beta stock and since i bought them in August they have been volatile, when the market dropped they seemed to drop like a stone,and when it turned they went up in leaps and bounds ,I sold a good part of my holding recently so am not too bothered ,however i wouldn't be surprised to see them bounce right back.
I don't think this sector was hit any harder than other shares i am in or watching ,most took a battering today,,here.s for a quick recovery.

Eric - it's not the sector which fell 4-5% today, it's DEBT which fell 8% - don't know why it's more volatile - maybe it has fewer insti's holding and more PI's/daytraders. Hope jimmyb's right about beta working both ways!

sd

In fact later trading was positive so this seems to bear out your comments, jimmy and sd. Volume not that big so seems like part of a general mark-down.

Eric

In my opinion this got off lightly today ,i expected to see it down a lot more than 1p ..

As i thought when i looked last night ,it had got off lightly ,not today though ,,if the market turns this will turn sharply with it ,my only concern is that this is more than just a correction ,i suppose the next few weeks will tell .

Jimmy: I suspect it is just a greater level of volatility probably arising from the proportion of hot money in the share and possibly also shorting it. Was shaken out at 304p as I held the shares in a cfd and couldn't risk a further fall. Convinced on the fundamentals but it is cioping wioth the market! How is my doggy friend taking it?

Eric

Sorry to hear that Eric ,this is not normal circumstances ,since i was in,, it has bounced around but always climbed ,,i stopped myself out of a large spread bet on CHTR (just as well) other than that i'm staying out until it looks like there is some sort of direction to the market ,i'm not clever enough to read this one .

Jimmy. Well done as you saw the merits of this one earlier than most of us. Bound to be a shake out in this sort of market even though the analysis by sd and others shows that there is a way further to go. If you are sitting on a really good profit, might be worth taking half of it or, better, recovering your original stake.

Eric ,i took profits a while back and left a few to run ,i also sold those when the market turned ,so i got this one right ,luckily i wasn't in much when the market fell ,except a large spread bet on Charter ,however that was enough to turn me to alcohol .Cheers .

Well done again, Jimmy. A lesson that it has taken me a long time to learn is, if you don't get in early, don't get in at all. Its the early birds that catch the worm. Have you any juicy worms in sight?

This has come storming back ,,i thought it would.

Debtmatters has been my 'star' share. Got in @75p & still holding. Debts.co.uk is a new company to the market & Invocas which floated earlier in the year has apparently 'got the Scottish market sewn up'. Agree with an earlier post, much talk on the boards of the mining & oil stocks but just need to looks at the gains made by Accuma, Debt Free Direct & Begbies Traynor & easy to realise that exposure to this sector is worthy of investment

Gaining back all it's losses now .

Good to see finals showing a 20% improvement on my (hardly dare believe) estimates in post 12 above to 2.8m pre-tax, giving a fully taxed EPS of 7.96p and a PE of 42 / PEG of 0.13.

Looking forward to studying the deails when published on 16th June.

sd

Good to see finals showing a 20% improvement on my (hardly dare believe) estimates in post 12 above to 2.8m pre-tax, giving a fully taxed EPS of 7.96p and a PE of 42 / PEG of 0.13.

Looking forward to studying the deails when published on 16th June.

sd

Results yesterday confirm the trading statement from earlier in the month. Great growth company with a growing market share of a market expected to double in 2006 (having pretty much doubled in 2005 as well). Seems well run and good margins / ROCE. EPS, PE, PEG all looking good as its astronomical rating comes down to market average PE of 14 over the next 2 years. Nice positive statements from Chairman Noel Guilford and CEO Ges Ratcliffe.

Turnover on the IVA business was at the more optimistic level of my two forecasts back in April, but margins were slightly lower at 58.5% than the 60% I anticiapted, with overhead lightly less than my guess. Overall operating profit 12% ahead of my guestimate.

The Unique Business corporate insolvency practice with net assets of 114k acquired from the CEO for 400k has turned in operating profit of 208k very nice too.

