(FRP) Fairpoint Group

for decent dividend here tomorrow, div rate is 3.55

Ex date on wednesday

Better than a savings account

One fact omitted from Simon Thompson's recent evaluation of Fairpoint in the Investors Chronicle was that a significant stake is held by Hanover Investors and that one of the founding partners of Hanover is Fairpoint's executive chairman, Matthew Peacock. This is one of the reasons why I invested in Fairpoint some time ago as it would appear that Hanover has a pretty good record with turn around situations. I was also attracted by the fact that the business may continue to do OK in a recessionary environment owing to the nature of its work. I am going to hold on to these shares as I think the business is quite lowly rated (I don't think consumer finance is a very popular area with investors) and I think the perfomance is improving under the influence of Hanover. Another of my AIM investments, Regenerisis, also has a significant stake held by Hanover and the share price of that has rocketed recently.

Investors Chronicle's Simon Thompson tipped as one of their under valued shares of 2013.

Investors Chronicle's Simon Thompson tipped as one of their under valued shares of 2013.

The price seems to be on the up recently. Can anyone shed any light on this please. I have a very small holding, (at a big loss) but may buy more to average my price down.

Having a conversation with myself on here...!

But, for any casual readers, Cleardebt announced in their results this week that from a £750k VAT refund, after distributions to creditors, they were taking accrued revenue of £338k - i.e. revenue more than likely to occur.

An indication for FRP though there may be differences between the two.

It's not so much the one off revenue that catches my attention, but the one off cash boost it translates into that can then be used to support the dividend, grow earnings through acquisitions etc.

Just think this is not priced in at 80p.

Price has consolidated after its strong run.

Could be a good buy moment - latest insolvency stats show broadly stable conditions, but more importantly at some point in the next 2 months we'll get clarity on how much fee income and cash FRP actually generates from the VAT refund. They said in interims it would be done by year end, FRP normally updates in the first 2 weeks of January but they might choose to do an update on this issue earlier. Just my opinion, but i reckon this pullback offers a decent moment in advance of some more hopefully good news.

http://www.brrmedia.co.uk/event/104554/chris-moat-chief-executive-officer

I just bought GBP5,000 worth.
Cash position is much better now and also cash generative.
Bank support in place (twice previous level).
Low PER and high dividend.
Also take note of the director and institutional buying over the last few months, especially Henderson.
Looking forward to next week!

It's not a no brainer - the core business is pretty much flat at best. But it does generate cashflow which is important and net debt is very controlled.

If investors value this on the same metrics (EV:EBITA,, div yield, eps multiple) as they were in 2010/2011 before the profit warning, then a realistic high side target range should be 90-100p in my opinion.

But, it's not a loved stock so who knows what will happen and how quickly.

good luck if you dip your toe in, let's see what happens on the 27th and afterwards.

Keen to hear views on whether now is a good time to get into FRP? I've done my research and think its got good upside potential (cost control/ diversification etc). Upcoming interims could be interesting....thanks in advance

that was a pleasant surprise.

must say when i saw the words trading statement so soon after the last AGM statement, I was fearing the worst... !

this should underpin a gradual recovery in sentiment towards the company that i hope will take the s/p up towards 80-100p.

well the 9m VAY refund has been confirmed which is huge boost to their expansion plans
and off the back of that able to get increased bank facility of another 8m or so
so tht leaves them with maybe up to 17m to invest which should enable further profit growth
and as before a counter cyclical play as they benefit as economic stalling continues
yield looks v. secure at 5p = 7.5% and with earnings possibly getting to 14p in 2013
can see the price now getting towards 95p as fair value (yield of 5.5% and p/e of 7)
chart pattern is now showing firm upward trend which limits downside
and always the possibility of a bid from overseas consolidator



All IMHO, DYOR + BoL
FRP is in my portfolio

reslts were positive though no positive surprises.......
- divi up 10% to 4.5p (now on 7% yiled)
- operating costs restructured
- bettter income in 2012 form debt products and PPI mis-selling recovery
- talk v.confidently re VAT recovery (c.£9m vs MV of 26m)
- debt at 5m

so remains to me fair value of c.75p giving yield of 7% (divi to be increased next year to 5p)
and P/E of 7 reflecting business risks
notable PFG is trading well and favoured by market
and of course there is an outside chance of a bid at 100p


so in summary i like FRP at 62p b/c:
(updated from previous analysis at 52p in Jan 12)

