Morses Club Share Discussion Threads

[bullsvbears] 10/8/2017 23:32

On the face of it...

[dendria] 10/8/2017 17:55

Did someone actually buy £1.6M @ 115p at 16:26?

[battlebus2] 09/8/2017 13:18

Shares slumping to £1 bid, now looking rather silly not selling.

[battlebus2] 01/8/2017 07:03

Thanks GHF....indeed.

[glasshalfull] 31/7/2017 23:54

BB2 - You've just missed the divorce settlement reference in the RNS.

"Morses Club PLC ("Morses Club" or "the Company"), the UK's second largest home collected credit ("HCC") lender, announces that on 24 July 2017, Paul Smith, Chief Executive Officer of Morses Club, sold 327,580 ordinary shares of 1 pence each in the Company ("Shares") at a price of 130p per Share.

Mr Smith was required to undertake this transaction pursuant to a divorce settlement."

Kind regards
GHF

[minerve] 31/7/2017 21:10

Never put much weight on director sales. They can be for all sorts of reasons. Director buys, particularly large ones, have more a bearing on sentiment than any other buy/sell executive activity.

[battlebus2] 31/7/2017 17:52

Apparently someone suggested earlier it was to satisfy a divorce settlement. I'm sticking with it for now as I believe the ceiling is around 115 for now so don't expect it to fall further at least not for now but everyone make your own minds up as GHF is rarely wrong.

[masurenguy] 31/7/2017 16:08

Hi GHF - Thanks for your interesting post and heads up on your own position.

nw99 - It is true that the CEO sold half of his shares last week but he still retains the rest (327,500). What is more significant is the CFO Andy Thomson who holds 5, 676,939 shares and has not made any share sales this year. That is hardly a sign of "no confidence here"

[nw99] 31/7/2017 15:49

Director sells no confidence here

[battlebus2] 28/7/2017 19:51

Geez!! Thanks GHF for your openness in your position here, it always was a concern here and is even more so given your post. Not going to panic into selling as I'm here for the income which looks pretty safe at the minute. Well that's more weekend thoughts you've given me 🙄

[glasshalfull] 28/7/2017 19:28

Forgot to add the update contained in Provident results this week concerning IFRS9




IFRS 9

IFRS 9 'Financial instruments' is effective from 1 January 2018 and replaces IAS 39 'Financial instruments: Recognition and measurement'. IFRS 9 significantly changes the recognition of impairment on customer receivables by introducing an expected loss model. Under this approach, impairment provisions are recognised on inception of a loan based on the probability of default and the typical loss arising on default. This differs from the current incurred loss model under IAS 39 whereby impairment provisions are only reflected when there is objective evidence of impairment, typically a missed payment. The resulting effect is that impairment provisions under IFRS 9 are recognised earlier. This will result in a one-off adjustment to receivables and reserves on adoption and will result in later recognition of profits in growing businesses such as Vanquis Bank, Moneybarn and Satsuma.

Despite the adjustment required to receivables and net assets, it is important to note that IFRS 9 only changes the timing of profits made on a loan. The group's underwriting and scorecards will be unaffected by the change in accounting, the ultimate profitability of loan is the same under both IAS 39 and IFRS 9 and more fundamentally the cash flows and capital generation from a loan remain unchanged. The group's bank covenants are unaffected by IFRS 9, as they are calculated based on accounting standards in place prior to the introduction of IFRS 9 and, based on latest draft guidance, the regulatory capital impact of IFRS 9 is expected to be phased in on a transitional basis over five years. The group also had over £200m of distributable reserves as at 31 December 2016, more than sufficient to accommodate the impact of IFRS 9.

The group has made good progress on quantifying the impact of IFRS 9 and now expects to be in a position to provide an impact analysis at a separate presentation for analysts and shareholders to be held during the second half of the year.

---

Regards,
GHF

[glasshalfull] 28/7/2017 18:53

MCL

Courtesy to update holders/lurkers that I've completely sold out, especially having been positive on the Morses as my handful of posts here testify.

This isn't a reflection on the company or this week's 300k sale by the CEO but rather prompted by the recent 19% EPS downgrade by Numis & reduction in their target price on MCL, which saw them reducing from 149p to 138p. This was part of a wider downgrade by Numis on the speciality finance sector on 03.07.2017 which saw them slash earnings forecasts & t/p on a number of finance companies (posted photo of downgrades via my twitter post).

