Fairpoint Group

www.fairpoint.co.uk TICKER: FRP     EXCHANGE: AIM

Fairpoint provides a range of retail consumer targeted professional services pivoted on debt solutions and legal services. The group's four core business segments are: IVA services, debt management plan (DMP) services, claims management and legal services. 

LATEST REPORTS

 
Whiplash reforms parked
Published: Oct 13 2016

Fairpoint Group provides a range of consumer targeted professional services. The group’s core business is a consumer legal operation (76% of H116 revenues), supported by legacy debt solutions services.
Press coverage this morning states that a previous source of concern over group earnings may have gone away. This related to changes, proposed by George Osborne in his Autumn statement last year, to reform the UK’s compensation culture around minor motor accident injuries, specifically the operation of whiplash claims. 
According to press reports this morning these reforms have been set aside by the government, indeed the insurance industry has concluded that they will never happen. 
The Ministry of Justice confirmed that the whiplash changes are not a priority but claims reforms are 'not off the agenda'. 
We recently adjusted our forecasts for Fairpoint in the light of their strategic decision to focus on the growth and margin opportunities in Legal Services. On those new forecasts the prospective yield on the shares is a remarkable 10% and the PER just 5.0x …and that is for the current year to Dec 2016. 
 
View the Results Webinar
Published: Sep 19 2016

You can now hear Chris Moat, CEO, and John Gittins, Finance Director, present the half year results for the six months ended 30 June 2016 and then answer investors questions.
To view simply click on the video below.
 
Respect the law
Published: Sep 18 2016

Fairpoint Group provides a range of consumer targeted professional services. The group's core business is a consumer legal operation (76% of H1, 2016 revenues), supported by legacy debt solutions services.
Progress in H1 pivoted on successful integration of newer parts of the group's Legal Services division, its growing scale and achievement of key strategic targets. This is driving Fairpoint's transformation into a focused legal services business with well-defined strategies and visible growth targets. 
The shift to Legal Services continues as Debt Management is wound down and acquisitions bolted on. Group H116 revenue was 24% up y o y on the back of acquisitions and c 4% organic growth attributed to marketing initiatives. Legal Services revenue was £21.5m in the first half, 90% up y-o-y post acquisitions; adjusted segment PBT was £3.1m (H115: £1.4m). Margin growth from 13% to 14% was achieved despite conveyancing performance and we see potential for further material progress over the next few years.
Legal Services is increasingly well-diversified but conveyancing had a disproportionate impact on earnings. We have reduced our full year adjusted PBT forecasts by c £1m to reflect this. The interim dividend was held and distributions remains very well covered.
On new FY'16 forecasts the yield on the shares is a healthy 6.7%, and the PER just 7.5x.
NB management will host a webinar today at 1.30pm: Register here
 
Strategic focus on strong growth
Published: Jul 21 2016

Fairpoint Group provides a range of retail consumer targeted professional services. The group's core business is a consumer legal operation, supported by legacy IVA services.
The two key messages from yesterday's H1'16 trading update were (a) strong progress by Legal Services, in line with expectations and (b) the decision to pursue an orderly wind-down of the debt management plan services (DMP), prompted by new FCA regulation which increased costs and made that business appear unviable.
This will continue the group's focus on core Legal Services which contributed 75% of H1'16 revenues. That was 20% up y-o-y, but the current run rate is closer to twice last year driven by the acquisition of Colemans completed in August 2015, near fully integrated. This division already represented 100% of medium term growth potential. DMP income pivoted on a steadily shrinking client portfolio, management of which has become more complex and time-consuming, resulting in higher potential churn. 
The transition to predominantly legal services is ahead of schedule, but was already well underway. There were no operational synergies between the two operations and no plans to rescale debt solutions. Legal Services reported a positive H1'16 and continues to seek acquisitions to complement its service portfolio.
Legal Services revenues are growing even without new acquisitions, long term facilities are available to fund organic growth and acquisitions, and even after this adjustment the dividend is very well covered. Share price weakness post small claims uncertainty and this latest news puts them on an attractive prospective FY16 PER of 6.5x and 7.1% yield.
 
