Think Money profits up as credit crunch bites

THINK Money, the North West debt management, insurance and loan broker saw profits grow 9.6% last year, despite the credit crunch starting to bite.

The Salford Quays-based group, which is majority owned by private equity group Alchemy Partners, said in newly-filed accounts for the year to the end of January that profits had risen from £12.4m to £13.6m on turnover of £48.7m – litte changed in the £48.3m in 2008.

The company, which operates several brands such as Gregory Pennington, Freeman Jones, Wilson Andrews, Think Banking, Think Insure and the Friendly Group, said it had seen growth in its managed banking service, but had encountered more challenges in its loans and debt management businesses.

In their report directors Stephen Stylianou and Simon Kay said: “The group has had a difficult year in mortgage and loan broking and has been directly impacted by the credit crunch and specifically the reduced availability of loan and remortage products in the market.”

As as a result the company, which employs around 600 people, scaled back and changed its product offering in these areas.

Think Money said remortgage volumes were down 55% and 57% in value and secured loan volumes were down 31% and 27% in total value.

There was growth in insolvency service and advice, although fee levels were down. In November last year the company expanded into home and motor insurance broking.

Looking ahead, the directors said the company was “well positioned” to maintain its position in the sector over the coming year” having invested strongly in its infrastructure, systems and staff.

However it warned that demand for its services would be affected to a “substantial degree” by  macro-economic factors”.

These include the strength of the economy, the availability of loan and remortgage products and prevailing interest rates and also “the attitude and policies of banks, buidling societies and large financial institutions to over-indebted consumers”. 

The accounts reveal that the comapny has guaranteed bank loans of its “intermediate parent company”, Milan Bidco of £52.5m, some £9m less than a year ago. The ultimate parent company is Milan Topco which is registed in Jersey and 61% owned by Alchemy.

Alchemy’s investment in Think Money reportedly valued the business at around £100m.