AIM:MCL

Stock Analysis Report

Executive Summary

Morses Club PLC, together with its subsidiaries, provides home collected credit services in the United Kingdom.


Snowflake Analysis

Undervalued with high growth potential and pays a dividend.

Share Price & News

How has Morses Club's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.8%

MCL

4.5%

GB Consumer Finance

1.4%

GB Market


1 Year Return

-16.5%

MCL

-36.3%

GB Consumer Finance

12.4%

GB Market

Return vs Industry: MCL exceeded the UK Consumer Finance industry which returned -37.9% over the past year.

Return vs Market: MCL underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

MCLIndustryMarket
7 Day2.8%4.5%1.4%
30 Day2.0%3.0%2.3%
90 Day14.1%6.1%8.8%
1 Year-11.7%-16.5%-33.2%-36.3%18.3%12.4%
3 Year27.0%8.8%-54.0%-67.0%23.8%8.0%
5 Yearn/a-52.7%-68.6%41.8%8.9%

Price Volatility Vs. Market

How volatile is Morses Club's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Morses Club undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCL (£1.3) is trading below our estimate of fair value (£3.05)

Significantly Below Fair Value: MCL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MCL is good value based on its PE Ratio (12.5x) compared to the Consumer Finance industry average (12.6x).

PE vs Market: MCL is good value based on its PE Ratio (12.6x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: MCL is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: MCL is overvalued based on its PB Ratio (2.4x) compared to the GB Consumer Finance industry average (1.5x).


Next Steps

Future Growth

How is Morses Club forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

26.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCL's forecast earnings growth (26.2% per year) is above the savings rate (0.5%).

Earnings vs Market: MCL's earnings (26.2% per year) are forecast to grow faster than the UK market (11.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MCL's revenue (9.6% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: MCL's revenue (9.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCL's Return on Equity is forecast to be high in 3 years time (26.6%)


Next Steps

Past Performance

How has Morses Club performed over the past 5 years?

-20.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCL has high quality earnings.

Growing Profit Margin: MCL's current net profit margins (10.9%) are lower than last year (13.6%).


Past Earnings Growth Analysis

Earnings Trend: MCL's earnings have declined by -20% per year over the past 5 years.

Accelerating Growth: MCL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MCL had negative earnings growth (-16.4%) over the past year, making it difficult to compare to the Consumer Finance industry average (9.2%).


Return on Equity

High ROE: MCL's Return on Equity (19.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Morses Club's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MCL has a low level of unsold assets or inventory.

Debt Coverage by Assets: MCL's debt is covered by short term assets (assets are 3.7x debt).


Financial Institutions Analysis

Asset Level: MCL's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if MCL has a sufficient allowance for bad loans.

Low Risk Liabilities: MCL reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if MCL has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MCL has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if MCL has an appropriate level of bad loans.


Next Steps

Dividend

What is Morses Club's current dividend yield, its reliability and sustainability?

6.02%

Current Dividend Yield


Dividend Yield vs Market

company6.0%marketbottom25%1.8%markettop25%5.0%industryaverage5.4%forecastin3Years7.2%

Current dividend yield vs market & industry

Notable Dividend: MCL's dividend (6%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: MCL's dividend (6%) is in the top 25% of dividend payers in the UK market (4.95%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, MCL has been paying a dividend for less than 10 years.

Growing Dividend: MCL's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (75.3%), MCL's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCL's dividends in 3 years are forecast to be covered by earnings (60.7% payout ratio).


Next Steps

Management

What is the CEO of Morses Club's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average board tenure


CEO

Paul Smith (52yo)

0yrs

Tenure

UK£708,810

Compensation

Mr. Paul Mark Smith serves as Chief Executive Officer of Morses Club Plc. Mr. Smith joined Morses Club in October 2014. He has been responsible for growing Morses Club by acquisition and organically. He ha ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD921.67K) is above average for companies of similar size in the UK market ($USD596.47K).

Compensation vs Earnings: Paul's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Board Age and Tenure

3.8yrs

Average Tenure

56yo

Average Age

Experienced Board: MCL's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£253,75029 Aug 19
Peter Ward
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares200,000
Max PriceUK£1.27
BuyUK£254,25029 Aug 19
Peter Ward
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares200,000
Max PriceUK£1.27

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dave Belmont (60yo)

    Company Secretary

    • Paul Smith (52yo)

      CEO & Director

      • Compensation: UK£708.81k
    • Myron Burlak

      Finance Director

      • Les Easson

        Director

        • Tenure: 0.3yrs
      • Tracey Mulligan

        Human Resources & Communications Director

        • Tenure: 4.6yrs
      • Ian Cooper

        Risk & Compliance Director

        • Andy Hayward (41yo)

          CFO & Executive Director


          Board Members

          • Nigel Knowles (62yo)

            Senior Independent Non-Executive Director

            • Tenure: 2.9yrs
            • Compensation: UK£56.67k
          • Stephen Karle (60yo)

            Independent Non-Executive Chairman

            • Compensation: UK£122.16k
          • Peter Ward (59yo)

            Non-Executive Director

            • Tenure: 4.8yrs
            • Compensation: UK£51.00k
          • Joanne Lake (55yo)

            Independent Non-Executive Director

            • Tenure: 3.8yrs
            • Compensation: UK£57.52k
          • Paul Smith (52yo)

            CEO & Director

            • Compensation: UK£708.81k
          • Andy Thomson (57yo)

            Non-executive Director

            • Tenure: 4.8yrs
            • Compensation: UK£519.59k
          • Les Easson

            Director

            • Tenure: 0.3yrs
          • Andy Hayward (41yo)

            CFO & Executive Director

            • Baroness Finn (51yo)

              Independent Non-Executive Director

              • Tenure: 0.7yrs

            Company Information

            Morses Club PLC's company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: Morses Club PLC
            • Ticker: MCL
            • Exchange: AIM
            • Founded: 2009
            • Industry: Consumer Finance
            • Sector: Diversified Financials
            • Market Cap: UK£169.962m
            • Shares outstanding: 131.24m
            • Website: https://www.morsesclubplc.com

            Number of Employees


            Location

            • Morses Club PLC
            • Kingston House
            • Centre 27 Business Park
            • Batley
            • West Yorkshire
            • WF17 9TD
            • United Kingdom

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            MCLAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPMay 2016

            Biography

            Morses Club PLC, together with its subsidiaries, provides home collected credit services in the United Kingdom. It offers small cash loans between £100 and £1000. The company offers consumer credit through a network of 95 branches and approximately 2,050 self-employed agents, as well as online channels. Morses Club PLC was incorporated in 2009 and is headquartered in Batley, the United Kingdom. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/17 21:48
            End of Day Share Price2020/01/17 00:00
            Earnings2019/08/31
            Annual Earnings2019/02/23


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.