Q1 - trading on track
Published: May 08 2016

Fairpoint Group provides a range of retail consumer targeted professional services pivoted on debt solutions and legal services. The group's four core business segments are: consumer legal services, IVA, debt management plan and claims management services.
Today's AGM statement confirmed performance in line with management expectations in the first three months of the financial year. That completes what is typically the group's quietest and arguably least illuminating quarter, but we take reassurance in confirmation that finances are on track.
A more detailed update - covering the first six months - is due in July. That is expected to reveal the benefits to the Legal Services division of the successful integration of Colemans and Simpson Millar. Recent investment in that division's infrastructure is specifically designed to support acquisitions that broaden and develop the Legal Services platform.
They also announced the CFO's decision to step down and pursue a portfolio career of NED positions. He will work with the Board to ensure a smooth handover, and a process has commenced to identify a replacement.
The decline in the price today leaves the shares on a prospective FY16 PER of 6.5x and 5.6% yield which looks overly pessimistic. We have not adjusted our forecasts, since we had already built in materially lower IVA volumes, modest growth in legal services division revenues and no new acquisitions. 
 
View the Results Webinar
Published: Mar 21 2016

You can now hear Chris Moat, CEO, John Gittins, Finance Director, and Peter Watson, Managing Director of Simpson Millar, present the FY2015 results for Fairpoint Group and answer investor questions.
To view simply click on the video below.
 
Legal services driving growth
Published: Mar 17 2016

Fairpoint Group provides a range of retail consumer targeted professional services pivoted on debt solutions and legal services. The group's four core business segments are: consumer legal services, IVA, debt management plan and claims management services.
FY'15 results yesterday revealed a number of positive core messages: double-digit growth in legal services' revenues and adjusted profit; continued cash generation and attractive operating margins from debt solutions; a strong balance sheet with access to further long-term debt to fund new opportunities to drive consolidation in the consumer legal services market. 
At group level there was 41% y-o-y revenue growth and a 13% increase in adjusted profits. That reflected significant growth in the legal services division, plus a focus on cost control across all areas of operation. Legal services contributed 58% of total FY'15 sales (FY14: 31%). It is currently 67% of total group sales on a proforma basis, offsetting lower contributions from the debt solutions segments.
We expect Fairpoint's Legal Services to benefit from an integrated brand with a broader product range and scale. Debt Solutions continues to contribute: the individual elements were profitable on an adjusted basis, and cash generative.
Looking forward, we have built in sharper falls in IVA volumes than we did at the mid-year, relatively modest savings or synergies from recent legal services division growth and no further acquisitions. That still leaves the shares on a low prospective PER of 8x, supported by a comfortably covered 4.6% yield.
NB  Management present to investors today at 3.45pm  via a webinar,  to register: click here

ARCHIVE

2016
FY 2015 on track
Published: Jan 19 2016

Fairpoint provides a range of retail consumer targeted professional services pivoted on debt solutions and legal services and today gave a reassuring update on trading, saying that FY15 results will be in line with expectations. That means  'double digit' year-on-year growth in segmental revenues and adjusted profit and improved margins.
Importantly, the potential impact of proposed changes to small claims limits and whiplash claims outlined in the Autumn Statement has no impact this year, looks manageable i.e. affects 8% of pro-forma revenues, appear specifically focused on whiplash claims relating to road traffic accidents and may well present an opportunity to leverage in-house competitive advantages in processing volume low-cost legal claims.
The key driver for the group is continued development of consumer legal services business Simpson Millar LLP, with the current year underpinned by the Colemans acquisition last August.
In summary, the strategic transition and evolution progresses. Debt solutions remains profitable and cash generative, but in the absence of any recovery in market volumes the shift towards legal services will continue.
The shares' reaction to the Autumn Statement was perhaps inevitable after a strong run, but looks overdone. The increased breadth and balance of group activities post recent acquisitions should leave it well-placed to capitalise as reform is rolled out, and certainly limits the downside. 
The current, well-covered 5% prospective FY16 yield provides material attractions pending further clarification, possibly with the FY15 results, due on 16 March. 
2015
Still motoring
Published: Nov 26 2015

Fairpoint's shares fell yesterday due to concerns over how proposals in the Chancellor's Autumn Statement could affect the performance of its consumer legal services operation. As per today's company statement, there is no impact on expectations for the current year or FY16.
The Chancellor referred to an intention to reform "the compensation culture around minor motor accident injuries." However, the immediate FRP share price reaction seems to overlook that:
 - the timing of any implementation, currently planned for April 2017, will not affect immediate results
- all relevant work-in-progress in our forecasts will be concluded well before this deadline
- any changes are still subject to detailed consultation
More injuries will have access to the small claims court, due to a planned increase in the upper limit for these claims from £1,000 to £5,000. This has been a 'hot' topic of legal debate for some time and Fairpoint is well-positioned operationally post its recent acquisition of Colemans LLP and its Legal Processing Centre. 
Fairpoint thus believes it is well prepared to ''take advantage of any changes'' having already reviewed the implications of the possible new price bandings and how it can structure its own processes to maintain competitive strengths.
Fairpoint Group - ED Investor Forum November 2015
Published: Nov 23 2015

