This is why doorstep lender Morses Club plans to create more jobs around Leeds

Doorstep lender Morses Club said it aims to create more jobs in Yorkshire after delivering a 'strong" financial performance over the first half year.
Paul Smith, the chief executive of Morses ClubPaul Smith, the chief executive of Morses Club
Paul Smith, the chief executive of Morses Club

Paul Smith, the chief executive of Morses Club, also said that the firm expected to make further acquisitions over the next 18 months.

He added: "I am actively talking to other home collected credit businesses as we speak."

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Birstall-based Morses Club is a non-standard financial services provider, consisting of Morses Club, the UK's second largest home collected credit (HCC) provider, and Shelby Finance, which operates online lending through its Dot Dot brand and U Holdings Limited, which provides online current accounts.

Mr Smith also confirmed that Morses planned to create around 30 jobs in the Leeds area over the next year.

Mr Smith said: "The period has seen continued strong financial performance in our core HCC business and significant developments in our diversification strategy. Our core HCC business remains one of the best in the sector and good progress has been made with our technology platform to enhance the customer/agent experience in HCC, as well as develop our product strategy, with clear adherence to our regulatory obligations.

"Our fundamental approach is to develop all our business segments in response to what our customers tell us, and how they respond to our service offering. Whilst the HCC model is still a strong and highly relevant product, as our customers evolve, so must we.

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"We have introduced a customer portal in the period, which already has over 30,000 registered customers, actively using the functionality to pay online, request further credit and access other offers. .

"Our digital division continues to go through a significant period of change, whilst our HCC division continues to deliver excellent results. The continued commitment, loyalty and work from all our teams, self-employed agents, suppliers and stakeholders is testament to our customer-centric culture and belief in our strategy".

In a statement, Morses club said: "The first half of the year has been an intensive period for the group with significant acquisition and integration activity, as well as embedding the impact of further regulatory change for the HCC sector.

"In addition, we have made significant savings on territory build subsidies as the movement of agents has returned to a more normalised state. As a result of this period of heightened activity, our volume of credit issued, loan book revenues and customer numbers have all increased."

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The first half of this year has seen the company's revenue increase by 15.4 per cent to £66.3m largely as a result of the acquisition of the two digital businesses. Total credit issued rose by 5.7 per cent to £91.0m, although credit issued in HCC is broadly flat.

Agent numbers in HCC have slightly reduced to 1,817 from 1,942, the company said.

The statement added: "This is due to consolidation of some smaller loan books, rather than agent churn. Vacancy rates are less than 2.5 per cent."

"Although operating costs have slightly increased during the period as a result of the intense period of acquisitions, which has impacted on overall Group profit, it is envisaged that these will revert to more normalised levels, as the digital division begins to increase its targeted revenue."

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Analysts from finnCap said: "Morses Club’s result for the six months to August 31 confirmed the group’s strong position to both build on its strength in the HCC market and ultimately benefit from the changes in customer behaviour by broadening the product range and acquiring further HCC loan books.

"The results showed strong progress in the digital offering, with close to 14 per cent of HCC customers now signed up for the customer portal launched earlier this year, but also indicated that the level of investment needed to follow the changes in customer behaviour is significant, and will have a near-term negative impact on profitability. The level of investment needed in the industry is, however, also likely to result in more acquisition opportunities as other HCC lenders are unable to make the needed investment."