25 May 2012

ClearDebt acquisitive after £0.5m profit

17/09/2010 Robert Tyerman

Debt management specialist ClearDebt has lifted annual revenues 94 per cent to £6.6 million after buying the business of distressed peer Relax.

The Manchester-based company increased pre-tax profits marginally to £466,000 in the year to June after buying the business and assets of Relax Group from the administrator for £1.5 million, a move which hit the bottom line by a net £275,000 in acquisition and restructuring expenses and finance costs.

AIM-quoted ClearDebt, which ended the financial year with £541,500 cash, is handling a record number of individual voluntary arrangements (IVAs) and sees scope for continuing organic growth in current economic conditions, says chief executive officer and significant shareholder David Mond. He adds the company is also 'entirely open' to possible further acquisitions, having accompanied the Relax deal with the issue of £2.3 million of loan notes, to which Mond subscribed £500,000.

According to Mond, ClearDebt is converting leads into business at an 'excellent' rate. Purchases of debt management plans are slowing, but the company interprets this as a shift by the financially hard-pressed to IVAs as 'the more appropriate solution'.

Floated on AIM 12 years ago at 2p, ClearDebt shares have traded between 2.53p and 1.5p over the past year, well below levels of a few years ago. They now stand at 1.65p, up 0.05p this morning, and value the business at £5.1 million.

Tags: AIM, Cash, Growth Stocks, Mergers & acquisitions

Sector: General Financial

Companies: ClearDebt

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