Morses Club plc (LON:MCL) is the topic of conversation when Mark Thomas Analyst at Hardman & Co joins DirectorsTalk. Mark explains why he has called his report ‘Value-added, customer-driven expansion from core’, the importance of company strategy being formulated by customers, what Morses Club is expanding into and the size of opportunity for the company.
Morses Club is an established non-standard financial services provider, consisting of Morses Club, the UK’s second largest home collected credit provider, and Shelby Finance, which operates online lending through its Dot Dot brand and U Holdings Limited, which provides online current accounts.
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 million1 people using the services of UK HCC lenders.
The HCC division is the second largest UK Home Collected Credit (HCC) lender with 224,000 customers and 1,817 agents across 92 locations throughout the UK. The majority of the Company’s customers are repeat borrowers and the HCC division enjoys consistently high customer satisfaction scores of 97%2. In April 2016 its cashless lending product Morses Club Card was introduced, enabling its customers to buy online as well as on the high street. In February 2019, the Company introduced an online customer portal for its HCC customers, which now has over 30,000 registered customers.
Shelby Finance, via the Dot Dot brand has 36,000 active customers and U Holdings, through the U Account online current account brand has 16,000 customers. Dot Dot is a provider of 3 – 12 month online loans in the non-standard credit market.