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.

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.

DFD & Accuma Group both issued profit warnings, saying profits would be below full year forecast. Accuma fell 117p to 105p. They are experencing more companies chasing the IVA market.

I think the biigest problem here is the annoncement that there is to be a Charity set up to provide IVA's. I read somewhere that dfd makes an average of 7,000 per client. Bit of a no brainer really, if your in financial straits and a charity is going to sort it for next to nothing!!!!!!!!!!!!!!!!! wish I had sold earlier in the week and held onto a 15% gain, never mind

From the trading update:

Over the last quarter, we have been challenged by two external factors; creditor
posturing and increased advertising from our competitors. Both areas are
discussed in more detail below.

The combined impact of these two factors will make it challenging to fully
achieve market expectations for the FY 2007. We do, however, believe that market
expectations for FY2008 are entirely realistic.

How can a Company say that it will be challenging to fully achieve market expectations for 2007 yet the expectations for 2008 be entirely realistic ?

Expect another markdown on Monday morning and a very long time for confidence to return.

Ian

A policing body for the controversial IVA industry will be formally launched next month in a move likely to put further pressure on profits of companies in the sector

The gloss gets further taken off? Might be time to leave this sector after a good run over 2-3 years?

This is a killer...all profits erased within 2 days.

I sold on friday and was worried all weekend that I had been trigger happy, not now

rob

u r very lucky, rob

The ridiculous wording of the trading update after hours on Friday has taken it's toll. Interesting to note that the update from DETS this morning has been received much more favourably.

Ian

Debt Free Direct warns meeting 2006-07 market forecasts will be 'challenging'
AFX


LONDON (AFX) - Debt Free Direct Group PLC (DFD) has warned that meeting market forecasts for full-year 2006-07 will be 'challenging' due to increased advertising by rivals and comments by creditors.

DFD said it had brought forward its third quarter trading statement after the badly received update by Accuma Group earlier today.

However, DFD said it believes that market expectations for 2007-08 are 'entirely realistic.'

DFD said its advertising performance in November and December showed signs of reduced response rates and January has been weaker than expected, results it put down to 'a dramatic increase in competitor advertising.'

The group has subsequently increased advertising spend to maintain volumes, 'albeit at a higher cost of acquisition.'

However, given the lead time in placing advertising, DFD said it will not be possible to place sufficient advertising to maintain the forecast call volumes in February.

DFD also said that creditor comment in recent months has impacted on confidence in the valuation of IVA stocks, adding that changing creditor criteria for acceptance of an IVA is casing cases to fail earlier in the process.

DFD forecast relations with creditors improving in the future.

newsdesk@afxnews.com