9th Mar 2005 08:00
Accuma Group PLC09 March 2005 Press Release 9 March 2005 Accuma Group plc ("Accuma Group" or "the Group") First day of dealings on the Alternative Investment Market Accuma Group plc ("Accuma" or "the Group"), the provider of personal debt advicespecialising in Individual Voluntary Arrangements (IVAs), today announces thecommencement of dealings of its Ordinary Shares on the AIM market (AIM) of theLondon Stock Exchange. Daniel Stewart is acting as Nominated Adviser and Brokerto the Company. The stock market EPIC is ACG.L. Admission and Placing StatisticsPlacing price 82pNumber of Placing Shares to be issued 5,049,078Value of Placing Shares at the Placing Price £4,140,244Number of Existing Ordinary Shares 15,375,000Enlarged share capital immediately following Admission 20,424,078Market capitalisation at the Placing Price immediately followingAdmission £16,750,000Estimated net proceeds of the Placing receivable by the Group £3,670,000 Reasons for Admission to AIM and use of proceeds of the Placing The proceeds of the Placing of the New Ordinary Shares raised £4.1 million(before expenses) will be used by the Group, among other things, to increasemarketing and advertising expenditure, in order significantly to increase clientacquisition and also to provide working capital for the Group. Charles Howson, Chief Executive of Accuma Group plc, said: "We are delighted tohave seen such strong demand for shares in Accuma during the placing. Ourlisting will provide the Group with the capital to enable us to continue ourstrong growth in the future." For further information:Accuma Group plcCharles Howson, Chief Executive Tel: +44 (0) 0161 235 [email protected] www.accumagroup.com Daniel Stewart & Co.Alastair Cade Tel: +44 (0) 207 374 [email protected] Media enquiries:AbchurchPeter Curtain / Chris Lane Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Introduction The Group is a provider of tailored financial solutions and advice toindividuals who are experiencing debt problems. The Group's principal aim is tohelp individuals regain control of their financial affairs by advising them onthe most appropriate course of action based on their individual circumstances.The Group is highly regulated as its key product, an IVA, is a legally binding,court-approved agreement and can only be administered by InsolvencyPractitioners (IPs) - individuals licensed under the Insolvency Act 1986 toundertake insolvency appointments. The Group's operations comprise a personal insolvency practice specialising inIVAs, general debt advice and the referral of individuals to other solutionproviders where appropriate. The Group does not lend money, nor does it takeclients' debt on to the balance sheet, thereby limiting its business risk. Thesolutions offered to individuals depend upon personal circumstances andprincipally comprise the following: Individual Voluntary Arrangement (IVA) IVAs were introduced as part of the Insolvency Act of 1986 as an alternative tobankruptcy, enabling individuals who were struggling with unsecured debtpayments to reach a legally binding compromise with their creditors. Penetrationof IVAs has historically been low due to the limited number of providers, costto the consumer and perceived complexity. The Directors believe that this gives the Group an opportunity to build criticalmass and create barriers to entry in a relatively short timescale. An IVA is a legally binding, court-approved agreement between the individual andhis/her creditors, under which the individual agrees to make fixed monthlypayments, generally over a five-year period. IVAs must be supervised by an IP and have many advantages for both the debtorand creditors. The debtor avoids bankruptcy which can be of particularimportance for home owners or those employed in occupations where bankruptcywould be highly disadvantageous. The IVA conveys a legal obligation on thecreditors to freeze all interest and charges and, subject to adherence of theterms by the debtor, to write off any outstanding debts after expiration of thefixed period. An IVA therefore provides both certainty to and reduced pressureon the individual. From the creditors' side, the attractiveness of an IVA is the ability toforecast a higher return than in bankruptcy combined with lower administrativecosts compared to traditional debt collection. This is driven by a legalobligation on the part of the debtor to make fixed monthly payments, or tointroduce other funds, which have been assessed by Accuma InsolvencyPractitioners (AIP), one of the Group's trading subsidiaries, as beingaffordable and sustainable. AIP does not directly charge the debtor a fee for its services; these arereceived as a priority from the contributions made by the debtor into the IVAand are agreed and funded by the creditors. AIP charges the creditor an initialfee of £2,500 - £3,000 as well as an average £78 monthly supervisory fee whichover the five-year period gives good cash-flow visibility. Where AIP believes anIVA is inappropriate the following solutions will be recommended: Informal Arrangement AIP advises on two types of informal arrangement, managed and self-managed,under which creditors agree to extend the repayment period for the individual.This is not a legally binding agreement and often interest and charges continueto be applied until the individual has repaid the amount in full. Under themanaged scheme, AIP refers individuals to a non-connected company which managesthe scheme between individual and creditor. Re-mortgage This solution is usually suitable for homeowners with positive equity in theirproperty. This has until recently been a particularly strong area of activity inthe UK with individuals re-mortgaging to consolidate high interest credit,taking advantage of lower mortgage interest rates and the high perceived valueof their property. AIP refers such individuals to professional finance brokersand receives a percentage of any commission payable to the finance