Final Results

Debt Free Direct Group PLC
27 June 2006

27 June 2006


                           DEBT FREE DIRECT GROUP PLC

              PRELIMINARY RESULTS FOR THE YEAR ENDED 30 APRIL 2006

                         ADJUSTED PBT UP 177% TO £5.13M



Debt Free Direct Group Plc, the leading debt advice and solutions company,
announces its results for the year ended 30 April 2006.



Michael Blackburn, Chairman, said:



'The Company has continued to deliver outstanding profitable organic growth.
With the benefit of a solid balance sheet and healthy cash position, the Board
is able to recommend a final dividend of 1.5p per share following on from the
maiden interim dividend of 1.5p per share announced in November 2005.  It is the
Company's intention to grow the dividend payment progressively, in proportion
with the Company's future growth.'



Andrew Redmond, Chief Executive Officer, said:



'Our strong position in the rapidly growing IVA market is reflected in our 177%
increase in adjusted PBT to £5.13m, compared to the prior period.  This success
has been built on very strong foundations and we are well positioned to continue
our profitable growth in the year ahead.



In addition to our increased capacity in the UK, we are also delighted to
announce the launch of our new business in Australia in the third quarter of
2006.  Australian consumers' levels of over-indebtedness are running at record
levels and Debt Free Direct Australia is targeted to grow to represent in excess
of 20% of the Australian Debt Agreements (IVAs) market over the next 2 - 3
years.'



Highlights for the year include



•        Financial growth on all fronts with an overall performance
         ahead of expectations.



     -        Turnover up 93% to £16.23m                 (£8.4m in 2005)
     -        Gross profit up 104% to £12.29m            (£6.0m  in 2005)
     -        Adjusted PBT up 177% to £5.13m             (£1.85m in 2005)
     -        PBT of £4.8m                               (£1.54m in 2005)
     -        PAT of £3.3m                               (£0.98m in 2005)




•        Balance sheet strengthened as a result of trading profits.

     -        Net assets increased to £17.58m            (£14.75m in 2005)



•        Positive net cash from trading as a result of growth in supervisory 
         fee income.

•        Reduced advertising cost per new IVA as a result of improved media 
         buying deals, new TV creative and increased conversion rate.

     -        Average cost per new IVA £807              (£1,252 in 2005)


•        Increased operational efficiency

     -        Annual turnover per employee £90K          (£68K in 2005)
     -        Adjusted PBT per employee £28K             (£15K in 2005)


•        Growth in IVA Run-rate and market share

     -        Annualised new IVA case run-rate has more than 
              doubled in the last 12 months and has increased 
              by 59% during the last 6 months.

     -        Whilst the IVA market continues to show dramatic 
              growth, Debt Free Direct has grown even faster 
              with its market share exceeding 20% again in May.


•        Building upon a Successful Model



Volumes are continuing to grow rapidly.  Planning ahead, the company has taken
steps to increase its capacity.



     -        In April 2006 the company brought on stream facilities in Northern
              Ireland capable of completing 150 IVAs per month with immediate 
              effect.  This capacity is expected to double over the next 
              12 months.

     -        In October 2006 the company will be taking on new leasehold 
              premises in Chorley which will more than double its capacity to 
              process IVAs.



Furthermore, we expect to develop new routes to market and new products in the
UK and we are excited about the long-term prospects of Debt Free Direct
Australia, which is being launched later this calendar year.





Enquiries:


Debt Free Direct Group plc
Andrew Redmond, Chief Executive Officer                01257 240599
Paul Latham, Finance Director                          01257 240529

Numis Securities
Iain McDonald                                          020 7776 1500
Lee Aston

Financial Dynamics
Ed Gascoigne-Pees                                      020 7269 7132
Nick Henderson                                         020 7269 7114







Notes



The new IVA average monthly case run-rate has been calculated consistently with
previous announcements.  An IVA is recognised on issue of a finalised IVA
proposal to the debtor which, based on historic experience and case data, is
subject to a provision for those cases that may not be approved by the meeting
of creditors.  In addition, the total includes referred IVA cases.



