LONDON (ShareCast) - (Sharecast News) - Embattled cash lender Amigo Holdings reported a 66.1% reduction in its net loan book by the end of its third quarter on Thursday, to £61.2m, and a revenue reduction of 76.5% to £17.8m.
The company said that reflected the ongoing run-off of its legacy loan book, and limited new lending during the period.

Its complaints provision year-on-year also reduced by 44.5% to £192.8m, reflecting the court sanctioning of its scheme, which increased the provision on an underlying basis since the half-year figure of £191.4m, largely due to a higher expected uphold rate.

The firm said the increase in the provision accounted for the income statement charge of £15.9m.

It added that the reduction in revenue, coupled with the increase in complaints provision, led to a reported loss before tax of £21.3m, swinging from a profit of £1.6m in the same period last year.

Amigo said its overall collections remained robust, despite the increased cost of living and the continued, but expected, rise in delinquency as the book ran off.

Its current unrestricted cash balance stood at over £105m, having settled the second scheme payment of £37m after the period ended.

The board said it had approved the early repayment of the remaining £50m of the group's outstanding senior secured notes, which it expected to complete in the coming weeks.

In May last year, Amigo was sanctioned by the High Court to operate according to the terms of a scheme of arrangement, including a 'preferred solution conditional on a 19:1 capital raise by 26 May 2023, followed by a minimum £15m payment to the scheme fund for creditor redress.

The company said it had been in conversations with potential investors to underwrite a £45m equity raise, with non-binding indicative interest for between £10m and £15m of equity and £10m of exchangeable notes received.

Amigo said it had fulfilled a key scheme condition by returning to lending before 26 February, with a pilot lending programme launched following approval from the Financial Conduct Authority.

The pilot began in late October for an initial two-month period, and was extended in January, with strong demand reported from applicants.

FCA enforcement action ended on 14 February with a fine of £72.9m, reduced to £0 by the regulator in order not to threaten Amigo's ability to meet its commitments to redress creditors identified under the scheme.

"In recent weeks we have made progress with the capital raise, despite extremely difficult market conditions, but have yet to secure the equity funding needed and conversations with potential investors are ongoing," said chief executive officer Danny Malone.

"Positively, Amigo's pilot RewardRate lending programme, launched under regulatory supervision, is now building momentum in a market where demand is strong.

"This is a clear indication of the need for a mid-cost lending solution for people not served by mainstream lenders and, as directors, we fully believe in the considerable growth potential of our business and the role it can play in greater financial inclusion and mobility."

Malone said the firm was continuing to face uncertainty, as it recognised it was a "very challenging time" both for shareholders and employees.

"The board would like to assure them that it is leaving no stone unturned as it seeks to secure additional equity funding and deliver the best outcome possible for all our stakeholders."

At 0846 GMT, shares in Amigo Holdings were up 19.04% at 2.98p.

Reporting by Josh White for Sharecast.com.

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