Morses Club Share Discussion Threads

[russell250] 05/10/2017 09:16

panmure house broker lifted guide price to 160 - buy


this update does not give guide of new business since half year - over 400 new in total population of 2100

perhaps analysts brief at 9.30 be more revealing

[fenners66] 05/10/2017 09:09

Look at the rise since early August it means the performance to date was already in the price.
An acceleration of new business next year will give these a lift when it happens.

[nakedsteve] 05/10/2017 08:54

looks like a good set of results, everything improving and there hasn't been long enough for the full fall out from provident to influence the figures.....any reason for the drop or is it simply ''buy on the rumour sell on the news''??

[fenners66] 03/10/2017 15:57

longer term ; I dont know if there has been time for it to happen with these results ; there is opportunity to pick up a large slug of business from Provident, their loss Morses gain.

[russell250] 03/10/2017 14:31

results two days - any views??

[speedsgh] 27/9/2017 15:11

Brief Q&A article...

Coverage Initiation by Zeus Capital’s Robin Savage -

Q3: Morses Club is currently trading at 144p, is this really a good time to buy shares do you think?

A3: I think we should think about four things, one is the valuation, the next is the seasonal timing of an investment in MCL, the third is the cyclical timing in terms of where we are in the business cycle and the fourth, structurally, what are the structural issues that we should bear in mind.

So, first of all, in terms of valuation, at 144p a share, the company offers investors the prospect of a 4.7% dividend yield and double-digit growth. We expect a 19% dividend growth in 2018/2019 and then in the following year, we expect it to be around about 12%. So, it’s attractive on valuation grounds.

Secondly, there is seasonal timing, Autumn is a good time to invest in home credit businesses because the first half of the year is complete and we know where we are for the first half and then we have the most important lending period, Christmas, about to begin.

The third is cyclical timing, now home credit businesses tend to trade well in difficult economic conditions, certainly they traded well in the last two recessions. So, I think investors should be quite confident that cyclically this is a good time to be thinking about investing in the company.

Fourthly, structurally, investors should recognise that the prospects for the company have dramatically improved since August, it has now got the £40 million bank facility, it has got hundreds of new agents, it’s got prospects of even more agents coming on board if that’s what they want and these agents should be productive in calendar year 2018 and beyond.

So, I think that in the next 6 months, we should see the company trading at between £1.67 and £2.00 a share and certainly, I expect, following the interim results on 5th October, I think the shares should do well.

[ny boy] 05/9/2017 10:23

Looking at these but just thinking they may have got away too quick, I will wait to see if mr. Market lets me in cheaper.

[jeff h] 01/9/2017 09:52

Yes thanks GHF, ever the gent and you dont get many wrong!

The IFRS change mentioned does not concern me as it has no effect on cash flows
or overall profit, it is just a potential timing change in charges a bit like if
you got a £100k vehicle with a 4 year life with no residual value and are currently
charging £25k a year against the vehicle but then move to yearly charges of £40k,
£30k, £20k and £10k - the overall effect is no change except earlier years are taking a bigger part of the charge and so will reduce accounting profit early on but increase them in latter years.

Piece in The Times today as well which mentions:-

"Mr Smith said he did not believe the financial regulator would force providers of home credit to make agents become directly employed or introduce video and audio recording of conversations with customers."

I know this has been a concern for some so looks like a hurdle cleared especially as MCL recently announced receiving full FCA authorisation.

[battlebus2] 01/9/2017 09:50

Thanks GHF, you can't win them all 😉

Through 150 this morning 👍

[yump] 01/9/2017 08:50

GHF

I think you've been a victim of sod's law here ;-)

I don't know if its your sort of stock but I took a stake in Nexus (NEXS) recently. Vowed to not invest in any more floats a while ago, but previous disasters were all tiddlers, so made an exception ! Appreciate your views over on that thread if you're interested.

[blueliner] 01/9/2017 08:10

Only to be expected

[glasshalfull] 31/8/2017 21:23

Well done holders. Nice positive statement & I certainly left the party prematurely!

Of course, nobody quite realised that PFG would implode as spectacularly as it has. I certainly didn't when I made the decision to sell out & have to say I've been tempted to reinvest a couple of times recently.

Again, I was quite clear in my post that my decision was not an indictment on any failings of management or MCL & pleased for those investors that had far more faith than me.

Kind regards,
GHF

[yump] 31/8/2017 20:28

30% rise since the recent drop is a bit embarrassing for Numis.

Not the first time that a general downgrade has given buying opportunities in a few companies caught up in the fall-out.