Advertising cost per new IVA has been calculated as the gross advertising spend
in the year divided by total new IVAs in the year.



Debt Free Direct helps individuals find the best solution to their debt
problems, based upon an analysis of their particular financial circumstances.
Financial information on an individual is processed through a computer model
(the Best Advice Model) developed by Debt Free Direct in order to recommend a
solution suitable for that individual's particular financial circumstances.  The
solutions offered range from basic advice, such as simply destroying credit
cards and curbing unnecessary expenditure, to the following solutions:



•                     consolidation loan
•                     re-mortgage
•                     informal arrangement
•                     individual voluntary arrangement (IVA)
•                     bankruptcy



Debt Free Direct is unique in the marketplace in that, unlike most of its
competitors who sell specific products, Debt Free Direct looks to provide the
best advice to the consumer and recommends them the most appropriate service.



Debt Free Direct is based in Chorley, Lancashire, and was admitted to AIM in
December 2002.



Chairman's Statement

Year Ended 30 April 2006



Financial Performance



In this, my first statement as your chairman, I am pleased to be able to report
on a strong period of growth in which turnover rose by 93% to £16.23million
(2005 £8.4million) and profit before tax, adjusted for goodwill amortisation
increased by 177% to £5.13million (2005 £1.85million).  With the benefit of a
solid balance sheet and healthy cash position, the Board is able to recommend a
final dividend of 1.5p per share following on from the maiden interim dividend
of 1.5p per share (2005 nil) announced in November 2005.   It is the Company's
intention to grow the dividend payment progressively, in proportion with the
Company's future growth.



Before the stock market correction in May 2006, our shares moved from 140.7p as
at 29 April 2005 to 431.5p per share as at April 28 2006.   During the year,
institutional investors took advantage of an increased free float as the
founding directors re-balanced their personal portfolios.  More recently, Debt
Free Direct became a constituent member of the Alternative Investment Market top
50 companies.



Market overview



Excessive optimism on the part of an increasing number of consumers allied to
some over-generous lending decisions have caused the market for individual
voluntary arrangements to develop and grow.  Despite the appearance of new
entrants, our share of that market has increased even further.  We welcome
competition as it allows us to differentiate our service which sets out to
provide best advice to individuals, which is crucial at a time when their
anxiety may not only be financial.  Annual growth rates of some 140% in the
market also reflect a wider knowledge of this solution which our own advertising
has helped to propagate.  Even without the mooted rise in interest rates later
this calendar year, the market will continue to show strong growth.  In the
medium term, the introduction of a simplified IVA will give further impetus to
the marketplace.



Board and Management



Gren Folwell took the company through its flotation in 2002 and presided over
the platform for growth which is coming through now.  Having been involved with
the business prior to its flotation, I was delighted to succeed Gren in
September 2005 and I thank him on behalf of the Board for his successful period
of service.



Derek Oakley joined the board in June 2005.  Initially appointed as Insolvency
Director, he has recently taken responsibility for Operations as well, allowing
Andrew Redmond, the Chief Executive, to concentrate more on strategic and
development matters.  Derek brings a wealth of insolvency and practical
experience to the business and is most welcome.



Our staff numbers grew from 152 as at 30 April 2005, to 214 at the year end.
Recruitment at all levels in the business has strengthened our capabilities.  On
behalf of the Board, I extend our thanks to all employees for their sterling
efforts throughout the year, which has enabled the Company to turn in another
impressive performance.



Strategy and Outlook



We have a clear focus on growing our market share, profitability and shareholder
value by being the biggest and best in our marketplace.  That does not mean that
we shall turn our back on diversification, however, we have much to do in our
core business.  The Chief Executive Officer covers this area in his review.



Our new financial year has got off to a strong start and your Board is confident
of making further significant progress.





J M Blackburn

Chairman

26 June 2006





Chief Executive Officer's Review

Year Ended 30 April 2006



Financial performance



The past year has been one of significant growth in all aspects of our financial
performance:



     -         Turnover has grown by 93% to £16.23m
     -         Gross profit has grown by 104% to £12.29m
     -         PBT before goodwill amortisation has grown by 177% to  £5.13m
     -         PAT has grown to £3.27m, compared to £978K last year
     -         Shareholders' funds have grown to £17.58m from £14.75m



The trading results for the year and the Group's financial position at the year
end are detailed in the financial statements which follow this review.



