Morses Club in-home collections fall year-to-date

Subprime lender Morses Club said on Thursday that cash collections had fallen in the first four months of the year but noted that collection rates have improved in recent weeks as the group lowered the amount of credit being issued.

Morses said that in-home collected credit issued so far this year was 34% ahead of its Covid-19 plan, corresponding to a year-on-year decline of 46.6%.

However, the AIM-listed firm highlighted an "improving sales performance" over recent months, with the reduced level of credit being issued turning a 72% year-on-year fall in April 2020 to a 50% decline in May and a 30% fall in June.

Morses Club also noted that cash collections within its home credit unit had decreased at a 19.8% year-on-year clip, with improving collection rates being offset by a smaller loan book. Cash collections were 21.2% ahead of guidance at 91% of normal June levels.

All the same, the company did caution that headwinds in the home credit sector were expected to continue.

Chief executive Paul Smith said: "We have worked hard to protect our businesses and our customers, leveraging the strong digital infrastructure we have at our disposal to continue to support our customers.

"As a result of this, the group has traded profitably during the first four months of the financial year and we remain in a robust financial position."

As of 1005 BST, Morses shares had shot up 14.67% to 59.86p.