Morses Club (LSE: MCL) continued its recent breakneck ascent in Thursday trading following a frenzied reception to latest trading details.
The stock was last dealing 12% higher from the prior close at fresh record highs. In total the financial giant has gained close to 40% in value during the past three weeks alone, and I do not expect investor appetite to run out of steam any time soon.
Morses Club – the country’s second-biggest home collected money lender – advised today that it issued £82.2m worth of credit during the 26 weeks to August 26, up 25% year-on-year and thanks to recent territorial expansion. By comparison, credit demand had risen 16% in the same 2016 period, to £66m.
The company is making terrific progress in expanding its territorial footprint, and advised that “the territory builds in-progress to date are performing ahead of management’s expectations set at the beginning of the year, and it is anticipated that this increased level of investment will not have an adverse impact on earnings expectations [in fiscal 2018].”
The company chiselled out a new loan facility last month to keep its expansion programme rolling, and it has eyed up 400 new agent territory builds in the current fiscal period alone.
In other news, the Leicestershire firm saw the number of customers on its books swell by 12% in the period, to 233,000, while its gross loan book also improved 12% year-on-year.
Morses Club has made a concerted effort to improve the quality of credit on its books and, as a result, it saw the proportion of loans attributable to its highest-tier borrowers rise 7% from a year earlier.
Jaw-dropping value
The lending leviathan is clearly making brilliant progress and so, unsurprisingly, the City expects the rate of earnings growth to steadily improve. For the year to February 2018, Morses Club is predicted to record a 7% earnings improvement, and to follow this with an 11% advance in fiscal 2019.
And current predictions make the business brilliant value for money — the company sports a P/E ratio of just 12.5 times, well under the widely-considered value benchmark of 15 times or below.
Furthermore, there is plenty for dividend investors to get stuck into as well. A predicted 7p per share reward for this year would mark a meaty upgrade from last year’s 4.3p payout. This figure also yields a stunning 4.8%. And the yield marches to 5.2% for next year thanks to expectations of a 7.6p dividend.
Record breaker
Restore (LSE: RST) is another possible growth hero I reckon investors need to consider right now.
In 2017 the records and documents management provider is predicted to deliver an 18% earnings improvement. And an additional 13% climb is predicted for next year.
A consequent forward P/E ratio of 23.3 times is clearly quite high on paper, but I reckon Restore is worthy of such a premium given that demand for its storage services continues to boom, and that this has much more room to grow. It advised last month that, at its Document Management arm, its core records management division “traded robustly” in the first half, while its Datashred and Scan divisions are also performing well.
