Companies: ACG   

Debt solutions star Accuma, backed by Growth Company Investor at 181.5p last year, has transformed into a comprehensive ‘consumer financial solutions provider’ through the acquisition of loan broker Loan Line for up to £18.5m and debt advisory play Byrom Keeley for up to £15m.

Accuma evolves from a business mainly offering Individual Voluntary Arrangements (IVAs) to clients into a far more rounded provider of ‘best advice’ solutions to ‘over-extended’ consumers. To fund the cash element of the earnings enhancing deals, new shares were placed at 270p with institutions in a placing raising £18m.

Chief executive Charles Howson explained that the acquisitions will bring cross-selling opportunities, decrease client acquisition costs by maximising the benefits of marketing spend and third party referrals and de-risk the business. Conversion rates from enquiries are expected to rise from 4% to over 30%, since to date Accuma has only offered IVAs. Loan Line acts as an intermediary between its indebted consumer clients and lenders including high street banks and finance companies, making pre-tax profits of £1.7m on £7.3m turnover last year. Through its websites Byrom Keeley offers debt consolidation and settlement solutions to 3,000 clients, generating work through the Internet and making profits of £650,000 from £1.95m turnover last year.

Howson also updated the market on trading, saying the group turned cash positive in June and should hit forecasts for the year to July. Accuma has continued to take share of the IVA market both organically, as well as through recent acquisition Thomas Charles.

For 2006 – the numbers are out in October – house broker Daniel Stewart & Co suggests a break into pre-tax profits of £2.1m from £9.9m of turnover. This ahead of profits of £10.4m on £32.3m sales for 2007, giving earnings of 22p and a 2007 forward p/e of 14. If you bought on our advice, hold for further growth in a buoyant market.