Interim Results

Debt Free Direct Group PLC
11 January 2005


11 JANUARY 2005



                           DEBT FREE DIRECT GROUP PLC
               INTERIM RESULTS FOR SIX MONTHS ENDED 31 OCTOBER 2004


            Strong Pre-Christmas Trading, Turnover For Period Up 66%


Debt Free Direct Group PLC, the leading debt advice and solutions company,
announces its results for the six months ended 31 October 2004.



Results Highlights :


•   Sales for the six months to October 2004 are up 66% to £3.09 million
    compared to £1.86 million in the corresponding period to October 2003.


•   The above growth in turnover reflects a continuing trend, which can be
    demonstrated as follows:

                                Average monthly    Employee          New IVA
                                     Turnover       numbers      Annualised case
                                        £        (period end)       run rate

-     5 months to 30 April 2003      211,650         51                699
-     6 months to 31 October 2003    309,472         57                870
-     6 months to 30 April 2004      392,280         88               1140
-     6 months to 31 October 2004    514,901        117               1320


•   Gross profit margin on advertising has been maintained at 65%, which
    is consistent with previous periods.

•   As demonstrated above, overheads and, in particular, employee numbers
    have increased significantly to expand our operating capacity and facilitate
    future growth.  This has had a short-term impact on EBITDA during their 
    initial training period.

•   Financial performance is in line with management expectations, with
    EBITDA profit of £251,169 and loss before tax of £8,496.

•   Net assets were £5.4m at 31 October 2004.


Whilst we remain confident that the monthly case run-rate by the end of our
financial year will exceed our previous expectations, it remains too soon to
predict whether that excess run-rate will be achieved early enough to compensate
fully in the current financial year for the investment in future growth made in
both the first and second half year.



Chief Executive's Report:


Current trading and prospects


•   Strong trading in the pre-Christmas period saw the trend growth in
    turnover continue, with monthly turnover for both November and December 
    being in excess of £600,000 (and new IVA annualised case run rate had grown 
    to 1764).

•   We previously announced our ambition to considerably expand our operating 
    capacity, notably with the recruitment of significant numbers of new
    employees.

    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 had initially proven to be slower than hoped, we have now 
    recruited more staff than originally envisaged, to enable us to achieve our 
    target number of cases for the year and continue to increase the pace of 
    growth in the business.  Total employee numbers now stand at 128.

    Consequently, this means that we will be in a stronger position moving into 
    the next financial year than previously anticipated.


The market

•   As we said in our trading update, released on 11 November 2004:

    'The board is increasingly confident that the scale of the consumer debt 
    problem is significantly greater than 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'.

This view was expressed in November 2004 and has been substantiated by our call
volumes for early January, which have generated 'qualifying responses' (for
IVAs), which are up 95% on the same period last year.  Therefore, we confidently
anticipate that the number of over-indebted consumers requiring our services in
the future will increase substantially.


Growing our business

•   As stated above, the increase in staff means that we are now in a stronger 
    position to meet the anticipated increase in demand.

•   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 continue our growth 
    through increased advertising spend in the more expensive, high volume
    media areas, whilst still maintaining our overall gross margin.

•   We have agreed bank facilities sufficient to fund the Company's
    anticipated future growth.

•   Additional premises (5,000 square feet) have been taken on, sufficient to 
    accommodate the IVA case supervisory team requirements for the foreseeable
    future.  Furthermore, this will free up space in our existing premises to 
    better accommodate future growth in call handling and IVA processing staff.


A Redmond
Chief Executive Officer
11 January 2004


Grenville Folwell, Chairman said:

'I am delighted that the Group has continued to make successful progress during
the six months to 31 October 2004.

The Group is well placed to exploit its distinct position in a dynamic market.
By providing best advice to our target sector and by maintaining our high
ethical and regulated standards, we aim to become the most respected provider of
advice and appropriate solutions to over-indebted consumers in a rapidly
expanding marketplace.'




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 process 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.


DEBT FREE DIRECT GROUP PLC

CONSOLIDATED PROFIT AND LOSS ACCOUNT

PERIOD FROM 1 MAY 2004 TO 31 OCTOBER 2004
                                                    Period from 1     Period from     Period from 1     Year from 1
                                                    May 04 to 31      1 Nov 03 to     May 03 to 31      May 03 to 30
                                                        Oct 04          30 Apr 04         Oct 03            Apr 04

                                                         £'000            £'000            £'000            £'000

Turnover                                                 3,089           2,354             1,857            4,211
Cost of Sales                                          (1,076)           (847)             (590)          (1,437)


GROSS PROFIT                                             2,013           1,507             1,267            2,774

Administrative expenses                                (1,762)         (1,317)             (949)          (2,266)


EBITA                                                      251             190               318              508

Depreciation                                              (77)            (69)              (26)             (96)
Goodwill amortisation                                    (157)           (160)             (152)            (312)


OPERATING PROFITS                                           17            (39)               140              100

Interest receivable                                         14              35                 7               43
Interest payable and similar charges                      (40)            (43)              (36)             (79)


(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE                (9)            (47)               111               64
TAXATION

Tax on (loss)/Profit on ordinary activities               (45)             (8)                 0              (8)


(LOSS)/PROFIT FOR THE FINANCIAL PERIOD                    (54)            (55)               111             (56)


(Loss)/Profit per share - basic and diluted             -0.17p          -0.23p             0.47p            0.21p



The group has no recognized gains or losses other than the results for the
period as set out above.

