Trading Statement

Debt Free Direct Group PLC
11 November 2004

11 November 2004



                            Debt Free Direct Group Plc

                                 Trading Update


Debt Free Direct Group Plc, the consumer debt advice and solutions company,
today releases a trading update ahead of its interim results announcement, which
will be during the week commencing 10th January 2005.





The market



The board are increasingly confident that the scale of the consumer debt problem
is significantly greater than we previously estimated.  We have recently
commissioned independent research and, as a result, our assessment of the size
of both the existing market and the potential future market has once again had
to be revised upwards.  This assessment allows for our view that interest rates
are probably near to, or at the top of, their cycle.



With regard to the existing market, the research shows that rising interest
rates have already taken their toll, as 865,000 people have considered (or are
considering) bankruptcy as an option.



One in three people is concerned about the impact of rising interest rates on
their ability to pay off debts.  This is not surprising given that 9% (4.8
million people) spend more than they earn on a regular basis and 5% (2.5 million
people) do so every month.  Therefore, we anticipate that the number of
over-indebted consumers requiring our services in the future will increase
substantially.





Regulatory change



In July 2004 we reported our belief that regulatory change was on the horizon.



Since then, The Insolvency Service has established that a review of the
Individual Voluntary Arrangement (IVA) is appropriate, particularly in the area
of 'consumer debtors'.  As a result, we were delighted to hear the news that the
Government (through The Insolvency Service) has subsequently set up an IVA
Working Group to fully examine this area.  We were equally delighted to have
been invited to participate in that Working Group.





Working towards meeting the demand



The Group has continued to make good progress at an operational level.



We have enjoyed considerable success in securing media buying deals at less than
forecast costs.  The benefits of this will be felt over the forthcoming year.
In particular, these savings will allow us to increase our advertising spend in
the more expensive, high volume, media areas whilst maintaining our margins.



We will therefore be well positioned to grow the business at a faster rate than
previously anticipated.



At the time of the placing (1 October 2003) we announced our ambition to
considerably expand our operating capacity, notably with the recruitment of
significant numbers of new people.



In recent months the emphasis has been on the recruitment of sufficient numbers
of call handling and IVA processing staff.  Whilst the pace of recruitment has
initially proven to be slower than hoped, we have now recruited more staff than
was originally envisaged.  We believe that this will allow us to achieve our
target number of cases for the year.  Furthermore, it will mean that we are in a
stronger position moving into the next financial year than previously
anticipated.



Current trading and prospects



We believe that the initial recruitment delays followed by later increased
capacity will not significantly impact the full year results.



Sales for the six months to October 2004 are approximately 63% up on the
corresponding period last year.



We remain confident that the Group's performance will be in line with brokers'
forecasts for the current financial year ending April 2005.





Enquiries



Debt Free Direct
Andrew Redmond (CEO)                             01257 240599
Paul Latham (FD)                                 01257 240529



Citigate Dewe Rogerson                           0207 638 9571
Michael Berkeley
Sarah Gestetner
Fiona Mulcahy





Note to Editors



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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange