Debtmatters, floated following a £3m placing at 65p last year, has moved further ahead to 174.5p following a bullish update. The fast-growing group, which helps debt-laden consumers clear their debts, boasted that profits for the ten months to January beat expectations and full year results will smash the upper range of City forecasts.

Chief executive Ges Ratcliffe says 2006 has started exceptionally well, with Debtmatters' astute marketing bringing in bumper levels of Individual Voluntary Arrangement (IVA) enquiries. Debtmatters delivered a record number of cases in January (some 344 IVAs were approved by creditors), which followed a strong quarter to December, during which the group processed 830 approved IVAs, giving the company 12% market share and leaving it in second spot behind AIM peer Debt Free Direct.

With the cost of generating cases continuing to fall and Debtmatters scoring sector-leading IVA turnaround times, Ratcliffe is accelerating the rate of expansion. Analysts argue the company has the lowest capture cost per new IVA in the sector and enjoys good returns from TV advertising.

House broker Charles Stanley – which had been at the low end of the consensus – has upgraded earnings estimates for March 2006 and 2007 by 37% and 45% respectively. Investors can expect pre-tax profits of £2.1m for the former, upgraded from £1.5m, from a top-line £6.6m, followed by profits of £4.7m on £13.2m sales the following year.

Those numbers place the shares on a lofty forward multiple of 29.6 this year, falling to 13.1 for 2007, which is undemanding given growth rates and current record levels of unsecured consumer debt.