Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
Morses Club Plc LSE:MCL London Ordinary Share GB00BZ6C4F71 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 93.00 87.20 91.60 93.00 93.00 93.00 127 09:34:06
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 100.2 0.5 0.2 547.1 123

Morses Club PLC Preliminary results

13/05/2021 7:00am

UK Regulatory (RNS & others)


Morses Club (LSE:MCL)
Historical Stock Chart


From Apr 2021 to Jun 2021

Click Here for more Morses Club Charts.

TIDMMCL

RNS Number : 4620Y

Morses Club PLC

13 May 2021

13 May 2021

Morses Club PLC

Preliminary results for the 52 weeks ended 27 February 2021

Digital Transformation

Morses Club PLC ("the Company" or "the Group"), an established provider of non-standard financial services , is pleased to announce its preliminary results for the 52 weeks ended 27 February 2021.

Operational Highlights:

-- Rapidly reconfigured operating model and existing technology, allowing us to maintain lending and collection activity throughout the pandemic

-- Further re-engineering of our online businesses to build our product offering and take advantage of the opportunity in the wider non-standard credit market

-- Delivered technology enhancements in our HCC business to provide a digital service to customers enabling a virtually paperless documentation process

   --    Strong customer satisfaction with further increase to 98% 
   --    107,000 customers registered for the digital HCC portal (FY20: 78,000) 
   --    67% of all HCC lending cashless with 80% of cash collections made remotely 
   --    Transformed the Group's estate footprint with 90 properties operationally exited 
   --    Total Group customer numbers: 180,000 (FY20: 255,000) 

-- Digital business moved e-money current account services and lending products onto two new operating platforms

   --    Continued progress in Group's strategy to become a more complete financial services provider 

Financial Highlights:

   --    Group: 

o Revenue decreased by 25.1% to GBP100.2m (FY20: GBP133.7m) due to Covid-19 impact on demand and inability to lend to new HCC customers during first 5 months of H1

o Total credit issued to all customers of GBP129.0m (FY20: GBP190.3m)

o Net loan book of GBP53.5m, reduced by 26.5% (FY20: GBP72.8m)

o Adjusted profit before tax (1) of GBP6.1m (FY20: GBP13.8m)

o Statutory profit before tax of GBP0.5m (FY20: GBP11.5m)

o Impairment as a percentage of revenue (1) for the period of 20.8% (FY20: 27.2%) evidencing improved quality of loan book

o Adjusted return on assets (1) of 8.9% (FY20: 14.8%)

o Statutory return on assets of 0.3% (FY20: 12.8%)

o Adjusted EPS(1) of 3.9p (FY20: 8.4p)

o Statutory EPS of 0.2p (FY20: 7.3p)

o Final dividend of 2.0p pence per share (FY20: 3.6p) reflecting Group's confidence in its outlook

   --    HCC 

o Total credit issued to HCC customers 37.0% lower at GBP109.7m (FY20: GBP174.2m)

o Adjusted HCC profit before tax (1) of GBP15.0m, a decrease of 34.2% (FY20: GBP22.8m)

o Statutory HCC profit before tax of GBP11.8m, a decrease of 44.3% (FY20: GBP21.2m)

   --    Digital 

o Total credit issued to Digital customers up 19.9% to GBP19.3m (FY20: GBP16.1m)

o Adjusted loss before tax(1) in Digital division of (GBP8.9m) (FY20: (GBP9.0m))

o Statutory loss before tax in Digital (GBP11.3m) (FY20: (GBP9.7m)) reflecting continued investment in the division

Alternative Performance Measures & Key Performance Indicators

 
                                  52-week     53-week     % +/- 
                                   period      period 
                                 ended 27    ended 29 
                                 February    February 
 Key performance indicators          2021        2020 
 
 Revenue                        GBP100.2m   GBP133.7m   (25.1%) 
 Net Loan Book                   GBP53.5m    GBP72.8m   (26.5%) 
 Adjusted Profit Before 
  Tax (1)                         GBP6.1m    GBP13.8m   (55.8%) 
 Statutory Profit Before 
  Tax                             GBP0.5m    GBP11.5m   (95.7%) 
 Adjusted Earnings per share 
  (1)                                3.9p        8.4p   (53.5%) 
 Statutory Earnings per 
  Share                              0.2p        7.3p   (97.3%) 
 Cost / Income ratio                70.9%       60.0%     18.2% 
 Return on Assets                    0.3%       12.8%   (97.7%) 
 Adjusted Return on Assets 
  (1)                                8.9%       14.8%   (39.9%) 
 Return on Equity                    0.4%       17.2%   (97.7%) 
 Adjusted Return on Equity 
  (1)                               10.3%       19.9%   (48.2%) 
 Tangible Equity / average 
  receivables (1)                   86.3%       74.4%     16.0% 
 No of customers (000's)              180         255   (29.4%) 
 Number of agents                   1,385       1,695   (18.3%) 
 Credit Issued                  GBP129.0m   GBP190.3m   (32.2%) 
 Impairment as % of Revenue 
  (1)                               20.8%       27.2%   (23.5%) 
                               ----------  ----------  -------- 
 

1. Definitions are set out in the Glossary of Alternative Performance Measures on page 35

Paul Smith, Chief Executive Officer of Morses Club, commented:

"The last twelve months have been truly transformative for Morses Club. The Covid-19 pandemic forced us to innovate and accelerate our digital strategy, reconfiguring our operating model to allow us to maintain customer contact and collection activity whilst generating new lending opportunities and transitioning towards being a more complete financial services provider.

"The Group performed resiliently and profitably, despite not being able to lend to new HCC customers for five months of the year. In HCC, we re-commenced lending to existing customers just three weeks after lockdown was announced in March 2020. 67% of lending in our HCC division is now cashless and 80% of cash is collected remotely. Despite the impact of the pandemic, we saw a significant increase in the quality of our lending, with impairment levels well below the guidance range. The fact that customer satisfaction has increased to 98% reflects our customers' positive experience of the new remote lending model. I am very proud and grateful to all of my colleagues for adapting so well and for maintaining our customer service levels, despite the significant changes in the marketplace.

"The Digital division transitioned to two new operating platforms during the year and, despite tightening our lending criteria, the division issued more loans and introduced longer-term lending during the period, which is an encouraging indicator for the future growth of the Digital business and for the achievement of break-even on a run rate basis by the end of FY22. We are experiencing a growing demand from customers for a wider range of digital products and services and we have created a robust digital current account proposition and loans management platform positioned to capture this growth.

"We are seeing robust demand for non-standard finance products as the market reopens, with positive sales trends since the year-end in both divisions and further uptake expected as Government restrictions relax further. A number of our competitors have stepped back from the HCC and digital sectors and, as a result, we expect to benefit from reduced competition within the market. The accelerated shift to digital is permanent and the investment the Group has made in technological infrastructure over a number of years stands us in good stead to continue supporting our customers and meeting their ever-changing financial needs with our broadening suite of financial products."

Sell-side Analyst Presentation

The Company will be holding a virtual sell-side analyst presentation at 10.30 am on Thursday 13th May. Please contact morses@camarco.co.uk if you would like to attend.

Forward looking statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, forward-looking statements involve known and unknown risks and uncertainties since they relate to future events and circumstances. Actual results may, and often do, differ materially from any forward-looking statements.

Any forward-looking statements in this announcement reflect Morses Club's view with respect to future events as at the date of this announcement. Save as required by law or by the AIM Rules for Companies, Morses Club undertakes no obligation to publicly revise any forward-looking statements in this announcement following any change in its expectations or to reflect events or circumstances after the date of this announcement.

For further information please contact:

 
 Morses Club PLC                                  Tel: +44 (0) 330 
  Paul Smith, Chief Executive Officer              045 0719 
  Graeme Campbell, Chief Financial Officer 
 Peel Hunt (Nomad)                                Tel: +44 (0) 20 7418 
  Andrew Buchanan / James Britton / Rishi          8900 
  Shah / Duncan Littlejohns (Investment Banking 
  Division) 
 Camarco                                          Tel: +44 (0) 20 3757 
  Jennifer Renwick / Oliver Head                   4994 
 

Notes to Editors

About Morses Club

Morses Club is an established provider of non-standard financial services in the UK. The Group consists of Morses Club, the UK's second largest home collected credit ("HCC") provider, and Shelby Finance Limited, Morses Club's Digital division, which operates under two online brands, Dot Dot Loans, an online lending provider, and U Account, which offers online e-money current accounts. The Group's growing Digital capabilities and scalable, highly invested IT platform has enabled Morses Club to deliver an inc reasingly broad range of financial products and services to the non-standard credit market.

UK HCC is considered to be a specialised segment of the broader UK non-standard credit market. UK HCC loans are typically small, unsecured cash loans delivered directly to customers electronically, or physically to customers' homes. Repayments are collected either remotely or in person, during weekly follow-up visits to customers' homes.

Morses Club's HCC division is the second largest UK Home Collected Credit (HCC) lender with 151,000 customers throughout the UK. The majority of the Company's customers are repeat borrowers and the HCC division enjoys consistently high customer satisfaction scores of 98% (2) . In 2016, the Morses Club Card, a cashless lending product, was introduced and in 2019 the Company introduced an online customer portal for its HCC customers, which now has over 107,000 registered customers.

The Group's growing Digital division, Shelby Finance Limited, operates under two online brands. Dot Dot Loans provides online instalment loans of up to 60 months to c. 23,000 active customers. U Account is a leading digital current account provider offering an altern ative to traditional banking by providing a fully functional agency banking service. U Account currently has c. 6,000 customers.

Morses Club listed on AIM in May 2016.

