Morses Club PLC (LON:MCL), an established provider of non-standard financial services, provided today an update in relation to the Group’s response to COVID-19. The Company continues to assess the impact of the current situation on the business, proactively adapting its activities in line with Government advice, with the health and wellbeing of its customers, employees and agents central to the changes made.
The business has quickly introduced wide-ranging adaptations to its operating model, to ensure that customer service is maintained. This includes all operational field management and agents now working from home and face-to-face customer visits replaced with a remote customer communication strategy. Morses Club is maximising the usage of its existing technology platform and payment methods to ensure that customer contact and collection activity can be maintained. Over 82,000 customers are now registered for the online customer portal, and the Company offers a range of remote payment methods, through which 41% of all collections were already completed remotely. Customer response to paying remotely has been very strong since the impact of COVID-19, with all agents and field managers now focused on collections and engaging with our customers through the comprehensive technology already in use across the business.
As a business, our focus will always be on lending responsibly and conservatively, putting the customer first. Therefore, at this stage, we are no longer extending credit to new customers. Our normal adherence to Treating Customers Fairly principles and forbearance continues. We are actively working on further adaptations to the model, in line with our regulatory permissions.
Over 50% of our customers are in receipt of state benefits or pension earnings and a significant proportion of our customer base is self-employed. The recent Government announcements regarding grants for the self-employed, and maintenance of 80% of earnings for employees who may become furloughed workers, are expected to help our customers to maintain levels of income.
Morses Club remains in a robust overall financial position, and positive negotiations continue with existing funding providers. Cash flows are being supported by the temporary cessation of home collected credit loans, significant tightening of online lending decisions, cutting discretionary expenditure and the increased focus on collections.
The Board recognises the difficulty in fully assessing the long-term macroeconomic impact of COVID-19 on the business and therefore considers it prudent to withdraw its financial guidance for FY21. In full consideration of all relevant circumstances, the Board will not recommend payment of a dividend in July and will review the capacity to make a payment at the appropriate time later in the year, once the impact of COVID-19 on Morses Club’s business has become clearer.
The proposed date for the release of our final results for the period ended 29 February 2020 is currently under review with our auditors. Our results, which we had intended to announce on the 30 April 2020, will now be published at a later date due to the backlog of work facing all auditors as a result of changes to corporate reporting due to COVID-19. We will update the market on the revised proposed date when we have clarity from our auditors on timing.