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RNS Number : 9598H
Morses Club PLC
30 March 2020
30 March 2020
Morses Club PLC
Update re COVID-19
Morses Club PLC ("Morses Club", the "Company" or the "Group"),
an established provider of non-standard financial services,
provides an update in relation to the Group's response to COVID-19.
The Company continues to assess the impact of the current situation
on the business, proactively adapting its activities in line with
Government advice, with the health and wellbeing of its customers,
employees and agents central to the changes made.
The business has quickly introduced wide-ranging adaptations to
its operating model, to ensure that customer service is maintained.
This includes all operational field management and agents now
working from home and face-to-face customer visits replaced with a
remote customer communication strategy. Morses Club is maximising
the usage of its existing technology platform and payment methods
to ensure that customer contact and collection activity can be
maintained. Over 82,000 customers are now registered for the online
customer portal, and the Company offers a range of remote payment
methods, through which 41% of all collections were already
completed remotely. Customer response to paying remotely has been
very strong since the impact of COVID-19, with all agents and field
managers now focused on collections and engaging with our customers
through the comprehensive technology already in use across the
business.
As a business, our focus will always be on lending responsibly
and conservatively, putting the customer first. Therefore, at this
stage, we are no longer extending credit to new customers. Our
normal adherence to Treating Customers Fairly principles and
forbearance continues. We are actively working on further
adaptations to the model, in line with our regulatory
permissions.
Over 50% of our customers are in receipt of state benefits or
pension earnings and a significant proportion of our customer base
is self-employed. The recent Government announcements regarding
grants for the self-employed, and maintenance of 80% of earnings
for employees who may become furloughed workers, are expected to
help our customers to maintain levels of income.
Morses Club remains in a robust overall financial position, and
positive negotiations continue with existing funding providers.
Cash flows are being supported by the temporary cessation of home
collected credit loans, significant tightening of online lending
decisions, cutting discretionary expenditure and the increased
focus on collections.
The Board recognises the difficulty in fully assessing the
long-term macroeconomic impact of COVID-19 on the business and
therefore considers it prudent to withdraw its financial guidance
for FY21. In full consideration of all relevant circumstances, the
Board will not recommend payment of a dividend in July and will
review the capacity to make a payment at the appropriate time later
in the year, once the impact of COVID-19 on Morses Club's business
has become clearer.
The proposed date for the release of our final results for the
period ended 29 February 2020 is currently under review with our
auditors. Our results, which we had intended to announce on the 30
April 2020, will now be published at a later date due to the
backlog of work facing all auditors as a result of changes to
corporate reporting due to COVID-19. We will update the market on
the revised proposed date when we have clarity from our auditors on
timing.
For further information please contact:
Morses Club PLC Tel: +44 (0) 330
Paul Smith, Chief Executive Officer 045 0719
Andy Thomson, Interim Chief Financial
Officer
finnCap Ltd (Nomad and Joint Broker) Tel: +44 (0) 20
Jonny Franklin-Adams / Giles Rolls (Corporate 7220 0500
Finance)
Tim Redfern / Richard Chambers (ECM)
Peel Hunt (Joint Broker) Tel: +44 (0) 20
Andrew Buchanan / Rishi Shah / Duncan 7418 8900
Littlejohns (Corporate)
Jock Maxwell Macdonald (ECM)
Camarco Tel: +44 (0) 20
Jennifer Renwick / Kimberley Taylor 3757 4994
Notes to Editors
About Morses Club
Morses Club is an established non-standard financial services
provider, consisting of Morses Club, the UK's second largest home
collected credit ("HCC") provider, and Shelby Finance Limited which
operates online lending through its Dot Dot brand and online
e-money current accounts through its U Account brand.
UK HCC is considered to be a specialised segment of the broader
UK non-standard credit market. UK HCC loans are typically small,
unsecured cash loans delivered directly to customers' homes.
Repayments are collected in person during weekly follow-up visits
to customers' homes. UK HCC is considered to be stable and
well-established, with approximately 1.6 million (1) people using
the services of UK HCC lenders.
The HCC division is the second largest UK Home Collected Credit
(HCC) lender with 224,000 customers and 1,695 agents across 90
locations throughout the UK. The majority of the Company's
customers are repeat borrowers and the HCC division enjoys
consistently high customer satisfaction scores of 97% (2) . In
April 2016, its cashless lending product Morses Club Card was
introduced, enabling its customers to buy online as well as on the
high street. In February 2019, the Company introduced an online
customer portal for its HCC customers, which now has over 78,000
registered customers.
Shelby Finance, via the Dot Dot brand, has 37,000 active
customers and via the U Account brand, has c.18,000 customers using
the online e-money product. Dot Dot is a provider of 3 - 9 month
short-term online loans and 18 - 48 month online loans in the
non-standard credit market.
Morses Club successfully listed on AIM in May 2016.
About the UK non-standard credit market
The UK non-standard credit market, of which UK HCC is a subset,
consists of both secured and unsecured lending and is estimated to
comprise around 10 million consumers (3) and total loan receivables
of GBP10.7bn (4) .
Non-standard credit is the provision of secured and unsecured
credit to consumers other than through mainstream lenders. Lenders
providing non-standard credit principally lend on an unsecured
basis and the market is characterised by high frequency borrowing.
Approximately 2 million people move annually between standard and
non-standard markets (4) .
Since February 2014, unsecured personal lending has grown from
GBP161 billion to GBP216 billion in February 2019 (5) .
(1 High Cost Credit Review ANNEX 1 - July 2017 2 Independent
Customer Satisfaction Survey conducted by Mustard 3 FCA High Cost
Credit Review Technical Annex 1: CRA data analysis of UK personal
debt - July 2017 4 Apex Insight - Non-Prime Consumer Credit: UK
Market Insight Report - September 2019 5 Table A5.2, Bank of
England Money and Credit Bank stats February 2019)
This announcement constitutes inside information for the
purposes of article 7 of the Market Abuse Regulation (EU) No
596/2014.
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END
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