‘Robust’ finances at listed home credit provider
Birstall-based lender Morses Club says it has adapted to the changes inflicted by the pandemic, with over 109,000 customers now registered for its online customer portal compared with about 78,000 at the end of FY20.
In its trading update for the period since 29 February 2020, the firm says reduced lending volumes largely as a result of a temporary pause in lending to new Home Collected Credit (HCC) customers were partially offset by higher quality lending to existing customers.
The company has also reviewed its property portfolio, as employees who had previously been based at these premises continue to successfully work from home.
Morses Club says it has not furloughed any staff and has not accepted any other Government assistance.
And having secured an extension of its revolving credit facility until the end of November 2021, the business says it remains in a strong financial position.
Its update adds: “The company has remained focused on collections and has limited discretionary expenditure, while reduced lending levels have supported the Group’s cash flow.
“The company’s borrowing has reduced to £12m compared to Morses Club’s Covid-19 budget of £18.5m and £23m as at the same date last year.
“This puts the company in a strong position to take advantage of any increase in market demand as a result of the current economic outlook and the likelihood that it will result in an increase in the size of the non-standard finance market.
“The company can confirm that it has traded profitably in the first four months of the current financial year.”
Paul Smith, CEO of Morses Club, said: “During this period, we have made structural changes to the business and accelerated the Group’s digitalisation strategy, the importance of which has become even more pronounced since the lockdown in March.
“In this regard, it has been pleasing to see an increase in demand for our digital products as the division comprises an ever more important part of the Group.
“We are encouraged by the improvement in credit issued and collections in HCC following the relaxation of the Government’s Covid-19 restrictions over recent weeks.
“And in a sign of the improving trading environment, we are also pleased to see some customers who requested payment holidays now starting to make repayments once again.”