About the UK non-standard credit market

The UK non-standard credit market, of which UK HCC is a subset, consists of both secured and unsecured lending and is estimated to comprise around 10 million consumers (3) and total loan receivables of GBP10.7bn (4) .

Non-standard credit is the provision of secured and unsecured credit to consumers other than through mainstream lenders. Lenders providing non-standard credit principally lend on an unsecured basis and the market is characterised by high frequency borrowin g. Approximately 2 million people move annually between standard and non-standard markets (4) .

Since February 2014, unsecured personal lending has grown from GBP161 billion to GBP225 billion in February 2020. It has since contracted to GBP197 billion in March 2021(5) .

(1 High Cost Credit Review ANNEX 1 - July 2017)

(2 Independent Customer Satisfaction Survey conducted by Mustard 3 FCA High Cost Credit Review Technical Annex 1: CRA data analysis of UK personal debt - July 2017 4 Apex Insight - Non-Prime Consumer Credit: UK Market Insight Report - September 2019 5 Table A5.2, Bank of England Money and Credit Bank stats March 2021)

(Review ANNEX 1 - July 2017)

Chief Executive Officer's Review

A transformative year for the business.

"Though FY21 was undoubtedly a year of many challenges, it is one we can look back on with an incredible amount of pride." - Paul Smith, Chief Executive Officer

We have delivered a resilient performance for our stakeholders and made significant progress towards becoming a more complete financial services provider.

The time and resources invested in developing our technology platforms in recent years have been instrumental to our successful response to the Covid-19 crisis. The swift transition to homeworking, including a fully operational virtual call centre system, and the speed with which we were able to restart lending to customers, were testament to our prior investment in digital. As a result, we find ourselves in a very promising position as the country begins to reopen.

In addition to the very high levels of customer satisfaction that we maintained, I feel immense pride in how adaptable and resilient our people have proven to be this year. The sheer doggedness of the whole team to react to our business having to change practically overnight and undertake the work required to produce such a strong performance has been nothing short of outstanding, and my thanks go out to everyone at Morses Club.

Performance

Despite the many positives from the year, Covid-19 has clearly impacted our performance, with customer numbers, credit issued and cash collected all down across the Group. This came as no surprise to us, with periods of lockdown meaning many consumers had little to no requirement for credit services.

Although we've lost customers, the collection percentage of our smaller base remained reasonably steady despite disruption towards the beginning of the pandemic, which is a real achievement and testament to the hard work of our people and systems. We also remain optimistic because we fully expect many customers to come back to us when the economy reopens.

Our successful response to Covid-19 has ensured the Group remains profitable, despite having to reconfigure our operating model and change the way we run our business. The value of new credit issued across the Group fell during the year as a consequence of reduced customer demand for our products during lockdown measures. Despite the economy shutting down for long periods of the year, our HCC division continued to perform strongly and issued new credit of GBP109.7m (FY20: GBP174.2m), closing the year with total loan receivables of GBP48.0m (FY20: GBP67.9m). During the period our digital division grew its loan book and issued new credit of GBP19.3m (FY20: GBP16.1m), closing the year with loan receivables of GBP5.6m (FY20: GBP4.9m). As a consequence of lower demand during the year in periods when the economy was closed, Group receivables fell from GBP72.8m in FY20 to GBP53.5m in FY21, our total number of customers also reduced to 180,000 (FY20: 255,000). Despite the challenges faced by the business, we continued to deliver excellent support and service to our customers, resulting in a 98% customer satisfaction score (FY20: 97%).

HCC

In response to the evolving Covid-19 situation, the HCC division tightened its lending criteria as we deliberately limited our appetite for lending. We sought to identify only the highest quality customer groups, and this resulted in us solely lending to existing customers for a time, before we cautiously expanded our offering to new customers again. We ended the year with customer numbers and lower lending at levels similar to what we forecasted, but the effectiveness of our cautious approach was demonstrated in the final quarter of FY21 as we were able to achieve a cash collections performance matching the same period of FY20, an outstanding result given the market circumstances.

It has also been clear from customer satisfaction surveys that our HCC customers are very happy with our new blend of digital and face-to-face customer service. Though many still value the personal contact of our agents, a significant number have embraced the ease and flexibility provided by the customer portal, and we expect this trend to continue.

Digital

We also tightened our lending criteria within our digital business, however, we still received and approved more applicants, grew our customer base, issued more loans and even managed to improve our collection performance. We believe this excellent performance demonstrates that better decision making is happening as a direct result of the new systems, practices and procedures we have embedded with our new loan management platform, which is hugely encouraging.

Though we expected the digital business to perform well with its established customers, as 27% of our lending has been from existing customers, our ability to achieve growth despite the circumstances has been a real positive of FY21.

In addition, we also rebased our e-money current account services products onto a new platform which offers true banking-grade digital services to our customers and is now truly scalable. This has seen us develop our longer-term, lower cost and revolving credit products, which we plan to offer to our banking customers in Q1 FY22.

External market

Our markets have been radically changed by the pandemic. We see robust demand in the non-standard finance market as Covid-19 recedes and beyond, with a pent-up demand expected to emerge once lockdowns are completely lifted.

We are likely to benefit from reduced competition within the HCC industry. The community of approximately 400 locally-focused and family-owned businesses has sadly been greatly reduced this year to 262, and we would be surprised to see all of those businesses re-emerge in the near future. We also believe that, post pandemic, our starting position is stronger than our national, quoted competitors, due to our successful changes to the way in which products are delivered and our risk appetite with regard to lending.

We are also strongly positioned to benefit from high demand in digital as a number of online lenders have exited the market and left us with far fewer competitors in that space.

Within the digital banking sector, there has been great interest as a growing number of customers migrate away from mainstream lenders to emerging digital banks. We see exciting opportunities for Morses Club to pick up customers as they move away from the mainstream, because the prevalent online disruptors are not focused on either the non-prime sector or on the provision of credit as an integral part of the banking relationship.

During the year, the Group has observed a noticeable increase in the level of complaints received from both Claims Management Companies (CMCs) and Customers. Whilst the increase in complaints is in line with sector-wide volumes, the number of complaints received by the Group is proportionately lower than other lenders in the sector. Many of the complaints received have been submitted by CMCs on behalf of customers, however, the Group is fully committed to reviewing every complaint and has provided sufficient resource to ensure each case is assessed individually and all customers are treated fairly.

Strategy

Our strategic response to the crisis has been focused on exploiting the re-engineering and digitalisation of the business that had been taking place for many years. Our steady evolution had to become a sudden shift, but our existing technology and expertise has enabled us to make good progress. Our new operating model is already lowering operating costs and increasing efficiencies, whilst still providing excellent levels of customer satisfaction, and good customer outcomes.

As we move beyond the pandemic, we are responding to an emerging desire from consumers for a wider range of products and services within the financial services sector. Our strategic pillars are focused on cross-selling our products and supporting all customers with a blend of our traditional, face-to-face DNA and what we believe to be our cutting edge technology solutions. We believe we are well positioned to drive strong volume growth across both divisions going forwards.

People, culture and stakeholders

Throughout the pandemic, our priorities have remained the same: protecting all of our key stakeholders whilst ensuring we could continue to support our customers and maintain high levels of satisfaction. Our deep-rooted culture and values, a key strength of the business, have been central to our response, with customer centricity, honesty, clarity and flexibility all underpinning our approach to helping stakeholders.

The transition to home working has been almost seamless, and I'm proud to say that our people have responded extraordinarily well to the year's many challenges. Our early investments in hardware and equipment have made long-term home working easier and more comfortable for our teams, and this has been reflected in no demonstrable decline in productivity.

Looking forward, we see many benefits of a permanent flexible working model for certain parts of the business. This has allowed us to massively reduce our property estate, including a move of our registered office and the closure of all field-based offices, which will result in cost savings and environmental benefits.

Just as we have prioritised delivering for our customers during a difficult time, our customers have delivered for us. Covid-19 had an initial impact on repayment rates, but these have improved and are now back to pre-Covid-19 levels. Customers have been responsible and cooperative, with our work to build long-term relationships being rewarded. Maintaining these relationships and building new ones going forwards will likely require a new blend of face-to-face and digital service and engagement, but we will always be driven by satisfaction rates and what our customers tell us they want.

In terms of wider stakeholders, during the year we have increasingly moved away from our reliance on external technology suppliers. Bringing many of these facilities in-house will have many financial benefits going forwards, and we're grateful to our partners for their help in this transition.

Outlook

As the economy gradually reopens throughout the first half of 2021, our priorities remain the health, safety and wellbeing of our key stakeholders. Though we appreciate many people are keen to return to the office as soon as possible, we will remain cautious in our own unlocking. With large parts of the economy set to remain closed until at least June, we are also cautious about our results for the first half of FY22.

However, the UK economy is widely predicted to rapidly recover over the coming year, and driven by pent-up demand across both of our divisions and a greatly reduced competitive landscape, we are optimistic about achieving year-on-year growth in the second half of the year. Should the UK suffer a longer-term economic downturn as a result of either the pandemic or Brexit or both, our sector has proven resilient in the past and we would remain confident in steady customer demand.

Overall, there are many reasons to be excited about our future growth prospects. Our HCC customer base should recover and expand as a result of welcoming customers back and welcoming new customers from competitors that no longer exist. Increased cross-selling will introduce existing HCC customers to a broader range of digital products, which will drive performance and satisfaction improvements for both divisions. In our digital division, volume growth and profitability will be delivered through attracting a wide range of new customers.

Taking full advantage of these opportunities will provide the bedrock for delivering attractive growth in the coming years once the pandemic has fully receded.

