Morses tries to capitalise on struggles at rival Provident
Morses Club
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16:50 10/02/23
Doorstop lender Morses Club enjoyed a "strong" first-half performance as it grew sales thanks to a "significant increase" in its territory coverage amid the troubles at rival Provident Financial, though it failed to improve the bottom line.
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The second largest lender of its sort in Britain, Morses said on Thursday that its practice of "capitalising on market opportunities" boosted its number of agents, customer base, loan book and revenues.revenue 14.8% to £54.2m
Paul Smith, chief executive of Morses, said, "Our strong first-half performance demonstrates the success of our credit policy and emphasis on high-quality lending, as well as our ability to capitalise on market opportunities to increase our customer base."
The AIM-listed firm's loan book shot up 16% to £65.2m as its customer numbers expanded 12.6% to 233,000, thanks in no small part to its main competitor, Provident Financial, which had previously issued a profit warning in August before losing its chief executive as a result of a failed attempt at reorganising its agent system, struggling to keep its head above water.
Provident, which historically have relied on self-employed debt collectors to conduct regular house calls to collect payments, announced that it would be replacing its 4,500 independently contracted collections agents and replacing them with 2,500 full-time staff, which led to a drive in recruitment and morale, bringing about lower collection levels, and a decrease in new business.
While impairment charges were slightly higher, Morses said the figure was "within our target range and reflecting our growth plans."
However, despite the double-digit revenue growth, Morses' adjusted pre-tax profit rose just £100,000 to £8.7m, with adjusted earnings per share sitting unchanged at 5.3p each.
As of 0845 BST, shares had dropped 2.32% to 145.55p.