We Introduce You

This morning Debmatters, who recently reported a good set of interims, announced a boardroom change. Jonathan Timmis joins on January 2 as Technical Director on the Operations Board.

Jonathan is a licensed insolvency practitioner and has held several positions within the industry including roles at Lathams as well as Ratcliffe & Co.

Ges Ratcliffe, the Debtmatters CEO, has previous experience of working with Timmis at Ratcliffe and Co., which was a predecessor to Debtmatters.

In this mornings announcement Debmatters say, “Jonathan, who joins from his own successful Lancaster based practice, which he founded in 1999, will bring with him a portfolio of cases as well five experienced members of staff who will join Debtmatters’ Corporate and Commercial Division.”

So it appears on the face of it, Timmis must be getting more out of the deal than merely a place on the board.

Debmatters entered the Secured Loans market through its purchase of Loanmakers in June and hopes to grow the cross referral of IVAs and secured loans between the two businesses.

In another change, Elephant Loans and Mortgages, who reported yesterday, announced the appointment of Maria Giambrione as Company Secretary. Elephant say Maria will be responsible for the accounts and administrative functions of the Group.

She replaces, David Gammond, who recently worked on the IVA operating subsidiary DebtSmashers, and has handed over his executive responsibilities but will be responsible on a non-executive basis for overseeing corporate strategy and specific projects.

One thing I’ve always found interesting is how the press reports things. As an example, take the recent knife amnesty. More or less as soon as it was announced the Press Association started to report individual stabbings and all of a sudden the general public were whipped into a belief that there was a growing knife culture. In reality the number of stabbings hadn’t materially increased since the beginning of accurate records began.

I recall this because in some ways a similar sort of ’selective reporting’ has happened again today.

Let me explain. In 2005 a task force was formed by CWC and Le Bea Visage to increase the sales of income protection. Members of the task force include Prudential, Bupa, Friends Provident and Legal and General and the idea behind the movement is to counteract the falling sales of Income Protection.

As opposed to individual protection for each product bought, like taking out Mortgage Payment Protection Insurance (MPPI) against a home loan, income protection covers the total loss of all income. Up until quite recently income protection was called Permanent Health Insurance (PHI).

Today the taskforce produced a 40 page white paper outlining its views on why people weren’t buying Income Protection, why they should and laid down a nine point recovery plan of how it was going to instigate a market recovery. In the same document the task force also openly criticised the sale and profiteering of payment protection insurance.

The thing that I find interesting is that, as Payment Protection Insurance (PPI) is hot news, the newspapers (or the on-line versions at least) hardly mention the substance of the white paper and just report the PPI elements of it. For example the Guardian tells us “Taskforce demands consumer protection over PPI” and the Daily Mail says, “Task force slams PPI sales tactics”.

To quote the old adage any press coverage is good press coverage, so maybe the task force will be content, but perhaps we should remember our hunger for sensationalism will always override the fact that 95% of real news really is actually quite boring.

Elephant Loans and Mortgages (ELEP) has reported its Interims this morning and from a first glance it looks like they are putting everything in place for future growth.

Elephant is a packager of Secured Loans and mortgages and following in the ever-growing trend is launching an IVA division called Debtsmashers.

Again, contrary to the problems reported by Compass, Elephant reports a 29% growth in commission income and a 75% increase in the number of agreements packaged for onward lenders.

Despite turnover going up, the group has made a substantial loss brought about by a dramatic increase in administration expenses (800k up to 1.5m). Elephant points out this is due to opening a further four branches, bringing its total number to seven, and recruiting additional staff.

Elephant feels that having direct to customer branches improves conversion rates and, to be honest, it will have to improve it significantly to cover the overheads and staff costs. It seems a strange strategy for Elephant to take on the big boys with a branch network and I guess only time will tell if they can pull it off.

Elephant says it has also signed up more affiliate partners and improved its commission rates with lenders. In October it raised nearly £1million with a share placing and says this will be spent on growing Debtsmashers.

Elephant was only admitted to Aim late last year and I’d rate it has a reasonably high risk share.