Well from what Ive heard and seen over the last two years its seems everybody has gone barmy borrowing as much money as possible. It seems the days when people used to save for a rainy day are far gone and the buzzword is now 'have you got a credit card'.
Nearlly everday I get a leaflet or letter through my door asking me if I want to borrow such and such for a new car or a house extension etc.
Leading Banks say we have never been a bigger country of borrowers, they estimate borrowing has gone up between 14% and 17% on an anualised basis this year alone, bang on all the existing debt outstanding and we could have OVERLOAD. And this will be further compounded with interest rate rises which I feel sure we will see later this year and going into next year.

Step forward Debt Free Direct, the provide a service that allows people to to get their finances back on track while still repaying their creditors far more than if the debts were passed to personal factoring and debt management companies.

Heres a summary of what services the company provide.....


Debt Free Direct helps individuals find the best solution to their debt
problems, based upon an analysis of their particular financial circumstances.
Financial information on an individual is processed through a computer model
(the Best Advice Model) developed by Debt Free Direct in order to recommend a
solution suitable for that individual's particular financial circumstances. The
solutions offered range from basic advice, such as simply destroying credit
cards and curbing unnecessary expenditure, to the following solutions:

* consolidation loan
* re-mortgage
* informal arrangement
* individual voluntary arrangement (IVA)
* bankruptcy

Debt Free Direct has a distinct position in the marketplace in that unlike most
of its competitors who sell specific products, Debt Free Direct looks to provide
the best advice to the consumer and recommends to them the most appropriate
service.

Debt Free Direct is based in Chorley, Lancashire and was admitted to AIM in
December, 2002.

The company have a strict sifting proceedure through the Best Advise Model and only about 33% of applicants get through therefore eliminating risk to the company.

Profit and Loss summary below


CONSOLIDATED PROFIT AND LOSS ACCOUNT

PERIOD FROM 26 APRIL 2002 TO 30 APRIL 2003


Period from
26 Apr 02 to
30 Apr 03


TURNOVER 1,058,248
Cost of sales (738,877)
_________
GROSS PROFIT 319,371
Administrative expenses
Goodwill amortisation (126,641)
Other administrative expenses (288,041)
_______
(414,682)
_________

(95,311)
OPERATING LOSS

Interest receivable 963
Interest payable and similar charges (80,443)
_________

LOSS ON ORDINARY ACTIVITIES BEFORE AND AFTER
TAXATION (174,791)

Tax on loss on ordinary activities 59,941
_________

LOSS FOR THE FINANCIAL PERIOD (114,850)
=========
Loss per share - basic and diluted (1.28p)

The balance sheet looks sound for a company in its infancy and its business model.


CONSOLIDATED BALANCE SHEET

AS AT 30 APRIL 2003

FIXED ASSETS


Intangible assets 2,791,424
Tangible assets 211,349
_________

3,002,773
CURRENT ASSETS
Debtors 1,254,124
Cash at bank 81,249
_________
1,335,373

CREDITORS: Amounts falling due within one
year (1,672,471)
_________
NET CURRENT LIABILITIES (337,098)
_________

TOTAL ASSETS LESS CURRENT LIABILITIES 2,665,675

CREDITORS: Amounts falling due after more than
one year (168,392)

PROVISION FOR LIABILTIES AND CHARGES (1,987,98)
_________

509,296
=========


CAPITAL AND RESERVES
Called-up equity share capital 225,000
Share premium account 399,146
Profit and loss account (114,850)
_________

SHAREHOLDERS' FUNDS 509,296
=========

In a business model like this you are going to get a big percentage of Intangibles.


The Business Plan Going Forward.

The model is based upon continuing to take a share of the existing market and
all our budgets and forecasts have been made upon that assumption. However
there is the potential for accelerated growth if the market, or our share of it,
increases. We believe that we are living through a period of quite exceptional
levels of:-

• high employment;
• low inflation;
• low interest rates; and
• rising house prices.

The above have dynamically combined and resulted in ever increasing record
levels of secured and unsecured debt. This is increasingly being used to fund
expenditure in excess of income. Essentially, too many people are living beyond
their means and are funding the gap with secured and unsecured debt.

At this time most people can afford the repayments on increased debt because the
interest they pay, notably on their mortgage, has been falling.

However the economic factors outlined above will not last indefinitely. We
believe that the time will arrive when interest rates will rise and this will
impact on the existing delicate economic balance prompting a vicious circle
resulting in ever increasing numbers of over-indebted people requiring our help.

We are confident that we are well placed to help them and that our business will
continue to grow even more rapidly in the years ahead.

Our purpose

Briefly our purpose is to:-

• provide the best advice to every over-indebted person who calls us;
and
• be the leading provider of advice and appropriate financial solutions
to over-indebted consumers with particular focus on the 'quality
sector'.

The 'quality sector'

Essentially these are generally responsible, mature people who through
unforeseen life events have become unable to pay their bills on time. This is a
situation that they do not like and they are 'the unfortunates' in what is often
perceived as an irresponsible market.

These are people, who having been pointed in the right direction will stick to
the most appropriate solution found for them and will become good customers for
us.

Building shareholder value

To continue to build shareholder value we will:

• target the appropriate market sector;
• provide the appropriate advice to a high technical and ethical
standard;
• provide appropriate empathy to their difficulties; and
• use the law and the regulatory framework which is appropriate for
their benefit.

In other words, shareholder value will be derived by doing what is right and
appropriate for all of our customers in every circumstance.

Debt Free Direct is different

We offer free, impartial, best advice to every caller........without exception.

