The catastrophic collapse of Provident Financial has handed rival Morses Club a enormous boost for profits.
The UK’s second largest doorstep lender now posted bumper half-year figures using one analyst saying it’s “stealing business hand over fist” from Provident.
Complete credit issued rose by a thousand to #82.2m, whilst customer figures shrunk by 12 per cent to 233,000 in the six weeks to 26 August.
Chief executive Paul Smith explained that the Morses had “capitalised on market conditions”.
Last week, stocks at the afterward FTSE 100 company Provident Financial plummeted nearly three-quarters in hours following showing a shopping list of concerns. The band’s market capitalisation has subsequently shrunk but is still 30 per cent of its May value. The company was relegated out of the blue-chip index.
Read more: Provident Financial stocks rise 22 per cent since it shakes up credit business
According to Morses announcement now, ETX senior analyst Neil Wilson stated: “More evidence of the botched revamp at Provident Financial — rival Morses Club is stealing business hand over fist.
Morses says the territory builds have performed ahead of management’s expectations. That is possibly an understatement — they could not have known how poorly Provvy would botch its own changes and quickly agents would switch to them.
He continued: “That is more evidence that the concept to alter a business model that has worked perfectly well for 130 years wasn’t so smart.”
Read more: Star finance manager defiant over Provident Financial share price meltdown
Shore Capital Markets analyst Gary Greenwood stated:
In general, full year gain performance is forecast to be in line with market expectations, notwithstanding additional upfront costs related to a significant increase in representative recruiting as the team has taken advantage of the fall out from the poorly handled restructuring with market leader Provident Financial of its home accumulated credit business.
Although Provident Financial stock fell more than two per cent stocks in Morses jumped on this morning’s statement by a per cent.
Smith stated: “We are pleased with all details of the improvement of the business, representing the fact that we have capitalised on market terms, whilst developing our strategy of product diversification. As the second largest lender within this market, we believe that our growth is based on a good foundation of adhering to our customers and adapting to their own requirements.”
Read more: Provident Financial stocks are now down 72 per cent after its CEO walked