Shares digital

Fairpoint (FRP:AIM) – Finals PTP: -£0.5m (n/a) Divi: 3p (n/a)

These are the first results reported under the new December year end (previously April) and come hot on November’s interims. The only real value in these numbers is as an insight into how January – traditionally a busy month for providers of Individual Voluntary Arrangements (IVAs) – stood up. On this front the news is mixed. January saw lead volumes ‘increase significantly’ but the realisations are falling. Realisations refer to the size of monthly repayments made by the IVA holder and, given Fairpoint’s fees are a proportion of how much is returned each month to the creditors (the banks), this is depressing revenues. Analysts at house broker Numis trimmed forecasts and shares are off about 16% since results day currently at 177p. Fairpoint, is presently benefiting from reduced competition in the IVA segment as rivals have exited but expects the ‘market to show significant growth again from the second quarter.’

Shares says: Creditors are getting comfortable with the IVA again after setting new ground rules last year. Fairpoint will benefit as IVA volumes rise.

BUY INTO WEAKNESS

by: Simon Keane