# Morses Club leverage its digital expertise servicing customers remotely

- Link: https://www.directorstalkinterviews.com/morses-club-leverage-its-digital-expertise-servicing-customers-remotely/412949154
- Published: 2020-12-18T07:17:43+00:00
- Author: Giles

**[Morses Club](https://www.directorstalkinterviews.com/company/morses-club-plc/mcl.l)
PLC** ([LON:MCL](https://www.directorstalkinterviews.com/company/morses-club-plc/mcl.l)),
an established provider of non-standard financial services, has announced its interim
results for the 26 weeks ended 29 August 2020. 

**Operational Highlights:**

·    Rapid and comprehensive response to Covid-19, leveraging existing digital technology
and expertise

·  Reconfiguration of lending, collecting and operating processes to ensure the 
safety of customers, employees and agents

·    Remote lending to existing HCC customers recommenced just three weeks after
March lockdown, in strict accordance with government guidance

·    Focus on quality of lending which gives confidence in future repayment levels

·    Remote lending to new HCC customers launched in July 2020

·    Very positive customer response to digital HCC offering

·    Significant progress in the development of a new loan management platform, 
now in final test phase to go live in December

·    Customer satisfaction maintained at 97%

·    Over 117,000 customers registered for customer portal as at 29 August 2020,
rising to 124,000 currently (H1 FY20: nil)

·  New service agreement with Modulr will provide enhanced products and services
for U Account customers, due from early Spring 2021

·    No staff furloughed nor any Government debt or other support packages applied
for

·    Total Group customer numbers: 205,000 (H1 FY20: 276,000)

**Financial Highlights:**

·    Revenue decreased by 24.3% to £50.2m (H1 FY20: £66.3m)

·    Total credit issued to all customers of £60.2m (H1 FY20: £91.0m)

·    Total credit issued to HCC customers was 40.2% lower at £51.1m (H1 FY20: £85.5m)

·    Net loan book of £55.6m, reduced 23.0% (H1 FY20: £72.2m)

·    Adjusted profit before tax^(1) of £2.3m (H1 FY20: £9.6m)

·    Statutory profit before tax of £0.8m (H1 FY20: £6.7m)

·    Adjusted HCC profit before tax^(1) of £6.8m, a decrease of 48.1% (H1 FY20: 
£13.1m)

·    Statutory HCC profit before tax of £5.6m, a decrease of 52.1% (H1 FY20: £11.7m)

·    Adjusted loss before tax^(1) in Digital division of (£4.5m) as a result of 
enhancing scale and capability of recent acquisitions (H1 FY20: (£3.5m))

·    Statutory loss before tax in Digital division (£4.8m) (H1 FY20: (£5.0m))

·    Impairment as a percentage of revenue^(1) for the period 23.5% (H1 FY20: 19.0%)

·    Adjusted return on assets^(1) of 9.9% (H1 FY20: 24.0%)

·    Adjusted EPS^(1) of 0.6p (H1 FY20: 5.9p)

·    Statutory EPS of 0.5p (H1 FY20: 4.1p)

·    Proposed interim dividend of 1.0p pence per share (H1 FY20: 2.6p)

_1. Definitions are set out in the Glossary of Alternative Performance Measures 
on page 35_

**Alternative Performance Measures & Key Performance Indicators**

| **Key performance indicators**  | 26-week period ended 29 August 2020 | 27-week period ended 31 August 2019 | % +/- | 
|   |   |   |   | 
| Revenue | £50.2m | £66.3m | (24.3%) | 
| Net Loan Book | £55.6m | £72.2m | (23.0%) | 
| Adjusted Profit Before Tax^(1) | £2.3m | £9.6m | (76.0%) | 
| Statutory Profit Before Tax | £0.8m | £6.7m | (88.1%) | 
| Adjusted Earnings per share^(1) | 0.6p | 5.9p | (89.8%) | 
| Statutory Earnings per Share | 0.5p | 4.1p | (87.8%) | 
| Cost / Income ratio | 67.5% | 63.9% | (5.6%) | 
| Return on Assets | 7.0% | 19.1% | (63.4%) | 
| Adjusted Return on Assets^(1) | 9.9% | 24.0% | (58.8%) | 
| Return on Equity | 9.5% | 22.6% | (58.0%) | 
| Adjusted Return on Equity^(1) | 13.4% | 28.4% | (52.8%) | 
| Tangible Equity / average receivables^(1) | 74.2% | 84.5% | (12.2%) | 
| No of customers (000’s) | 205 | 276 | (25.7%) | 
| Number of agents | 1,584 | 1,817 | (12.8%) | 
| Credit Issued | £60.2m | £91.0m | (33.8%) | 
| Impairment as % of Revenue^(1) | 23.5% | 19.0% | (23.7%) |

_1. Definitions are set out in the Glossary of Alternative Performance Measures 
on page 35_

> **Paul Smith, Chief Executive Officer of Morses Club, commented:**
> “In response to the Covid-19 pandemic, Morses Club responded decisively, leveraging
> its digital expertise and capabilities to accelerate its strategy of servicing
> customers remotely.
> “Within just three weeks of lockdown in March, we recommenced lending to existing
> HCC customers and launched digital lending to new HCC customers in July 2020. 
> Credit issued and collections in the HCC division were inevitably impacted by 
> the loss of face-to-face interaction, but customers responded very positively 
> to our remote HCC lending product with c. 65% of loans now being delivered through
> bank transfer. The acceleration of the digitalisation of our business can only
> serve to improve choice and flexibility for our customers, employees and agents.
> “Our Digital division continues to make strong progress. In August, we announced
> a new strategic relationship with Modulr, which will enable us to offer services
> not typically available outside of mainstream banking providers. The forthcoming
> launch of our improved mobile application and new lending products by the end 
> of this financial year will deepen and broaden our customer base further.
> “The way in which Morses Club has responded to the unprecedented challenges posed
> by Covid-19 is something that I am extremely proud of. I am hugely grateful to
> our colleagues across the company, all of whom went the extra mile to ensure that
> our customers’ needs were met and continued to receive excellent customer service.
> “The speed of progress we have made across the Group in the period is testament
> to our investment in technology over a number of years and Morses Club is well-
> placed to become a more complete financial services provider in the growing and
> fragmented non-standard credit sector.
> “Whilst we are pleased with the undoubted resilience shown by the business during
> H1, we are fully cognisant of the impact on consumer confidence due to the ongoing
> lockdowns across the UK, which directly affects the communities we serve. We accept
> that market conditions remain challenging but are confident that our approach 
> will continue to deliver improvements.”

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