Morses Club’s profit slides 76% in H1 due to COVID-19 disruptions

Morses Club plc (LON: MCL) said on Friday that its profit in the fiscal first half printed at £2.3 million that represents a 76% decline on a year over year basis, that it attributed to the ongoing Coronavirus pandemic that has so far infected more than 1.9 million people in the United Kingdom and caused over 66 thousand deaths.

Morses Club opened roughly 3% up on Friday but lost close to 8% in the next hour. On a year-to-date basis, its shares (learn more: how to buy stocks for beginners) are now over 65% down in the stock market. At 41 pence per share, the British firm is still trading close to its year-to-date low of 36 pence per share in March.

Morses Club reports £50 million of revenue in the first half

Morses Club also said that its revenue tanked 24% in H1 to £50 million. According to the British company, its existing HCC customers (home collected credit) could benefit from remote lending this year that it started only three weeks after Prime Minister Boris Johnson announced a nationwide lockdown to combat the COVID-19 crisis in March.

Remote HCC products, it added, were introduced in July for its new customers as well. In separate news from the United Kingdom, Serco Group said on Thursday that its underlying trading profit was expected to see a 35% annualised growth this year.

Chief Executive Paul Smith of Morses Club commented on the financial update on Friday and said:

“Credit issues and collections in the HCC division were inevitably impacted by the loss of face-to-face interaction, but customers responded very positively to our remote HCC lending product.”

Morses Club declares one penny per share of interim dividend

The board declared an interim per-share dividend of one penny on Friday. In an announcement last month, Morses Club had expressed confidence that it was well-positioned for post-pandemic recovery in borrowing.

The Birstall-based company said it issued £60.2 million of credit to all customers in the first six months of the ongoing financial year. As of the end of the fiscal first half, Morses Club valued its net loan book at £55.6 million that represents a 23% decline on an annualised basis.

Morses Club preformed fairly downbeat in the stock market last year with an annual decline of more than 15%. At the time of writing, the British sub-prime lender is valued at £54.53 million and has a price to earnings ratio of 5.76.