MCL.L Regulatory News (MCL)

27 November 2018

Morses Club PLC

Expansion of Loan Facility

Morses Club PLC ("the Company", "Morses Club" or "the Group"), the UK's second largest home collected credit ("HCC") lender, is pleased to announce that it has increased its revolving credit facility (the "RCF") from £40m to £50m. Morses Club is delighted to welcome a new partner to its funding syndicate, with half of the new of funding being provided by a highly regarded financing provider, and one of the UK's leading high street lenders extending its existing funding to provide a further £5m.

The Group has also agreed a further £5m mezzanine facility (the "Mezzanine") with the potential to increase this to £15m if required. The RCF expiry remains unchanged at August 2020, with the Mezzanine expiring in February 2021.

The extension of the Group's funding supports the growth strategy of the business, providing certainty of long-term funding. It will enable Morses Club to continue to grow and take advantage of the consolidation that it expects to see in the market following recent regulatory changes.

The Company was advised in this process by the EY Financial Services Corporate Finance Team.

Paul Smith, Chief Executive Officer of Morses Club, commented:

"We are delighted to have introduced another well-respected financial institution to our funding partners. The extension to our debt facilities will enable us to invest further in the growth of the business and finance exciting acquisition opportunities, as we continue to expand our product offering to address the evolving needs of our customers."

For further information

 Notes to Editors

About Morses Club

Morses Club is the second largest UK Home Collected Credit (HCC) lender with 230,000 customers and 1,942 agents across 98 locations throughout the UK.

The Company offers a range of loan products to its customers through its extensive self-employed agent network. The majority of the Company's borrowers are repeat customers and the Company enjoys consistently high customer satisfaction with scores of 95% or above1.

The Company is using technology to broaden its offering and provide new products to ensure customers can access credit with the flexibility they require. In April 2016, its cashless lending product, the Morses Club Card, was introduced, enabling its customers to buy online as well as on the high street. Dot Dot Loans, the Company's first online instalment product, was launched in March 2017.

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 consumers2.

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.

Since February 2014, unsecured personal lending has grown from £161 billion to £209 billion in February 20183.

1 Independent Customer Satisfaction Survey conducted by Mustard2 FCA High Cost Credit Review Technical Annex 1: CRA data analysis of UK personal debt - July 20173 Source: Table J Bank of England Money & Credit Report February 2018

About UK Home Collected Credit

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 million2 people using the services of UK HCC lenders.

2 High Cost Credit Review ANNEX 1 - July 2017