(Alliance News) - Morses Club PLC on Friday reported plummeting full-year revenue and profit but believes the pandemic has transitioned it towards being a "more complete financial services provider".
For the year ended February 27, the doorstep lender recorded pretax profit of GBP456,000, down sharply from GBP11.5 million the year before.
Revenue shrunk 25% year-on-year to GBP100.2 million, from GBP133.7 million in 2020.
Morses attributed the poor financial performance to the impact of Covid-19 on demand and its inability to lend to new home collect credit customers during the first 5 months of its financial year. Home collect credit issued dropped 37% year-on-year to GBP109.7 million from GBP174.2 million, which reflected lower demand due to lockdowns and stricter lending criteria, Morses explained.
Morses ended the period with a net loan book of GBP53.5 million, compared to GBP72.8 million the year before. Total credit issued fell 32% to GBP129.0 million from GBP190.3 million.
Despite a challenging year, Morses said the pandemic had forced it to innovate and focus on its digital offering, with credit issued to digital customers up 20% to GBP19.3 million.
The firm said it expects year-on-year growth in the second half of the year calendar year, partly driven by growth from its digital division.
"The last twelve months have been truly transformative for Morses Club," commented Chief Executive Paul Smith.
"The Covid-19 pandemic forced us to innovate and accelerate our digital strategy, reconfiguring our operating model to allow us to maintain customer contact and collection activity whilst generating new lending opportunities and transitioning towards being a more complete financial services provider.
"The group performed resiliently and profitably, despite not being able to lend to new HCC customers for five months of the year."
The firm proposed a final dividend of 2.0 pence, compared to the 1.0p distribution paid out the year before, taking its total dividend to 3.0p down from 3.6p the year before.
Shares in Morses Club were up 3.9% in London on Thursday at 62.35 pence each.
By Will Paige; willpaige@alliancenews.com
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