Home credit firm reports strong start to the year
A West Yorkshire credit provider has reported a 4.3% rise in the credit it issued during the first half of 2018, which it said was due to new market opportunities and a demand for its cashless card product.
Batley-based Morses Club, the UK’s second largest home collected credit lender, this morning issued a trading update for the 26-week period to 25 August 2018.
The listed business said it had performed strongly in the period, with trading in line with the Board’s expectations. Total credit issued increased by 4.3% to £85.7m compared to the same period last year (H1 2018: 25% to £82.2m). Cash collections were up 11.9% (H1 2018: 12.7%).
Demand for the Morses Club Card, its cashless lending product, has continued to be strong, with in excess of 27,000 customers holding over £13.1m of loan balances on cards. This is a rise from 11,000 customers and £4.6m of loan balances during the first half of the last financial year. It said its Dot Dot Loans continued to develop, providing useful customer insights and learnings.
Total customer numbers of 229,000 at 25 August 2018 have remained largely stable and the gross loan book has increased by 6.1% (H1 2018: 12%).
The proportion of loans attributable to the highest tier of customers remains steady, which Morses Club said reflected the continued focus on the quality of the loan book due to the company’s “prudent credit policy” and the success of the investment in territory builds in the prior financial year.
Morses Club took on a significantly higher number of territory builds in FY 2018 as a result of a unique market opportunity which arose at that time. These new agents and managers have been successfully integrated into the business. Territory builds are now operating at a more normalised level in the period, said the firm.
The firm has been able to take advantage of the difficulties of West Yorkshire rival, Provident Financial. Bradford-based Provident last year issued profit warnings, saw its share price tumble and is undergoing an FCA investigation.
Paul Smith, chief executive of Morses Club, said: “We are pleased with our first half performance as we have delivered high quality growth in our core HCC loan book, whilst remaining focused on good customer outcomes. We have been working hard on implementing best-in-class operational controls and streamlining our lending process, whilst ensuring we always put our customers first.
“We are encouraged by the continued demand for the Morses Club Card, which is fundamental to our cashless strategy and offers our customers the flexibility they have asked for. We are confident in our outlook for the rest of the current year and remain positive on opportunities in both the HCC and wider non-standard finance markets.”
