Morses Club PLC New Loan Facility (3884L)
April 30 2020 - 2:00AM
UK Regulatory
TIDMMCL
RNS Number : 3884L
Morses Club PLC
30 April 2020
30 April 2020
Morses Club PLC
New Loan Facility
Morses Club PLC ("the Company", "Morses Club" or "the Group"),
an established provider of non-standard financial services, is
pleased to announce that it has secured an extension of its
revolving credit facility (the "RCF") with its existing funding
syndicate until the end of November 2021.
The Company has agreed a reduction in the level of the facility
from GBP50 million to GBP40 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
GBP10m 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."
For further information please contact:
Morses Club PLC Tel: +44 (0) 330 045
Paul Smith, Chief Executive Officer 0719
Andy Thomson, Interim Chief Financial Officer
finnCap Ltd (Nomad and Joint Broker) Tel: +44 (0) 20 7220
Jonny Franklin-Adams / Giles Rolls (Corporate 0500
Finance)
Alistair Hay / Graham Cooke / Krishan Raval (Debt
Advisory)
Tim Redfern / Richard Chambers (ECM)
Peel Hunt (Joint Broker) Tel: +44 (0) 20 7418
Andrew Buchanan / Rishi Shah / Duncan Littlejohns 8900
(Corporate)
Jock Maxwell Macdonald (ECM)
Camarco Tel: +44 (0) 20 3757
Jennifer Renwick / Kimberley Taylor 4994
Notes to Editors
About Morses Club
Morses Club is an established non-standard financial services
provider, consisting of Morses Club, the UK's second largest home
collected credit ("HCC") provider, and Shelby Finance Limited which
operates online lending through its Dot Dot brand and online
e-money current accounts through its U Account brand.
UK HCC is considered to be a specialised segment of the broader
UK non-standard credit market. UK HCC loans are typically small,
unsecured cash loans delivered directly to customers' homes.
Repayments are collected in person during weekly follow-up visits
to customers' homes. UK HCC is considered to be stable and
well-established, with approximately 1.6 million (1) people using
the services of UK HCC lenders.
The HCC division is the second largest UK Home Collected Credit
(HCC) lender with 224,000 customers and 1,695 agents across 90
locations throughout the UK. The majority of the Company's
customers are repeat borrowers and the HCC division enjoys
consistently high customer satisfaction scores of 97% (2) . In
April 2016, its cashless lending product Morses Club Card was
introduced, enabling its customers to buy online as well as on the
high street. In February 2019, the Company introduced an online
customer portal for its HCC customers, which now has over 78,000
registered customers.
Shelby Finance, via the Dot Dot brand, has 37,000 active
customers and via the U Account brand, has c.18,000 customers using
the online e-money product. Dot Dot is a provider of 3 - 9 months
short-term online loans and 18 - 48 month online loans in the
non-standard credit market.
Morses Club successfully listed on AIM in May 2016.
About the UK non-standard credit market
The UK non-standard credit market, of which UK HCC is a subset,
consists of both secured and unsecured lending and is estimated to
comprise around 10 million consumers (3) and total loan receivables
of GBP10.7bn (4) .
Non-standard credit is the provision of secured and unsecured
credit to consumers other than through mainstream lenders. Lenders
providing non-standard credit principally lend on an unsecured
basis and the market is characterised by high frequency borrowing.
Approximately 2 million people move annually between standard and
non-standard markets (4) .
Since February 2014, unsecured personal lending has grown from
GBP161 billion to GBP216 billion in February 2019 (5) .
(1 High Cost Credit Review ANNEX 1 - July 2017)
(2 Independent Customer Satisfaction Survey conducted by Mustard
3 FCA High Cost Credit Review Technical Annex 1: CRA data analysis
of UK personal debt - July 2017 4 Apex Insight - Non-Prime Consumer
Credit: UK Market Insight Report - September 2019 5 Table A5.2,
Bank of England Money and Credit Bank stats February 2019)
This announcement constitutes inside information for the
purposes of article 7 of the Market Abuse Regulation (EU) No
596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCKKCBBABKDKQB
(END) Dow Jones Newswires
April 30, 2020 02:00 ET (06:00 GMT)
Morses Club (LSE:MCL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Morses Club (LSE:MCL)
Historical Stock Chart
From Jul 2023 to Jul 2024