Paul Smith

Chief Executive Officer

13 May 2021

Chief Financial Officer's Operational and Financial Review

"The Group delivered an encouraging financial performance in FY21, overcoming the many challenges presented by Covid-19 to remain profitable whilst transforming our operating model." - Graeme Campbell, Chief Financial Officer

Overview

The results for the Group for the 52 weeks ended 27 February 2021 reflect an encouraging financial performance, overcoming the many challenges presented by Covid-19 to remain profitable while transforming our operating model.

Though the closed economy has lowered demand for our services and caused our customer base and the loan book to shrink, our underlying debt and collection performance has been very strong and we have trimmed costs to mitigate the impact as much as possible. We also decided not to take any government support or furlough any staff.

On a personal level, I'm delighted to have joined the Group and have been very impressed by the progress achieved during the year. We are well placed to grow both sides of the business as the economy reopens and customer demand returns.

Reconciliation of Statutory profit before tax to Adjusted profit before tax and explanation of Adjusted EPS

 
                                                     FY21                   FY20 
-------------------------------------------  ---------------------  --------------------- 
GBP'm (unless otherwise stated)                HCC  Digital  Total    HCC  Digital  Total 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Statutory Profit Before Tax                   11.8   (11.3)    0.5   21.2    (9.7)   11.5 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Covid-19 adjustment to impairment                -        -      -    1.7        -    1.7 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Statutory Profit Before Tax before 
 Covid-19 adjustment                          11.8   (11.3)    0.5   22.9    (9.7)   13.2 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Acquisition, restructuring and 
 non-recurring costs                           2.9      2.4    5.3    0.9      2.6    3.5 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Exceptional (gain)(2)                            -        -      -      -    (2.3)  (2.3) 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Amortisation of acquisition intangibles(3)     0.3        -    0.3    0.8      0.4    1.2 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Gains arising on acquisition                     -        -      -      -        -      - 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Normalised Adjusted Profit Before 
 Tax(1)                                       15.0    (8.9)    6.1   24.5    (9.0)   15.5 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Covid-19 adjustment to impairment                -        -      -  (1.7)        -  (1.7) 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Adjusted Profit Before Tax(1)                 15.0    (8.9)    6.1   22.8    (9.0)   13.8 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Tax on Adjusted Profit Before 
 Tax                                         (0.8)    (0.2)  (1.0)  (2.4)    (0.4)  (2.8) 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Adjusted Profit After Tax                     14.2    (9.1)    5.1   20.4    (9.4)   11.0 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Statutory EPS(1)                                              0.2p                   7.3p 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Normalised EPS(1)                                             3.9p                   9.5p 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Adjusted EPS(1)                                               3.9p                   8.4p 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Statutory Return on Assets(1)                22.0%            0.3%  27.5%           12.8% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Normalised Return on Assets(1)               27.2%            8.9%  31.1%           16.6% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Adjusted Return on Assets(1)                 27.2%            8.9%  29.3%           14.8% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Statutory Return on Equity(1)                18.5%            0.4%  30.1%           17.2% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Normalised Return on Equity(1)               22.8%           10.3%  34.1%           22.3% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
Adjusted Return on Equity(1)                 22.8%           10.3%  32.1%           19.9% 
-------------------------------------------  -----  -------  -----  -----  -------  ----- 
 

1 Definitions are set out in the Glossary of Alternative Performance Measures on pages 138 to 141.

2 Release of contingent consideration in relation to the U Holdings Limited acquisition

3 Amortisation of acquired customer lists and agent networks

In FY21 we achieved an adjusted profit before tax(1) of GBP6.1m (FY20: GBP13.8m). Statutory profit before tax was GBP0.5m (FY20: GBP11.5m).

As expected, Covid-19 impacted demand within HCC with closing customers down by a third to 151,000 (FY20: 221,000) and period end receivables decreasing by 29.3% to GBP48.0m (FY20: GBP67.9m). This resulted in adjusted profit before tax of GBP15.0m (FY20: GBP22.8m).

As with HCC, the Digital division was impacted by reduced demand due to lockdown measures and a tightening of lending criteria. Closing customers reduced by (14.7%) to 29,000 (FY20: 34,000) and revenue declined (4.2%) to GBP13.8m (FY20: GBP14.4m). This resulted in an adjusted loss before tax of (GBP8.9m), compared to FY20 (GBP9.0m).

Total equity for the Group remained unchanged from GBP70.7m in FY20 to GBP70.7m.

Trading summary

 
                                              52-week period ended      53-week period ended 
                                                27 February 2021          29 February 2020 
------------------------------------------  ------------------------  ------------------------ 
GBP'm (unless otherwise stated)                 HCC  Digital   Total      HCC  Digital   Total 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Customer numbers ('000s)                        151       29     180      221       34     255 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Credit issued                                 109.7     19.3   129.0    174.2     16.1   190.3 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Period end receivables                         48.0      5.6    53.5     67.9      4.9    72.8 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Average receivables                            52.3      5.2    57.5     69.3      5.0    74.3 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Revenue                                        86.4     13.8   100.2    119.3     14.4   133.7 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Impairment                                   (13.2)    (7.6)  (20.8)   (27.6)    (7.1)  (34.7) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Agent Commission & Other 
 cost of sales                               (20.0)    (0.6)  (20.7)   (27.0)    (0.6)  (27.6) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Gross Profit                                   53.2      5.6    58.8     64.7      6.6    71.3 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Administration expenses (pre-exceptional)    (33.8)   (12.2)  (46.0)   (34.4)   (13.8)  (48.2) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Depreciation                                  (3.6)    (0.7)   (4.3)    (3.6)    (0.7)   (4.3) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Operating Profit before exceptional 
 items and amortisation of 
 acquisition intangibles                       15.8    (7.3)     8.5     26.7    (7.9)    18.8 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Amortisation of acquisition 
 intangibles                                  (0.3)        -   (0.3)    (0.8)    (0.4)   (1.2) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Acquisition, restructuring 
 and non-recurring costs                      (2.9)    (2.4)   (5.3)    (0.9)    (2.6)   (3.5) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Covid-19 adjustment to impairment                 -        -       -    (1.7)        -   (1.7) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Exceptional gain                                  -        -       -        -      2.3     2.3 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Operating profit                               12.5    (9.7)     2.8     23.2    (8.5)    14.7 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Funding costs                                 (0.7)    (1.6)   (2.4)    (2.1)    (1.1)   (3.3) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Statutory Profit Before Tax                    11.8   (11.3)     0.5     21.2    (9.7)    11.5 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Tax                                           (0.3)      0.1   (0.2)    (2.0)      0.1   (2.0) 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Statutory Profit After Tax                     11.5   (11.2)     0.2     19.2    (9.7)     9.5 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
Basic EPS                                                       0.2p                      7.3p 
------------------------------------------  -------  -------  ------  -------  -------  ------ 
 

Group results

Credit issued to customers decreased by (32.2%) to GBP129.0m (FY20: GBP190.3m) mainly because of the Covid-19 impact on HCC business. HCC credit issued of GBP109.7m was a (37.0%) reduction on FY20 (FY20: GBP174.2m), reflecting both the reduced demand due to multiple national and regional Covid-19 lockdowns during the year and stricter lending criteria to protect the quality of the loan book. Credit issued in Digital was impacted by Covid-19 lockdowns and tighter lending criteria, but despite this, credit issued increased by 19.9% to GBP19.3m (FY20: GBP16.1m).

Revenue decreased by (25.1%) to GBP100.2m (FY20: GBP133.7m) due to the Covid-19 impact on demand and the temporary inability in HCC during H1 to lend to new customers. HCC revenue decreased by (27.6%) to GBP86.4m (FY20: GBP119.3m). Digital revenue decreased by (4.2%) to GBP13.8m (FY20: GBP14.4m) as a result of the collection of the acquired CURO Transatlantic Limited loan book inflating the numbers in FY20.

Gross profit decreased by (17.5%) to GBP58.8m (FY20: GBP71.3m). The gross profit percentage increased to 58.7% from FY20 53.3%. The HCC impairment charge as a percentage of revenue of 15.3% is below our guidance range of 21% to 26% of revenue. This is due to the favourable impact from a shrinking loan book under IFRS9, tighter lending criteria and the high proportion of lending to existing customers. The Digital impairment charge as a percentage of revenue of 55.1% is at the upper end of our guidance range of 45-55% of revenue.

HCC agent commission costs decreased by (25.9%) to GBP20.0m (FY20: GBP27m), while as a percentage of revenue they increased to 23.1% from 22.6% in FY20 as a result of the loan book reducing during Covid-19. Administration expenses and depreciation decreased by GBP2.2m to GBP50.3m (FY20: GBP52.5m), although as a percentage of revenue they increased to 50.2% (FY20: 39.3%). A provision of GBP2m (FY20: GBPnil) for customer redress and Financial Ombudsman (FOS) fees has been recognised in recognition of outstanding complaints at the end of the period. Due to significantly lower complaint volumes in FY20 a prior year provision was immaterial and therefore not recognised. In estimating the FY21 provision, management have incorporated historical company information for the average percentage of complaints which are upheld, the average value of compensation claims paid out and the number of outstanding complaints that remained unresolved at the balance sheet date.

Adjusted profit before tax decreased to GBP6.1m from GBP13.8m in FY20. HCC adjusted return on assets decreased from 29.3% in FY20 to 27.2% in FY21.

Acquisition, restructuring and non-recurring costs increased to GBP5.3m from GBP3.5m in FY20. These costs consist of a restructure within the HCC field team to align them to the new operating model, IT system transition costs and the settlement of the historic Ffrees court case which was disclosed in the FY20 accounts.

Funding costs of GBP2.4m were (GBP0.9m) lower than FY20 reflecting the lower level of borrowings throughout FY21.