Only small cloud to watch on the horizon is the acquisition of loan broker Loanmakers for up to 19M against pre-tax earnings of 1m, to be paid for by 10m loan from RBS and the balance in cash/shares over the next 24 months earn-out. This whooshes the gearing up to 224% - not very clever in this day and age of rising interest rates - and removes all the cash (assuming the large list of debtors pay up) from the B/S for the next couple of years, reducing the prospect of any dividend for the foreseeable future. Still an exit PE of 19 is less than half DEBT's PE of 42 (diluted by end of year shares in issue) so, if it grows as fast as its parent, it could well have a silver lining.

Looking at this year, we are on track for 6.9m operating profit (nearly double turnover, margin of 60% and ooverhead of 2m ??) from the two existing businesses and, say 1.1m from the acquisition, makes 8m, or 5.6m after tax. EPS and PE calculations are difficult to assess given the acquisition of Loanmakers and part payment in shares to be issued, but it should look pretty good for this year and even better next year as the effect of the acquisition washes through and its earnings start to move forward.

sd

DEBT ticking up a few points this morning - i see DFD are due to post their preliminary results tomorrow - might be worth keeping an eye out for, expected to be good.

Attached release from DEBT adds great credibility to this company which is now poised to continue its rapid growth in this sector - interesting how its share price growth has mirrored DFD, but at a 'delay' of about 5 months - looking at 4.00 - 4.50 by christmas IMHO

augustman

Debtmatters Group PLC
14 September 2006


DEBT.L

Debtmatters Group plc
('Debtmatters' or the 'Company')


Major accreditation award and new Insolvency Practitioner appointment
underpin further expansion

The Board of Debtmatters is pleased to announce that it has received
accreditation under ISO9001 for the Company's quality management system. The
Company believes that this prestigious award reflects Debtmatters' ongoing
commitment to delivering best advice to all who contact it. The detailed audit
of Debtmatters' systems undertaken as part of the accreditation has reinforced
the Company's confidence that it is not only achieving compliance in all its
working practices, but also has sufficiently robust systems to continue its
rapid rate of growth.

The Board also supports recent sentiments concerning regulation of the debt
industry and would welcome any future regulatory requirements The challenging
accreditation achieved by the Company, in a process taking almost a year,
demonstrates its willingness and ability to meet any increase in regulation
which may be introduced.

As part of the Company's ongoing growth strategy, the Board is delighted to
announce the recruitment of another Licensed Insolvency Practitioner ('IP'),
Martin Hepworth, bringing the total number of active IPs to six. Martin was
formerly a partner in Debtmatters' predecessor practice, Ratcliffe and Co,
before moving to establish his own practice. He has considerable IVA experience
and his arrival will strengthen resources in this key area, enabling business
volumes to continue their rapid rise.

This continued growth, has necessitated further premises expansion. The Company
now employs around 200 Debtmatters staff and 70 Loanmakers staff, and has agreed
terms for a further 20,000 square feet of office space immediately adjacent to
its existing 15,000 square feet of offices. Half of this will be used to
accommodate Loanmakers Limited and the remaining half will facilitate organic
growth in Debtmatters Limited.

A pre-close trading update will be announced during the week commencing 18
September 2006.


Ges Ratcliffe, Chief Executive, commented,

'We are delighted to have been awarded this accreditation for the quality of our
systems. We believe it to be the first of its type in our industry, and
particular thanks go to our Insolvency Director, David Rankin, and his team for
all their hard work in achieving it. I am also pleased to welcome Martin
Hepworth to the business. Having worked with him before I know what a valuable
contribution he will make to the Company's continued expansion. I look forward
to updating shareholders on our progress more fully in a week's time.


For more information, please contact:

Ges Ratcliffe CEO, Debtmatters Group plc 01204 678 200
Dugald Carlean / Freddy Crossley Charles Stanley & Co. Limited 020 7739 8200
Shane Dolan / Dan Bradley Biddicks 020 7448 1000




This information is provided by RNS
The company news service from the London Stock Exchange

from donaferentes on the other board

Good strong trading update on DFD this morning with robust attitude to welcoming regulation - should help sector sentiment.

looks like some form of regulation will start to be applied to the debt co's - should benefit the larger + more "ethical" players - DFD and DEBT - while the banks start to face up to the problems caused by their loose lending policies over the last few years.

