(Alliance News) - Doorstep lender Morses Club PLC on Wednesday said both annual customer numbers and the loan book have shrunk, with profit set to significantly miss expectations.
Shares were 28% lower on Wednesday morning in London at 75.52 pence each.
For the 53 weeks to February 29, Batley, Yorkshire-based Morses said the Home Collect Credit division was "very strong" despite sector headwinds. Total credit issued fell 2.4%, however, to GBP174.2 million.
Customer numbers in the division were 4.7% lower at 224,000, while the gross loan book fell 2.4% over the year compared to 7% growth the year before.
"As anticipated, the change in the UK Financial Conduct Authority regulations on the non-solicitation of loans has had a minimal impact on our business, demonstrating the prudent and tight credit controls employed by Morses Club. Impairments are anticipated to be at the lower end of our normal range," said Morses.
The company said it was a "significant" year for the Digital business after several acquisitions. Losses were higher than expected in the year, however, and in its new financial year Morses expects a narrowed loss and breakeven in the second half.
Despite a "robust" overall profit performance in its recently ended year, Morses said adjusted pretax profit will be 18% to 23% below market expectations. The dividend policy will be unchanged, however.
Adjusted pretax profit in its financial year ended February 2019 was GBP22.0 million, 15% up, with the statutory figure rising 26% to GBP20.2 million. It paid an annual dividend of 7.8p for that year, up from 7.0p in financial 2018. At the halfway stage of the current year, Morses paid 2.6p, unchanged.
Morses will be announcing annual results on April 30.
By George Collard; georgecollard@alliancenews.com
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