The statutory profit before tax fell to GBP0.5m from GBP11.5m in FY20.

Earnings per share

The adjusted earnings per share for FY21 was 3.9p, a decrease of 53.6% relative to the adjusted earnings per share of 8.4p for FY20. The reported earnings per share for FY21 was 0.2p, a decrease of 97.3% relative to the reported earnings per share of 7.3p for FY20.

Dividend

Subject to shareholder approval at the Annual General Meeting on 22 June 2021, the Board proposes to pay a final dividend of 2.0p per Ordinary Share (FY20: 1.0p) payable on 30 July 2021 to shareholders on the register at the close of business on 2 July 2021.

The payment is in addition to the interim payment dividend already paid of 1.0p per Ordinary Share on 9 April 2021, making a total dividend for the year of 3.0p per Ordinary Share (FY20: 3.6p). This dividend payment reflects the Board's confidence in the Group's prospects.

Funding

During the period we extended our loan facility with the incumbent three lender consortium to December 2021, reducing the facility limit to GBP40m. In May 2021 we successfully reached agreement with a new two lender consortium, for a more cost efficient and slightly lower GBP35m facility, extended to December 2022. The new facility will continue funding our existing HCC products, but crucially, it will unlock funding for our Dot Dot loan products and help the business achieve its immediate strategic objectives.

As anticipated, the impact of Covid-19 resulted in reduced lending volumes, a smaller loan book and lower levels of borrowing. In FY21 borrowing peaked at GBP22.5m in December 2020 (December 2019: GBP40m of the GBP55m limit).

Balance sheet

The total equity for the Group is unchanged from GBP70.7m in FY20 to GBP70.7m. The Group's main asset is our loan book, which due to the Covid-19 impact on lending volumes decreased on a net basis by (26.5%) to GBP53.5m.

 
Summarised balance sheet GBP'm    FY21    FY20 
-------------------------------  -----  ------ 
Loan book                         53.5    72.8 
-------------------------------  -----  ------ 
Goodwill                          12.9    13.0 
-------------------------------  -----  ------ 
Bank borrowings                  (8.3)  (33.8) 
-------------------------------  -----  ------ 
Cash at bank                       8.3    11.9 
-------------------------------  -----  ------ 
Other net assets                   4.4     6.8 
-------------------------------  -----  ------ 
Total equity                      70.7    70.7 
-------------------------------  -----  ------ 
 

Cash flow

The simplified cash flow statement below illustrates the cash generated by the business. Cash from operating activities increased by 54.7% to GBP33.1m (FY20: GBP21.4m), with net borrowing decreasing by (GBP25.5m), as a result of the shrinking loan book.

 
Summarised cash flow GBP'm                           FY21    FY20 
-------------------------------------------------  ------  ------ 
Cash inflow from operating activities                33.1    21.4 
-------------------------------------------------  ------  ------ 
Net borrowing (decrease)/increase                  (25.5)    19.5 
-------------------------------------------------  ------  ------ 
Net cash outflow from investing activities          (6.4)  (22.4) 
-------------------------------------------------  ------  ------ 
Dividends paid                                      (1.3)  (10.2) 
-------------------------------------------------  ------  ------ 
Other net cash flow movements                         3.5     4.3 
-------------------------------------------------  ------  ------ 
(Decrease)/Increase in cash and cash equivalents    (3.6)     4.0 
-------------------------------------------------  ------  ------ 
 

Outlook

Due to much of the economy being closed for the majority of this financial year, we're yet to see the financial benefits of our HCC operating model transformation. There are economic uncertainties ahead, with the UK currently in the process of emerging from lockdown. We remain cautious about the first half of FY22, however, strong foundations have been laid and we're excited for what can be achieved in the future and confident in the growth opportunities that will be created by our new operating model.

The Digital division implemented two new IT platforms in the year to strengthen the existing loans management system and to create a robust banking proposition. The Digital division is now primed for growth and we are now focusing on scaling the business and achieving run-rate profitability by the end of FY22.

Graeme Campbell

Chief Financial Officer

13 May 2021

CONSOLIDATED INCOME STATEMENT

FOR THE 52 WEEK PERIODED 27 FEBRUARY 2021

 
                                                    52 weeks   53 weeks 
                                                       ended      ended 
                                                     27.2.21    29.2.20 
                                            Notes    GBP'000    GBP'000 
 
 
 Revenue                                             100,234    133,651 
 Impairment on financial assets                     (20,794)   (36,358) 
 Cost of sales                                      (20,657)   (27,669) 
                                                   ---------  --------- 
 GROSS PROFIT                                         58,783     69,624 
 
 Administration expenses                            (55,967)   (54,918) 
                                                              --------- 
 Operating profit before amortisation 
  of intangibles and exceptional items                 3,161     13,593 
 Amortisation of acquisition intangibles               (345)    (1,222) 
 Exceptional items                                         -      2,335 
-----------------------------------------  ------  ---------  --------- 
 
 Operating Profit                                      2,816     14,706 
 
 Finance costs                                       (2,360)    (3,255) 
                                                   ---------  --------- 
 
 Profit before taxation                       2          456     11,451 
 Tax on profit on ordinary activities         3        (239)    (1,974) 
                                                   ---------  --------- 
 Profit after taxation                                   217      9,477 
                                                   ---------  --------- 
 
 
                           27.2.21             29.2.20 
 Earnings per share          Pence               Pence 
 Basic                 5      0.17                7.26 
                          --------  ------------------ 
 Diluted               5      0.17                7.21 
                          --------  ------------------ 
 

All results derive from continuing operations. A Statement of Comprehensive Income is not included as there are no other gains or losses, other than those presented in the Income Statement.

BALANCE SHEET

AS AT 27 FEBRUARY 2021

 
                                               Group 
                                       --------------------- 
 Assets                         Notes    27.2.21     29.2.20 
 Non-current assets                      GBP'000     GBP'000 
 Goodwill                         6       12,854      12,981 
 Other intangible assets          7        8,863       7,362 
 Investment in Subsidiaries                    -           - 
 Property, plant & 
  equipment                                  734         818 
 Right-of-Use Assets                       1,696       2,783 
 Deferred Tax                     9          581         659 
 Amounts receivable 
  from customers                  8           82         657 
                                          24,810      25,260 
                                       ---------  ---------- 
 Current Assets 
 Amounts receivable 
  from customers                  8       53,408      72,171 
 Taxation receivable                       1,387         501 
 Other receivables                         4,927       4,256 
 Cash at bank                              8,258      11,868 
                                          67,980      88,796 
                                       ---------  ---------- 
 Total assets                             92,790     114,056 
                                       ---------  ---------- 
 
 Liabilities 
 Current Liabilities 
 Trade and other payables               (10,039)     (6,723) 
 Complaints provision            11      (2,012)           - 
 Lease liabilities                         (790)     (1,286) 
                                        (12,841)     (8,009) 
                                       ---------  ---------- 
 
 Non-current liabilities 
 Bank and other borrowings         10    (8,302)    (33,838) 
 Lease Liabilities                         (994)     (1,553) 
                                         (9,296)    (35,391) 
                                       ---------  ---------- 
 Total liabilities                      (22,137)    (43,400) 
                                       ---------  ---------- 
 NET ASSETS                               70,653      70,656 
                                       ---------  ---------- 
 
 Equity 
 Called up share capital                   1,325       1,312 
 Group reconstruction                          -           - 
  reserve 
 Retained Earnings                        69,328      69,344 
 
 TOTAL EQUITY                             70,653      70,656 
                                       =========  ========== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 52 WEEK PERIODED 27 FEBRUARY 2021

 
                                                 Called              Retained                Total 
                                                     up 
                                          share capital              Earnings               Equity 
 Group                                          GBP'000               GBP'000              GBP'000 
 As at 23 February 2019                           1,298                69,835               71,133 
                                   --------------------  --------------------  ------------------- 
 Profit for year                                      -                 9,477                9,477 
                                   --------------------  --------------------  ------------------- 
 Total comprehensive income 
  for the period                                      -                 9,477                9,477 
 Deferred Tax on Acquisitions                         -                    39                   39 
 Share issue                                         14                     -                   14 
 Share based payments charge                          -                   155                  155 
 Dividends paid                                       -              (10,162)             (10,162) 
 As at 29 February 2020                           1,312                69,344               70,656 
                                   --------------------  --------------------  ------------------- 
 Profit for year                                      -                   217                  217 
                                   --------------------  --------------------  ------------------- 
 Total comprehensive income 
  for the period                                      -                   217                  217 
 Share issue                                         13                     -                   13 
 Share based payments charge                          -                 1,079                1,079 
 Dividends paid                                       -               (1,312)              (1,312) 
 As at 27 February 2021                           1,325                69,328               70,653 
                                   ====================  ====================  =================== 
 

CASH FLOW STATEMENTS

FOR THE 52 WEEK PERIODED 27 FEBRUARY 2021

 
                                                                                       Group 
                                                      -----------------  ------------------- 
                                                                27.2.21              29.2.20 
                                               Notes            GBP'000              GBP'000 
 
     Net cash inflow from operating 
      activities                                                 33,054               21,418 
 
     Cash flows used in financing 
      activities 
     Dividends Paid                                4        (1,312)                 (10,162) 
     Proceeds from additional long-term 
      debt                                                       11,500               36,000 
     Repayment of long-term debt                           (37,000)                 (16,500) 
     Principal paid under lease liabilities                     (1,499)              (1,385) 
     Interest received                                                -                   13 
     Interest paid                                              (1,622)              (2,533) 
     Interest paid (lease liabilities)                            (353)                (472) 
     Net cash inflow/(outflow) from 
      financing activities                                     (30,286)              (4,961) 
 