- divi fcst to be 5p in 2012
- eps fcst to be > 10p
- industry provides hedge against economic downturn
- mgt has taken significant cost out of business
- share price has found support at historical level so 50p so downside seems limited
- recent sector news confirms demand in their industry



All IMHO, DYOR + BoL
FRP is in my portfolio

quarterly insolvency stats show 13047 IVA's in final quarter of 2011.

this number is 4.5% more than Q4 2010, almost identical to Q3 2011 and substantially higher than the low numbers in Q1 and Q2 2011.

all in all = continued market stability for FRP which with its reset cost base should be back to steady profits and cashflow.

No bad news in the update, would suggest the ship is stable and set fair.
Still need to know what their bank facilities will be, as noticeable that very little acquisition activity in H2 (most was done in H1) so I guess preserving cash until facilities agreed.
Anyway, this is a nice diversification play, I'm happy with predictable and boring, as long as it keeps converting cash and paying a nice dividend. Intrigued by what they might get back and retain from HMRC in cashflow terms....

Key to FRP is unemployment. Today's numbers were positive for them.

being mulling over my holdings for the new year
very interesting move today up 4p
and i suspect that there will be the volume behidn it recorded over next day or 2
i'm not totally happy with their move into payday loans for the reasons cited
but also can see the other side that if they become a bigger player then regulation can help then consoldiate the market and maybe this is their learning from IVA times....
of course the lending rate % seem horrendous but if there is a demand then some company has to provide the service and i'd raher a respectable business like FRP do it than some-one else.

i think trading announcement will have big effect on the price either way
i dont think the stock will become a market darling
but there is room for upside with a decent update and confirmation of the big divi
to me fair value would be c.75p giving yield of 7% and P/E of 7 reflecting business risks
notable PFG is trading well and favoured by market
and of course there is an outside chance of a bid at 100p


so in summary i like FRP at 52p b/c:

- divi fcst to be 5p in 2012
- eps fcst to be > 10p
- industry provides hedge against economic downturn
- mgt has taken significant cost out of business
- share price has found support at historical level so 50p so downside seems limited
- recent sector news confirms demand in their industry
- up coming trading update might be catalyst for re-rating

best wishes for 2012


All IMHO, DYOR + BoL
FRP is in my top10 hldgs

Recent press coverage confirms that payday loans, FRP's newest area (loanextra.com), are certainly big business (see below)..... but in the medium term, suspect there will be regulatory issues to deal with. Having been through the grinder with IVA's a few years back, I hope FRP have set their model up to cope with likely clamp downs on practices.

One can only imagine the headlines - Fairpoint lends money at 1000% plus APR then cleans up with a debt solution! Ching ching, but could bite them on the backside.

That said, I think it's going to be profitable in the short run and hopefully will see the s/p recover.

**********


Nearly half of UK adults struggle to make their finances stretch to payday, according to research by the insolvency industry body.

The survey of more than 2,000 people commissioned by R3, found that a growing number of people are turning to short-term funding like payday loans with interest rates up to 1,000% to make ends meet.

The quarterly survey recorded the highest level of worry over debt - over 50% more people said they are concerned about their finances since the last poll three months ago.

With 7% of respondents saying it is likely that they will need to turn to these loans in the next six months, the trade body estimates that 3.5 million people across the UK will be in the same position.


The campaign group Consumer Focus has said the situation is "alarming".

"These are hard times and in the run up to Christmas, many will be tempted by a payday loan despite APRs of over 1,000%," director of financial services Sarah Brooks said.

"Considering this is now a billion-pound industry, regulation in this area is not strong enough and much more needs to be done to prevent consumers getting caught in spiralling debt."

The group has called for payday lenders to limit the number of loans per household to five per year to prevent the problem ballooning out of control.

some thoughts in the run in to year end

i like FRP b/c:

- divi fcst to be 5p in 2012
- eps fcst to be > 10p
- industry provides hedge against economic downturn
- mgt has taken significant cost out of business
- share price has found support at histroical level so 50p so downside seems limited


All IMHO, DYOR + BoL
FRP is in my top10 hldgs

Q3 2011 = 0.7% increase in IVA's versus Q3 2010.

