Debt consultant Fairpoint lost over half its value Tuesday on news it has scrapped the interim dividend and warned that worse than expected full year figures will miss consensus forecasts.

“In the first five months of the trading period a combination of internal and external factors have combined to impact significantly our expectations for full year contribution per lead,” said the firm.

Fairpoint, which predicts EBITDA for the year to 31 December 2008 will be around £4.3m, said the last year has been challenging on two fronts, with reduced fee levels following the agreement reached with creditors in October 2007 and creditor preference for Debt Management Plans.

The company’s share of the Individual Voluntary Agreements (IVA) market has been maintained at 25% in the first quarter, but IVA volumes have fallen 22% year on year.

The closure of the group’s Nottingham call centre and insolvency operations will save £1.4m a year from July, but incur £1.2m of non-recurring exceptional costs.

Meanwhile, the migration into one site at Adlington has hit operational key performance indicators, leading to lower conversion rates.

On a brighter note, the firm said it has tested new product initiatives in the first part of the year with “promising results” that it reckons will bring material benefit in the second half.

Its funding position remains “robust”, with £16m of debt facility available and indications of ongoing support from Royal Bank of Scotland.

Renold chairman Matthew Peacock will become chairman of Fairpoint when Mike Blackburn retires in September.

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