Acquisition

26 February 2019

Morses Club PLC

Acquisition of certain assets of CURO Transatlantic Limited

Morses Club PLC ("Morses Club", or the "Company"), the UK's second largest home collected credit lender, announces that it has acquired, through its fully owned subsidiary Shelby Finance Ltd, the business and certain assets of CURO Transatlantic Limited ("CURO TA"), trading as WageDayAdvance out of administration (the "Transaction"). The total consideration for the acquisition is approximately £8.5m paid in cash, 50% on completion and the balance over 5 months (depending on the final valuation of the acquired loan book).

CURO TA is a provider of online loans in the non-standard credit market. Under the terms of the Transaction, Morses Club is acquiring all the existing infrastructure of CURO TA including its decision platform, call centre, and online lending capabilities. All of CURO TA's current employees will become employees of Shelby Finance Ltd. The gross receivables (before any collection provisions), which exclude all the CURO TA bad loans identified by the Company, amount to approximately £19m.

This acquisition fits well with the Company's stated strategic priority to increase its online offering in response to a growing demand. The acquisition also adds a sizeable customer base of around 50,000, increasing the Company's overall customer base by over 20%.

While it is not expected to add to earnings in the first 12 months, management are confident that the acquisition will make a positive contribution to earnings in FY21.

Paul Smith, Chief Executive Officer of Morses Club, commented:

"This exciting acquisition of such a well-established online lending business represents a significant escalation for Morses Club's product diversification strategy. The range of online lending products that we will deploy through the newly acquired platform will exclude any form of payday style lending and the trading style will be dropped. The loan products will fit neatly within the existing Dot Dot Loans strategy, in terms of loan duration, affordability and forbearance. This acquisition, alongside those recently announced in our core HCC market, reinforces our plans to build a digital platform to meet the evolving needs of our customers across the UK, whether online or in the customer's home.

"We look forward to working with the new teams to maximise the expertise that they bring to deliver best in class service and continue to broaden Morses Club's capabilities and product offering in the non-standard credit space."

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

For further information

Notes to Editors

About Morses Club

Morses Club is the second largest UK Home Collected Credit (HCC) lender with 230,000 customers and 1,942 agents across 98 locations throughout the UK.

The Company offers a range of loan products to its customers through its extensive self-employed agent network. The majority of the Company's borrowers are repeat customers and the Company enjoys consistently high customer satisfaction with scores of 95% or above1.

The Company is using technology to broaden its offering and provide new products to ensure customers can access credit with the flexibility they require. In April 2016, its cashless lending product, the Morses Club Card, was introduced, enabling its customers to buy online as well as on the high street. Dot Dot Loans, the Company's first online instalment product, was launched in March 2017.

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 consumers2.

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.

Since February 2014, unsecured personal lending has grown from £161 billion to £209 billion in February 20183.

1 Independent Customer Satisfaction Survey conducted by Mustard2 FCA High Cost Credit Review Technical Annex 1: CRA data analysis of UK personal debt - July 20173 Source: Table J Bank of England Money & Credit Report February 2018

About UK Home Collected Credit

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 million2 people using the services of UK HCC lenders.

2 High Cost Credit Review ANNEX 1 - July 2017