Morses Club Investors - MCL

Morses Club Investors - MCL

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Morses Club Plc MCL London Ordinary Share GB00BZ6C4F71 ORD GBP0.01
  Price Change Price Change % Stock Price Last Trade
-0.40 -0.47% 84.60 11:23:47
Open Price Low Price High Price Close Price Previous Close
84.80 83.00 86.60 85.00
more quote information »
Industry Sector
GENERAL FINANCIAL

Top Investor Posts

DateSubject
16/6/2021
07:49
bostik17: Indeed OD. Step change yesterday with good market updates and significant purchases. Likely trading update on back of AGM next Tues? should cement Paul’s recent comments seen with the investor roadshow on YouTube
24/5/2021
17:02
smithie6: 2 sides to every trade/deal if there is a big need for accom. this year then maybe providing accom. is meeting a real need & many ppl might not find any where to stay otherwise & would have to stay at home. any/most tourist accom. will have had a collapse in occupancy since 1 March 2020, & surely receive no Govt. help & some will have used savings to pay the mortgage costs; or have taken longer term rentals. Cornwall is normally full for accom. for school holidays every year anyway. sure, people will charge the max they can get. Perhaps the Govt could control that & limit to say 10% more than the price charged in 2019. ----- in some areas there is insufficient occupancy over a year to get investors to build a new hotel so, providing accomodation in pubs, B&Bs, & rooms in homes, complete houses/flats allows tourists to stay & then spend money in local shops/cafes, restaurants, guided walks etc which can help a village/town ---- complicated subject but imo it would be wrong if tourist money could only be spent in a hotel & in the hotel's restaurant & in the hotel's bar. (sure, a property owner renting to tourists makes more profit than a young lad serving pints to tourists in the pub but they both get some benefit; & the property owner should be paying more tax which helps everyone)
20/5/2021
08:49
currencytrader1: That peaky scum has been pumping new investors up on the amigo board for weeks, do feel for them.. Hope he looses his shirt on this one.
13/5/2021
08:29
yump: Its the investment in stuff for the future that causes a problem for many investors. The heights of irony really. I have no idea why a reaction from a few punters on results day a few hours in, is of any interest to an investor, as long as the outlook is promising. Clearly the current year is going to deliver earnings that will only have Morses on a p/e around 10, without anything in for digital figures improving. MCL could be right place, right time wrt to others leaving the space.
13/5/2021
08:13
jamessmith23: Complaints has a liability built into balance sheet now for 2m, if that's the total amount then not much of a problem. I sold out recently on the strength because the digital division is continuously pulling down the rest of the business and I wasn't sure how folks would react on results day. May buy back in as long term I think cash generation could be very good.The dividend is very attractive at these levels, c5% for the year, but unless they turn this digital division profitable soon I think other investors may lose faith. Maybe just also feeling markets are a bit toppy so happy to bank some profits from buys last year.
05/5/2021
09:04
peaky00: Yump and Currency talk so much poop.All investors here to make MONEY no sentimental value
29/3/2021
06:16
opaldouglas: Hi all, certainly lots of discussion regarding the merits of different companies. In my view it’s good to look at the sector as a whole but the outlook for MCL is only getting better as we push on with the the Covid recovery and reopening of the wider economy. The lower the price drifts the better the risk vs reward in my view. The real bone of contention seems to be increased impairment figures due to complaints? MCL reported on this and did advise within last years accounts: “Principal Risks and Uncertainties R6 Wider Industry Risk Concerted action by Claims Management Companies (CMCs) can lead to a significant increase in the level of complaints being raised against the Group, whether they are ultimately settled or rejected. A change of approach by the Financial Ombudsman (FOS) resulting in more complaints being upheld without good reason. The increased cost of each FOS claim, whether the complaint is upheld or not. During the year, the Group has seen a noticeable increase in the level of complaints received from CMCs. In many cases, these have been spurious or allegedly sent by individuals who have never been customers or have been sent without the customer’s knowledge or consent. CMCs are now regulated by the FCA and it is hoped that they will act more responsibly in the future. The Group is actively engaging with FOS and the FCA through the sector trade associations. Following the ending of PPI claims, it is clear that CMCs are looking for opportunities to challenge companies” For the sake of ease, I’ll just reiterate my previous comments: 652 upheld complaints in 2020 for MCL, avg HCC loan of £327 @70% interest equals £229. So £149,242.80 extra impairment for 2020. This is really a drop in the ocean and has already been covered by trading statement earlier this month ahead of expectations. Frankly, you could increase this figure 5 fold and it wouldn’t have a marginal effect on profitability. FOS FCA complaints data, it’s readily available online and includes both Morses Club and Provident. See link below: hxxps://www.financial-ombudsman.org.uk/data-insight/half-yearly-complaints-data Provident’s complaints have indeed been going through the roof recently, complaint are up from 3536 in 2020 h1 to 10387 in h2 of which 74/75% are upheld in the customers favour. Provident