Doorstep lender Morses Club is set to report its full-year results on Thursday August 25 amid news of a potential scheme of arrangement to limit compensation liabilities to customers who were missold unaffordable loans.
Shares in the provider of non-standard credit services have crashed over 90% this year following a bout of legal challenges against lending practices in the sector.
The company warned in July that “whilst the directors consider that Morses Club has adequate liquidity for the immediate future, they believe that without a potential scheme, the level of redress claims could jeopardise the group's future”.
Scant guidance has been given in the lead up to the results, though in July Morses stated: “The Directors believe, therefore, that for the year to 25 February 2023, which is a transition year in which legacy issues can be largely resolved, the company will not make a profit.”
Adjusted profit before tax is expected to fall up to 40% below market consensus and as a result, no dividends are expected to be paid out to shareholders.
However, with fewer competitors on the market and an increasing demand for quick cash, results could be more favourable in the medium to long term.