     Cash flows used in investing 
      activities 
     Purchase of intangibles                                    (5,282)              (4,277) 
     Purchase of property, plant and 
      equipment including RoU Assets                            (1,096)              (2,180) 
     Additional investment in subsidiary                              -                    - 
     Acquisitions                                                     -             (15,947) 
     Net cash (outflow) from investing 
      activities                                           (6,378)                  (22,404) 
 
 
     (Decrease)/Increase in cash and 
      cash equivalents                                          (3,610)                3,975 
                                                      =================  =================== 
 
 
 
     Reconciliation of increase in 
      cash and cash equivalents 
 
     Movement in cash and cash equivalents 
      in the period                                             (3,610)                3,975 
 
 
     Cash and cash equivalents, beginning 
      of year                                                    11,868                7,893 
                                                      =================  =================== 
 
     Cash and cash equivalents, end 
      of year                                                     8,258               11,868 
                                                      =================  =================== 
 

NOTES TO CONSOLIDATED CASH FLOW STATEMENT

RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES

 
                                                                     Group 
                                                 -----------------  -------------- 
                                                           27.2.21         29.2.20 
                                                           GBP'000         GBP'000 
 ---------------------------------------------   -----------------  -------------- 
         Profit before tax and exceptional 
          items                                                456           9.116 
         Exceptional gains                                       -           2.335 
                                                 -----------------  -------------- 
         Profit before taxation                                456          11,451 
 
 
         Interest received included 
          in financing activities                                -            (13) 
         Interest paid included in financing 
         activities                                          2,006           3,006 
         Share issue                                            13              14 
         Depreciation charges                                1,915           2,436 
         Share based payments charge                         1,079             155 
         Impairment of goodwill                                126              16 
         Amortisation of intangibles                         2,811           3,136 
         Write off of Right-of-Use Assets                      261             142 
         Loss on disposal of Tangible                           92               - 
          Assets 
         Loss on disposal of Intangible                        969               - 
          Assets 
         Decrease/(increase) in debtors                     18,667           6,702 
         Increase/(decrease) in creditors                    5,849         (1,466) 
                                                            33,788          14,217 
 
 
         Taxation paid                                     (1,190)         (4,160) 
                                                 -----------------  -------------- 
         Net cash inflow from operating 
          activities                                        33,054          21,418 
                                                 =================  ============== 
 
 

Notes to consolidated financial statements

   1.   ACCOUNTING POLICIES 

Basis of preparation

Basis of preparation

The preliminary announcement has been prepared in accordance with the Listing Rules of the FCA and is based on the consolidated financial statements for the period ended 27 February 2021 which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The financial statements have been prepared on a going concern basis under the historical cost convention. In preparing the financial statements, the Directors are required to use certain critical accounting estimates and are required to exercise judgement in the application of the Group and Company's accounting policies.

Shopacheck Financial Services Limited qualifies for an exemption to audit under the requirements of Section 480 of the Companies Act 2006. Shelby Finance Limited and U Holdings Limited both qualify for an exemption to audit under the requirements of Section 479A of the Companies Act 2006. As such, no audit has been conducted for these companies in the current financial year. As such, no audit has been conducted for these companies in the period ending 27 February 2021.

The preliminary announcement has been prepared on a going concern basis consistent with the basis of preparation of the statutory financial statements for the period ended 27 February 2021.

The preliminary announcement does not constitute the statutory financial statements of the Group within the meaning of Section 434 of the Companies Act 2006.

The preliminary announcement has been agreed with the Company's auditor for release.

   2.            PROFIT BEFORE TAX 

The operating profit is stated after charging:

 
                                                52 weeks        53 weeks 
                                                   ended           ended 
                                                 29.2.21         29.2.20 
                                                 GBP'000         GBP'000 
------------------------------------      --------------  -------------- 
 Depreciation - owned assets                         329             740 
 Amortisation of intangibles                       2,811           3,135 
 Depreciation of right-use-asset                   1,586           1,696 
 Impairment of financial 
  assets                                          20,794          36,358 
 Operating lease rentals - Motor 
  vehicles                                           205             339 
 Operating lease rentals - Property                  443             710 
--------------------------------------    --------------  -------------- 
 
 
 Directors' and key management personnel remuneration 
  includes the following expenses: 
                                                         52 weeks           53 weeks 
                                                            ended              ended 
                                                          27.2.21            29.2.20 
                                                          GBP'000            GBP'000 
 Short-term employee benefits                               1,055                979 
 Post-employment benefits                                      32                 25 
 Long-term benefits                                             -                275 
 Share-based payments                                         248                134 
                                                            1,335              1,413 
                                                =================  ================= 
 
 The number of directors to whom retirement benefits 
  were accruing was as follows: 
 Money purchase schemes                                         4                  3 
                                                =================  ================= 
 
 Information regarding the highest 
  paid director is as follows: 
                                                         52 weeks           53 weeks 
                                                            ended              ended 
                                                          27.2.21            29.2.20 
                                                          GBP'000            GBP'000 
 Emoluments                                                   462                570 
 Pension contributions to money 
  purchase schemes                                             17                 15 
                                                =================  ================= 
 
 
   3.            TAXATION 
 
 Analysis of the tax charge 
 The tax charge on profit before 
  tax for the period was as follows: 
                                           52 weeks   53 weeks 
                                              ended      ended 
                                            27.2.21    29.2.20 
                                            GBP'000    GBP'000 
 Current tax: 
 UK corporation tax                             318      1,866 
 Adjustment in respect of prior 
  years                                          24        (3) 
                                          ---------  --------- 
 Total current tax                              342      1,863 
 
 Origination and temporary timing 
  differences                                 (103)        124 
 Adjustment in respect of prior 
  years                                           -          1 
 Effect of change of tax rates                    -       (14) 
 Total deferred tax                           (103)        111 
 
 Tax on profit on ordinary activities           239      1,974 
                                          =========  ========= 
 
 

The tax assessed for the period is lower than the standard rate of corporation tax in the UK.

 
 
 
 The difference is explained 
  below: 
                                            52 weeks   53 weeks 
                                               ended      Ended 
                                             27.2.21    29.2.20 
                                             GBP'000    GBP'000 
 Profit before exceptional costs                 456      9,116 
 Exceptional gains                                 -      2,335 
 Profit on ordinary activities 
  before tax                                     456     11,451 
                                           =========  ========= 
 Effects of: 
 Profit on ordinary activities 
 multiplied by the standard 
  rate of corporation tax 
 in the UK of 19% (2019 - 19%)                    87      2,176 
 
 Effects of: 
 Expenses not deductible for 
  tax purposes                                   233         85 
 Release of deferred consideration                 -      (290) 
 Adjustment in respect of prior 
  periods                                         24         13 
 Rate difference - deferred 
  tax                                           (67)       (13) 
 Movement in amounts not provided 
  in deferred tax                                  9          3 
 Tax losses surrendered by another              (52)          - 
  group company 
 Fixed asset differences                           5          - 
 Tax on profit on ordinary activities            239      1,974 
                                           =========  ========= 
 
 

The standard rate of corporation tax applicable for the period ended 27 February 2021 is 19% (2020: 19%).

   4.            DIVID PER SHARE 
 
                                               52 weeks            53 weeks 
                                                  Ended               ended 
                                                27.2.21             29.2.20 
 Dividend (GBP'000)                               1,312              10,162 
 Weighted average number of shares 
  (000's)                                       131,383             130,531 
 Per share amount (pence)                          1.00                7.78 
                                      =================  ================== 
 

Subject to shareholder approval at the General Meeting on 22 June 2021, the Board proposes to pay a final dividend of 2.0 pence per Ordinary Share payable on 30 July 2021 to all shareholders on the register at the close of business on 2 July 2021.

   5.            EARNINGS PER SHARE 
 
                                                     52 weeks   53 weeks 
                                                        ended      ended 
                                                      27.2.21    29.2.20 
 
 Earnings (GBP'000)                                       218      9,477 
                                                    =========  ========= 
 
 Number of shares 
 Weighted average number of shares (000's)            131,383    130,531 
 
 Effect of dilutive potential ordinary shares 
  through share options ('000s)                           200        843 
 
 Weighted average number of shares for the 
  purposes of diluted earnings per share ('000s)      131,583    131,374 
                                                    =========  ========= 
 Basic earnings per share amount (pence)                 0.17       7.26 
                                                    =========  ========= 
 Diluted earnings per share amount (pence)               0.17       7.21 
                                                    =========  ========= 
 

Diluted earnings per share calculates the effect on earnings per share assuming conversion of all dilutive potential

Ordinary Shares. Dilutive potential Ordinary Shares are calculated for awards outstanding under performance related share incentive schemes such as the Deferred Share Plans. The number of dilutive potential Ordinary Shares is calculated based on the number of shares which would be issuable if the performance targets have been met.

   6.            GOODWILL 
 
                                                    Group 
                                                 Goodwill 
 COST                                             GBP'000 
 At 23 February 2019                                3,834 
 Additions 2019/20                                  9,496 
 At 29 February 2020                               13,330 
 Additions 2020/21                                      - 
 At 27 February 2021                               13,330 
                                    --------------------- 
 
 Impairment 
 At 23 February 2019                                (333) 
 Impairment loss for the period                      (16) 
                                    --------------------- 
 At 29 February 2020                                (349) 
 Impairment loss for the period                     (127) 
 At 27 February 2021                                (476) 
                                    --------------------- 
 Net Book Value 
 
 At 27 February 2021                               12,854 
                                    ===================== 
 At 29 February 2020                               12,981 
                                    ===================== 
 At 23 February 2019                                3,501 
                                    ===================== 
 

Key assumptions used in goodwill impairment review

The market share price of the Company at 27 February 2021 was GBP0.631, reflecting the market's view of the current and future value of the Group. This share price results in a market capitalisation value for the Company of GBP83.6m which is below the Company's net asset value of GBP91.5m and therefore, an indicator of possible impairment. As a result, we have assessed the recoverable amount of both the Company's goodwill and its investment in subsidiary. The recoverable amount has been calculated using the value in use method. Goodwill is tested for impairment annually or more frequently if there are indications that goodwill might be impaired. Determining whether goodwill is impaired requires an estimation of the discounted future cash flows of the Company using a discount rate of 13% (FY20: 13%) and an initial growth rate over the first three years of 47% (FY20: 22%) followed by a terminal value based on a minimum future growth rate of 2% (FY20: 2%).

