Morses Club proposes to re-list as U Money

16th August 2021

Sub-prime lender Morses Club announced that it is proposing a significant reorganisation of its business and corporate structure. which includes forming a holding company called U Money and listing new shares under that name.

The company says once U Money is formed it will run its company as two distinct businesses, one its home-collected credit operations under the Morses Club name, and the other its digital lending unit as Shelby Finance. These will operate through separate operating subsidiaries of U Money – HCC through Morses Club and Digital through Shelby Finance Ltd under the brands Dot Dot Loans for online lending and U Account for online e-money current accounts.

The company says that recent acceleration of its digital transformation, as a result of changes to market conditions and customer needs due to the pandemic, means it must change its structure to better facilitate the development of its digital strategy.

In its latest results, the company said that the Group continues to perform in line with expectations and demand has steadily increased across all lending products in both the HCCand Digital divisions. The company has continued to make progress towards offering its customers a more complete suite of financial services and products to suit market demand. Customer satisfaction for the HCC division remains high at 98%.

Customer numbers in the digital division for short-term and long-term lending products have increased by 80% since the beginning of the financial year and the customer base now stands at over 42,000. The average product mix continues to move towards longer term loans, with loan book growth at 158% from the year end. This increase in lending volumes has not resulted in a deterioration in credit quality, with collections performance in-line with management’s budgeted plan. New credit issued is 34% higher than budget. The significant increase in both demand and volume for longer and shorter-term digital lending products has led to the lengthening of the maturity profile of the loan book. The impairment range for the digital division in H1 will increase due to the IFRS9 requirement to take forward-looking provisions at the outset of the loan period.

Paul Smith, Chief Executive Officer of Morses Club, said “Our expanded offering in the Digital division along with the continued strong performance in our HCC division is encouraging. Our recently announced proposed corporate restructure is all part of our long-term plans to grow and differentiate our products and services to meet customer demand.”

“The Group’s significant experience in the sector and its commitment to providing best in class HCC and digital products will enable us to take advantage of changes in the market and further strengthen our position as a leading provider of non-standard financial services products in the UK.”