Doorstep lender Morses Club is to launch a new online brand to tap into the growing demand for web loans.
The Birstall-based firm, which floated on AIM five months ago, is the UK’s second largest doorstep lender after Bradford-based Provident Financial. It said there are nine million users in the non standard credit market that it is keen to tap into.
Paul Smith, CEO of Morses Club, said: "It won't be a payday loan. It will be an online installment loan. It's for tech savvy customers. We get 110,000 hits to the web and of these, 75 per cent are looking for an online loan and 82 per cent are hits from a mobile phone."
He was speaking as the group announced an 8 per cent rise in revenue to £47m in the six months to August 27.
The loan book grew 5 per cent to £56.2m and impairments as a percentage of revenue was 22.5 cent, up on the previous year's 18.3 per cent, but at the lower end of the group's target range. Morses Club said this reflected its policy to focus on higher quality lending.
The firm saw a 2.1 per cent increase in customer numbers to over 207,000.
Adjusted pre-tax profit fell to £8.6m from £8.8m.
The group said it has issued over 5,000 Morses Club Cards (Visa pre-paid cards) exceeding its target for the year within the first six months of launch.
"Morse Club Cards are like a pay-as-you go mobile phone," said Mr Smith.
"Customers use it to shop on Amazon, eBay and Argos online. Some people use it to book flights. With discount flight operators you have to use a card online."
The group is planning to launch a new scheme to send card holders money-off vouchers before Christmas.
The firm said the credit market it operates in is largely unaffected by the macro-economic climate so it is not worried about a Brexit fall out.
"If Brexit has a negative impact, it will leave our customers unaffected," said Mr Smith.
Andy Thomson, chief financial officer, said: "If unemployment increases, it's an opportunity for us. An employed steel worker is not one of our customers, an unemployed one is."
Analyst Donald Tait at Panmure said: "A strong top line performance was driven by 5 per cent growth in the loan book and 2.1 per cent increase in customer numbers year on year.
"Despite this growth, impairments are at the low end of the guided range as management continues to focus on high quality customers, and not sacrifice credit standards for growth.
"New products are gaining plenty of traction with the Club Card performing ahead of management expectations and the soft launch of an online lending brand due in the fourth quarter of this year."