3rd Jul 2006 07:01
Accuma Group PLC03 July 2006 Press Release 3 July 2006 Accuma Group plc Acquisition of Thomas Charles & Co Accuma Group Plc ('Accuma' or the 'Group'), a leading provider of consumerfinancial solutions, is pleased to announce the acquisition of London basedThomas Charles & Co Limited ("Thomas Charles"), a consumer debt advice companyspecialising in packaging of Individual Voluntary Arrangements (IVAs). Summary • Acquisition of Thomas Charles & Co - a consumer debt advice company specialising in packaging of IVAs; • Thomas Charles currently averages 40 IVA approvals per month, expected to increase to circa 70 per month within 3 to 4 months; • Board expects the acquisition to be immediately earnings enhancing; • Will increase monthly run rate and market share; • Gives Accuma a London base. The acquisition is for an initial consideration of £2 million with up to afurther £10.5 million payable under a three-year earn out, further details ofwhich are set out at the end of this announcement. Thomas Charles was founded in 2004 and since this time has experiencedsignificant growth. The founders of the business, James Falla and WilliamBerry, will both remain with the business and work closely with the Board ofAccuma to enhance growth and profitability. The business operates as an intermediary between Insolvency Practitioners andconsumers who are experiencing significant financial difficulties. Whereappropriate, an IVA is recommended and Thomas Charles assists the client inpreparing the statement of affairs required by an Insolvency Practitioner topropose an IVA. For the 6 month period to 31 May 2006, Thomas Charles recorded an unaudited pretax profit of £206,000 on turnover of £641,000. Historically, as anintermediary, Thomas Charles has passed all of its cases to a network ofindependent insolvency practitioners throughout the UK, for which it earns areferral fee equal to approximately 20 per cent. of the IVA case fee, which istypically £7,500-8,000 over five years (with circa 50 per cent. of the totalearned in year one). All of these cases will now be completed by Accuma, whichwill thus retain all of the case fees (i.e. 100 per cent. rather than 20 percent.) and increase its market share. Recent increases in operational resource and increased marketing activity byThomas Charles is expected to see that average number of IVA approvals increasefrom 40 to circa 70 cases per month within 3 to 4 months. Thomas Charles has 19 staff in its West London offices which will give Accuma aLondon presence from where further insolvency staff can be recruited ifrequired. Details of the consideration The initial consideration is £2 million, of which £1.5m is payable in cash byway of a guaranteed loan note and the balance by the issue of 182,216 ordinaryshares (at a price of 274.4p). Up to a further £10.5 million is payable, asfollows: • If profit before tax ("PBT") in the year ending 30 June 2007 is at least £1.5 million, £2 million (75% in cash and 25% in shares); • If PBT in the year ending 30 June 2008 is at least £2 million, £2 million (75% in cash and 25% in shares); • If PBT in the year ending 30 June 2009 is at least £2.5 million, £2 million (all cash). In each year, the consideration will be reduced by £2 for every £1 shortfall inPBT with minimum PBT requirements of £1 million, £1.5 million and £2 million ineach of the years ending 30 June 2007, 2008 and 2009, respectively, below whichno consideration will be payable for that year. If average PBT over the three years is £2m, a further £2m is payable, if it is£2.5m, £3.125m is payable, and if it is £3m, £4.5 million is payable, all as to50% in shares and 50% in cash. All of the ordinary shares being issued or to beissued to the vendors will be subject to a 12 month lock-in. Charles Howson, Chief Executive of Accuma Group, commented: "I am delighted to welcome Thomas Charles as part of the Accuma Group. Thisacquisition complements our core offering, will be immediately earningsenhancing and will of course increase our monthly run rate and market share.The experience of the founders will further strengthen our management team asthe Group continues to grow. "Having established solid foundations and significant market share in less thanthree years, we are excited about the next stage in our growth and inimplementing our stated strategy to offer a wider consumer financial solutionsplatform. Not only will this enhance our best advice offering to clients,moreover it will have a significant impact on efficiencies, client acquisitioncosts and therefore earnings growth. I look forward to updating you on ourprogress in due course." - ends - For further information:Accuma Group plcCharles Howson, Chief Executive Tel: +44 (0) 161 235 [email protected] www.accumagroup.com Daniel Stewart & Co.Marc Young / Tom Jenkins Tel: +44 (0) 20 7776 [email protected] Media enquiries:AbchurchSarah Hollins / Chris Lane Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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