Morses Club PLC , the UK’s second largest home collected credit lender, has announced its latest results in the period to 26 August 2017. The results have shown that 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%).
Total credit issued increased by 25% to £82.2m compared to the same period last year (H1 2017: 16% to £66.0m), 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.
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.
Morses Club 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.
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.”