The future cash flows take into account management's view of the impact from Covid-19 on future performance. The Group has conducted a sensitivity analysis on the goodwill impairment assessment and believes that there are no reasonably possible changes to the key assumptions in the next year which would result in the carrying value of goodwill exceeding the recoverable amount. The key assumptions used in the value in use calculation are the growth rates and the discount rates adopted. The growth rates are based on the most recent financial budgets approved by the Group Board for the next three years. The discount rates which reflect the time value of money and the risks specific to the financial services sector are sourced from an independent third party. No reasonably foreseeable reduction in the assumptions would give rise to an impairment and therefore no further sensitivity analysis has been presented. The same assumptions have been applied to the goodwill impairment review in both CGUs. The impairment loss for the period of GBP126,260 arose due to the CURO Transatlantic Limited loan book now being fully settled.

The carrying amount of goodwill has been allocated to cash-generating units as follows:

 
                      52 weeks           53 weeks 
                         ended              ended 
                       27.2.21            29.2.20 
                       GBP'000            GBP'000 
 HCC                     3,293              3,293 
 Digital                 9,561              9,688 
                        12,854             12,981 
            ==================  ================= 
 
   7.            OTHER INTANGIBLE ASSETS 
 
                               Software   Customer      Agent 
 Group                       & Licences      Lists   Networks     Totals 
                                GBP'000    GBP'000    GBP'000    GBP'000 
 Cost 
 At 23 February 2019              8,864     21,241        874     30,979 
 Additions                        3,897        380          -      4,277 
 At 29 February 2020             12,761     21,621        874     35,256 
 Additions                        5,282          -          -      5,282 
 Disposals                      (3,085)          -          -    (3,085) 
 At 27 February 2021             14,958     21,621        874     37,453 
                            -----------  ---------  ---------  --------- 
 
 Accumulated Amortisation 
 At 23 February 2019              4,226     19,724        808     24,758 
 Charge for the period            1,914      1,191         31      3,136 
 At 29 February 2020              6,140     20,915        839     27,894 
 Charge for the period            2,428        329         16      2,773 
 Eliminated on disposal         (2,115)          -          -   -(2,115) 
 Impairment losses                    -         38          -         38 
 At 27 February 2021              6,453     21,282        855     28,590 
                            -----------  ---------  ---------  --------- 
 
 Net Book Value 
 At 27 February 2021              8,505        339         19      8,863 
                            ===========  =========  =========  ========= 
 At 29 February 2020              6,621        706         35      7,362 
                            ===========  =========  =========  ========= 
 At 23 February 2019              4,638      1,517         66      6,221 
                            ===========  =========  =========  ========= 
 

Impairment losses relate to the Hays Customer List amounting to GBP38,133.

Research and development expenditure expensed during the year was GBPnil (2020: nil).

   8.            TRADE AND OTHER RECEIVABLES 
 
 Amounts receivable from                           Group 
  customers 
                                   ------------------------------------ 
                                             27.2.21            29.2.20 
                                             GBP'000            GBP'000 
 Amounts falling due within 
  one year: 
 Net receivable from advances 
  to customers                                53,408             72,171 
 Amounts falling due after 
  one year: 
 Net receivable from advances 
  to customers                                    82                657 
                                   -----------------  ----------------- 
 Net loan book                                53,490             72,828 
 
 
 Other debtors                                 2,880              1,718 
 Intercompany funding                              -                  - 
 Prepayments                                   3,434              3,039 
                                   -----------------  ----------------- 
                                              59,804             77,585 
                                   =================  ================= 
 

Amounts receivable from customers

 
                                        Group 
                                 ------------------ 
                                  27.2.21   29.2.20 
                                  GBP'000   GBP'000 
 Amounts receivable from 
 customers                         53,490    72,828 
                                 --------  -------- 
 
 Analysis by future date 
 due 
  - due within one year            53,408    72,171 
  - due in more than one 
  year                                 82       657 
                                 --------  -------- 
 Amounts receivable from 
 customers                         53,490    72,828 
                                 ========  ======== 
 
 Analysis by security 
 Other loans not secured           53,490    72,828 
                                 --------  -------- 
 Amounts receivable from 
 customers                         53,490    72,828 
                                 ========  ======== 
 

Impairment provisions are recognised on inception of a loan based on the expected 12-month losses or the lifetime losses of the loan. Further details can be found on page 102 of the Annual Report and Accounts .

At 27 February 2021 the amounts receivable from customers are as follows:

 
                                     Group 
                             -------------------- 
                               27.2.21    29.2.20 
                               GBP'000    GBP'000 
 Gross Carrying Amount          90,063    120,946 
 Impairment Provision         (36,573)   (48,118) 
 Net Amounts Receivable         53,490     72,828 
                             =========  ========= 
 

Amounts receivable from Group customers can be reconciled as follows:

 
                                                                                       2020/21 
                                                                                          IFRS 
                                                                                             9 
                                           Stage           Stage             Stage       Total 
                                Ref*           1               2                 3 
 Group                                   GBP'000         GBP'000           GBP'000     GBP'000 
-----------------------------  -----  ----------  --------------  ----------------  ---------- 
 Gross carrying amount 
 At 29 February 2020                      60,345          34,602            25,999     120,946 
 New financial assets 
  originated                     1       129,004               4                 -     129,008 
 Net transfers and changes                                                                   - 
  in credit risk: 
 From Stage 1 to Stage 
  2                              2      (30,617)          30,617                 -           - 
 From Stage 1 to Stage 
  3                              2       (9,314)               -             9,314           - 
 From Stage 2 to Stage 
  1                              2         2,147         (2,147)                 -           - 
 From Stage 2 to Stage 
  3                              2             -        (10,415)            10,415           - 
 From Stage 3 to Stage 
  1                              2            90               -              (90)           - 
 From Stage 3 to Stage 
  2                              2             -           2,755           (2,755)           - 
 Write-offs                      3       (9,310)         (9,224)          (15,581)    (34,115) 
 Collections                     4     (185,567)        (34,351)           (7,216)   (227,134) 
 Revenue                         5        90,973           8,730               531     100,234 
 Other movements                 6         1,012             (6)               118       1,124 
 At 27 February 2021                      48,763          20,565            20,735      90,063 
-----------------------------  -----  ----------  --------------  ----------------  ---------- 
 
 Loan loss provision account 
 At 29 February 2020                       9,110          16,887            22,121      48,118 
-----------------------------  -----  ----------  --------------  ----------------  ---------- 
 Movements through income statement: 
 New financial assets 
  originated                     7        18,834               2                 -      18,836 
 Net transfers and changes 
  in credit risk: 
 From Stage 1 to Stage 
  2                              2      (12,539)          14,166                 -       1,627 
 From Stage 1 to Stage 
  3                              2       (7,271)               -             7,841         570 
 From Stage 2 to Stage 
  1                              2           318           (351)                 -        (33) 
 From Stage 2 to Stage 
  3                              2             -         (8,666)             8,666           - 
 From Stage 3 to Stage 
  1                              2            25               -              (28)         (3) 
 From Stage 3 to Stage 
  2                              2             -           1,758           (1,758)           - 
 Remeasurements within 
  existing stage                 3        10,181         (3,379)           (3,295)       3,507 
 Prior Year Covid-19 Overlay 
  Reversal                       8       (1,134)           (461)              (75)     (1,670) 
 Total movements through income 
  statement                                8,414           3,069            11,351      22,834 
 Other movements: 
 Write-offs                      3       (9,310)         (9,224)          (15,581)    (34,115) 
 Other movements:                6             -               -             (264)       (264) 
 Loan loss provision account 
  at 27 February 2021                      8,214          10,732            17,627      36,573 
------------------------------------  ----------  --------------  ----------------  ---------- 
 Reported amounts receivable 
  from customers at 27 February 
  2021                                    40,549           9,833             3,108      53,490 
------------------------------------ 
 Reported amounts receivable 
  from customers at 29 February 
  2020                                    51,235          17,715             3,878      72,827 
------------------------------------  ----------  --------------  ----------------  ---------- 
 
 
 
 *References above indicate what each line of the table 
  demonstrates: 
 (1) New loans issued in          (5) Revenue per Stage 
  the year 
 (2) Staging movements of         (6) Other Movements, including 
  new loans issued and existing    acquisitions 
  debt brought forward 
 (3) Net write-offs per Stage     (7) Impairment provision 
                                   associated with new loans 
                                   issued in the year 
 (4) Collections per Stage        (8) Covid-19 overlay 
 

A breakdown of the gross receivable by internal credit risk rating is shown below:

 
 2020/21 
 Group Credit Risk Grade    Stage 1   Stage 2   Stage 3     Total 
                            GBP'000   GBP'000   GBP'000   GBP'000 
-------------------------  --------  --------  --------  -------- 
 Very Good                   32,285     8,910     9,407    50,602 
 Good                        14,330     9,833     8,628    32,791 
 Satisfactory                 1,719     1,340       622     3,681 
 Lower Quality                  431       481     2,077     2,989 
 Total                       48,765    20,564    20,734    90,063 
-------------------------  --------  --------  --------  -------- 
 

Internal credit risk rating reflects the internal credit risk grade of customers at the year end. The table above illustrates the split of the gross carrying value at the year-end by the latest customer credit scores at the time of issue. Customers are re-scored if they decide to renew.