Chris Moat, Chief Executive Officer, explains to investors how Fairpoint is continuing to evolve and diversify.
Resilient model offers much more growth
Published: Nov 15 2015

Fairpoint provides retail consumers with professional services in two broad areas: debt solutions and legal services. The last two years has seen progressive improvement in the balance of the product portfolio as growth in legal services, both organic and acquisition based, has comfortably offset regulatory driven headwinds in its traditional IVA and debt management markets.
Management has performed well, delivering resilient financial performances despite difficult markets during the four year tenure of the current team. A focus on profitable business and careful cost control has maintained margins, even where volumes have declined. 
Via an innovative legal services model, Fairpoint plans to transform the traditional retail legal services offering. Since January it has offered its clients guaranteed deliverables at predetermined fixed prices, providing a far more transparent arrangement than typically available.
The Group now has a strong growth template and platform. They have secured two large scale acquisitions and intend to close more during FY16. Opportunities for industry consolidation are being driven by regulation and growth plans are underpinned by the strong balance sheet and access to funding.
A prospective 9.8x FY16 PER is materially below that of the market and other quoted peers,  and the shares are supported by a well covered 3.7% yield. Forecasts are based upon conservative assumptions and we see potential for better than expected growth in legal services revenues over the forecast period. Despite strong share performance a further rerating looks deserved: a move to 12x FY16 would imply a 240p share price, still yielding 3% on our forecast dividend.
NB Fairpoint CEO will present to investors this Thursday evening at the ED Forum. To attend:  Click to register
View the Half Year Results Webinar
Published: Sep 03 2015

You can now hear Chris Moat, CEO, John Gittins, Finance Director and Peter Watson, Managing Director of legal services, present the half year results for Fairpoint Group Plc (AIM: FRP) and address audience questions. 
To view simply click on the video below.
Strong growth driven by legal services acquisitions
Published: Sep 02 2015

Fairpoint Group has now evolved into a broadly based professional services business. 
The success of the diversification policy is shown in today's interim results with a 64% increase in revenue and the 21% rise in "adjusted profits" (IFRS profits rose by even more) despite the 30.4% fall in the number of IVAs passed in the half-year and a significantly greater fall in the value of those cases. 
As a result of last month's trading statement we had already revised upwards our forecast for full year profits and eps to £10.5m and 18.5p. Today the interim dividend was increased by 6.5% (slightly more than we forecast) to 2.45p.
Legal Services is now the largest part of the group, contributing 49% of revenue in H1 and is expected to contribute nearly two-thirds going forward following the recent acquisition of Colemans. One could say that the acquisition and organic growth of the Legal Services division is nearly trebling group revenue.
The change in composition of Fairpoint's business from one centred on the cyclical (and temporarily shrinking) insolvency market to a more broadly-based one with legal services comprising a majority has already lead to some re-rating of its shares. This should have further to go since the nearest comparator, Gateley, is on a double-digit PFER for 2016 and 2017, while Fairpoint, even after the recent rise, is on only 8.6x for 2016.
Our new target share price of 200p would still leave the group on a PFER discount to the All-Share index, and remains well above last night's closing price of 171p. 
A Longer arm of the law
Published: Aug 02 2015

Today Fairpoint has announced the immediately earnings enhancing acquisition of the Colemans-CTTS legal services business for an initial payment of £9m, with further contingent payments of up to £7m, and also published a positive trading update on the first half ahead of the interim results next month. 
The acquisition is a further major step on the way towards Fairpoint's target of creating a top 5 legal services business through acquisitions and organic growth, and follows the successful acquisitions of Simpson Millar in June 2014, and of the much smaller Fosters, the following month. Including today's Colemans acquisition, on a pro forma basis, legal services is now expected to represent 62% of the Group's revenues going forward.
Fairpoint has also released a very strong H1 trading update, saying that  "overall group trading for the first half of 2015 has been materially ahead of the same period last year, and is in line with the Board's expectations". Fairpoint will release its Interims on 3 September. 
With Colemans included for just four and a half months in Fairpoint's current financial year, we upgrade our PBT forecast by £0.5m to £10.5m, and increase our EPS forecast from 18p to 18.5p. For 2016, with a full year's benefit from Colemans, our EPS forecast rises by 7% to 20p.
Gateleys, the law firm which recently IPO'd on AIM is on a prospective P/E (to April 2016) of 10.7x.  On our increased EPS forecast (to December 2016) of 20p, Fairpoint is on a prospective P/E of just 6.75x, (and yields 5%), and continues to look extremely modestly rated.
View the recent results webinar
Published: Mar 18 2015

