Cleardebt sweeps up rivals’ back books
DEBT advisory group ClearDebt saw its pre-tax profits halve to £227,219 in the year to June 30 despite a 17% increase in revenues to £7.8m.
The Timperley-based company said that earnings before interest, tax, depreciation and amortisation increased by 47% to £2.2m, but amortisation charges of £1.4m relating to the acquisition of back books from other firms dragged down profitability.
The company acquired two back books of debt management plans during the year, and towards the year end acquired a sizable IVA book from Invocas Group. The cost of acquiring these was £1.1m.
Chief executive David Mond said that cash generated from the Relax Group’s assets bought in December 2009 had also been way ahead of its initial targets.
ClearDebt paid £3.2m for the Relax back books, but these have now generated fees of £5.7m. Mond said this demonstrated “the value that can be generated by acquisitions bought at the right price and successfully and efficiently integrated into our systems and processes”.
The number of new IVAs handled by the company increased by more than 1,600 during the year (2010: 799), but the company said that it continued to diversify successfully with its debt management arm, Abacus, continuing to make a profit and its prepaid master card Clearcash increasing both the number of cards in issue and the amount of revenue per card.
Mond said: “Whilst some sections of society have been able to escape the worst consequences of the recession, we at ClearDebt are here to provide counsel and support to the large sections that are unable to cope with the proliferation of consumer debt.
“The economy is not going to improve overnight. We expect continued strong organic growth due to the combination of the prevailing economic situation and the realisation that ClearDebt’s ‘appropriate advice’ model offers our clients the opportunity to stabilise their financial situation.”