   9.            DEFERRED TAX 
 
                                        Group 
                                  27.2.21   29.2.20 
                                  GBP'000   GBP'000 
                                 --------  -------- 
 Fixed asset temporary 
  differences                       (142)     (165) 
 Other temporary differences          723       824 
 Deferred tax asset                   581       659 
                                 ========  ======== 
 
 
                                                        Group 
                                                      GBP'000 
                                                     -------- 
 Balance as at 29 February 2020                           659 
 Accelerated Capital Allowances 
 Deferred Tax charge in profit and loss account 
 for period - CY                                          (9) 
 Deferred Tax charge in profit and loss account 
 for period - PY                                           99 
 Deferred Tax rate change                                  14 
 Short Term Timing Differences 
 Deferred Tax charge in profit and loss account 
 for period - CY                                         (51) 
 Deferred Tax rate change                                  49 
 Intangibles 
 Deferred Tax charge in profit and loss account 
 for period - CY                                           29 
 Deferred Tax charge in profit and loss account 
 for period - PY                                        (136) 
 Deferred Tax rate change                                (31) 
 Share based payments 
 Deferred Tax charge in profit and loss account 
 for period - CY                                           97 
 Deferred Tax rate change                                   6 
 
 Deferred Tax charged in the statement of 
  total recognised gains and losses                     (145) 
 Balance as at 27 February 2021                           581 
                                                     ======== 
 
 
                                                            GBP'000 
                                                           -------- 
 Asset values for which deferred tax has not 
 been recognised in relation to the Tax Written 
 Down Value of intangible fixed assets which 
 is not available to deduct against profits 
 until the intangibles are realised.                            508 
 
 Asset values for which deferred tax has not 
  been recognised in relation to tax losses 
  carried forward which are available to offset 
  against future taxable profits from the same 
  trade.                                                         46 
 Total value of assets on which deferred tax 
  has not been recognised                                       554 
                                                           ======== 
 
 

Deferred tax assets have been recognised in respect of all tax losses and other temporary differences where the directors believe it is probable that these assets will be recovered.

   10.          BANK AND OTHER BORROWINGS: AMOUNTS FALLING DUE AFTER ONE YEAR 
 
                                        Group 
                                 ------------------ 
                                  27.2.21   29.2.20 
                                  GBP'000   GBP'000 
 Bank loans                         8,500    34,000 
 Unamortised arrangement fees       (198)     (162) 
                                 --------  -------- 
                                    8,302    33,838 
                                 ========  ======== 
 

In November 2018 the Company signed a GBP10,000,000 loan facility to bring its total revolving credit facilities to GBP50,000,000. In addition, the Company also signed a GBP15,000,000 mezzanine facility, of which GBP5,000,000 is comitted and GBP10,000,000 is uncommitted.

In April 2020 an extension of the funding arrangement from August 2020 to the end of November 2021 was signed with the incumbent lender consortium, and subsequently further extended to December 2021. The facility limit was reduced from GBP55m committed to GBP40m to better match the needs of the business post Covid-19. By reducing this unused headroom and repaying the GBP5m mezzanine layer, non-utilisation charges for any given level of borrowing will be reduced and therefore so too will the overall cost of funding.

In May 2021 we successfully reached agreement with a new two lender consortium, for a more cost efficient and slightly lower GBP35m facility, extended to December 2022. The new facility will continue funding our existing HCC products, but crucially, it will unlock funding for our Dot Dot loan products and help the business achieve its immediate strategic objectives.

   11.          PROVISIONS 
 
                                Customer 
  Group                       Complaints     Other     Total 
                                 GBP'000   GBP'000   GBP'000 
 
 At 29 February 2020                   -         -         - 
 Additional provisions in 
  the year                         2,012         -     2,012 
 At 27 February 2021               2,012         -     2,012 
                             ===========  ========  ======== 
 
   Group 
 Analysed as:                              27.2.21   29.2.20 
 
 Current liabilities                         2,012         - 
 Non-current liabilities                         -         - 
                                             2,012         - 
                                          ========  ======== 
 
 

Complaints provision

The complaints provision represents management's best estimate of the group's liability with regard to outstanding customer complaints that remained unresolved as at the balance sheet date. In estimating the provision, management have incorporated historical company information for the average percentage of complaints which are upheld, and the average value of compensation claims paid out. The provision represents the present value of management's best estimate of the future outflow of cash required to settle the complaints and FOS fees in full.

12. CONTINGENT LIABILITIES

The non-standard lending sector has continued to experience the impact of CMC's and high-profile publicity campaigners promoting the potential for customers to claim redress from their lenders. As a result, the number of complaints with regard to irresponsible lending and referrals to FOS has risen significantly across the sector. Although proportionately lower than other lenders in the home collect credit sector, the Group has experienced an increase in complaints and FOS referrals during the period. The Group has recognised a provision for the cost of fully settling complaints and FOS fees in relation to outstanding complaints at the balance sheet date. However, should the final outcome of these complaints differ materially to management's best estimates, the cost could be higher than expected. It is however not possible to estimate this increase reliably.

13. POST BALANCE SHEET EVENTS

In May 2021, the Group agreed a new loan facility with a consortium of two lenders, which secured funding for our HCC and digital products through to December 2022. This was at a reduced commitment level of GBP35m, all in the Revolving Credit Facility (RCF), compared to the GBP40m funding commitment previously in place until December 2021.

   14.          ALTERNATIVE PERFORMANCE MEASURES 

Alternative performance measures

This Annual Report and Financial Statements provides alternative performance measures (APMs) which are not defined or specified under the requirements of International Financial Reporting Standards. We believe these APMs provide readers with important additional information on our business. To support this, we have included a reconciliation of the APMs we use where relevant and a glossary indicating the APMs that we use, an explanation of how they are calculated and why we use them.

 
                           Closest 
                            Statutory 
 APM                        Measure       Definition and Purpose 
------------------------  -------------  --------------------------------------------------- 
 Income Statement 
  Measures 
------------------------  -------------  --------------------------------------------------- 
 Impairment as %           None           Impairment as a percentage of revenue is 
  of Revenue (%)                           reported impairment divided 
                                           by reported revenue and represents a measure 
                                           of credit quality that is 
                                           used across the business and within the 
                                           sector. 
------------------------  -------------  --------------------------------------------------- 
 Agent Commission          None           Agent commission, which is included in 
  as % of Revenue                          cost of sales, divided by reported revenue. 
  (%)                                      This calculation is used to measure operational 
                                           efficiency and the proportion of income 
                                           generated which is paid to agents. 
------------------------  -------------  --------------------------------------------------- 
 Cost / Income Ratio       None           The cost/income ratio is cost of sales 
  or Operating Cost                        and administration expenses, excluding 
  ratio (%)                                exceptional items, finance costs and amortisation 
                                           divided by reported revenue. This is used 
                                           as another efficiency measure of the Company's 
                                           cost base. 
------------------------  -------------  --------------------------------------------------- 
 Credit Issued (GBPm)      None           Credit issued is the principal value of 
                                           loans advanced to customers and is an important 
                                           measure of the level of lending in the 
                                           business. 
------------------------  -------------  --------------------------------------------------- 
 Sales Growth (%)          None           Sales growth is the period-on-period change 
                                           in Credit Issued. 
------------------------  -------------  --------------------------------------------------- 
 Gross Profit before       Gross Profit   Gross Profit per the Income statement adjusted 
  Covid-19 adjustment                      for the Covid-19 overlay. 
                                           This is used to provide a measure of gross 
                                           profit before the impact of 
                                           Covid-19. 
------------------------  -------------  --------------------------------------------------- 
 Statutory Profit          Profit         Profit Before Tax per the Income statement 
  Before Tax                Before         adjusted for the Covid-19 
  before Covid-19           Tax            overlay. This is used to provide a measure 
  adjustment                               of business performance 
                                           before the impact of Covid-19. 
------------------------  -------------  --------------------------------------------------- 
 Normalised Adjusted       Profit         Profit Before Tax per the Income statement 
  Profit                    Before         adjusted for the Covid-19 
  Before Tax (GBPm)         Tax            impairment, exceptional items, non-recurring 
                                           costs and amortisation of 
                                           goodwill and acquisition intangibles. This 
                                           is used to measure ongoing 
                                           business performance. 
------------------------  -------------  --------------------------------------------------- 
 Adjusted Profit           Profit         Profit Before Tax per the Income statement 
  Before Tax (GBPm)         Before         adjusted for exceptional 
                            Tax            items, non-recurring costs and amortisation 
                                           of goodwill and acquisition 
                                           intangibles. This is used to measure ongoing 
                                           business performance. 
------------------------  -------------  --------------------------------------------------- 
 Adjusted Profit           Profit         Profit Before Tax per the Income statement 
  Before Tax (underlying    Before         adjusted for exceptional 
  HCC)                      Tax            items, non-recurring costs and amortisation 
                                           of goodwill and acquisition 
                                           intangibles, Territory Build subsidies 
                                           and losses of Digital CGU. 
------------------------  -------------  --------------------------------------------------- 
 Normalised Earnings       Earnings       Normalised Adjusted Profit After Tax divided 
  Per                       Per Share      by the weighted average 
  Share                                    number of shares. This gives a better reflection 
                                           of underlying earnings 
                                           generated for shareholders. 
------------------------  -------------  --------------------------------------------------- 
 Adjusted Earnings         Earnings       Adjusted Profit After Tax divided by the 
  Per Share                 Per Share      weighted average number of 
                                           shares. This gives a better reflection 
                                           of underlying earnings generated 
                                           for shareholders. 
------------------------  -------------  --------------------------------------------------- 
 