Given that in May management were budgeting declines of 9.8%yoy I think, this appears positive for FRP, who presumably having cut costs should now benefit from stability in the volume of IVA's.

FRP – at 53p has been ticking up nicely from previous analysis at 46p after the august fall

it feels as if there are steady buyers around and with a reasonable secure 10% yield there seems little downside in the medium term.

the chart pattern looks very strong with a golden cross now in place

i'm hoping for mid 60's in the near term but again expect value to be longer term and ultimately a bid i think will offer shareholders the highest price exit within a couple of years - that could be at 100p + so happy to bank divi and away that morning to see a huge share price jump! - here's hoping :-)


ALl IMHO, DYOR + BoL
FRP is in my top10 hldgs

Fairpoint (LON:FRP) - Fair point, well made
Wednesday, Sep 28 2011 by Equity Development
http://www.stockopedia.co.uk/research/fair-point-well-made-60483/

Sep 28th 2011 - Equity Development today published a report on Fairpoint (FRP.L, LSE:FRP, LON:FRP) entitled "Fair Point, Well Made". In summary, the report says:

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.

at 52p recent trading update had lots of news
and the follow up note from Equity Development had a 2 yr price target of 120p.

Not surprisingly ED seemed to have rose tinted specs on and everything seemed to be good news.
My own view is less perfect but still offers good upside from the current 52p. i think with many smaller compnaies they struggle to find their way and so it is not possble to have continual annual growth the way the multinationals can smooth performance.
my take is that FRP has been through growing pains and is not well placed in various markets that offer it potential to the next step.

At a simple level they are involved in personal debt mgt which is a growth business and they are a leading player thus i still think there is the possibility of a strategic bid by a larger player.

their IVA business had lower turnover against expectations in H1 so they were caught with costs planning for growth when turn over fell - this is just a one off hit and i;d imagine going forward they will be more conservative re forecasts and growth planning but the IVA market will be steady for several years to come and see to predict return to profit.

in the interim they have built up a debt mgt business which is profitable and growing in a growth industry. i;d imagine now that they are getting close to a critical mass point where profit could grow further.

these alone as good earners and then the company has financail web sites and ledning under development as well as any potential new ventures.

obviously the company is small and liquidity limited so it's only a smaller holding for me but critically there is strong CASH position and CASH flow. the divi will be increased this year to 4.5p and 5p next year. so it is offering a near 10% yield which seems reasonably secure and reasonable upside - i;d say more like the previous highs of 90p than the 120p predicted by ED.


in summary - steady business, good CASH flow, great divi yield, leading player involved in growth sector and AIM IHT advantages



ALL IMHO, DYOR and BoL
FRP is in my portfolio

New report just published:
Fairpoint(FRP):
Fighting the head winds
Analyst:John Borgars Published on 13/09/11
http://www.equitydevelopment.co.uk/
http://www.equitydevelopment.co.uk/login

Here is our latest analyst report on Fairpoint:
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
Download full report click here
Symbol/Epic FRP
Listing AiM
Sector Financials
Price 51.5p
Market Capitalisation £23m


If you would like any further information either on this company or any other companies we cover please contact us on:
Tel - 020 7065 2690
Email - info@equitydevelopment.co.uk.
Website - www.equitydevelopment.co.uk


Equity Development
1st Floor, 65 London Wall | London | EC2M 5TU

...for next week. expecting a messy P&L with exceptional costs maybe creating a net loss (but adjusted ongoing operating profits), but for me it all hinges around cash position, dividend declaration and a stabilised outlook.

Slightly nervous as to why the directors or Hanover didn't choose to top up in the 40's..... but balanced out a bit by most of their options being linked to share prices of 120 +, so every incentive to focus on delivery and not mess around buying shares.

Any other hopes and fears...?

price seems to have stabalised and there seems to be reasonable buying at these levels.
agree re the IVA stats and think that as economic news worsens that iva figures will get relatively better. also would not rule out a bid.


All IMHO, DYOR + BoL
FRP is in my portfolio

trading update said management were basing remainder of 2011 year on 11.5% year on year declines in IVA numbers. Latest insolvency stats show Q2 year on year decline of 9.8% which suggests that the revised forecasts / cost structure should be about right. Might well be a buying opportunity.

