Growing debt agreement numbers help FSA's bottom line

Debt solutions company FSA Group has reported a 15 per cent increase in net profit for the six months to December on the back of a substantial increase in client numbers.

FSA is in the business of assisting debtors enter into payment arrangements with their creditors, through informal arrangements, debt agreements, personal insolvency agreements or insolvency.

The company reported an 18 per cent increase in the number of clients entering debt agreements, compared with the previous corresponding period, and an eight per cent increase in the number of clients entering personal insolvency agreements and bankruptcy.

It manages A$321 million of unsecured debt under various agreements.

This service division contributed $4.4 million to group profit during the half - up from $3.2 million in the previous corresponding period.

Group net profit was $7.3 million, compared with $6.4 million in the previous corresponding period.

The company's other big earner, consumer lending, contributed $2 million to group profit - down from $2.4 million in the previous corresponding period.

The company said in its financial report that the consumer lending division's profitability was affected by costs involved in the established of a team of business development managers.

FSA has $224 million in non-conforming home loans (up from $221 million in June last year) and $3.5 million of personal loans (up from $1.1 million in June last year).

The business lending division, which provides factoring finance, contributed $866,525 to group profit - up from $837,228 in the previous corresponding period.

The business loan book grew from $24 million in June last year to $29 million in December.

FSA's loan books are funded by facilities provided by Westpac.

The company said that with consumer debt levels at record levels, it expected to see growing demand for its services.