Repcol shares plunge on loss forecast

Shares in Subiaco-based debt collection agency Repcol Ltd have nose-dived over 46 per cent in today's trade after the company announced that it expects to report an estimated loss of between $7 million and $9 million for the six months ending 31 December 2006.

At market close, Repcol shares were down 15 cents to 17 cents.

Repcol also announced that its chief operating officer Scott Linklater has resigned from the company.

In a statement to the ASX, the company said that after management and structural changes, the second half should yield a significant improvement in performance with an estimated profit of between $2 million and $4 million for the second half.

Repcol noted that the estimated loss for the first half was before estimated restructuring costs of $0.8 million to $1.1 million and potential impairment of intangible assets of up to $3 million.

"During the first half, the company has experienced an increase in operating costs relating to the collection of debt by Australian based resources and a decline in the valuation of ledgers principally located in the Brisbane office," the company said.

Repcol advised that to counter this decline in financial performance, the company has set about restructuring its activities with an increased dependence on its lower cost operation in Bangalore, India.

"Targeted rehabilitation strategies have already been introduced to restore value to those ledgers adversely impacted in the first half," the company said.

"The improved financial performance expected in the second half of the 2007 financial year will reflect this restructure."

Repcol advised that cash generated from operations for the year is expected to be in the range of $12 million to $14 million.

The directos, following feedback from shareholders, have withdrawn the special resolution to be put forward at its AGM relating to the change of its name from Repcol Ltd to Byond Global Ltd.
In September, Repcol announced a net profit after tax of $9.7 million for year ended 30 June 2006, 46.1 per cent above the previous year, during a period which included the acquisition of its debt purchasing associate Javelin SPV1 Pty Ltd.