Trading update

5 September 2019

Morses Club PLC

Trading update

Morses Club PLC ("Morses Club" or the "Company"), the UK's second largest home collected credit lender, provides the following trading update for the 27-week period to 31 August 2019. (Please note that the prior year comparison is a 26-week period).

The Company has performed well in the period with strong progress on the development of our product diversification strategy. Trading conditions in our core HCC market remain in line with the Board's expectations, with total credit issued remaining broadly at the same level when compared to H1 2019 at £85.5m (H1 2019: £85.7m). Cash collections were up 5% compared to H1 2019 (H1 2019: 11.9%), and impairments expected to remain within the Company's IFRS 9 guidance range. Consistent with previous years, our results are expected to be fairly evenly split between each half, with the usual slight seasonal uplift in H2.

Total customer numbers of 224,000 at 31 August 2019 have remained largely stable (H1 2019: 229,000), with the gross loan book also remaining stable with 0.2% growth (H1 2019: 6.1% growth). 

Morses Club also continues to make good progress with the broadening of its digital product offering. Gary Marshall, the recently appointed COO of Shelby Finance Limited, is focused on the successful integration of CURO Transatlantic Limited and U Holdings Limited as part of the development of the digital product strategy enabling the Group to offer banking style services with various credit services attached. The introduction of a wider range of digital products will enable Morses Club to capture a larger share of the non-standard credit market and retain more of the customer base as it evolves in parallel with HCC.

Morses Club was delighted to welcome Andrew Hayward to the Company as CFO in July. Andrew brings significant technological and digital payments expertise which will be invaluable as Morses Club continues to expand its product offering.

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

"We are pleased by the performance of the business over the period. Morses Club continues to make strong progress on the development of our product diversification strategy, tailored for our customers across the non-standard credit market. We are fully engaged with ensuring that we effectively consolidate our new acquisitions into the Group in line with our principles of financial prudence and excellent customer service. We are fully committed to developing a wider portfolio of products in line with the changing credit needs of our customers and the wider market.

"We successfully launched our new customer portal earlier in the year, and now have c. 27k customers in Morses Club who can access their account details digitally, whilst still having the face-to-face service from an agent we have always provided.

"The Company is trading in line with expectations and we look forward to the second half of the year with confidence."

Notice of Interim Results

Morses Club will be announcing its interim results for the 27-week period ended 31 August 2019 on Thursday 10 October 2019.

This announcement constitutes inside information for the purposes of article 7 of the Market Abuse Regulation (EU) No 596/2014.

For further information

Notes to Editors

About Morses Club

Morses Club is the second largest UK Home Collected Credit (HCC) lender with 224,000 customers and over 1,900 agents across 95 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 97% 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 £216 billion in February 20193.

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 A5.2, Bank of England Money and Credit Bank stats February 2019

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