Debts Results in Focus
debts.co.uk, who floated in May, announced their maiden results today. In one headline catching statement they say “our profitability for the current year exceeded our expectations at the time of the flotation by nearly 25%”. The headline figures are :-
o Turnover up 79.3% to £6.1 million (2005: £3.4m)
o Gross profit up 24.6% to £4.8 million (2005: £2.7m)
o Reported pre-tax profit up 61.9% to £2.1m (2005: £1.3m)
Regarding the acquisition, that I’ve mentioned before, they say “Neville Eckley & Co which will enable us to offer a bankruptcy option for the first time as well as allowing us to enter the corporate market with company voluntary arrangements and corporate insolvencies“. At the time I commented that - on the face of it - the acquisition looked a good deal for Debts.
One thing that surprises me slightly about the results is, there is very little mention of the secured loans market that Debts deal in. The results seem to concentrate on IVAs and the acquisition, although they do repeat on a number of occasions that they offer complete debt management including “IVAs, debt management programmes, bankruptcy and secured loans or second mortgages.”. They also say, as they have before, they hope to enter the Mortgages market sometime in 2007. So maybe they haven’t got the same strategy as Compass, who it appears seem to have steered their ship a direction slightly away from secured loans and more towards the lucrative IVA market.
Debts have also announced an increase in spend and change in marketing strategy with money being spent on TV advertising, radio, newspaper and on-line affiliate partnerships.
The market hasn’t opened yet, but I expect it to react favourably.