Further analysis of financial performance



Drilling down from the headline figures, impressive growth has been demonstrated
on all fronts:



Turnover



     -         IVA related turnover has grown by 95% to £15.26m
     -         Commission income has grown by 66% to £974K



The increase in IVA related turnover results from growth in both the new IVA
run-rate and supervisory fee income generated from live cases.



Whilst the market particularly focuses on the growth in new IVA cases, it is the
growth in the 'bank' of supervisory cases which is of greatest long term
significance.  Last year that 'bank' grew to in excess of 5,500 live cases,
generating supervisory fee income of more then £4.65m.  Supervisory fee income
now accounts for 38% of our direct profit (turnover less advertising and direct
labour costs).



Fundamentally, it is the growth in supervisory fee income, that has driven an
increase in net cash from trading for the first full financial year since we
were admitted to AIM.  Those familiar with our business model will be aware that
the cashflow dynamics mean that cash flows out on a case before it flows in.
Historically this meant that as we grew new IVA run-rates we would experience
cash outflows.  Today, given the large bank of contracted supervisory cases, the
impact of growth on cashflows is substantially outweighed by supervisory income.



Advertising cost per new IVA



     -        Average cost per new IVA has reduced by 36% this year to £807.



Over the last year we have benefited from media buying deals, which have allowed
us to increase our advertising spend, whilst improving our margins.  Our new TV
creative launched in late 2005 has significantly increased our ability to
generate IVA leads.



In addition, we have focused on improving conversions, which allow us to
increase our new IVA run-rate without incurring additional advertising spend.
We anticipate that significant gains will be made in this area in the months
ahead.



Increased operational efficiency



Operational efficiency has improved significantly.  This is perhaps best
demonstrated by the fact that although total employee numbers have grown, annual
turnover per employee has increased to £90K (an increase of 32%).  More
importantly, Adjusted PBT per employee has increased to £28K (an increase of
87%).



Insights into a rapidly growing market



Last year we confidently predicted organic growth in the year ahead.  This year
that message has not changed.



This market originally emerged against a long term backdrop of benign economic
conditions.  Low interest rates and full employment, combined with readily
available credit and a buoyant housing market resulted in consumer spending
running well ahead of wage inflation.  This increased spending was fuelled by
debt.



Whilst the debate continues with regard to exactly how many over-indebted
consumers are struggling with significant debts, nobody can be in any doubt that
the total is in excess of a million people.  However, this number is set to grow
further.



Today, the growth in consumption continues to exceed the growth in earnings as
does the growth in debt levels.  Falling interest rates have kept many
over-indebted consumers afloat so far, but interest rates are now moving in the
wrong direction from their perspective.



Meanwhile the supply side of the marketplace continues to evolve.  However,
whilst many companies have moved towards being a multi-product supplier, we
strongly believe that only Debt Free Direct can truly claim to be a 'Best Advice
Company'.



Fee charging debt management companies are already in long-term decline, whilst
consolidation loan advertising spend has peaked and is now falling.  This has
prompted more and more over-indebted consumers to move towards the IVA as the
most appropriate solution to their problem.



This is evidenced by the growth in the IVA market.  Numbers doubled in 2005 and
are set to do so again in 2006.  However, this only represents 'the tip of the
iceberg' and we believe that IVA numbers will continue to grow.  We would in
particular point towards the following:



     -    awareness of the IVA will grow through advertising.  Our
          penetration of the market is set to treble over the forthcoming year.

     -    the USA continues to show the way.  The US debt market developed 
          earlier than the UK and evidence there would suggest that, even
          accounting for recent growth, the IVA market will more than treble.

     -    recent public opinion surveys suggest that the public will demand it.



We strongly believe that as a 'Best Advice Company', Debt Free Direct is well
placed to prosper in the years ahead.  We are 'Regulation Ready' and our
long-term investment in IT means we can demonstrate scalability of the model.