broker. Consolidation Loans This is a highly competitive area of the market where individuals take out a newloan to repay existing unsecured debts. AIP recommends professional financebrokers and would usually receive a percentage of any commission generated. Bankruptcy If an individual is made bankrupt, a trustee is appointed to manage theirfinancial affairs and to sell any assets that may exist in order to repay theirdebts. Accuma does not directly advertise or promote bankruptcy as a solution.However, as the Group aims to provide a full range of solutions, if bankruptcyis deemed the most appropriate option, the individual is provided with freeinformation detailing the actions to be undertaken. The Market Historically AIP has attracted prospective clients primarily through directadvertising in a range of media channels including press, directories, radio,the internet and more recently television. Prospective clients call a free-phonenumber that is answered by a team of experienced debt advisers who collectpersonal and financial details in order to ensure that recommendations can bemade based on the most appropriate course of action considering the personalcircumstances of the individual concerned. According to a report published by the University of Wales, commissioned by TheInsolvency Service: "Unsecured consumer debt has risen at a compound rate of 12-15 per cent eachyear since late 1997. This phenomenon is in large part a reflection offavourable economic factors, national credit policy, social pressures todemonstrate certain patterns of perceived material influence, and hard marketingby lending institutions." The Bank of England's recent Financial Stability Review (December 2004), notedthat unsecured lending had been rising more rapidly than mortgage lending. InNovember 2004 consumer debt passed the £1 trillion barrier; £182 billion ofwhich is outstanding on credit and store cards, personal loans and overdrafts. According to the Financial Times, the average household now borrows 140 per centmore than its combined income, up from 90 per cent in 1998 and from 100 per centat the peak of the last boom in the 1980s. The Bank of England also believes that "the growth rate of householdindebtedness is likely to remain strong over the next few years" and with 42 percent of individuals with unsecured debts experiencing repayment problems theDirectors of Accuma believe that this increasing level of consumer indebtednesscreates a strong opportunity to rapidly increase market share and createbarriers to entry in a relatively short timescale. Directors Charles Taylor, B Comm, CA (aged 56) Non Executive Chairman Charles Taylor qualified as a Scottish chartered accountant with Deloitte priorto commencing a career in the banking and financial services sector where he hasheld many senior positions. In 1991 he became Managing Director of SovereignFinance Plc prior to it being acquired by Alliance and Leicester Plc in 1996. Hethen became Chairman of Sovereign Finance Plc and in 1998 he became ManagingDirector of Girobank Plc. In addition he was Director of Commercial Banking atAlliance and Leicester Plc and was also a member of several group committeesincluding the group audit committee. Charles left Alliance and Leicester Plc in2002 and currently holds a number of non-executive directorships. Charles Howson (aged 38), Chief Executive Charles Howson has worked in a number of senior commercial roles, includingMarketing Director of Expense Reduction Analysts, a worldwide managementconsultancy specialising in cost containment and procurement. In March 2001 hejoined the board of Baines and Ernst Limited, one of the UK's largest debtmanagement companies and became Chief Executive shortly afterwards. He wasinstrumental in driving the company through a difficult period of regulatorychange whilst managing efficiencies and improving profitability. He left Bainesand Ernst Limited in October 2002 and later acquired Chambers ConsultantsLimited. In September 2004 the Insolvency Service, (a Government agency), set up an IVAWorking Group in order to review the IVA process and Charles Howson is a memberof this group. Samantha Poole FCA (aged 40), Finance Director Samantha Poole qualified as a chartered accountant in 1986 and spent the next 14years in practice including four years with Arthur Andersen working with FTSE350 companies. Samantha has since undertaken a number of commercial assignmentsincluding Head of Finance and Company Secretary for Axiomlab Plc, an AIM-listedventure capital company. Samantha joined the Group as Finance Director andCompany Secretary in December 2004. Robert Benjamin (aged 42), Marketing Director Robert Benjamin passed the Chartered Institute of Marketing examination in 1985.He has held a number of senior marketing positions within consumer marketingorganisations specialising in brand building and direct-response advertising.Robert has considerable experience in advertising within the debt solutionsindustry having worked for Baines and Ernst Limited from July 2000 to August2003 (latterly as Marketing Director). Nicola Lesley Francis MIPA MABRP (aged 45), Executive Director Nicola Francis qualified as an Insolvency Practitioner in 2001. She hasextensive personal insolvency experience having spent 9 years at the OfficialReceivers Office prior to spending eight years working in private practice.Nicola is licensed by the Insolvency Practitioners Association and is a Memberof the Association of Business Recovery Professionals. Terms defined in the Prospectus have the same meaning in this press release. Availability of Prospectus Copies of this Prospectus are available free of charge from the Company'sregistered office and at the offices of Daniel Stewart, during normal businesshours on any weekday (Saturdays and public holidays excepted) and shall remainavailable for at least 14 days after Admission. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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