A proliferation of customer redress claims for unaffordable lending has rocked doorstep lender Morses Club’s 2022 financial year results.
A total of £42.6mln in statutory losses was recognised mainly due to the claims, though uncertainty remains around the total liability given the company’s pursuit of a scheme of arrangement.
The group has a £35mln facility in place until 31 March 2023, but discussions for an extension are ongoing.
The company warned that a combination of factors is creating material uncertainty that may cast significant doubt about the group's "ability to continue as a going concern".
Chief executive officer Gary Marshall said: "The last 12 months have been challenging for the company and we fully recognise the current challenges we as a group still face.
“However, we are deeply committed to the sector and the customers who require our services more than ever due to the current macroeconomic environment.”
Despite severe losses noted in the core doorstep lending segment (referred to as HCC in the earnings), Morses Club’s digital lending segment is growing.
Digital customer numbers saw a yearly increase of nearly 50%, resulting in revenue increase of 114%.