Whilst we are delighted to have already grown our market share to in excess of
20% we do not believe that represents the limit of our potential.





Current trading and prospects



It is clear from the above analysis of the market that IVA providers have yet to
deliver anywhere near the number of IVAs that are needed by over-indebted
consumers.



The challenge, as it has been since we started, is threefold:



     -      find consumers who need IVAs in ever-increasing numbers
     -      build our capacity to deliver best advice and IVAs in
            ever-increasing numbers
     -      do both the above in a cost-effective way so as to deliver maximum
            profit to shareholders



In October we will move into new premises in Chorley, which combined with our
recent expansion into Northern Ireland will mean that we can expand capacity
significantly in the forthcoming year.



Notwithstanding the above, the potential exists to build upon our successful
model.  We expect that the existing market will grow and that the potential
exists to maximise further the market opportunities.  We expect to develop new
routes to market (albeit strategic advertising will always remain at our core).



Furthermore, we anticipate that there will be opportunities to explore new
markets beyond the confines of the UK market.  In particular we are excited
about the prospect of launching Debt Free Direct Australia later this calendar
year.



However, we are as ever mindful of shareholder value.  When we make any move it
will only be when we consider that the time and opportunity is right.



A Redmond

Chief Executive Officer

26 June 2006





CONSOLIDATED PROFIT AND LOSS ACCOUNT

YEAR ENDED 30 APRIL 2006


                                                            Year         Year
                                                           ended        ended
                                                        30 April     30 April
                                                              06           05
                                          Note                 £            £

TURNOVER                                              16,230,184    8,422,063

Cost of sales                                         (3,937,504)  (2,389,519)
                                                     
GROSS PROFIT                                          12,292,680    6,032,544

Administrative expenses
Goodwill amortisation                                   (311,737)    (311,920)
Other administrative expenses                         (7,434,486)  (4,165,676)
                                                      (7,746,223)  (4,477,596)

OPERATING PROFIT                                       4,546,457    1,554,948

Interest receivable                                      288,796       72,275
Interest payable and similar charges                     (15,769)     (83,972)
                                                    
PROFIT ON ORDINARY ACTIVITIES                         
BEFORE TAXATION                                        4,819,484    1,543,251

Tax on profit on ordinary activities         1        (1,553,265)    (564,815)

PROFIT ON ORDINARY ACTIVITIES                          3,266,219      978,436
                                                      
Dividends                                               (557,988)           -
                                                      
RETAINED PROFIT FOR THE YEAR                           2,708,231      978,436
                                                      
Earnings per share - basic                   2             8.79p        3.04p
Earnings per share - diluted                 2             8.55p        2.97p



The group has no recognised gains or losses other than the results for the year
as set out above. All of the activities of the group are classed as continuing.





CONSOLIDATED BALANCE SHEET

30 APRIL 2006

                                                            2006           2005
                                                 £             £              £
FIXED ASSETS
Intangible assets                                      1,942,193      2,250,584
Tangible assets                                          927,837        736,848
                                                       2,870,030      2,987,432
CURRENT ASSETS
Debtors (including £1,389,647 due       11,964,511                    6,668,952
after more than one year (2004:
£940,697))
Cash at bank                             5,366,634                    6,782,385
                                        17,331,145                   13,451,337

CREDITORS: Amounts falling due within   (2,558,890)                  (1,555,822)
one year

NET CURRENT ASSETS                                    14,772,255     11,895,515
                                                        
TOTAL ASSETS LESS CURRENT LIABILITIES                 17,642,285     14,882,947

CREDITORS: Amounts falling due after                     
more than one year                                       (25,202)       (73,119)

PROVISION FOR LIABILITIES AND CHARGES                          -
Deferred Tax                                             (20,561)
Other provisions                                         (18,000)       (64,164)
                                                      
                                                       17,578,522    14,745,664
                                                    
CAPITAL AND RESERVES
Called-up equity share capital                            373,294       369,492
Share premium account                                  13,576,979    13,456,154
Profit and loss account                                 3,628,249       920,018
                                                     