This downgrade followed MCL's positive June t/s & strong set of maiden results. Numis have been v bullish on the company so following their 19% earnings downgrade I did some digging to ascertain their rationale.

I've come across articles that indicate the introduction of accounting standard IFRS9 will impact lenders by requiring them to provide for Expected Credit Loss in relation to performing assets during the following year to the lending & provide for this loss over the life of the asset. It appears that the reporting period after January 2018 will introduce a one-off increase in balance sheet impairment.

This pdf from KPMG from 2016 may explain the impact more succinctly than I can. Plenty other articles if one roots about.



IFRS9 forces lenders to recognise impairment earlier & I believe this may be one of the reasons for the Numis downgrade, as in reality MCL will be subject to impairments based on their 2018 loan book.

Anyway, the impact of IFRS9, Numis downgrade & the potential fallout (or uncertainty) in the sector following Provident's recent results & outlook in relation to IFRS9 have resulted in me selling down over the last fortnight. My patient selling certainly didn't impact the shareprice until today when my final few 5k share sales around midday appear to have triggered stop losses as you can see from the AT trades that kicked in. My apologies, as I was attempting to exit fully with a clean pair of heals rather than trash the shareprice. Almost succeeded but always the difficulty when building a modest holding in an illiquid share.

I like MCL and management team & didn't foresee selling down this early, but there are simply too many uncertainties for me at present. Small profit & decent dividend received, however happy to spend time on the sidelines for the time being.

GLAH.

Kind regards,
GHF

[sttrader] 28/7/2017 17:37

Looks like a forced sale from the CEO as part of a divorce settlement and not a reflection on the company.

[battlebus2] 28/7/2017 14:55

Bit of a recovery from the 115p thankfully....

[panic investor] 28/7/2017 13:14

not a massive holding left either tbh

[battlebus2] 28/7/2017 13:10

Getting a hammering today, not good to see the CEO half his holding this week.

[masurenguy] 17/7/2017 22:24

Cheers GHF

[glasshalfull] 17/7/2017 17:03

Mas - Here's the link. Don't see it having any impact positively or negatively on MCL.



Regards
GHF

[masurenguy] 17/7/2017 16:32

What does the above comment in #85 actually mean?

[solarno lopez] 17/7/2017 15:27

And Provident have just slate for sending out 1m nuisance texts

[battlebus2] 24/6/2017 09:28

May or may not so let's not worry.

The Hardman note talks in detail about the opportunities with market change and refers to Provident.

[masurenguy] 24/6/2017 08:21

Doorstep lenders may be forced to hire agents

The doorstep lending industry may be forced to follow Provident Financial’s lead in abandoning self-employed agents, even if that leads to slumping profits, according to industry insiders. They said that the Financial Conduct Authority was closely watching Provident’s shift from agents to direct employees and may insist that its smaller rivals adopt a similar model. The FCA took over responsibility for consumer credit in 2014 and has been taking a closer look at the companies in the sector to decide whether to grant them licences. Morses Club and Non-Standard Finance, the second and third-ranked home credit lenders, have received full authorisation, while Provident’s licence is still pending. The two smaller companies also use self-employed agents and the fact that they have been granted licences led some to say that they may not be forced to make a similarly drastic change to their business. However, other experts said that the FCA could still require the change once it had observed it in action at Provident.

Frederic Nze, who founded the digital credit company Oakam ten years ago, said: “With self-employed agents who are highly commissioned and vulnerable customers, there is an issue around control and knowing what is going on in the home of the customer. The relationship between the agent and the customer can become one of dependency.”

Complete article:

[battlebus2] 22/6/2017 09:45

Yes and a nice dividend it is 👍

[100laila] 22/6/2017 09:41

drop today also due going xd today. div was 4.3p

[haroldthegreat] 22/6/2017 09:22

MCL highlighted their strategy of taking on the pf agents so they knew pf were going to suffer. their agent would take their pf clients to MCL hence pf loss is MCL gain. Also mcl xd today. This is company specific to pf because they underestimated the power of their agents. The relationship between agent and customer is stronger than brand loyalty.the customer regards the agent as a friend and if the agent changes company the customer will not mind changing as long as the terms are similar.