Morses Club have slid to a pre-tax statutory loss of over £40m after a ‘challenging’ year for the listed home loan provider.
The Batley-based business reported a pre-tax statutory loss of £42.9 million for the 52 weeks to February 26, 2022, compared to a profit of £500,000 in 2020/21.
Group turnover increased by 11.2% to £111.4 million from £100.2 million the previous year.
The group’s net loan portfolio also increased by 4.3% to £55.8m.
The loss was attributed to a one-time cost of £42.6 million related to customer repair claims. Morses Club is currently pursuing a potential settlement plan to deal with the increase in complaints.
The company has suspended the processing of all new unaffordable loan applications from August 11, 2022, as directors believe that without this action the group could have suffered significant short-term liquidity problems, threatening its continuity of business. operation.
Gary Marshall, Managing Director of Morses Club, said: “The past 12 months have been difficult for the business and we fully recognize the current challenges we still face as a group. However, we are deeply committed to the industry and the clients who need our services more than ever due to the current macroeconomic environment.
“The underlying operating performance of our credit business was stable and consistent throughout the period. The digital lending division, Shelby Finance, had a particularly strong year, with total credits issued more than doubling for reach £41.3 million. The division delivered adjusted pre-tax profit in January and February 2022, which was a key milestone.”
He added: “The overall long-term outlook for the group is positive. We have made significant progress in reshaping the group and there will be more to do as we continue our discussions with the Financial Conduct Authority (FCA) to make progress on A potential Any potential scheme of arrangement would remove the uncertainty of ongoing claims for relief and remove the risk of ongoing liabilities with respect to volatility in the level of claims.
“I am confident that we can constructively address this issue, as it is essential that our customer demographics continue to be served by a supplier that understands the market and operates in a socially responsible manner.”
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