Well it’s been tough 2 weeks and even with the recent bounce i think we will see lower levels in months to come. My analysis below and on other BB’s re my top 10 hldgs.


FRP – at 46p – down 1% from recent highs
fundamentals = p/e of 3, good CASH flow and divi yield of 10%!!
chart = needs to find a bottom but recent 15% relative performance is a good indicator as is the larger than average volume going through this last week that has kept the price up during the market turmoil.
If market collapses > than the expected 5%= price could fall to something silly like 30p - would buy more as medium risk 2 yr 2 bagger.
market bounce – might see the price rise up to 50p if volume buying continues
Gut feel = company will bid for at c. 65p. Divi will def. Be held giving 10% yield so expect more buying prior to results in 15 sept.



Dow Jones – at 10700 and looks like this might be support. If no next stop is 10000 but at least that is only 7% away.
NASDAQ – at 23500 and support looks to be 22000 – c.7% away.
S&P – at 1130 and support looks to be 1080 – c.4% away.
FTSE ALL – at 2630 and support looks to be 2500 – c.6% away.
FTSE 100 – at 5000 and support looks to be 4800 – c.4% away.
So that all seems consistent around 5% away. This would make a straight line fall of c.20%.
In autumn 08 the straight fall before bounce was c. 27% but i think it would be reasonable to expect a lower lever of fall for 2 reasons:
1 – investors could see this coming (i.e. the facts were visible enough) we know now that the lower ratings a couple of months ago and the low volumes all year were b/c some were trading cautiously and not investing.
2 – the banks (which are c.20% of index) are much better capitalised so there is relatively less chance that they would need the same level of emergency capital and thus likely falls would be less.
So i’ve rationalised a further 5% fall from here and at least then a bounce of some sort.
Longer term big picture does not look good but immediate priority is to assess what current action needed.


All IMHO, DYOR + BoL
FRP is in my portfolio

I have researched and researched, I have decided that at this price it is just much too cheap!
It's a small percentage of my portfolio though!

A rattling profit warning - there is bad history in the sector, Accuma, Relax both cost shareholders a lot of money and Fairpoint itself was hammered a few years back. But Fairpoint is bigger, not overly geared and better diversified so should be able to trade through this setback. This is about matching revenues and costs - management messed up, gearing up costs to meet pretty aggressive growth schedules that didn't come through - rather than a threat to the whole nature of the industry like in 2008. Now, reset the cost base to match revenues and stabilise the ship.

The comment on cashflow is ultimately the key to survival, i.e. enough cash generation to keep growing the non IVA segments (and pay dividends) without pressure on banking facilities (as I am sure that half their facilities expire in December 2011, the other half in 2012 so a bit of pressure). I hope that they have got this forecast right.

Interesting that current market cap of £20m compares to Net Tangible Worth of £25m, may well be some value in here at this price, but it would be a brave person that buys in against the negative sentiment around the stock without more news from the company. A long road back (again!)

there is an inverse correlation between ic tips and the sp they are tipping
-----------------------------------------------------------------
Check NOP for a recent example!!

double ouch! to be honest expected a further fall today but trading seemed to be much more two way and larger volume so i guess MM just trying to find a floor to attract buyers again. as before would think that they will be back at 70p + by end of year and now tempted to buy some back. despite the bad news eps wil stilll be c. 8-9p but always a risk after the ol' profit warning!


ALPH - i managed to buy recently before the rise and would be bullish on them generally. the divi seems more secure than ever and the discount to NAV too large. by all accounts they are over the worst and any inflation will be of help in terms of making property assets more attractive similarly with any fall out with equities as property giving good yields. chart looks strong now that > 32p so would expect 40p by end of year with divi and little downside i think.


