(Adds details on divisions)
LONDON (Thomson Financial) - Accuma Group PLC said it experienced difficult
trading conditions in 2007, especially within its Individual Voluntary
Arrangement division (IVA) and expects to make a substantial loss for the 5
months ended Dec 31, 2007, its new financial year end.
The debt advice group said its consumer loan broking division was impacted
by the credit crunch in second half.
For the 5 months to Dec 31, the company said it expects EBITDA loss of 2.7
mln stg, which includes exceptional costs and overheads.
The IVA division chiefly contributed to the group's loss. The division faced
rising creditor pressure on fees, as did its competitors.
The creditor acceptance rates of IVA proposals dropped from Accuma's average
of 96 pct to 78 pct. The pressure on fees was expected to increase activity.
Accuma said that as it did not materialise, so it restructured the division,
including reducing headcount, dramatically cutting its advertising spending and
changing its business model to take advantage of referrals from newly acquired
businesses in the group.
Since the start of the new year, the acceptance rates have improved to 85
pct of IVA cases. If the trend continues for the rest of the year, the division
would see a profit, Accuma said.
The company has also received some approaches which may lead to a
satisfactory offer for the IVA business.
It believes the realizable value of this business alone significantly
exceeds the group's existing market capitalisation.
Byrom Keeley, its informal debt management solutions division, has had a
good start to the year with increased volume, Accuma said, adding it has
continued to invest in the division and expects it to grow during 2008..
Commenting on Loan Line, its loan and mortgage broking division, the company
said it has been significantly impacted by the substantial changes in the
sub-prime market and the entire sector.
But having refocused this business, the division returned to profitability
in January 2008.
Accuma said that with the restructuring, its position has improved immensely
for the year ahead.
TFN.newsdesk@thomson.com
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