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.

Pumacat, yup think youve called this one right. Just interested to know why a sell between March/April next year, do you think it will have run out of steam?.

cheers GF.

No not really.

I have been investing in the stockmarket for a little while but over the past 8 months I have become an active trader I suppose.

I now have 2 holdings dfd and cyh for a total of 40k. CYH is my speculative stock whereas dfd is my medium term investment. My investment philosophy is generally time sensitve (ie positive nes flow, results etc) and I just think that at about March April the investment will have grown sufficiently for me to invest in another share. Not very technical but it has worked form me this year as I have manged to increase my initila investment fund from 10K.

However I have only just started using the bulletin boards and its nice to get some feedback from other people.

Back again

I notice that trading volume on this share is up a little bit over the last couple of days. As another rate rise is likely its safe to assume this compnay will benefit massively from other peoples misfortune. I also think that as xmas is coming up this would be an ideal oppotunity for that long awited announcemnt of a tie in with a large bank under a pilot scheme.

What does everyone else think the outlook is?

I have been away for a while and I am very surprised that this share has not attracted a lot more interest. I was also surprised at the recent comment made in Shares maagzine given its previous support for the stock at a higher level than it is at now.

I also disagree with the last analysis by shares magazine.

The level of debt in this current at present is staggering and does not appear to be slowing down. With the proposed tax increases and possible interest rate rise (more likely I think as December sales were not as disastrous as people had been predicting and if my own exeprience is anything to go by the January sales are off to a fine start) then there is fetile ground indeed for a compnay such as debt free direct.

I note that they have been tipped to reach 92p within 12 months but I think they could go higher simpl,y on the basis of new business. It seesm that people are more likely to acknowledge debt problems early as a result of heavy media coverage (ie bbc breakfast pre-christmas) and that must only be a good thing for DFD.

The trading statement was very postive and now the only barrier is the uopcoming EGM. I jnoted however that there was a delayed reaction to what the markets thought of the trading statement but on Friday the shares shot up.

It seesm a pity that not more people are on the this board disucssing the share.

Good trading update recently. Good business model and clearly lots of potential. One thing that concerns me is that as I understand it, DFD makes most of its money when it structures IVA's for clients. Given that the government is keen to take a leaf out of US bankrupcy books (by reducing the stigma of, and making it easier for people to go bankrupt... and then bounce back within a year), does this not mean that people will not bother with IVA's ie they will simply file for bankrupcy ?

Any ideas out there ?

Possibly Pumacat missed the fact that Investors Chronicle also recommended a purchase, thus pushing DFD up by 6p about ten days ago. This is not the first time that Shares Magazine has, suddenly, abandoned a stock that they had previously heavily promoted. About a year ago they were into MEARS and fairly regularly recommended purchases. The fact that Mears went down to 58p didnt persuade 'Shares' to give them a buy rating - but I question why they dont have the courtesy to admit that they might, just might, have been a buy at that price -particularly since Mears now stand at 141p. I have read in these pages that stocks recommended by Inv Chron have, mysteriously, risen PRIOR to the published plug. What such a rise indicates I do not, of course, know. BUT in a country where even respected Judges produce seemingly bizzare findings you can speculate to your hearts content.

Thanks Hilldee I did miss the IC tip but I am glad they made one!

After a little dip the shares seem to be again on a upward trend - certainly more shares than normal appear to have been changing hands for quite a sustained period now

As for the issue about bankruptcy many of dfd clients are middle class middle income people who have overstretched themselves. Most therefore would be houseowners and bankruptcy is not suitable for them.

The other excellent business pratice of dfd is its own self regulation which I think may very well come to the fore after the current review of credit law being undertaken by the government.

I hear the boys at Sky have got a price target on this of 1.35 for this year, but maybe they have got their heads in the clouds!

Nice to see all buys today and also my lamentations about lack of discussions appear to be wrong as well.

Just wondering where the info re sky is gallick?

Just a quick note

egm on the 10th keep your eyes peeled for news

Pumacat

I was looking at an old copy of redsky research, back in about Oct 2003 and in the broker section Sky capital set a price target on DFD of 1.36 since their analyst reckoned that sales of IVA's were going to 'quintuple'. Given the positive trading update there could be a big uplift after results are announced. However the newsflow on this stock is so low that methinks that this could be an in and out job before the share price goes back to sleep after the event!

This is, possibly, the most reputable of the debt re arrangement outfits. It will, as time goes on, make its own news. In any event, the current p/e is academic.Whilst I would balk at 1.36 I can well see the right side of 1.10.

Thanks for the info Gallick

It is disappointing that the shares have not moved much given the positive outlook posted by the compnay. I have no doubt that they will increase significantly in value.

In the past week there has been significant purchases in the stock (I am aware that these shares have significant purchases in thousands rather than tens of thousands) so I cannot imagine that the mm would want to sell at a loss

Just back from a nice break in the lake district.

Glad to see that SHARES have mentioned dfd in a positive light once again (although again they seem to be contradicting themselves to a degree - different authors for the negative comments).

With rate rises on the increase and this pilot scheme around the corner dfd should be on the home straight - hoping to see at least 85p in the next couple of months.

Nice rise on Friday lets hope that continues!

Hoping to hear of the tie up woith the scottish bank in the new financial year - they have now been talking about it for about a year

Donts know if anyone out there is stll interested in this share - broker consensus is 90p by the end of year - I reckon 1+ after results anyone else offer speculation?

when are the results? pumcat.

This share has been suprisingly quiet (on the bb at least). Am I the only person who has invested in this share or what? I know it's the most exciting share in the world, but overall not a bad performer especially considering most of the recent interest rises have been outside the last results period. This should fly on the next results. My friend ,who is a mortgage advisor talks of a lot of the current business being not of new mortgages but of people who are already in the shit and having to remortgage to keep afloat.I appreciate in the end that Cornwall will be particularly badly hit by the whole ...can't believe my house is worth what they say, let's take out the equity , oops we can't afford to repay it scenario, but I'm sure we are not alone.I originally invested in this as my safe investment -- as long as it performed as well as or (hopefully better) than the banks I'd be happy -but I really think you lot are missing out on an opportunity. People are going to the wall whether or not we profit from it. Get in there .Don't miss out.

Hi sand, I am out but you make a very good case for buying. Good luck, what a rotten day for investing.

cheers GF.