30th Sep 2022 12:53
(Alliance News) - Morses Club PLC shares were down on Friday as it said it is materially loss-making in the first half of its financial year 2023, due to redress claims in its Home Collected Credit division.
Morses is a Nottingham, England-based home collected credit provider and online lender. Its shares were down 25% to 3.71 each in London on Friday morning.
In July, Morses Club said it would pursue a scheme of arrangement to deal with customer redress claims for "unaffordable lending" against the company. A month later, Morses Club said it had paused the processing of all new redress claims, to allow the company to develop a potential scheme to "ensure the equitable treatment of all customers."
On Friday, the company said its trading performance has continued to be impacted by the level of claims made against its HCC division, and it is now materially loss-making.
Further, Morses Club said it has seen a reduction in lending volumes and customer numbers in both its HCC and Digital divisions.
Customer numbers in the Digital arm have fell by 37% to 24,500 from 39,000 at the beginning of the financial year, whilst customer numbers in the HCC division fell by 19% to 116,000 from 143,000.
Chief Executive Gary Marshall said: "The level of previous claims in our HCC division continues to impact the overall trading performance of the business, which means we are materially loss-making as a result and has the additional impact of constraining the cash available to generate future revenue.
"Although the business continues to be a going concern, the material uncertainty of the trading position of the group means that it is increasingly imperative that we make substantive progress regarding a potential Scheme of Arrangement," Marshall added.
By Sophie Rose; [email protected]
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