Doorstep lender Morses Club has reported a strong half year performance and said it expects to benefit from consolidation as regulatory changes force smaller players out of the market.
The Birstall-based company, which is the UK’s second largest home collected credit lender after Provident Financial, reported a 6 per cent rise in revenue to £57.5m in the six months to August 25.
Morses Club CEO Paul Smith said he expects smaller players could be forced out of the market because many of them still use paper to do business rather than digitally.
“Smaller players are still very paper-centric, which is prone to mistakes and omissions,” he said.
“The FCA has a mantra - if you can’t prove something happened, it didn’t happen.”
The group said it had reaped the success of last year’s territory builds.
In addition to consolidation as smaller players are forced out of the market, the group expects to broaden its customer base as it offers customers a greater choice of products to suit their needs going forward.
Mr Smith said: “Whilst the traditional home collected credit product remains at our core, we continue to recognise that the needs of our customers are evolving, and we are making good progress in developing our digital offering.“
Morses Club is looking at longer term, higher value loans for a different demographic.
“These are people with a salaried income, earning £35,000 a year and they own their own homes,” said Mr Smith.
“They have some form of impairment on their credit.”
The group will also launch a full service account which will give customers a debit card. The account will be launched between March and July next year under a new brand name.
Mr Smith said: “Our proven ability to successfully integrate territory builds and the progress we are making in developing new products for our customers gives us confidence in the outlook for the full year.”
On a like for like, pro forma basis, revenue rose 12 per cent.
The group said customer numbers remain stable at 230,000, down from 233,000 in the same period last year.
The firm said 27,000 live Morses Club Cards were issued, with loan balances of over £13.1m.
Adjusted pre-tax profit rose 20.6 per cent to £10.5m.