Invocas reaping the rewards as more Scots sink into debt

Published on Thursday 14 December 2006 12:12

EDINBURGH debt help specialist Invocas has reported yet another period of strong growth, driven by the rising number of Scots getting into debt.

Turnover increased by 50 per cent to 4.1 million at the Coates Crescent-based firm, while operating profit shot up by 22 per cent to 1.5m over the six months to September 30.

And chief executive John Hall said the company was continuing to perform strongly in the first weeks of this quarter, with November becoming a record month for new customer wins.

He said more and more people north of the Border were getting into debt, with the problem made worse by interest rate rises.

The company boosted its workforce by 26 to 96 over the period, and said the number of insolvency practitioners at Invocas increased from three in March to seven now - providing capacity for significant growth in that area.

The half-year also saw the successful launch of Newtomorrow, Invocas' consumer debt solutions service, which offers a website and Glasgow-based call centre helpline for individuals struggling with debt problems.

In June, when Invocas reported its end-of-year results to the date of its March floatation on London's Alternative Investment Market, the company said it had seen eight periods of successive growth - and that is set to continue into the current quarter.

Mr Hall said: "Our ethos is very different to a lot of companies. We want to balance ourselves between the debtor and the creditor."

He added that operating profits at Invocas appeared to be slightly low due to flotation costs. But Invocas expects its next results to be just as strong, off the back of the recent interest rate rises.

He said: "The impact of the interest rate rises is only just beginning to be felt - as people come off their fixed rate mortgages and start to notice the difference. Our business also gets a boost after Christmas."

The firm has around 4000 Scots cases on its books, with the majority in Lanarkshire and Ayrshire.

Mr Hall added: "There tends to be slightly fewer debt cases on the east coast. However, I think the image of the thrifty Scot who has notes stuffed under his mattress has gone - and people north of the Border want the same lifestyle as people down south, although they have a slightly lower starting point, as the average base of assets is lower in Scotland."

Chairman Howard Bell added: "We are continuing to grow our market share, cementing our position as the first-choice provider of personal debt solutions in Scotland."

He added that favourable market conditions, excellent relationships with banks and other financial institutions and ongoing investment in strengthening and expanding the business, had boosted Invocas' fortunes.

Invocas floated on London's Alternative Investment Market in March after acquiring the business recovery and insolvency arm of Haines Watts and rebranding it.

Mr Hall founded Haines Watts Business Recovery and Insolvency Scotland in January 1998 alongside Ian Wright, non-executive director Bob Lewis and finance director Stephen Lightley.