All of the activities of the group are classed as continuing.




DEBT FREE DIRECT GROUP PLC

CONSOLIDATED BALANCE SHEET

AS AT 31 OCTOBER 2004
                                                  As at 31 Oct                     As at 31 Oct     As at 30 Apr
                                                            04                               03               04
                                                          £000                             £000             £000
FIXED ASSETS

Intangible assets                                        2,400                            2,639            2,558
Tangible assets                                            602                              207              564


                                                         3,002                            2,846            3,122

CURRENT ASSETS
Debtors                                                  3,753                            1,641            2,642
Cash at bank                                             (182)                            3,682            1,171


                                                         3,571                            5,323            3,813

CREDITORS: Amounts falling due within one year         (1,044)                          (1,717)          (1,330)


NET CURRENT ASSETS                                       2,527                            3,606            2,483

CREDITORS: Amounts falling due after more than            
one year                                                  (42)                            (156)             (64)

PROVISION FOR LIABILITIES AND CHARGE                      (94)                          (1,988)             (94)


                                                         5,393                            4,308            5,447


CAPITAL AND RESERVES                                       309                              289              309
Called-up equity share capital                           5,196                            4,023            5,196
Share premium account                                    (112)                              (4)             (58)
Profit and loss account

SHAREHOLDERS' FUNDS                                      5,393                            4,308            5,447







DEBT FREE DIRECT GROUP PLC

CONSOLIDATED CASH FLOW STATEMENT

PERIOD FROM 1 MAY 2004 TO 31 OCTOBER 2004
                                                     Period from                       Period from      Year from 1
                                                     1 May 04 to                       1 May 03 to      May 03 to 30
                                                      31 Oct 04                         31 Oct 03       Apr 04 £'000
                                                        £'000                             £'000

NET CASH FLOW FROM OPERATING ACTIVITIES                (1,168)                             (37)            (764)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE

Interest received                                           14                                7               43
Interest paid                                             (35)                             (36)             (85)
Interest element of finance lease rental payments          (4)                                0              (9)


NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND          
SERVICING OF FINANCE                                      (25)                             (29)             (51)
                                                                                           

CAPITAL EXPENDITURE

Payments to acquire tangible fixed assets                 (87)                             (22)            (318)


NET CASH OUTFLOW FROM CAPITAL EXPENDITURE                 (87)                             (22)            (318)

ACQUISITIONS

Acquisition of DFD Limited preference shares and             
loan notes                                                   0                                0          (1,360)


NET CASH (OUTFLOW) / INFLOW FROM ACQUISITIONS                0                                0          (1,360)

NET CASH OUTFLOW BEFORE FINANCING                      (1,280)                             (87)          (2,493)

FINANCING

Issue of equity share capital                                0                            3,850            3,850
Professional costs charged to the share premium              
account                                                      0                            (162)            (188)
Capital element of finance lease rental payments          (28)                            (162)            (188)
Repayments of loans                                          0                                0             (33)


NET CASH INFLOW FROM FINANCING                            (28)                            3,688            3,583


(DECREASE)/INCREASE IN CASH                            (1,308)                            3,601            1,090



RECONCILIATION OF OPERATING PROFIT TO NET
CASHOUTFLOW FROM OPERATING ACTIVITIES

Operating profit                                            17                              140              100
Amortisation                                               157                              152              312
Depreciation                                                77                               26               96
Increase in debtors                                    (1,111)                            (387)          (1,396)
Increase in creditors                                    (308)                               32              124


Net cash outflow from operating activities             (1,168)                             (37)            (764)


RECONCILIATION OF NET CASH FLOW

(Decrease)/Increase in cash in the period              (1,308)                            3,601            1,090
Hire purchase agreements acquired with subsidiary                                                              0


                                                       (1,308)                            3,601            1,090





DEBT FREE DIRECT GROUP PLC
CONSOLIDATED ACCOUNTS FOR THE PERIOD FROM 1 MAY 2004 TO 31 OCTOBER 2004


NOTES


1. EARNINGS PER SHARE

The earnings per share has been calculated using the loss for the financial
period and a weighted average number of ordinary shares in issue during the six
month period to 31 October 2004 of 30,949,200 (23,790,308 for the period ended
31 October 2003 and 26,744,493 for the year ended 30 April 2004).


2. COMPARATIVE FIGURES

The comparative figures represent the 6 month periods to 30 April 2004 and 31
October 2003 and the year from 1 May 2003 to 30 April 2004.


3. STATUS OF FINANCIAL INFORMATION

The accounts of the Group for the six months to 31 October 2004 were approved by
the Board on 7 January 2005.

The interim financial statements have not been audited and do not constitute
statutory accounts as defined under s.240 of the Companies Act 1985.


The interim financial statements have been prepared in accordance with
applicable accounting standards and are consistent with those adopted and
disclosed in the Group's statutory accounts for the year ended 30 April 2004.
Those accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.


4. DISTRIBUTION OF THE INTERIM REPORT

Copies of the Interim Report are being sent to shareholders.  Further copies of
the Interim and Annual Report and Accounts may be obtained from the Company's
Registered Office, Cloth Hall Court, Infirmary Street, Leeds.  In addition, an
electronic version will be available on the Company's website,

www.debtfreedirect.co.uk




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