Lender reports strong trading despite rise in complaints

Subprime lender, Morses Club, says its Home Collected Credit (HCC) division traded well in the 52-weeks to 26 February 2022, despite an increase in complaints submitted by claims management companies.

In a trading update for this period issued today, the Batley-based business said it has “tightened its criteria” to ensure the quality of its lending is maintained.

Last month, shares in Morses Club slumped by more than 60% after it revealed a profit warning and the immediate departure of its chief executive.

The business, which is headquartered in Nottingham and also has a base in Batley, said its pre-tax profits will be up to 30% lower than expected and Paul Smith, who became chief executive in 2015, has been replaced by the company’s chief operating officer Gary Marshall.

Today, Morses Club says its HCC customer numbers of 143,000 (FY21: 151,000) at the end of the 52-weeks to 26 February 2022 are a strong indicator of consistent demand.

Total credit issued during FY22 was £108.0m, 9% above management’s budgeted plan and marginally lower than the previous year (FY21: £109.7m).

Marshall, chief executive officer, said: “We have traded profitably, with a renewed focus on delivery and enhancing our customer experience. Our digital expertise gives us the ability to adapt to the continued change in customer and regulatory demands in both the Digital and HCC divisions.

“The HCC business has traded strongly, with proven levels of adaptability which we will continue to mould to our customers’ needs over the coming years.”

Following a strategic review of the e-money current account product, U Account, Morses Club says it has decided to withdraw this product from the market “due to significant changes in market conditions.”

The company’s digital lending division saw customer numbers of over 36,500 at the end of the period, an increase of 59% since the end of FY21.

Total credit issued for the period was £41.2m (FY21: £19.3m), a 113% increase. The gross loan book was £23.9m, an increase of 98% (FY21: £12.1m).

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