Morses Club chief executive steps down

In an update today (21 February), the firm said its home collected credit division had been impacted by a rapid increase in the volumes submitted via claims management companies (CMCs) in recent days. It added that, given the scale of these complaints, it’s anticipated costs will increase and will impact its adjusted profit before tax for the current financial year.

It now expects its adjusted profit before tax to be between 20% and 30% below the current consensus of £7.5m - subject to a year-end audit review. 

Commenting on this, the Consumer Credit Trade Association’s chief executive Jason Wassell said the news demonstrates the impact CMCs continue to have on the alternative lending sector. He added: “We hear from our members, that CMCs continue to dump hundreds of complaints at a time.

"Often this includes duplicates or triplicates of the same complaint. A significant proportion is on behalf of individuals that have no history with the firm. All of this draws away time and resources, placing more pressure on lenders.

“The customers of alternative credit stand to lose the most from this if it continues to be as difficult as it is to lend. The outcome will be that access to credit is reduced and these consumers will be forced to look elsewhere, possibly at less desirable options."

Smith, who has stepped down from the board with immediate effect, will be replaced by the Morses Club’s chief operating officer Gary Marshall - subject to approval from the Financial Conduct Authority. The board has also confirmed that his current chief operating officer role will not be directly replaced. 

It comes after the company announced that, following a review of its reorganisation proposals, it would abandon its restructuring process and the incorporation of a new holding company. This decision was taken after it became apparent there was no certainty the work required to complete the process could be achieved within the timeframe - coming to an end on 31 December 2021. 

The provider initially set out its scheme of arrangement on 13 August 2021. The corporate restructure would have involved the introduction of a new, AIM-quoted holding company for the group under the name U Money, and would have operated two distinct business divisions. 

In its latest update the group announced it would issue a full-year trading statement following the conclusion of this financial year, with it likely to be published in May 2022.