Morses Club's H1 revenue rises as it posts maiden dividend

AIM-listed home collected credit lender Morses Club’s half-year revenue increased due to the launch of a club card as it declared a maiden dividend, although profit slipped.

For the six months ended 27 August, revenue rose 8% to £47.2m, in comparison to the same period last year as the net loan book grew 5% to £56.2m.

Adjusted pre-tax profit ticked down 2.27% to £8.6m and reported pre-tax profit fell 28% to £4.6m. The company attributed the drop in profit to the fact that it restructured its agent packages to attract and retain the best agents with a consequential increase in overall agent commission cost.

Impairments as a percentage of revenue for the period were 22.5%, up from 18.3% last year, remaining at the lower end of the company's target range and focus on higher quality lending.

Customer numbers rose 21% to over 207,000 with more than 5,000 Morses Club Cards issued since its launch in April, which exceeded the company’s target for the year within the first six months.

Basic earnings per share fell to 2.7p from 3.7p last year and a maiden interim dividend was declared of £2.7m equating to 2.1p per share.

During the six months the company also made three acquisitions totaling £3.3m.

Chief executive Paul Smith, said the company had made “significant” progress with its strategic plan of using technology to maximise the customer experience and implementing growth initiatives, such as the Morses Club Card.

He added: “Customer demand for the Morses Club Card exceeded our expectations ... its success gives us confidence that we can continue to build on our core home collected credit customer service ethos to target a broader non-standard credit customer base, offering consumers products in increasingly flexible ways. We remain confident in the outlook for the full year."

Shares in Morses Club were down 0.86% to 115p at 0857 BST.