HGV - had analysed before and decided not to invest but recent price action indicates something. not sure if it might be corporate activity or just that positive trading now confirmed and taking them into a higher level of investor trust etc.... dont intend to buy as have exposure to sector through TMMG which have high hopes for.


not familiar with your others but will try to get to look at next week


All IMHO, DYOR and BoL
ALPH and FRP are in my portfolio
TMMG is in my top 10 hldgs

there is an inverse correlation between ic tips and the sp they are tipping

It was the yield of this stock that caught my eye, and, generally, I'm looking for stocks that have at least a little yield, because I have quite a few at present who do not pay dividends (NOP, SRX, TEG (Fido would be a better name for that dog), PTR, GBP). With, possibly, one exception: Volga Gas. (I'm not selling anything at present, just keeping about 25% in cash. Though the consensus amongst experienced investors – there's a few on Bloomberg right now – appears to be that the future of the market looks pretty good, some are saying there might be a bit of a pull back – it may be happening now.) As for Volga Gas, they are looking very good. They recently had a dispute with a partner over a gas processing plant, which they won in the Russian courts. The result is that they will have their own gas-processing plant, and they are already pumping oil. They also have several exploration licenses, and, some time back looked as if they were on the brink of a major discovery. At the time, I was in and making about 300% on my investment. Through greed and stupidity, I held on for more, and got out with about 70% for my trouble,. Now, I'm back in with a very small stake and up about 30% so far. I'm looking to double up, once the market calms down a bit, and, hopefully, they fall back a little more, however, it is interesting to note, Volga are very strong today. They also have the kind of s.p. graph I like: one that has come down from way up, rather than the other way around. However, I wouldn't risk big money in them, not because they appear to be dishonest, far from it, their RNSs simply give you the facts and contain no “spin”, but because they are a Russian company.

Another company I'm watching, is Hasgrove, another IC recce. They too have the sort of 3-year s.p. graph I like. Apparently, they expanded too quickly, but now are doing quite well. They don't pay much of a dividend at present, but are forecast to raise it substantially. Another thing I like about them is that Octopus, who are quite canny investors, have a large stake.

A third I am watching, having been tempted to buy in but held back so as to conserve cash, with the result I have missed one of their dividends and the s.p. has risen in the meantime - it's one of the perils of trying to time the market, I suppose - is Alpha Pyrenees. They pay a hefty dividend, are also very strong right now, and have the kind of graph I like. A few years hence their banking covenants come up for review and, although there's no suggestion they are going to breach them right now, it's something to bear in mind.

yep oftent hat ol' gut feeling is the best trader!
agree market nervous so likely to be better opportunites ahead - anything else on your horizon? luckily had bgt FRP at much lower prices and had reduced holding at some of recent highs so now happy to sit on 5-6% yield and see if mgt can develop business.

As you say, ouch! I very nearly bought in after an IC recce: only general market weakness and a feeling these could also fall back a few pence has held me back. I shall continue to watch and wait.

ouch! RNS says that IVA growth is -10% compared to expectations of 5% and thus profits will be below expectations. for me i had said previously that their last RNS was a 'little flat' but did not expect this especially as the price was rising nicley (maybe that was MM getting out).

previously i had eps of 12p and think now can expect 30% lower to be c. 8.4p. good news is that cash flow is good enough to continue with divi policy so at 4p divi yield at 70p is almost 6%.

company is still an interesting development and reasonably well run but obviously investment scenario has changed. i put fair value around 75-80p (i.e. p/e of 8/9 and yield of 5% +) as there still is good chance that revenue diversification will provide growth for future years.

the fall today is also on low volume which gives some encourage that there could be a bounce and the chart generally looks solid > 65p.

so for me it is no longer in my top 10 but a reasonable AIM hold.


all IMHO, DYOR and BoL
FRP is in my portfolio

Fairpoint set fair
Created: 20 April 2011 Written by: Jonas Crosland
BULL POINTS:
■ Diversifying revenue stream
■ Strict cost control
■ Rising interest rates and taxation
■ Attractive dividend yield
BEAR POINTS:
■ IVA cases static
■ Fall in revenue per ongoing case
Fairpoint has been busy diversifying away from its original speciality of arranging individual voluntary agreements (IVAs) and into organising debt-management solutions. And with good reason. Back in June 2008, the group paid the price of putting its eggs in one basket when a slide in the number of IVA cases led to a profit warning and a 62 per cent collapse in the share price to 31p.
But circumstances have changed significantly since then and for the better. Fairpoint has broadened its range of services to include advice for indebted clients to cover consolidation of loans, re-mortgaging and informal arrangements. Basically, its main aim is to get people out of a financial mess without resorting to bankruptcy, although the group also provides this service.
IC TIP RATING
Tip style Value
Risk rating Medium
Timescale Long term
What do these mean? Find out in our guide to tip ratings
Revenue comes from taking a servicing charge, although an effect of Fairpoint doing more work for customers with lower debts was that its revenue per ongoing case for IVAs slipped from £32 per month in 2009 to £28. However, this was offset by a strict cost control, which meant that ongoing costs per case fell 15 per cent to £10.83 per month. Providing debt-management solutions has generated a new revenue stream, boosted by acquiring four books of debt management during 2010. While average fees for debt management slipped from £375 in 2009 to £362, overall income was maintained, thanks to a jump in the number of these cases on the group's books, from 5,539 to 12,541. Non-IVA revenue now accounts for 20 per cent of group income.
FAIRPOINT (FRP)
ORD PRICE: 82p MARKET VALUE: £36m
TOUCH: 80-82p 12-MONTH HIGH: 86p LOW: 61p
DIVIDEND YIELD: 5.5% PE RATIO: 8
NET ASSET VALUE: 89p NET DEBT: 16%
Year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2008 26.5 1.12 1.51 nil
2009 28.9 5.72 9.47 2.0
2010 29.4 5.85 9.56 4.0
2011* 32.7 6.08 10.03 4.5
% change +11 +4 +5 +13
*Shore Capital estimates Normal market size: 2,000 Market makers: 6 Beta: 0.4
And Fairpoint's bosses reckon that trading has yet to benefit from what they think will be an almost inevitable rise in the number of people forced to restructure their finances. That increase would probably have already happened had it not been for sustained low interest rates. But management feels that the pressure will get harder, not just because interest rates will rise at some point, but because unemployment will rise, too. Even clients still in a job will see a squeeze on their disposable income as taxes and mortgage payments rise.
Fairpoint has also been expanding the service it provides to encourage people to switch utility providers in order to save money - providing switching services to 26,266 customers last year against 4,706 in 2009. Business levels have been boosted further by the acquisition of Moneyextra.com, which has broadened Fairpoint's range of services. Cost savings from integrating Moneyextra have yet to come through, so profits should also receive that boost this year.
Group finances are in pretty good shape, too, with net debt of £5m and a £16m credit facility. Operating cash flow held steady at about £6m last year and earnings easily cover the dividend payout, which, on City forecasts, will generate a nice 5.5 per cent yield this year.
SHARE TIP SUMMARY:
Buy
Fairpoint's plan to diversify its revenue stream is starting to deliver results. And more work is likely as tougher regulations force some of the smaller operators out of the market. Meanwhile, its shares look moderately rated at just eight times forecast earnings for 201

http://www.growthcompany.co.uk/recommendations/1617346/fairpoint.thtml

Fairpoint BUY

08/04/2011 Miles Nolan

It's an ill wind but the effects of tighter consumer spending should work to the benefit of leading debt management group Fairpoint (FRP). Once known as Debt Free Direct and well known for its IVA work the AIM listed counter has expanded the range of services it provides, so that when financially stressed customers phone its call centre they are now offered more solutions.

Indeed the range of value added services has jumped from 4,706 a couple of years ago to in excess of 26,000 currently. This was also fuelled by the acquisition of Moneyextra.com, a move which brings a broader range of switching services and access to a proven technology platform.

The effect of new management led by chief executive Chris Moat appears to be working, as in the year to December adjusted pre-tax profits jumped 13% to £6.9m on sales a touch higher at £29.4m. The number of financially stretched customers is expected to snowball from 7m to 8.3m next year so there is plenty of scope for Fairpoint to continue expanding. Indeed, Moat adds 'our strategy is to convert more enquiries and offer useful price savings for customers'.

Joint broker Oriel predicts 2011 pre-tax profits of £8m and EPS of 13p, as well as a 4.5p dividend. We recommended Fairpoint at 71.5p in February 2010, but even after the slight improvement, the shares still sport a 5.6% yield and an attractive earnings multiple. Buy.

Tags: AIM market, Chris Moat, Dividend, Growth company, IVA, Moneyextra.com

Sector: Financial Services

Companies: Fairpoint Group

Market cap: £35.3mPE Forecast: 6.2
Share price: 81p