SHAREHOLDERS' FUNDS                                    17,578,522    14,745,664
                                                     




CONSOLIDATED CASH FLOW STATEMENT

YEAR ENDED 30 APRIL 2006
                                                             Year         Year
                                                         ended 30     ended 30
                                                            April   April 2005
                                                             2006
                                                                £            £
NET CASH INFLOW FROM OPERATING ACTIVITIES                 565,162   (1,617,260)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received                              288,796                  72,275
Interest paid                                     (575)                (93,381)
Interest element of finance lease rental       (10,896)                 (9,813)
payments

NET CASH INFLOW FROM RETURNS ON                           277,325      (30,919)
INVESTMENTS AND SERVICING OF FINANCE

TAXATION                                               (1,201,778)


CAPITAL EXPENDITURE
Payments to acquire tangible fixed assets     (481,256)               (248,021)
Payments to acquire intangible fixed assets     (4,085)                 (4,855)

NET CASH OUTFLOW FROM CAPITAL EXPENDITURE                (485,341)    (252,876)

ACQUISITIONS

Acquisition of DFD Limited preference shares              (68,462)     (34,821)
                                                         (557,988)           -

EQUITY DIVIDENDS PAID

CASH OUTFLOW BEFORE FINANCING                          (1,471,082)  (1,935,876)

FINANCING
Issue of ordinary share capital                           124,627    8,520,000
Issue costs charged to the share premium account                -     (200,209)
Capital element of finance lease rental payments          (69,295)     (61,599)
Repayment of loans                                              -     (711,106)

NET CASH INFLOW FROM FINANCING                             55,332    7,547,086

DECREASE IN CASH                                       (1,415,750)   5,611,208
                                                     


RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES

                                                      Year ended  Year ended
                                                       30 Apr 06   30 Apr 05
                                                                           £

Operating profit                                       4,546,457   1,554,948
Amortisation                                             312,476     311,920
Depreciation                                             288,785     160,076
Loss on disposal of fixed assets                           1,483           -
Increase in debtors                                  (5,305,718) (4,069,121)
Increase in creditors                                    721,679     424,917

Net cash inflow from operating activities                565,162 (1,617,260)




YEAR ENDED 30 APRIL 2006

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS



                                                      Year ended  Year ended
                                                       30 Apr 06   30 Apr 05
                                                               £           £
Decrease in cash in the period                        (1,415,750)  5,611,208
Cash outflow from repayment of loans                           -     711,106
Cash outflow from decrease in lease financing             69,295      61,599

Change in net debt resulting from cash flows          (1,346,455)  6,383,913
                                     
New hire purchase agreement                                   -      (84,413)
                                                      

Change in net funds                                   (1,346,455)  6,299,500

Net funds at 30 April 2005                             6,639,107     339,607
Net funds at 30 April 2006                             5,292,652   6,639,107
                                                        





NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 30 APRIL 2006



1.         TAX ON PROFIT ON ORDINARY ACTIVITIES


                                                   Year ended Year ended
                                                    30 Apr 06  30 Apr 05
                                                            £          £

Current tax:

UK Corporation tax based on the results for the      
period at 30%                                        1,522,545      522,779
Deferred taxation charge
- origination and reversal of timing differences        30,720       42,036
                                                   
  Total tax charge                                   1,553,265      564,815
                                                   



2.          EARNINGS PER SHARE


The calculation of basic earnings per share is based on the profit of £3,266,219
(2005: £978,436) and a weighted average number of ordinary shares in issue
during the period of 37,143,181 (2005: 32,182,064). The calculation of diluted
earnings per share is based on the profit of £3,266,219 (2005: £978,436) and a
diluted weighted average number of ordinary shares of 38,185,719 (2005:
33,741,364).


3.          STATUS OF FINANCIAL INFORMATION


The financial information set out in this report does not constitute the
company's statutory accounts for the year ended 30 April 2006, but is derived
from those accounts. Statutory accounts for the year ended 30 April 2006 will be
delivered to the Registrar of Companies shortly. The auditors have reported on
the statutory accounts for the year ended 30 April 2006 and their opinion was
unqualified for these financial statements.

END



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