MORSES CLUB PLC (lon:mcl)
Morses Club - Short Term Gain But Long Term Pain?

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Title: Morses Club - Short Term Gain But Long Term Pain?
Company: MCL - MORSES CLUB PLC
Share Price Then: 148p
Author: Ian Smith
Date: Tue 05 Sep 2017
Comments: Morses club offer doorstep lending formed out of a merger between Morses Club and Shopacheck Financial Services like Provident they are well established business.

This has given them about 216k customers whilst Provident claim about 800k across all of its consumer credit division.

Provident’s recent woes related to the replacing of self-employed agents with employed Customer Experience Manager has led a number of commentators to suggest that Morses is going to be a growth share.

In the very short term I might agree but in the long term I suspect that Provident are right and Morse are wrong in keeping the agents who sell loans and collect payments as self-employed.

This is for two reasons firstly the government's desire to crack down on self-employment where the individual is not genuinely self-employed.

Secondly it is almost certain that the "No Win - No Fee" brigade have already looked at or will look at the possibility of mis-selling complaints. The fact that the agents are self-employed can easily and possibly correctly be portrayed as them operating without appropriate supervision by the company.

That fact that Provident has operated in the same way for over a hundred years won't matter.

Whilst it is almost inevitable that Morses will gain a significant number of Provident customers over the next few months I suspect that by the end of the year the remaining Provident customers will be mostly happy with the new arrangements. The question is will these be the good customers or the bad ones?

Provident offer Doorstep loans, Vanquish Credit Card, Personal Loans and Car Loans.

Moreses offer Doorstep loans, note that Morses Club Card is simply a prepaid Visa card.

Having thought about it for a while I can’t see why Provident’s difficulties change the case for buying or not buying Morses shares.
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