Morses Club latest company results show 17% revenue increase

The UK’s second largest home collected credit Morses Club has announced its preliminary results for the 52 weeks ended 24 February 2018.

Commenting on the results Paul Smith, Chief Executive Officer of Morses Club, said “We are very pleased to report that FY18 was an even stronger year for Morses Club, reflecting our continued success in serving our core HCC market, delivering good customer outcomes and careful implementation of our prudent credit policy.  We have seen 19% growth in our loan book whilst keeping our impairments within our guidance range, testament to our focus on high quality lending.”

“Our advanced digital platform has improved customer experience and streamlined the lending process, reducing our operating cost ratio and enhancing regulatory compliance.  Technology has also enabled us to expand our product offering to provide customers with the flexibility they desire, as well as access a new customer base in the wider non-standard credit market. During the year, we have remained committed to our strategy of growing sustainably and focused on integrating new agents into the business. We are excited for the coming year as we look to further strengthen our core business, whilst also developing our complementary product offering.”

Financial Highlights included:

• • Continued strong performance with revenue up 17.1% to £116.6m (FY17: £99.6m)
  • Adjusted profit before tax increased by 8.5% to £19.2m (FY17: £17.7m); reported profit before tax increased by 44.6% to £16.2m (FY17: £11.2m)
  • Total credit issued increased by 21% to £174.4m (FY17: £144.1m), driven primarily by new territory builds
  • Net loan book growth of 19% to £72.8m (FY17: £61.2m)
  • Impairment as a percentage of revenue for the period was 26.1% (FY17: 24.4%), remaining within our target range
  • A 6% increase in customer numbers to 229,000 (FY17: 216,000)
  • Secured additional funding in August 2017 to increase overall revolving facility from £25m to £40m
  • Adjusted EPS increased by 8% to 11.7p (FY17: 10.8p); Basic EPS increased by 53% to 10.1p (FY17: 6.6p)
  • Proposed final dividend of 4.8p (FY17: 4.3p)

Operational Highlights

• • Recruitment of c. 600 agents and managers during the year, which translated into 463 territory builds in FY18
  • 21,000 Morses Club Card customers, with £10.6m in loan balances (FY17: £3.9m)
  • Technology continues to enhance Morses Club’s offering, improving customer experience, driving efficiencies and productivity gains and supporting diversification into complementary product areas
  • Received full Financial Conduct Authority (“FCA”) authorisation