MCL.L Regulatory News (MCL)

18 August 2017

Morses Club PLC

New £15m 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 the Group has secured the addition of one of the UK's leading high street lenders to its existing loan facility (the "Facility"). Sitting alongside the existing funder, Shawbrook Bank, this has increased the overall revolving facility from £25m to £40m.

The Facility has also been extended from its existing expiry date of March 2019 to August 2020. This will support the growth strategy of the business, providing the certainty of long-term funding and enabling Morses Club to continue its expansion plans, taking advantage of the current opportunities in the market place.

In particular, the funding supports the growth anticipated from the c.550 self-employed agents and managers who have recently joined the Group. As well as strengthening the core business, the Company anticipates that this will lead to over 400 new agent territory builds in the current financial year. The territory builds in progress to date are performing ahead of management's expectations set at the beginning of the year, and it is anticipated that this increased level of activity will not have an adverse impact on earnings expectations in FY18.

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

"We are delighted that two of the UK's leading financial institutions have recognised the strength of our business and will be key financial partners in supporting our growth strategy going forward.

"Our investment in technology has achieved efficiencies and created capacity that has supported significant growth in agent numbers and their successful integration into the business in the first half of this year. This new loan facility will enable us to continue to invest in growth and our product diversification strategy, whilst delivering high quality service to an increasing customer base.

"We remain committed to our view that growth in this sector is based on a deep understanding of the non-standard customer, and delivering the needs of a changing market. We look forward to updating the market further in our Trading Update on 31 August."

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Notes to Editors

About Morses Club

Morses Club is the second largest UK Home Collected Credit lender with 216,000 customers and 1,826 agents (as at 25 February 2017) across 98 locations throughout the UK.

The Company offers a range of loan products to its customers through its extensive agent network. The majority of the Company's borrowers are repeat customers and the Company enjoys consistently high customer satisfaction scores of 95 per cent or above.

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.

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.

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.

Since 2009, unsecured personal lending has grown from £161 billion to £244 billion in 2015.

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 via self-employed agents 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 3 million people using the services of UK HCC lenders, of which 1.8 million people borrow regularly.