Morses Club sees 'steady increase' in customer demand during Q1

Doorstep lender Morses Club said on Tuesday that it had seen "a steady increase" in customer demand in both its home collected credit and digital divisions in the first quarter of the year despite the continued impact of the Covid-19 pandemic on trading.

Morses stated that strategic investment into technology infrastructure had continued to develop its service offering in line with evolving customer needs and noted that further platform development was underway for its current account product, which it expects will "positively impact planned volume growth" in the second half of the year.

Customer numbers in Morses' digital division for short-term and long-term lending products increased by 40%, with total loan book balances increasing 99% when compared to its 2021 year-end position, while new credit issued was 33% above management's budgeted plan, with collections performance also ahead of budget.

The AIM-listed firm highlighted that the "significant increase in both demand and volume" for longer and shorter-term digital lending products had led to the lengthening of the maturity profile of its loan book, increasing the impairment range for its digital division in the first half of the year due to IFRS9 requirements to take forward-looking provisions at the outset of the loan period. However, Morses anticipates volumes will stabilise and return to "more normal levels" during the course of the year.

Chief executive Paul Smith said: "Despite the continued impact of the pandemic, trading performance across all of our lending products has been very strong in the first quarter of FY22. This encouraging start to the year has been achieved through standout delivery from all our teams and agents and continues the group's strong momentum from the second half of last year.

"The importance of a technology-led offering has never been clearer. Our investment and focus on ensuring our service model adapts to changing customer needs, whilst maintaining our core ethos of putting the customer at the heart of what we do, is central to our success as a group."

As of 0850 BST, Morses shares were up 6.23% at 90.51p.