Morses Club plc (LON:MCL), an established provider of non-standard financial services, has today announced that it has secured an extension of its revolving credit facility with its existing funding syndicate until the end of November 2021.
The Company has agreed a reduction in the level of the facility from £50 million to £40 million to better reflect the requirements of the business over the next 18 months as it anticipates some deleveraging of the business driven by decreased sales volumes due to COVID-19. In the last year this additional £10m headroom has not been used. Facility levels that better reflect the near term needs of the business are expected to reduce funding costs, with the Group’s higher interest rate mezzanine debt facility now fully repaid and lower non-utilisation costs on the RCF facility expected.
The Company was advised on the extension of the RCF by finnCap Ltd’s debt advisory team.
The customer response to Morses Club’s recently launched remote lending product has been positive and collections are still performing strongly with 100,000 customers now registered to use the online customer portal. The Company has decided not to furlough any of its staff and all staff and agents are continuing to work remotely in support of customers. Morses Club is pleased to report that customer satisfaction levels for March continue to be high, at 97%.
Paul Smith, Chief Executive Officer of Morses Club, commented:
“I am delighted that we have secured a new loan facility and that our three existing funders continue to support the business during this challenging period, demonstrating their confidence in Morses Club and our growth and digital diversification strategy. The new loan facility provides us with sufficient funding to meet our requirements including expanding our product offering as we address the evolving needs of our customers.”