You can now hear Chris Moat, Chief Executive Officer, John Gittins, Group Finance Director and Peter Watson, Managing Director of Legal Services present the full year results for Fairpoint Group Plc (AIM: FRP) and address audience questions. 
To view simply click on the video below.
Delivering growth, with more to come
Published: Mar 17 2015

Fairpoint has produced profits before exceptionals of £9.25m, 15% higher than in 2013 and modestly better than our forecast of £9.12m, leading to adjusted earnings per share of 17.17p (up 14% and again modestly better than forecast) and dividends of 6.4p for the year. 
More significantly in the long run, 2014 saw its expansion into legal services with the major acquisition of Simpson Millar in June, followed by the add-on acquisition of the much smaller Fosters in July. The group also took advantage of its better systems and economies of scale to acquire three Debt Management companies and/or back books boosting its portfolio to over 25,000 DMPs. 
Fairpoint is still the leading company in the shrinking IVA sector, but it is growing despite the decline in its core market because: it now has four major divisions, diversifications generate 65% of revenue, legal services now generating more revenue than IVAs, immediate synergy from acquisition of Fosters, further legal services acquisitions in prospect, and scope for both organic growth and more purchases: £12m headroom on debt facility and strong cash generation.
The group's diversification policy has returned it to growth and with less risk of being surprised by a sudden slump in any one of its markets. Our forecasts are for its PFER for 2015 to be 6.6x, less than half the sector average while the yield is 5.7%, more than twice the sector average.
There should be a discount for smaller companies, but we feel that one greater than 25% - 50% on a PER or yield basis is excessive. Fair value per share is somewhat above 150p.  
NB The management of Fairpoint would like to invite you to a webinar TOMORROW,  Wednesday 18th March at 1.00pm, to discuss these strong results. If you would like to participate, please register at ED
2014
Fairpoint Half Year Webinar Sept 2014
Published: Sep 16 2014

Chris Moat, CEO, and John Gittins, CFO, discuss their results for the half year to 30 June 2014 and answer questions.
Running faster uphill
Published: Sep 10 2014

In H1 Fairpoint has managed to increase interim profits despite the further decrease in the number and size of individual insolvencies.

We think that the Group is back on a growth trajectory because of many reasons: acquiring Legal Services consolidator, Simpson Millar; the diversification programme achieves 52% of revenue from new divisions; a new £20m bank facility provides "firepower" for more acquisitions; two DMP firms, and one DMP book, and a second legal firm were purchased; a selective approach increases profits in shrinking IVA division; and strong cash flow (partially offset by exceptional costs).
Past investment to improve operating efficiency and a selective approach to new business has reduced costs in the core IVA division by £1.6m. Reported profits are lower due to IFRS, but the interim dividend increase of 7% reflects management confidence that the underlying/ adjusted profits are more than adequate. 
H2 profits will be enhanced by the acquisitions on a Headline earnings basis although the IFRS adjustments will knock some £1.5m off reported profits. Despite the difficult market for IVAs we are confident in our forecast of £9.12m.
At 134p share price, a PER of 8.9x against a sector average of 16.1x is clearly an excessive discount; also a prospective yield of 4.8% against 1.9% for the sector is out of line. 
Update and upgrade
Published: Apr 10 2014

Yesterday we noted that Fairpoint had agreed, subject to approval by the Solicitors' Regulation Authority, to acquire Simpson Millar LLP a medium-sized law firm, for up to £15m in cash and shares. 
We are consequently revising our forecasts upwards for 2014 and 2015 in the wake of this announcement, and they become £9.12m pre-tax and 16.5p EPS in 2014, followed by £10m pre-tax and 18p EPS for 2015. 
With its shares at 149p, Fairpoint is therefore on a PFER of 9.0x and yield of 4.3% for the current year, and 8.3x and 4.6% for 2015. Despite rising over 10% in the last four weeks, that is still cheap.
Trust in the law
Published: Apr 08 2014

