Trading Statement

Debt Free Direct Group PLC
01 November 2005


1 November 2005


                              DEBT FREE DIRECT GROUP PLC

                                   TRADING UPDATE

                      NEW IVA CASE RUN-RATE TREBLES YEAR ON YEAR


Debt Free Direct Group (DFD), the leading debt advice and solutions company,
today releases a trading update ahead of its interim results announcement, which
will be made during the week commencing 28 November 2005.

Highlights
     
•    106% increase in turnover, compared to prior period
•    Year on year market in new IVAs doubles.
•    Year on year DFD's annualized new IVA case run-rate trebles.
•    Advertising cost per IVA fell by 30 per cent in the 6 months to 31 October 
     2005.
•    Anticipated profits for the full year comfortably in line with market 
     expectations.


Andrew Redmond, Chief Executive Officer, commented:

'We are delighted to have significantly grown our market share in this rapidly
expanding market and anticipate that the gap between us and the competition will
widen further in the months ahead.  We are well positioned to grow faster than
other IVA providers as a result of our long term investment in people and
readily scalable systems.

The current weakness of the unsecured debt market will be exacerbated by
impending economic triggers, such as the weak housing market and the prospect of
interest rate rises as inflation continues to creep upwards.  For increasing
numbers of consumers the 'party is over' and the 'debt hangover' has arrived.

The IVA market grew by 41 per cent in 2004 and it is abundantly clear that new
IVA growth in 2005 will eclipse that rate.'


Turnover and labour resources

Turnover in the first half of the financial year grew by 106 per cent, compared
to the same period last year.

                                                                 Average monthly               Employee
                                                                 turnover                      numbers
                                                                 £K                            (period end)

-     6 months to 31 October 2003                                309                           57
-     6 months to 30 April 2004                                  392                           88
-     6 months to 31 October 2004                                515                           117
-     6 months to 30 April 2005                                  888                           153
-     6 months to 31 October 2005                                1059                          165


Employee numbers grew by 41 per cent during the same period.  This reflects the
investment in resources made, particularly in the second half of the financial
year ended April 2005.   This is demonstrated by only 8 per cent growth in
employee numbers in the six months to October 2005.


New IVA case run-rate

Debt Free Direct's run-rate trends have continued to increase in the first half
of the financial year, as shown below:
                                                                          New IVAs monthly case run-rate
                                                                  Joint cases = 1         Joint cases = 2

-        6 months to 31 October 2003                              72                      96
-        6 months to 30 April 2004                                95                      130
-        6 months to 31 October 2004                              110                     147
-        6 months to 30 April 2005                                208                     285
-        6 months to 31 October 2005                              266                     365


Moreover, in the quarter ended October, the total new IVA run-rate was 346 / 475
per month, which is ahead of market expectations.

Consequently, the annualised new IVA run-rate has increased to 4152 / 5700 from
3036 / 4212 in April 2005 and 1320 / 1764 in October 2004.

Overall, the annualised new IVA case run-rate has more than trebled in the 12
months to 31 October 2005.  This compares with a doubling in the IVA market
since December 2004.  Clearly, Debt Free Direct continues to outperform the
growth in the market as a whole.

Further to our trading update, released on 3 October 2005, the above figures
include outsourced cases.  At present, Debt Free Direct receives a fee for work
carried out prior to referral, whilst the case itself is registered in the name
of the IVA provider's Insolvency Practitioners.


Market update

The total number of IVAs registered in the UK market continues to grow apace.
Commentators are now predicting that by September 2005 the annualised new IVA
run-rate will have more than doubled when compared with 2004.

As previously announced, these predictions do not surprise us, given
     
(a)  increased awareness of the IVA brought about by the advertising of DFD and 
     others;
     
(b)  signals from the market in the United States (US).  The proportion of 
     individuals entering into the US equivalent of the IVA is now approximately 
     4 times greater than the proportionate number per capita of people
     entering into IVAs in the UK.

These signals are supported by research recently published by Capital Economics.
They conclude that households are 'bowing under the pressure of their £1
trillion debt mountain' and that a significant potential problem lies with
unsecured debt arrears and anticipate a resultant doubling of bankruptcies by
2008.

Advertising cost per new IVA

Further to our trading update of 3 October, we continue to benefit from media
buying deals secured over the past year, which have allowed us to increase our
advertising spend, whilst maintaining our margins.

In the six months to 31 October 2005 our advertising cost per new IVA reduced
from £1,252 in the year ended 30 April 2005 to £877, a reduction of 30 per cent.

The above includes the impact of the outsourced cases but excludes the impact of
counting joint cases as two.  On that basis, the respective costs would be £922
for the year ended 30 April 2005 and £638 for the six months to October 2005.


Current trading and prospects

The impact of the investment in resources made in the second half of the
financial year ended April 2005, combined with the tangible benefits in
advertising costs per new IVA, are now being seen.

Meanwhile, our new IVA case run-rates continue to grow as the market size
increases

We are very confident, as a result, that the above will translate into profits
comfortably in line with expectations for the full year.  We look forward to
providing more detail at the time of our interim results announcement.


Enquiries:

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

Teather & Greenwood                                                020 7426 9000
Mark Dickenson
Jon Drage

Financial Dynamics                                                 020 7831 3113
Ed Gascoigne-Pees
Dominick Peasley



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 basis 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