Debt discounts pays dividends
FSA Group will pay a maiden dividend of one cent a share next month - a minor milestone for the largest administrator of debt agreements.The 2011 full-year profit for the group is otherwise pretty unexceptional. Revenue increased seven per cent, to A$54 million, and net profit increased 20 per cent, to $9 million.FSA reported an increase of 30 per cent in the number of debt agreements it manages and a rise of 32 per cent in the number of personal insolvency agreements. Both are alternatives to bankruptcy under which creditors take a hair-cut on what they are owed. Debtors often use an administrator, such as FSA's Fox Symes arm, to help negotiate with lenders and to oversee arrangements.FSA puts its market share of the debt agreement sector at 53 per cent, up from 51 per cent a year ago, but down from 54 per cent two years ago.Westpac recently increased its funding line for mainly non-conforming home loans through FSA to $260 million, from $235 million. FSA says that arrears in this portfolio are much lower than the industry average reported by Standard & Poor's.FSA also has a $50 million funding line from Bendigo and Adelaide Bank.