Complaint Numbers 2020 h2 10387 (upheld 75%) 2020 h1 3536 (upheld 74%) 2019 h2 1930 (upheld 59%) 2019 h1 1131 (upheld 47%) To put this into context Provident’s CCD division had circa 379,000 customers in h1 2020, that’s a complaint rate of 0.93%, this has now risen to circa 2.74% in h2 2020. Morses is really a different story in terms of numbers, complaints have indeed increased, but by a much smaller number. from 53 in h2 2019, to 224 in h1 2020 and finally 794 on 2020 h2. Whilst any increase is of course unwanted, Morses does have a lower upheld rate averaging 64%. See figures below: Morses Complaint Numbers 2020 h2 794 (upheld 63%) 2020 h1 224 (upheld 65%) 2019 h2 53 (upheld 66%) 2019 h1 below 30 To compare the two Morses HCC customer complaints ranges from 0.13% to 0.46% in 2020, Provident ranges from 0.93% to 2.74% in 2020 with a much larger customer base. Provident CCD customers numbers in h1 2020 was 379,000 vs Morses 170,000. This really reinforces my view that Morses does focus on quality over quantity and backs up Morses ethos and customer review data that they are always so keen to reference. Morses had 1018 customer complaints in the whole of 2020, at 64%, that’s 652 complaints upheld. It’s unlikely this will impact FY 2021 results due out 13th May as we’ve already had a beat on expectations from the Morses via latest trading statement. Certainly one for all investors to watch but in my view comparisons with Provident are unwarranted. Additionally a collapse in Provident CCD will only provide a larger customer base for Morses club, as long as they stick to a robust lending criteria. Looking at the recent TU it's really impressive. Based upon previous guidance I’d forecast HCC sales of £97M, so that’s a beat of £13M based upon £109.7. MCL have issued updated throughout 2020 which have been most helpful, I based the last six months on an estimated average 80% of 2020 HCC sales. This gives MCL £51.2M (h1) vs £58.5M in h2. HCC sales of 109.7M extrapolated from historic levels generates revenues of £76.8M, allowing for “normal” impairment charges reduces to £72.4M. Again, base upon historic averages this translates into a PBT of 12.3M. If MCL decide they were perhaps too hasty with initial Covid write down this could increase. Again, digital is the short term drag (long term growth!) with breakeven pushing out to Feb 22 this increases my previous forecast a touch to £5.3M losses, hence a near £7M PBT for MCL for last FY, due in May. What HCC sales do we foresee for the rest of this FY? Trading update would suggest an avg h2 run rate of of 9.75M, clearly this has been rising since h1 and would have peaked higher around the seasonal Christmas period. In this regard I’d rather not second guess too much and suggest MCL sales will revert back to pre covid levels, perhaps next FY year ending Feb 2023 (Paul Smith did suggest MCL were 12 months away from HCC pre covid levels last Autumn). The date is almost incidental in my investment horizon, if it’s this year, next or the one after I have a high degree of certainty sales will revert back as a minimum, this provides me with a good basis to forecast HCC sales will again match FY year ending Feb 20 with sales of 174M and PBT of 20.7M. Clearly a sensible PE should be used for what is not a particular racy company, I’d suggest 10, based upon a PBT of 20.7M, equating to circa £207 Mcap. This is triple current Mcap. Historically MCL was valued between 150p - 200p and with no dilution it’s reasonable in my view that this is achievable again. Re, Dot Digital. It’s been a long slog for MCL to merge this acquisition and clearly it’s been a drag on the share price. Although MCL have pushed back breakeven this is now due within 12 months and in my view this is the game changer for a substantially larger rerating. Dot digital provides a much larger target market 10-12M customers compared with 1.6M in the HCC market. MCL are clearly trying to cross sell products between HCC and Dot digital and are trying to take market share from high street banks and the wider credit market. Paul Smith has already been quoted last year stating that dot Digital will contribute the same amount of profits HCC has historically achieved pre covid within 3 years. This would equate to over £40M PBT for MCL. This would equate to a Mcap of £400M, that’s over 4 times todays Mcap. The above doesn’t account for MCLs loan book which is a net asset even allowing for any adverse impairments, including cash which I have penciled in at 46M end of this FY. For anyone who see inflation looming (I’m firmly in this camp) and the prospect of rate hikes on the horizon, even a few years out. This has the potential to sadly push people into more debt as cost of goods outpaces wage increases and the cost to service debt and mortgages etc will no doubt rise if interest rates rise, this will ultimately affect MCL’s customer base and sub prime lending will no doubt rise drastically. Clearly Morses is not without risk, I’d surmise most these risks are quantifiable and that’s why I’m personally happy with my holding here. Investor sentiment and phycology is a funny old thing and clearly will not change. Until theres a fundamental change of circumstance I'll retain my position, so many "if" and "buts", it's all market noise and to be expected. This is AIM after all. Good luck to all holders (and non holders), takes two to make a market! OD
27/3/2021
12:47
ronwilkes123: That’s what’s at stake here, credibility. Morses does things right. A big rise in claims would make private investors question the company. This is all conjecture no one knows for sure what the claims numbers are, but they appear important to investors in recent weeks if morses is to regain credibility and get back over a quid.
