(Alliance News) - Morses Club PLC on Thursday said profit fell by a third in the first half, despite reporting a rise in revenue and net loan book growth.
In the 27 weeks to August 31, the doorstep lender had a 33% year-on-year fall in pretax profit to GBP6.7 million from GBP10.0 million. The firm reported a 58% rise in administrative expenses to GBP29.5 million from GBP18.7 million and GBP3.0 million in non-recurring costs, against none last year.
On an adjusted basis, pretax profit was down by 8.6% to GBP9.6 million from GBP10.5 million.
Revenue increased by 15% to GBP66.3 million from GBP57.5 million from last year, and the lender's net loan book grew by 6.2% to GBP72.2 million from GBP68.0 million.
Morses Club held its interim dividend of 2.60 pence per share.
The lender operates its core home collected credit division, and also provides online instalment loans from its subsidiaries Shelby Finance Ltd and U Holdings Ltd.
In its Home Collect Credit unit, revenue rose by 3.8% year-on-year to GBP59.4 million from GBP57.2 million. Morses Club reported that net loan book in this segment grew by 0.4% to GBP68.2 million from GBP67.9 million.
In Digital Lending, revenue leapt to GBP6.9 million from GBP300,000. The unit's net loan book jumped to GBP4.0 million from GBP100,000.
The digital segment incurred GBP2.1 million of non-recurring expenses, Morses explained. The firm said GBP900,000 was related to restructuring costs and GBP1.2 million was due to the write-off of interest from loans in the CURO Transatlantic Ltd book. In February, Morses Club acquired CURO, which traded as WageDayAdvance, for GBP8.5 million.
Chief Executive Paul Smith said: "The period has seen continued strong financial performance in our core Home Collect Credit business and significant developments in our diversification strategy. Our digital division continues to go through a significant period of change, whilst our Home Collect Credit division continues to deliver excellent results."
Morses added that it is confident about its full-year outlook, with Home Collect Credit trading remaining in line with internal expectations, and further progress in the Digital Lending planned for the remainder of the financial year.
Shares in the company were 7.4% lower at 106.52 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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