Scottish debt solution firm Invocas 'guilty by association' with England

INVOCAS, Scotland's largest personal debt solution provider, said its shares had been found "guilty by association" with English counterparts.

The Edinburgh-based company yesterday revealed a pre-tax profit of £3.36 million in the year to 31 March, compared with an estimated comparative of £2.24m in its last year as a partnership, as turnover rose by more than half to £8.53m.

Chief executive John Hall said the company had achieved what it had set out to achieve, although its shares, which have fallen by a third in just over three months, had been weighed down by issues south of the Border.

England, which operates a different system to Scotland, recently overhauled its fee structure for providers of Individual Voluntary Arrangements, with banks demanding fees be cut and only paid on resolutions of the arrangements.

Shares at listed English providers, Debt Free Direct and Debtmatters, have fallen sharply since the overhaul was announced. However, Invocas was yesterday at pains to point out the changes had no direct impact on its business, providing the similar Protected Trusts Deeds in Scotland, while the failure rate in Scotland was much lower. Hall said: "We've achieved what we set out to achieve and what we told the market we were likely to achieve only three months ago, but if you look at the share movement, there seems to be a guilt by association."

The market reacted favourably to Invocas hitting its targets, with shares rising 8 per cent to 112.5p. Invocas said its market share of Protected Trust Deeds had risen to 16.8 per cent, compared to 14.8 per cent the previous year, making it the "pre- eminent provider" in Scotland.

Hall said the company was "actively seeking" acquisitions, walking away from deals in the past six months because of a difference in approach, and actively engaged in talks with parties at the moment. The company ended the year with £3.4m in cash.

"The goal is to build a one-stop shop where we provide the full suite of financial solutions in house."

While the company would not rule out a move into the English market, Hall said there were no immediate plans to.

BPI HIT BY RISING POLYMER COSTS

SHARES in Glasgow-based plastic packaging maker British Polythene Industries dropped 1.2 per cent after the firm said it will post interim profits slightly below last time, as rising polymer costs continue to hit margins.

"Polymer costs remain high and our suppliers have forced through small increases every month this year," chairman Cameron McLatchie said.

"As we have indicated previously, this is a difficult scenario for us, as we cannot re-price all of our sales monthly and this lag in pricing affects our margins. Volumes have also been sluggish," he added.

However, McLatchie added that the current "difficult scenario" will ease some time next year as new capacity comes on stream globally, but it was unlikely it will be of any assistance in the coming six months.

In March the company reported full-year profits had fallen to £14 million last year, down from £19.7m in 2005, blamed chiefly on extra energy costs of £4m, as well as increased competition. Sales rose less than 1 per cent to £414m. A dividend of 15p has been maintained.