Best advice is systematically delivered through a sophisticated computer advice
model. This has been independently recognised as an industry leader.

Furthermore, in a largely unregulated market our business operations are highly
regulated; something which we welcome. We provide advice in all financial areas
to include the most formal, legal insolvency processes and we employ highly
qualified Licensed Insolvency Practitioners whose advice and working practices
are monitored and regulated by the appropriate authorities,

We believe that this is a market which is ripe for increased regulation in the
future and we will positively welcome that when it happens.

We are encouraged to see that others share our view as highlighted by the OFT
guidelines issued to debt management companies and the recently announced
investigation into consolidation loans. Any increased regulations resulting
from these or any other government initiatives can only strengthen our position
in the marketplace.

We will particularly benefit as others struggle to embrace the cultural change
required from higher regulatory standards imposed upon them.

A Redmond
Chief Executive Officer

And finally the company have recently placed 3.85 million of new shares ahead of costs to partly fund a TV Campaign going up towards the xmas spending spree on Satelite and Terrestial TV. 1.5 million will go on advertising and to increase its Call Centre Capacity.

I rate the shares a long term Investment but there could be some interesting times ahead.

Please DYOR.

GF.

Personal debt in the UK rises by 1 million every four minutes.
(quote from Invocas.com website)

Results to be announced next Tuesday.
Could be one of the better performing stocks over a traditionally quiet period for the market.

;o)

Debt free is also expanding to Australia.

a total overreaction in this sector due to one of the smaller players CLEA having a 'system failure',that has disrupted its smooth progress. Debt Matters have even gone to press stating that they have no reason for their share price being depressed and they have had their best month yet in September. Hoped for a positive tick up today after all the press comment on rising bankrupcy rates over the weekend - hey ho see what tm brings - any news due from ACG SOON????

I chose today as a good day to top up at somewhat less than my original investment.

Story's still the same, PEG, margin, ROCE, macro-econimoc environment - all lovely. Why would we want a share to rise in price while we are still buying it. I want it to be good and fat in more than 10 years time.

Would like rather more than Mr Prideaux's modest holding amongst the directors, but in these days of giveaway share options (which I assume they all have without having checked??) what can you do?

Chart closing above its previous low and the RNS confirming no known reason for the fall gives me confidence enough that we have hit bottom and should now work our way back to new highs by whenever. This has a 2 year growth story - who cares exactly when it matures.

sd

ACG results on 31st March - should hopefully be good - should see a turnaround in this sector - just shows how much hype in values though

AM

Well, I got that wrong. THought m=by midday I'd had a lucky escape, but not liking the look of further falls during the day. Some good buys towards close. Who knows why or where it will stop.

Augustman - hoping for some comfort a little sooner than end March 2007!! Thanks all the same.

Sugar!!!!!!!!!!!!.....meant 31st October sd .......plus dets.co.uk just announced results to be on 24th.....smaller player but hopefully steady.....see dfd reported that it expects record levels of IVA'S in coming months.....a turn we hope!!!!

DFD has been going downhill because there has been a surprise drop in IVAs, as mentioned in the Investors Chronicles this week. Recent headline news on record bankruptcy has not helped DFD.

DFD has said the drop represents a week's worth of business lost whilst moving to bigger offices to accommodate more business for the future - no evidence that volume of IVA's have reduced in the market as a whole (other than, if DFD isn't there to do them, there may be an actual reduction in that restricted period). Journo's needing bad news to sell their rags IMHO.

The drop across the sector is worrying, admittedly, but I cannot see the fundamentals saying enything but increasing profits as we continue witht he interest rate cycle - predicted to keep rising by 0.25% every c. 3 months over the course of next year.

Sector has had a pullback, but recent comments from managements have all been positive... good results, controlled growth, all very cash generative.

- wouldnt be surprised to see some consolidation here as 1) main players look to increase capacity; and 2) outside (private equity?) buyers see the potential for growth and cash returns.

- DFD now into new premises - should allow growth to reaccelerate; but better play in sector in my view is DEBT - same growth, but on HALF the earnings multiple for next year.

Matt - I was in DFD early (sold far too early) and am now in DEBT, since I agree of the top 4 (DFD, DEBT, DETS, ACG) they have the best overall rating/security IMHO.

We just have to wait patiently for this spate of bad market sentiment to pass. They can't argue with the numbers much, for long, eventually!

Closed down 31p on news below....


Debt Free Direct falls short of forecast
MoneyAM
Debt Free Direct Group, the debt advice firm, said that adjusted first-half pretax profits more than doubled to 4.26m from 1.86m in the first half of 2005.

The result was below a consensus analyst forecast by the company of 4.65m.

First half turnover rose to 12.24m, up 91% from 6.43m in the first half of 2005.

Gross profit rose to 9.97m from 4.74m in the first half of 2005.

Earnings per share rose 146% to 7.66p from 3.11p in 2005.

The company reiterated that it had arranged 536 IVAs per month in the first half of the year, up from 266 IVAs per month a year ago.

Looking ahead, Debt Free Direct said that it anticipated full-year profits for the financial year to end-April 2007 to 'comfortably meet expectations.'

These have got to be worth a look on the back of that interest rate hike.

I bought in last week and am up 10% and have just added, I think this is gonna be one busy company in coming months

dyor........... Rob

looking strong again today fella's

dont miss out!

Like this co but think DETS has more upside.

This is a falling knife today...down 55p now

DETS is also a falling knife today down 16p, most be some news annouced will try to find out.

See my post on the DEBT thread - more serious than mere sentiment this time.