16/3/2021
12:36
opaldouglas: Hi all, Some interesting discussion, first and foremost it's good to flag risks. I often think advfn has 75% people running their own book. I'm not sure in the grand scheme of things it actually makes any difference. In my eyes what's really important is figures. I'd implore investors who take MCL as a serious investment to take a step back and look into these issues, speak with the FOS and management (where possible). I keep a keen eye on the FOS FCA complaints data, it's readily available online and includes both Morses Club and Provident. See link below: hxxps://www.financial-ombudsman.org.uk/data-insight/half-yearly-complaints-data Provident's complaints have indeed been going through the roof recently, complaint are up from 3536 in 2020 h1 to 10387 in h2 of which 74/75% are upheld in the customers favour. Provident Complaint Numbers 2020 h2 10387 (upheld 75%) 2020 h1 3536 (upheld 74%) 2019 h2 1930 (upheld 59%) 2019 h1 1131 (upheld 47%) To put this into context Provident's CCD division had circa 379,000 customers in h1 2020, that's a complaint rate of 0.93%, this has now risen to circa 2.74% in h2 2020. Morses is really a different story in terms of numbers, complaints have indeed increased, but by a much smaller number. from 53 in h2 2019, to 224 in h1 2020 and finally 794 on 2020 h2. Whilst any increase is of course unwanted, Morses does have a lower upheld rate averaging 64%. See figures below: Morses Complaint Numbers 2020 h2 794 (upheld 63%) 2020 h1 224 (upheld 65%) 2019 h2 53 (upheld 66%) 2019 h1 below 30 To compare the two Morses HCC customer complaints ranges from 0.13% to 0.46% in 2020, Provident ranges from 0.93% to 2.74% in 2020 with a much larger customer base. Provident CCD customers numbers in h1 2020 was 379,000 vs Morses 170,000. This really reinforces my view that Morses does focus on quality over quantity and backs up Morses ethos and customer review data that they are always so keen to reference. In summary, Morses had 1018 customer complaints in the whole of 2020, at 64%, that's 652 complaints upheld. It's unlikely this will impact FY 2021 results due out 13th May as we've already had a beat on expectations from the Morses via latest trading statement. Certainly one for all investors to watch but in my view comparisons with Provident are unwarranted. Additionally a collapse in Provident CCD will only provide a larger customer base for Morses club, as long as they stick to a robust lending criteria. @SimonGordon - Glad you're well. Extra regulation is always a risk, can't disagree with that. You'll laugh at me but in the instance it's all about the fundamentals, valuation still stacks up and I see good growth drivers. At these levels I really like the risk vs reward. OD
07/12/2020
12:33
simon gordon: Ptolemy, CEO gave video spiel on 17th July in which he described their lending during Covid: Morses Club expects to build market share as credit market recovers says CEO Https://www.proactiveinvestors.co.uk/companies/news/924506/morses-club-expects-to-build-market-share-as-credit-market-recovers-says-ceo-924506.html Here he is at last week's Proactive Investors forum: Morses Club present at the Proactive One2One virtual investment forum Https://www.proactiveinvestors.co.uk/companies/news/935840/morses-club-present-at-the-proactive-one2one-virtual-investment-forum-935840.html
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