I'm hoping PETS will continue to strengthen - its a while since it took a hit with many other retailers being downgraded, despite being in a resilient consumer market.

[fenners66] 31/8/2017 16:19

Climbed on board for a few - fallout from PFG looks like MCL will benefit.

[battlebus2] 31/8/2017 13:27

Great trading update and new highs. Let's see what their results will bring. Looking forward to that dividend.

[yump] 31/8/2017 09:02

Its a stonking yield and covered well as well. Ideally MCL will provide business (earnings) growth and dividend growth.

[haroldthegreat] 31/8/2017 08:18

Increased business as a result of provident getting rid of their agents their loss our gain.

[blueliner] 22/8/2017 19:27

Thanks Jeff H, confirms my own thinking.

[jeff h] 22/8/2017 10:19

I been buying here lately. Last weeks RNS was positive with Numis increasing their forecasts on the back of it.

Trading Update next week. Beaufort positive as well:-

Morses Club (MCL.L, 119.00p) – Buy

The UK's second largest home collected credit ('HCC') lender, on Friday announced that the Group has secured the addition of one of the UK's leading high street lenders to its existing loan facility (the 'Facility'). Sitting alongside the existing funder, Shawbrook Bank, this has increased the overall revolving facility from £25m to £40m. The Facility has also been extended from its existing expiry date of March 2019 to August 2020. This is strategic in respect of supporting growth strategy of the business, providing the certainty of long-term funding and enabling Morses Club to continue its expansion plans, taking advantage of the current opportunities in the market place.

Our View: The quite dramatic tumble in Morses' share price that took place mid-July to mid-August provides an important buying opportunity. Morses had been lumped together with others in the UK's non-standard finance sector, all of which took a sharp hit as the dominant player, Provident Financial, warned that its Consumer Credit Division ('CCD') had been severely impacted by disruption from its migration to a new operating model. Shortly after this, early in August, Non-Standard Finance plc also provided its own half year results, from which several commentators suggested as NSF was successfully stealing market share from what they suggested were various sleepy peers, including Morses Club. The interpretation was wrong in both cases. Firstly, the hit on Provident Financial's CCD division was largely self-inflicted. Its move from commissioned agents to contract staff, while also seeking to migrate away from the bottom rung of accounts, had been badly planned and effectively handed significant numbers of active agents to competitors. A real own goal! As far as Non-Standard Finance itself is concerned, the Company continues to make progress, although this comes at a cost; divisional impairment at the H1 stage rose to 37.5% (compared to 28.7% last year), with the loan book rising 16% despite customer numbers falling 10%. After central costs, NSF's Loans-at-Home is still not generating a profit while quoting their number of new agents as rising by 229 following Provident's loss something like 250. Morses, by comparison, is expected to add up to 600 new agents by its February 2018E year end and Friday's announcement detailing its new larger revolving facility, demonstrates management's confidence that activity levels set to deliver a step improvement. Yes, there will be some short-term costs for this expansion but, as Beaufort explained back in a note on 21st June, the anticipated squeeze in margins will be more than compensated in the P&L just one further year out. The Group's trading update, expected on 31st August, is likely to outline management's confidence in its strategy going forward.

Far from being 'sleepy', Morses' current push is expected to deliver an impressive leap in both revenues and earnings by year-end February 2020. Beaufort has re-set its P&L projections in response to Friday's announcement, which now places the shares on 2019E and 2020E earnings multiples of 10.0x and 7.2x, together with yields of 6.1% and 8.3% respectively. Much too cheap considering an operation that this year should deliver 24% ROE on a P/BV of just 2.5x. Beaufort retains a price target for Morses Club of 155p/share along with its Buy rating.

[dendria] 22/8/2017 08:46

MCL should pick up a bit of business from PFG after their horrendous TU this morning - but they are too small currently to take it all on - not sure who is going to gain (MCL, NSF) or will PFG rebuild?

[battlebus2] 18/8/2017 10:18

2 million shares gone through at mid price....

[battlebus2] 18/8/2017 08:47

Yes apparently moving over in droves 🤔

[dendria] 18/8/2017 07:55

Also pleasing to see 'The territory builds in progress to date are performing ahead of management's expectations'. I assume many of the new agents are ex-PFG.

[battlebus2] 18/8/2017 07:45

Good news this morning with new loan facility of 15 mm now 40 mm in total from existing lenders so they must see a viable business. Helping to fund the raft of new self employed agents circa 400. 👍

[battlebus2] 11/8/2017 16:24

Shroders down to 4% now, buyer should be notifying shortly.