Morses Club : Preliminary Results 2021/22 - Presentation

2022 Full Year Results

Gary Marshall - CEO Graeme Campbell - CFO

25 August 2022

Company Update

• Renewed focus on the different opportunities which exist for each division. Considerable challenge in HCC business due to continued high level of customer claims from CMCs.
• Tightened lending criteria over the last six months has led to reduced lending and will impact revenue and profitability in FY23.
• Working with key stakeholders to pursue a potential Scheme of Arrangement to provide a more equitable outcome for our customers.
• Pausing of processing of all new unaffordable lending claims effective from 11 August.
• Reshaping the HCC business to draw a line under redress complaints - creating a product blueprint to serve our customers and address a market which will continue to grow in the current economic climate.
• Working with funders, who remain supportive, to secure funding in line with the future operating model of the business.
  RESHAPED FOCUS, AMBITION AND COMMITMENT TO THE SECTOR

HCC	Digital
The only HCC provider of scale in	Delivered profit in Jan/Feb FY22
the UK	Core digital expertise with
Stable customer base, despite the
customer-centric focus - 92%
changes to the sector	customer experience score
97% customer satisfaction	Significant opportunity for growth
Loyal team committed to the sector	Digital technology capability
Blending the best of	Turnaround phase complete with
behavioural/digital
stable lending platform
knowledge

We have a strong commitment to the non-standard credit	2
sector and supporting customers to access regulated credit

Section 01

Potential Scheme of Arrangement

Potential Scheme of Arrangement

What is a Scheme of Arrangement?

• A Scheme of Arrangement is a Court-approved arrangement to identify 'special' creditors - in our case customers and to deal with redress claims.
• Subject to a majority vote from customers.
• Defined eligibility and period of time in which to make a claim.
• Formal communication to eligible customers using a practice statement letter.
• Subject to approval - Morses Club is working with external advisors to ensure that the detail of any Scheme complies with regulatory guidance.

Benefits of a potential Scheme

• Provides the most equitable outcome for customers.
• Ensures that the Company can move on, continuing to trade, without the uncertainty of continued redress claims.
• Preserves the value of the trading business - deals with the cost of complaints and removes the risk of ongoing liabilities.
• As part of any consideration for a potential Scheme, and redress liabilities, the Company has taken a provision in its FY22 accounts accordingly

4

Next Steps - Potential Scheme of

Arrangement

Where are we currently?

• Board is reviewing the detail of the option around a potential Scheme of Arrangement.
• Will help to draw a line under uncertainty around the redress claims liability in the HCC division.
• Customer Committee in process of being set up with customer nominations invited.
• Committee Chairman appointed - Jamie Drummond-Smith.
• Announced pausing in processing of all new unaffordable lending claims in the HCC division effective from 11 August.

5