Fairpoint is commencing its move into Legal Services earlier than most had expected as it has found a willing partner that already has at least one service offering fully tested and up and running. 
It is buying the Simpson Millar Limited Liability Partnership for up to £15m in cash and shares. Simpson Millar is a medium-sized law firm with just over 250 employees in 13 offices around the UK and headquarters in Leeds. 
The acquisition has two major benefits in that it gives Fairpoint an entry into legal services which will generate cross-selling opportunities between Simpson Millar and the rest of the group, and the team will provide the legal expertise and oversight for any new legal services the group may develop. 
The icing on the cake is that Fairpoint expects this acquisition to be earnings-enhancing - even in the first year. A pleasant surprise since most of cross-selling synergies take time to build up.
Fairpoint preliminary results webinar
Published: Mar 16 2014

Chris Moat, CEO and John Gittins, CFO, present their full year results and answer questions on the opportunities afforded by a move into legal services, and the ongoing consolidation opportunities in debt management.
Diversification a springboard for growth
Published: Mar 12 2014

Despite the continued shrinkage in its core IVA market, which caused a decline in gross revenue, Fairpoint managed to increase pre-exceptional profits by 7% to £8.05m and earnings by 12% to 15.03p, justifying a 9% rise in the annual dividend to 6p. 
We expect a further rise in profits this year, principally from the Debt Management division which has been significantly expanded by the purchase of two major back books since the year-end. Despite a 20% rise in its share over the past year, Fairpoint is still rated at a discount of roughly one-third to the market and sector averages. 
2013
Investor Forum presentation
Published: Dec 04 2013

The case for continued growth was made very succinctly by Chris Moat, CEO of Fairpoint, at our recent investor forum.  You can hear the full presentation here: 
If you would like to read our last report: 

Delivering on all fronts
Published: Nov 24 2013

The recent appointment of David Harrel as the new Chairman confirms his predecessor's statement that its recovery stage has been completed. Mr Harrel was, until his retirement, the senior partner of S J Berwin, one of the most prestigious city law firms.
IVAs still generate a majority of revenue but successful diversification means contributions from the other two divisions nearly doubled (up 97%) between H1 2011 and H1 2013. 
The cash position has also improved dramatically from net borrowings of £8.4m at end-June 2011 to net cash of £2.8m at end-June 2013.This financial strength (it has a £13m financing facility on top of its cash) has enabled it to buy up "back books" of IVA and DMP clients from weaker competitors exiting the sector.
We forecast adjusted profits of £8m, leading to eps of 14.5p and dividends of 6p for 2013, followed by £8.5m, 15.4p and 6.4p for 2014. So the group's yield is significantly higher, and its PER significantly lower, than the market.
As Fairpoint is both cash-positive and simultaneously cash-generating, and growing its business, we are of the view that it remains undervalued.
A profitable cash-generating machine
Published: Sep 15 2013

Fairpoint achieved a modest 6% increase in profits in its first half despite the continued softness in the IVA market, where a 1% rise in the number of IVAs passed did little to make up for a 10% fall in the average fee per IVA. Reductions in the tax rate and in the number of outstanding shares converted this into a 12% rise in adjusted earnings per share to 5.87p. The interim dividend increased to 10%.
The group's performance in an economic environment designed to minimise insolvencies and consequent job losses, with rivals throwing in the towel, was impressive. We have left our forecast for 2013 unchanged. 
Despite the rise in the share price (more than doubled since we commenced coverage), Fairpoint is still visibly undervalued relative to its sector (PER of 18.6x) or the wider market (PER 16x). Also its progressive dividend policy and yield, 35% higher than the market's, should make it attractive to Small-Cap income funds.
A solid opening for 2013
Published: Jul 24 2013

Fairpoint's neutral-looking trading statement this morning should actually be mildly positive for the share price. We reiterate our view that Fairpoint, priced at 63% discount to the sector average PER and yielding 5.9% is unreasonably cheap. 
Strong progress, more to come
Published: Mar 14 2013

Fairpoint continued its strong recovery, with adjusted profits 87% higher at £7.55m, and EPS rose 97% to 13.44p. It raised the dividend 22% to 5.5p.
Cash flow was also excellent and even after repaying its bank borrowings the group still had net cash of £1.6m at year end.
The two main drivers of the improvement were the costs taken out of the IVA division and providing Claims Management to IVA clients who had been mis-sold PPI.
On a PER half the market average, a yield almost two thirds above it, and a forward PER below 7x, Fairpoint is still visibly underpriced, with at least 115p seeming a fairer level for the shares at the moment.
2012
Strong momentum
Published: Sep 28 2012