I guess the industry will concentrate down to a couple of leading players, who work with (& are recommended by) the UK banking industry; the growth in this subsector should follow that from the US, where penetration rates are over 5x those in the UK currently for this kind of product. (IVA)

Sentiment for the stocks should start to improve , the likely rate rise this week will help, while I can almost see the headlines already about Christmas debt levels...

Excellent results...


RNS Number:3933M
Debtmatters Group PLC
21 November 2006


DEBTMATTERS GROUP PLC
("the Company")

Interim results for The Six Months Ended 30th September 2006


Financial Highlights

Strong performance across entire business and accordingly the Board
anticipate that results for the full year to March 2007 will now be ahead of
current market expectations

Revenues up 465% to 13.79million (H1 2006: 2.44million)

EBITDA up 531% to 4.83million (H1 2006: 765,000)

"Approved" IVA cases average 503 per month during the period underpinned
by strong conversion rates

Infrastructure in place to support further growth with additional
Insolvency Practitioners recruited

Acquisition of Loanmakers now fully integrated and performing well with
cross referral opportunities emerging

Regulation ready: ISO9001 accreditation awarded with systems and
procedures in place ensuring Company ready for increased regulation

IVA market continues to grow rapidly. Directors are confident the
Company is well positioned to continue its growth


Ges Ratcliffe, Chief Executive of Debtmatters, commented,

"I am delighted to announce another strong set of results as Debtmatters
consolidates its position as one of the UK's leading debt solutions providers.
Growth is accelerating across our entire business and in order to support this
we have made the necessary investments in both infrastructure and management
systems.

"As a result, we have exceptionally strong foundations in place which will
underpin our IVA and secured loan businesses as they continue to grow their
market share. With 636 approved IVAs secured in September, a near threefold
increase over September 2005, and with ISO9001 accreditation in place we are
primed for further growth."


Enquiries:

Ges Ratcliffe CEO, Debtmatters Group plc 01204 678 200
Rick Thompson / Freddy Crossley Charles Stanley Securities 020 7149 2000
Shane Dolan Biddicks 07947 118 383


Debtmatters Group plc
Interim results for the six months ended 30 September 2006

Chairman's Statement

I am delighted to report Debtmatters' interim financial results for the six
months ended 30 September 2006.

During the period under review, the Company has achieved strong, profitable
growth and continues to consolidate its position as one of the UK's leading
providers of consumer IVAs. Financial performance is ahead of the Board's and
market expectations with turnover up 465% to 13.8 million and profit before tax
up 494% to 4.4 million compared with 2.44 million and 0.74 million
respectively for the same period in 2005 (as adjusted for the provisions of FRS
20).

In September 2005 we processed 230 IVAs; by contrast, September 2006 was a
record month with 636 IVAs processed by us, a 275% increase on the previous
year. This sustained growth has been underpinned by the appointment of two
additional Insolvency Practitioners. In addition, we have taken on a further 60
staff in the period since March 2006 and agreed terms on a further 20,000 square
feet of office space. These actions have significantly enhanced our IVA
processing capability as well as secured our reputation for offering industry
leading service levels.

Key achievements during the period include the successful acquisition of
Loanmakers, which has been integrated with our existing business and will
relocate to our Middlebrook premises shortly. Loanmakers' results since
acquisition are in line with expectations.

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 and anticipate that results for the full
year to March 2007 will now be ahead of current market expectations. 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 2006

Chief Executive's Statement

Business

I am delighted to report an exceptionally strong set of results as the Company
continues its growth momentum and I feel we are well placed for further growth.
Our market share has grown since joining AIM in June 2005 and we hope to
consolidate our position as a leading provider of debt solutions to the UK
market.

The Market

The IVA market continues to grow rapidly and shows no sign of abating. I
anticipate this trend will continue into 2007 and beyond with many commentators
predicting that the market size will more than double by 2009.

I believe that the company has the infrastructure in place to capitalise on this
forecast growth. September 2006 was a record month for Debtmatters in terms of
case volumes with 636 cases approved in the month. In the last six months,
growth has been such that we have again had to accelerate our plans to increase
our office space. The Group now occupies 35,000 square feet, accommodating the
new staff we are recruiting and enabling us to relocate Loanmakers into the
Group's headquarters.

