Collections 'robust' at Amigo
By Abigail Townsend
Date: Friday 08 Jul 2022
(Sharecast News) - Amigo Holdings said collections were "robust" last year, as the troubled firm continued to work with the regulator about a return to lending.
The guarantor lender halted new lending in 2020 after being hit by the pandemic and a barrage of customer complaints over alleged mis-selling.
It agreed a rescue plan with the Financial Conduct Authority earlier this year, which was sanctioned by the High Court in May.
Posting full-year results, Amigo said on Friday the New Business Scheme would deliver "the best possible outcome" for creditors. The preferred outcome of the NBS remains dependent on Amigo restarting lending within nine months of 29 May, however, when the scheme became effective, and completing a successful equity raise within 12 months.
Gary Jennison, chief executive, said: "We are continuing to engage with the FCA on the terms of Amigo's return to lending, and we are thankful to them for working closely with us over such a long period of time.
"As a company, we have learnt the lessons of the past. Our executive team has changed the culture of the company, and we have developed new lending products built to serve the needs of a clearly defined set of customers."
Reflecting the pause in new lending, Amigo posted revenues of £89.5m in the year to 31 March, a 48% decline year-on-year, while the number of customers fell to 73,000 from 136,000 a year previously. The loan book - which represents total outstanding loans less provision for impairment - was £138m, down 60%.
But the company added: "Despite an increasing trend in delinquency, overall collections, including early repayments and recoveries from written-off accounts, have remained robust."
Pre-tax profit was £167.9m, compared to a loss of £283.6m a year ago, after the release of provisions set aside for complaints following the High Court sanctioning the scheme of arrangement.
Jennison said: "The profit should not be taken as an indication of the company performance or shareholder benefit.
"Prior to the ruling, Amigo was insolvent and the only change is that the complaints provision has been replaced with a scheme provision of just under £170m resulting in a credit of £157m to the P&L. The adjusted profit after tax was £13.3m."
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