Fairpoint Group is the leading UK provider of advice and solutions to financially stressed individuals
The major turn-round into substantial profit in Fairpoint's seasonally weaker first half adds credence to our recent upwards revision of our forecasts for this and next year. On an IFRS basis pre-tax profit swung from a GBP2.15m loss to a GBP2.15m profit and the dividend rose by 11%, another sign of confidence.
The two main reasons for the improvement were the reduction in the cost of processing and managing IVAs and the growth in Financial Services revenue. A third was the augmentation to creditor returns, with a knock-on benefit in higher fees for Fairpoint, resulting from its campaign to get clients to claim if they had been mis-sold PPI.
At today's share price of 81.5p the yield is 6.1% and current year PFER 6.3x; for 2013 the PFER is 5.8x and yield 6.7% which, even for a small company in an unfashionable sector, looks cheap.
The placing of the founders' 22.5% shareholding in the group in July should make it easier to reach our increased fair price of 96p per share.
Positive trading update: Forecasts increased
Published: Jun 25 2012

Fairpoint has issued a trading update because progress and profitability in the current year has so far been significantly better than anticipated.
Our previous profit forecast, made in March, now looks too low:
The major cause for the upgrade has been the success of Fairpoint's move to facilitate claims by their IVA clients over mis-sold PPI policies - FRP earns a percentage of the money that it pays over to their creditors.
We have raised our forecast for 2012 from GBP6.85m pre-tax and 11.62p of eps to GBP7.5m and 12.73p of eps, and for 2013 from GBP7.5m to GBP8m, leading to earnings per share of 13.76p. At the current price of 66p, that puts Fairpoint on a current year PFER of 5.2x and yield of 7.6percent, and a 2013 PFER of 4.8x and yield of 8.3percent.
Pointing in the right direction
Published: Mar 16 2012

Fairpoint Group is the leading UK provider of advice and solutions to financially stressed individuals. It is a leader in the provision of Individual Voluntary Arrangements (IVAs) and has strongly growing businesses in debt management and associated financial services
Adjusted full-year profits were modestly ahead of the consensus forecasts at GBP 4.04m, more than enough to justify the increased dividend of 4.5p for the year, which leaves the yield on the shares over 7%.
Virtually all of the profit was earned in the second half of the year:  partly due to the normal seasonal bias to the second half, partly to the cost reduction programme in the first half, partly due to the pre-planned introduction of an improved IT system and progress in the diversification strategy.We see the second half as the best guide to the future.
In 2012 we expect growth in adjusted pre-tax profits to GBP 6.85m, leading to earnings per share of 11.6p and a well-covered dividend of 5p, followed by further growth in 2013 to GBP 7.5m pre-tax, eps of 12.9p and a dividend of 5.5p. This puts the shares on an attractive prospective PFER of 5.3x and a yield of 8.1%.
2011
Fair point, well made
Published: Sep 28 2011

Fairpoint is one of the leaders in the debt resolution market: it is the clear leader in the provision and management of Individual Voluntary Arrangements (IVAs).

The second half should show a significant improvement thanks to rapid growth in the two smaller divisions and the cost-saving measures undertaken, including operational cost savings worth £1.4m p.a.

At the current price the PFER is only 8.4x compared to a prospective yield of 8.3% - this looks too cheap.

Our estimate of fair value per share is at least 75p (a 38% premium to current price) in the short term, rising to 120p by 2013/4.

Fighting the head-winds
Published: Sep 13 2011

Fairpoint is one of the leaders in the debt resolution market: it is the clear leader in the provision and management of Individual Voluntary Arrangements (IVAs)

After a trading statement in May, the company's brokers halved their earnings forecasts for 2011  but not for 2012 (down by one-sixth), and the market responded by halving the share price. We felt it was an over-reaction and saw no justification for a discount to net asset value excluding Goodwill.

At the current price PFER is only 8.0x compared to a prospective yield of 8.7% - this looks too cheap. Our estimate of fair value per share is at least 75p (a 46% premium to current price) in the short term, rising to 120p by 2013/4

2009
Bottom line focus restores profitability
Published: Mar 18 2009

Fairpoint's results for 2008 show that it is well on the way to recovery, having turned around a pre-tax loss of £1.3m (£1.2m excluding discontinued businesses) in the first half to a pre-tax profit of £2.3m in the second half. This is due partly to the change in the market environment but just as much or more so to actions by the new management team to restore profitability.