I am particularly pleased to report that Loanmakers has made an excellent start
to its life under the Group's ownership. Volumes of business are in line with
expectations and we are pleased by the encouraging early signs of the levels of
referrals between Loanmakers and Debtmatters. This is an area we intend to build
upon once Loanmakers has relocated in the next few weeks.

Industry Issues

In recent months, we have witnessed a great deal of press coverage concerning
the "debt industry" in general and the IVA sector in particular. Debtmatters
welcomes calls for greater regulation and we believe our continuing investment
in systems and procedures will ensure that when this arrives we will more than
meet the standard expected. We have already invested significant time and effort
in developing a system to meet the rigorous demands of ISO9001 accreditation. In
recent months a number of competing interest groups have been established hoping
to formulate a framework for greater levels of regulation. I believe Debtmatters
is in a strong position to meet the requirements set by whichever of these
groups eventually has the mandate to set standards.

Strategy

With one of the lowest costs of case acquisition and one of the highest
conversion rates in the sector, our strategy for continued growth continues to
be centred around organic growth primarily through direct marketing and
advertising activities. Our low cost of client acquisition and high conversion
rates primarily derive from two key factors:

A tightly managed overhead structure and low cost base (demonstrated by
industry leading net profit margins), coupled with very low staff turnover,
enable Debtmatters to undertake cases at very competitive levels of
supervisory fees.

As we disclosed at the time of flotation, Debtmatters has an
infrastructure of representatives who are able to undertake home visits
anywhere in the UK where an IVA is being considered. These representatives,
who are not incentivised with commissions, demonstrably enhance conversion
rates. The involvement of these representatives also helps to accelerate
turnaround times on cases, providing clients with excellent service and
thereby reducing the number of clients who do not follow the process through
to its conclusion.

Outlook

We will continue to strengthen and develop our established IVA business and
recently acquired loan brokerage and seek to capitalise on the potential
synergies available from a multi product strategy.

We have established a solid infrastructure with robust 'regulation ready'
management systems to address the challenges of greater regulation which will
inevitably arise. These systems will provide a platform for the continued growth
of the business as the Group benefits from a rapidly expanding market and the
economies of scale achieved to date.

The Directors are confident of continued progress and look forward to updating
shareholders in due course.


Ges Ratcliffe
Chief Executive

Good article in the Shares mag on DEBT and DFD this week.

Debtmatter reports strong progress
MoneyAM
Debtmatters Group said pretax profit for the first half beat market forecasts on strong performance across the business and it now expects full-year results to be ahead of expectations.

The company, which provides solutions to consumers in debt via Individual Voluntary Arrangements (IVAs), said pretax profit rose 494% to 4.4m as revenues rose 465% to 13.8m.

CEO, Ges Ratcliffe, said Debtmatters is confident of continued progress as it is well positioned to capitalise on the rapid growth in the IVA market.

IVAs are on a rapid rise...BUY into DEBT at 312p

Huge drop today to 239p...why is that?????

I think its called a 'tree shake'. DFD also hit, it happened a few months back just before results time. We'll see if there's anything behind it.

This is not a 'tree shake' at all. It involves all companies dealing with IVA's - DEBT, DFD, DETS, MDCG etc...maybe regulatory bodies are looking into IVA's.

ACG have announced a profit warning - bad marketing and resistance from creditors (i.e. the Banks), alongside the various press comments that the Banks favour their pet charities to do this work at lower cost to themselves rather than the commercial outfits, on top of general chat about better regulation which, although I do not believe it would cause detriment to the two leaders (DFD and DEBT) is nonetheless playing on market fears.

So, it's more serious thatn last time, although I have no reason to believe DEBT's figures will be less than as announced at their interims.

Ges Ratcliffe, Chief Executive of Debtmatters, commented,

"I am delighted to announce another strong set of results as Debtmatters
consolidates its position as one of the UK's leading debt solutions providers.
Growth is accelerating across our entire business and in order to support this
we have made the necessary investments in both infrastructure and management
systems.

"As a result, we have exceptionally strong foundations in place which will
underpin our IVA and secured loan businesses as they continue to grow their
market share. With 636 approved IVAs secured in September, a near threefold
increase over September 2005, and with ISO9001 accreditation in place we are
primed for further growth."

I look forward with interest to the March pre-close update.