Reconciliation of Statutory profit before tax to Normalised and Adjusted profit before tax and explanation of Normalised and Adjusted EPS

 
                                                FY21                      FY20 
 GBP'm (unless otherwise 
  stated)                              HCC    Digital   Total    HCC    Digital   Total 
 Statutory Profit Before 
  Tax                                  11.8    (11.3)     0.5    21.2     (9.7)    11.5 
 Covid-19 adjustment to impairment        -         -       -     1.7         -     1.7 
-----------------------------------  ------  --------  ------  ------  --------  ------ 
 Statutory Profit Before 
  Tax before Covid-19 adjustment       11.8    (11.3)     0.5    22.9     (9.7)    13.2 
 Acquisition, restructuring 
  and non-recurring costs               2.9       2.4     5.3     0.9       2.6     3.5 
 Exceptional (gain)(2)                    -         -       -       -     (2.3)   (2.3) 
 Amortisation of acquisition 
  intangibles(3)                        0.3         -     0.3     0.8       0.4     1.2 
 Normalised Adjusted Profit 
  Before Tax(1)                        15.0     (8.9)     6.1    24.5     (9.0)    15.5 
 Covid-19 adjustment to impairment        -         -       -   (1.7)         -   (1.7) 
-----------------------------------  ------  --------  ------  ------  --------  ------ 
 Adjusted Profit Before Tax(1)         15.0     (8.9)     6.1    22.8     (9.0)    13.8 
 Tax on Adjusted Profit Before 
  Tax                                 (0.8)     (0.2)   (1.0)   (2.4)     (0.4)   (2.8) 
-----------------------------------  ------  --------  ------  ------  --------  ------ 
 Adjusted Profit After Tax             14.2     (9.1)     5.1    20.4     (9.4)    11.0 
 Statutory EPS(1)                                        0.2p                      7.3p 
 Normalised EPS(1)                                       3.9p                      9.5p 
 Adjusted EPS(1)                                         3.9p                      8.4p 
-----------------------------------  ------  --------  ------  ------  --------  ------ 
 Statutory Return on Assets(1)        22.0%              0.3%   27.5%             12.8% 
 Normalised Return on Assets(1)       27.2%              8.9%   31.1%             16.6% 
 Adjusted Return on Assets(1)         27.2%              8.9%   29.3%             14.8% 
 Statutory Return on Equity(1)        18.5%              0.4%   30.1%             17.2% 
 Normalised Return on Equity(1)       22.8%             10.3%   34.1%             22.3% 
 Adjusted Return on Equity(1)         22.8%             10.3%   32.1%             19.9% 
-----------------------------------  ------  --------  ------  ------  --------  ------ 
 
 
                                                         52 weeks         53 weeks 
                                                    ended 27.2.21    ended 29.2.20 
                                                          GBP'000          GBP'000 
                                                  ---------------  --------------- 
 Adjusted basic earnings per share 
 Basic earnings                                               217            9,477 
 Amortisation of acquisition intangibles                      345            1,222 
 Non-recurring (income)/costs                               5,339            1,153 
 Tax effect of the above                                    (799)            (863) 
 Adjusted earnings                                          5,102           10,989 
                                                  ===============  =============== 
 Weighted average number of shares for the 
  purposes of                                             131,383          130,531 
                                                  ===============  =============== 
 basic earnings per share ('000s) 
                                                  ===============  =============== 
 Normalised Adjusted earnings per share amount 
  (pence)                                                    3.9p             9.5p 
                                                  ===============  =============== 
 Adjusted earnings per share amount (pence)                  3.9p             8.4p 
                                                  ===============  =============== 
 

1 Definitions are set out in the Glossary of Alternative Performance Measures on Pages 138 to 141 of the Annual Report and Accounts

2 Release of contingent consideration in relation to the U Holdings Limited acquisition

3 Amortisation of acquired customer lists and agent networks

 
                          Closest 
                           Statutory 
 APM                       Measure     Definition and Purpose 
-----------------------  -----------  ---------------------------------------------------- 
 Balance sheet 
  and returns measures 
-----------------------  -----------  ---------------------------------------------------- 
 Tangible Equity          Equity       Net Assets less intangible assets less 
  (GBPm)                                acquisition intangibles. 
-----------------------  -----------  ---------------------------------------------------- 
 Normalised Return        None         Calculated as normalised adjusted profit 
  on                                    after tax divided by rolling 12-month average 
  Equity (%)                            of tangible equity. This calculation has 
                                        been adjusted to an IFRS 9 basis. It is 
                                        used as a measure of overall shareholder 
                                        returns adjusted for exceptional items. 
                                        This is presented within the interim report 
                                        as the Directors believe they are more 
                                        representative of the underlying operations 
                                        of the business. 
-----------------------  -----------  ---------------------------------------------------- 
 Adjusted Return          None         Calculated as adjusted profit after tax 
  on Equity (%)                         divided by rolling 12-month average of 
                                        tangible equity. This calculation has been 
                                        adjusted to an IFRS 9 basis. It is used 
                                        as a measure of overall shareholder returns 
                                        adjusted for exceptional items. This is 
                                        presented within the interim report as 
                                        the Directors believe they are more representative 
                                        of the underlying operations of the business. 
-----------------------  -----------  ---------------------------------------------------- 
 Normalised Return        None         Calculated as normalised adjusted profit 
  on                                    after tax divided by 12-month average Net 
  Assets (%)                            Loan Book. This calculation has been adjusted 
                                        to an IFRS 9 basis. It is used as a measure 
                                        of profitability generated from the loan 
                                        book. Net Loan Book is Amounts owing from 
                                        customers less provisions for deferred 
                                        income and impairments. This is presented 
                                        within the interim report as the Directors 
                                        believe they are more representative of 
                                        the underlying operations of the business. 
-----------------------  -----------  ---------------------------------------------------- 
 Adjusted Return          None         Calculated as adjusted profit after tax 
  on Assets (%)                         divided by 12-month average Net Loan Book. 
                                        This calculation has been adjusted to an 
                                        IFRS 9 basis. It is used as a measure of 
                                        profitability generated from the loan book. 
                                        Net Loan Book is Amounts owing from customers 
                                        less provisions for deferred income and 
                                        impairments. This is presented within the 
                                        interim report as the Directors believe 
                                        they are more representative of the underlying 
                                        operations of the business. 
-----------------------  -----------  ---------------------------------------------------- 
 Tangible Equity          None         Net Assets less intangible assets less 
  / Average Receivables                 acquisition intangibles divided by 12-month 
  Ratio (%)                             average receivables. This calculation has 
                                        been adjusted to an IFRS 9 basis. 
-----------------------  -----------  ---------------------------------------------------- 
 
 
 Adjusted Return on Assets and Adjusted     52 weeks ended         53 weeks 
  Return on Equity                                 27.2.21    ended 29.2.20 
  GBP'm                                               FY21             FY20 
----------------------------------------   ---------------  --------------- 
 Normalised Adjusted Profit After Tax 
  (Rolling 12 months)                                  5.1             12.3 
 Adjusted Profit After Tax (Rolling 12 
  months)                                              5.1             11.0 
 12-month average Net Loan Book                       57.5             74.3 
 Normalised Adjusted Return on Assets                8.87%           16.61% 
 Adjusted Return on Assets                           8.87%           14.79% 
 12-month average Equity                              48.1             55.3 
 Normalised Adjusted Return on Equity               10.29%           22.32% 
-----------------------------------------  ---------------  --------------- 
 Adjusted Return on Equity                          10.29%           19.87% 
-----------------------------------------  ---------------  --------------- 
 
 
 Other measures 
-----------------------  ------------  ---------------------------------------------- 
 Customers                None          Customers who have an active loan and from 
                                         whom we have received a payment of at least 
                                         GBP3 in the last 17 weeks. 
-----------------------  ------------  ---------------------------------------------- 
 Agents                   None          Agents are self-employed individuals who 
                                         represent the Group's subsidiaries and 
                                         are engaged under an agency agreement. 
-----------------------  ------------  ---------------------------------------------- 
 Cash from Operations     Cash from     Cash from Operations (excluding investment 
  (excluding investment    Operations    in the loan book) is Cash from Operations 
  in loan book)                          excluding the growth in the loan book due 
  (GBPm)                                 to either acquisition or movement in the 
                                         net receivable otherwise. 
-----------------------  ------------  ---------------------------------------------- 
 Adjusted Net Margin      None          Adjusted Profit before tax (which excludes 
                                         amortisation of intangibles on acquisitions, 
                                         the one-off costs of the IPO and other 
                                         non-operating costs) divided by reported 
                                         revenue. This is used to measure overall 
                                         efficiency and profitability. 
-----------------------  ------------  ---------------------------------------------- 
 Cash from funding        None          Cash from Funding is the increase/(decrease) 
  (GBPm)                                 in the Bank Loan balance. 
-----------------------  ------------  ---------------------------------------------- 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR XLLLFFELFBBD

(END) Dow Jones Newswires

May 13, 2021 02:00 ET (06:00 GMT)

1 Year Morses Club Chart

1 Year Morses Club Chart

1 Month Morses Club Chart

1 Month Morses Club Chart
ADVFN Advertorial
Your Recent History
LSE
MCL
Morses Clu..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20210624 09:18:46