Morses Club PLC Trading update and notice of interim results (3575P)
31 August 2017 - 4:01PM
UK Regulatory
TIDMMCL
RNS Number : 3575P
Morses Club PLC
31 August 2017
31 August 2017
Morses Club PLC
Trading update and notice of interim results
Morses Club PLC ("the Company"), the UK's second largest home
collected credit lender, provides the following trading update for
the 26-week period to 26 August 2017.
Trading performance for the period has continued to be strong.
Total credit issued increased by 25% to GBP82.2m compared to the
same period last year (H1 2017: 16% to GBP66.0m), reflecting the
significant increase in territory builds. Impairment for the period
is expected to remain within the Company's target range.
Notwithstanding the up-front costs of the investment in territory
builds and infrastructure during the first half of the year,
overall, business performance is in line with expectations.
Customer numbers increased substantially by 12% to approximately
233,000 as at 26 August 2017, driven by territory builds and
organic growth (H1 2017: 2.4%).
The gross loan book also increased by 12% (H1 2017: flat) with
the average customer balance unchanged. We continue to improve the
quality of the customer base with the proportion of loans
attributable to the Company's highest tier customers increasing by
7% compared to 27 August 2016. This reflects the continued success
of the Company's credit policy which focuses on higher quality
lending.
The territory builds in progress to date are performing ahead of
management's expectations set at the beginning of the year, and it
is anticipated that this increased level of investment will not
have an adverse impact on earnings expectations in FY18. The
Company anticipates that the new loan facility announced on 18
August 2017 will lead to over 400 new agent territory builds in the
current financial year.
The Company continues to make good progress on the development
of its digital platform to provide innovative new services and
products for its customers. Morses Club Card, the Company's
cashless lending product continues its organic growth with Dot Dot
Loans, its first online instalment product launched in March 2017,
continuing in its market test phase.
Notice of Interim Results and dividend
Morses Club will be announcing its interim results for the
26-week period ended 26 August 2017 on Thursday, 5 October 2017. It
will also declare its dividend (to be paid in Q1 2018) on that
date.
Paul Smith, Chief Executive Officer of Morses Club, said:
"We are delighted with all aspects of the progress of the
business, reflecting the fact that we have capitalised on market
conditions, whilst developing our strategy of product
diversification. As the second largest lender in this market, we
believe that our growth is based on a solid foundation of listening
to our customers and adapting to their needs. Our depth of
operational experience is central to our customer service model
which consistently delivers customer satisfaction levels of 95% or
more.
"We continue to focus on a strong technology platform to
underpin the core business, which also means that we can utilise
this expertise across our strategic growth initiatives. Our aim is
to build new product streams carefully over time, so that they have
solid foundations, rather than quick-fire initiatives.
For further information
Morses Club PLC Tel: +44 (0) 330
Paul Smith, Chief Executive 045 0719
Officer
Andy Thomson, Chief Financial
Officer
Panmure Gordon (UK) Limited Tel: +44 (0) 20
(Nomad and Joint Broker) 7886 2500
Richard Gray / Fabien Holler
/ Atholl Tweedie (Corporate
Finance)
Charles Leigh-Pemberton (Corporate
Broking)
finnCap Tel: +44 (0) 20
Jonny Franklin-Adams / Emily 7220 0500
Watts / Anthony Adams (Corporate
Finance)
Tim Redfern / Richard Chambers
(Corporate Broking)
Camarco Tel: +44 (0) 20
Ed Gascoigne-Pees 3757 4984
Jennifer Renwick
Kimberley Taylor
Notes to Editors
About Morses Club
Morses Club is the second largest UK Home Collected Credit
lender with 233,000 customers and 2,124 agents (as at 26 August
2017) across 98 locations throughout the UK.
The Company offers a range of loan products to its customers
through its extensive agent network. The majority of the Company's
borrowers are repeat customers and the Company enjoys consistently
high customer satisfaction scores of 95 per cent or above.
The Company is using technology to broaden its offering and
provide new products to ensure customers can access credit with the
flexibility they require. In April 2016, its cashless lending
product, the Morses Club Card, was introduced, enabling its
customers to buy online as well as on the high street. Dot Dot
Loans, the Company's first online instalment product, was launched
in March 2017.
Morses Club successfully listed on AIM in May 2016.
About the UK non-standard credit market
The UK non-standard credit market, of which UK HCC is a subset,
consists of both secured and unsecured lending and is estimated to
comprise around 12 million consumers.
Non-standard credit is the provision of secured and unsecured
credit to consumers other than through mainstream lenders. Lenders
providing non-standard credit principally lend on an unsecured
basis and the market is characterised by high frequency
borrowing.
Since 2009, unsecured personal lending has grown from GBP161
billion to GBP244 billion in 2015.
UK Home Collected Credit
UK HCC is considered to be a specialised segment of the broader
UK non-standard credit market. UK HCC loans are typically small,
unsecured cash loans typically delivered via self-employed agents
directly to customers' homes. Repayments are collected in person
during weekly follow-up visits to customers' homes.
UK HCC is considered to be stable and well-established, with
approximately 3 million people using the services of UK HCC
lenders, of which 1.3 million people borrow regularly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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