Try to sleep easy over the weekend!

Sleeping is not easy nowadays, sd.

See also DFD's profit warning. Will DEBT follow suit?

NB. Even with a 20% downgrade on DFD and DEBT EPS for 2007, they still pass all fundamental criteria for a growth stock. For example, say DEBT delivers EPS of 19.72p instead of the 24.65p currently forecast and say the SP was still 300p, this gives a PE of only 15.2. But we'll still have had growth in EPS of 135%, giving a PEG of 0.11 - not exactly an ex-growth rating.

Looking forward to 2008, where EPS is currently forecast at 34.05p. Again, downgrade this by 20% to 27.24p - growth of 38%. At 300p this gives a PE of 11 and a PEF of 0.29 - still pretty good.

However, the market as ever will probably not be forgiving in the short term. It will require this current spat between IVA's and banks to be resolved. Whereas the banks may have good reason to try to stop some of the freeer and easier operators from selling their services by claiming to be able to knock 65% off anyones debt and still sting the bank for 7,000 a pop, I doubt if the monopolies commission or the charity commissioners will be impressed by their insistence all IVA's are arranged via their chosen charitable operator who seem to charge 5,000 a go.

If the banks subsidise the charity by giving it the 2,000 difference, they can claim 30% tax relief on their gift = 857. But, hey, the banks get charged 2,000 less. So they make a profit on the deal. Now a fundamental tenet of charitable giving , at least when I worked in subsidised theatre admittedly a while ago, is that the donor should not receive a material benefit in return for its gift. That would preclude their receiving any tax relief.

However, short term I doubt the market will be so forgiving, and it will be a struggle to climb back up to 300p by March update. I do expect a fairly hefty bounce sooner than that - which I do not anticipate will be dead cat in nature - which will be a quick exit point for many among us, so prolonging the recovery to what I see as par value of around 300p. I guess dreams of 450p by time of results is now a rather diminished prospect.

Ah well, good luck to all holders and try to keep your collective nerve.

I hope you're right for holder, but I never liked this stock as it trades on a premise of gloom and doom ( but then I don't hold funeral companies either).
The way the sp is going it looks like early investors are takig their profits - so I guess should you and hope for a recovery, by buying on a return to good news.

It's possible the heady days are over - and all the "easy" punters satisfied, therefore it becomes ever-harder to maintain the income - add to that a negative press and this business looks like ambulance-chasers and the like....IMHO

I suspect the fundamentals of this business-model are changed forever, but I am so often wrong.......do you feel lucky?

Below is taken from EK's diary...beware! DEBT may go lower...he is shorting DEBT to 83p.


Debtmatters (DEBT) has quite a lot of debt and I wonder if it starts to have problems whether it will be able to take its own advice? The bottom line is that even though the shares have collapsed they remain a stonking short. Let us take Debtmatters as a case in point. At the half year it generated a post tax profit of 3 million pounds so let us value it at 5 times an annualised figure of 6 million pounds minus debt of 9.5 million pounds equals 20.5 million pounds or 83p a share. The shares still trade at 167.5p so I'd be mad to close my short. I also remain short of Debt Free Direct (DFD)

But why accept EK's PE of 5? Surely 15 would be quite reasonable, given even a reduced rate of growth hereafter. That makes it worth 80.5m or 325p per share.

Let EK plough his furrow. However often he wins or loses, one thing is for certain - he is not making these pronoucements to offer best advice to you and me.

well said stockdog but lets watch to see if the directors come out and buy that will show us either way

Interesting concept, matthewr

Looks like Evil Knieval is right again on DEBT. It is starting to slide, stockdog. Now 158p.

Daily Mail has an article today on DEBT - ''Don't bet your shirt on debt relief firms''

It appears DEBT has made a comeback and defied gravity and Evil Knieval has to eat his words and his shoes...LOL!

Yes, DEBT IS PROVING THAT eVIL kNIEVAL HAS TO EAT HIS HUMBLE SHOES NOW. hAHAHA

DEBT has highlighted a problem in IVA market which is hurting not only DEBT but others in the sector who have until now stayed mum... I estimate that the true asset value per share for Debtmatters to be within 40p to 57p which represents maximum of 300% discount to todays price of 18p..BUY for short-term profit.