Morses Club set for growth in post Brexit world
Paul Smith, CEO of Morses Club, said: "The UK home collected credit sector is well established and, as the second largest lender in this market, we believe we are well placed to grow as the uncertainty caused by the outcome of the EU referendum is likely to cause mainstream lenders to tighten their underwriting criteria further."
The Birstall-based firm, which floated on AIM four months ago, is the UK’s second largest doorstep lender after Bradford-based Provident Financial, which was promoted to the FTSE 100 recently.
Morses Club issued £66m in credit in the six months to August 27, up 16 per cent on the previous year. The increase in lending followed geographic expansion, strategic growth initiatives and acquisitions.
The group said impairment was in line with the lower end of the company’s target range.
“The momentum in the business continues following our recent successful IPO, and demonstrates the resilience of our business model in challenging economic environments," said Mr Smith.
"We look forward to declaring our maiden dividend at our first results since IPO."
Customer numbers rose by 2.4 per cent to 208,000.
The gross loan book remained level with last year, although the share coming from highest tier customers increased by 6 per cent following a focus on higher quality lending.
The firm said it is making make good progress on the development of its digital platform to provide new services and products for its customers.
Analyst Donald Tait at Panmure Gordon said: "This is a very positive update, with credit issued increasing 16 per cent, customer numbers increasing 2.4 per cent, and management guiding that impairments will be at the lower end of expectations.
"We reiterate our belief that Morses Club's business model ensures it will be a consistent performer in the current uncertain macro environment."
The company said it will announce interim results for the six months to August 27 on October 6 and said it will also declare its maiden dividend then,
Morses Club has around 1,840 agents across 100 locations throughout the UK.
It traces its history back over 130 years and was originally established as a drapery store and retail business. Two years ago it merged with Shopacheck, the doorstep lender formerly owned by Cattles.
The firm said significant investment in IT has resulted in a platform that can meet the challenge of future growth opportunities.
The current pipeline of new products include the Morses Club Card, Remote Collect & Lend, Banking-Lite, Online Lending and Mobile.