Morses Club upbeat ahead of preliminary results

Home collected credit lender Morses Club updated the marker on its trading for the 52-week period to 25 February on Thursday, ahead of its preliminary results announcement, due on 27 April.

The AIM-traded company said trading performance for the period continued to show strong growth and was in line with the board's expectations.

Total credit issued increased by 18% to £144m compared with the prior year, with customer numbers increasing by 9% to 216,000 as at 25 February.

The board said that increase reflected the success of new territory builds and acquisitions in the company’s core home collect credit market.

Morses Club’s gross loan book was up over 4% compared with 27 February 2016, and the proportion of loans attributable to highest tier customers increased 10% against last year, which the board claimed demonstrated the company's focus on higher quality lending.

It said it expected to report impairments comfortably in line with its guidance range.

The company acquired Shelby Finance, a provider of online instalment loans, in January 2017, and was finalising plans for the launch of its new online instalment lending product

That purchase marked the next step in the company's strategy of developing digital products to expand its core offering and target a wider range of customers across the UK non-standard credit market, according to the board’s statement.

“We are pleased with our continued growth and performance for the year, with progress achieved against all of our key metrics,” said chief executive Paul Smith.

“We have continued to invest in technology to support our strategic plan to offer customers a broader range of products and the ability to access credit more flexibly.

“On top of the successful introduction of the Morses Club Card in April 2016, we are finalising the launch of our new online instalment loan product.”

Smith said the company was investing to streamline processes and reduce costs, further demonstrating its commitment to develop technology to keep the firm at the forefront of its core HCC market and broaden its offer to the wider non-standard consumer finance sector.

“We have a number of developments planned for the coming year as part of our expansion into consumer rewards, interactive and mobility-based customer communications channels, social media and banking and card-related services.

“We remain confident in our outlook, with a strong pipeline of territory builds for our growth plan, and continue to see attractive acquisition opportunities in the HCC and the wider non-standard finance markets.”