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Come on amigo lets have some good news. Get us out of this Groundhog day!
Could the new Vreq limiting dividends bonuses etc be because the FCA know that the genuine claims are likely to be WAY less than the initial provision. Ie circa 25%. The Vreq ensures that the rest of the provision stays in the business in case anything else came out of the woodwork later etc.
I’m taking it as a sign the BOD and regulator are negotiating and pulling together. This ship will be prudently steered towards the destination, but it’s taking the long way around the known areas of pirates
Checked out the website yesterday and now my Facebook feed is full of no win no fee claim against amgo guff....just what you need to see....
Break out this afternoon or just bounce around the spread?
FrankyS1971
Morning Sir, you are bang on!
That was the report I based by previous statements on Amigo Shifting from "Unstable" to "Stable":
The Moody report stated back in August:
FACTORS THAT COULD LEAD TO AN UPGRADE :
The outlook could be turned to stable
i) if volume of complaints declines significantly and FCA discussions conclude without adversely impacting the franchise positioning and cash reserves;
ii) Moody's views that the company will be able to gradually successfully resume new credit lending and improve its profitability to a more sustainable level, as well as
iii) if Amigo achieves a more diversified funding profile.
So far since the report:
1. The FOS themselves are placing claims on hold :
“The particular intricacies of this product area have needed to be reviewed in a lot of detail, for us to be confident that the decisions our ombudsmen reach are correct, fair and reasonable to both our consumers and businesses. This in turn has meant our ombudsman aren’t able to issue decisions on cases such as yours until these considerations are fully looked into and resolved. These are currently under review at a higher level and as soon as these things are sorted the ombudsman will be able to start issuing their decisions.”
(Could be a 25% to 50% reduction in provisions made in the annual report)
In addition to Garys statement in his recent interview that "A lot Of these claims are not genuine claims".
2. Resumption of lending within the next few weeks, already addressed by CEO Gary Jennison in his recent Interview:
https://www.amigoplc.com/investors
(Awaiting RNS imminently)
3. We have yet to see if Gary & the Amigo team will produce a more diversified funding profile however I suspect we will not find out about this until Lending resumes & the official RNS for Lending.
All in all we could be witnessing the transition of Amigo Holdings from "Unstable To "STABLE".
A Stable rating with Gary Jennison's expertise in turnarounds, would surely have a major impact on the Institutional Investors interest as well as Retail.
It is interesting that Gary's mantra in the video is:
"Fix the complaints"
"Fix the relationship with the regulator"
"Get the business lending again"
Exactly in line with Moody's analysis on the Factors that will lead to an upgrade.
The lending RNS if understood by the markets and its impact on Amigo's ratings should without doubt have a substantial effect on the SP and Market Cap.
Yuri - thanks I think we are on the same page. Amigo should be able to wangle a reduced fine due to showing co-operation with the regulator and the impact of COVID. If they have decent lawyers they may be able to push this all back until COVID is well over. I don't think the FCA is in tip top shape as it stands
https://www.ftadviser.com/regulation/2020/10/12/fca-fines-drop-to-four-this-year-in-record-low/
Hounddog went pretty quiet the day before yesterday when I offered him a gentleman’s bet of £1000 of his own money that Amigo wouldn’t be at 7p at close of business. The individual is a nuisance and not someone that has a bankroll capable of playing with the big boys. The £1000 bet was a nominal amount but to HD it’s a few months of UC. Nobody is interested in your opinion on here.
I love that....literally the polar opposite. If you guys want a good refresher there is a decent report on moodys investor services for August which is free. There are 2 more on amigo which are analysis of business but charge rate is 250$ or so and they were released in september...the one thing that was positive was the cash we have as a buffer and the suggestion that we would get rerated to Stable from at risk quite quickly if things fall into place. Nsf have no cushion which is why they are desperately lending away to use new money to service the deteriorating book. Their runway is a lot shorter than ours and thats just a concrete fact.
Didn t read whole thread but laughable suggestion. Like BA buying Lufthansas flights to China lol
Quote: I think amigo is going to buy NSF book on the cheap
The last thing Amigo wants to do in this crisis in make an acquisition, buy back shares or pay dividends . It wouldn't be sensible to buy a book of loans which is also partially under redress and claims payouts.
Amigo need to preserve all the cash they have to weather the COVID storm. Added to that they are under a voluntary Asset Req so couldn't see the FCA allowing them to do that.
Hounddog buys to sells was 3:1 yesterday?
Volvic water is less filtered that hound.
You must also remember that NSF charges higher rate and why?? Because their assets are even worse than Amigo. JB turned down NSF book they wanted to sell to us as they did some analysis and many of the customers had been rejected by Amigo but accepted by NSF. The rest even Hound can work out.
No one is mad at you HD. We barely listen to you.
Guys stop being mad at me. I'm just trying to help you all see the wood for the trees.
Oh dear the selling is relentless here this morning. It looks as though AMGO is going to go down the NSF route and have to issue equity. How much though, that's the question?
Monday RNS will confirm everyone's worse fears of no satisfactory outcome to the vreq. This will quickly be followed by the lender demanding the company raises an extra £100m via an equity raise.
This will dilute the sp a lot.
2p-4p by Christmas.
hunniford - that's my main point in this, regulator's messed-up, they fail to follow the law and see no problems if money (billion plus) go into pockets of shareholders whilst fail to provision 100 million for such liabilities.. When the trash-storm comes (employee pension fund deficits, etc.) then those guys just say - sorry, we're out of money (which we paid as dividends just a "moment" ago)..
I hope FCA treats us the same way (as ICO), granting waiver to our little problem too.. FCA is looking into too many companies I'm holding positions with (although with good margin of safety / at relatively low sp).
Gov programs aimed at business support mostly (even furlough - indirectly to prevent structural breakdown of business technology) with gov-backed loans, there's much less activity on universal credit side.
Plus NSF is "High(-er) Cost" lender (vs Amgo) afterall, I hope we'll be treated better.
by the way, again about NSF:
..
On the basis of the above analysis, the Directors note that a material uncertainty exists regarding the current and
future impacts of COVID-19 and the extent of the redress to be paid to certain GLD customers. The impact on
liquidity and solvency under both the base case and downside scenarios therefore may cast significant doubt on the
Group’s and the Company’s ability to continue as a going concern.
..
The Directors believe that the most immediate and appropriate mitigant to the material uncertainties is an injection
of additional equity.
...
Whilst I’m still nervous that Amigo’s provision won’t be enough, I don’t think it’s right to say NSF’s provision of £16m for 5% of the market gives an indication of Amigo’s liability.
The CEO of NSF has said it’s important that NSF is able lend to customers who are struggling with bills. This is highly risky. If you’re lending to enable borrowers to cover regular expenses, then when those regular bills land again, the customer will have to pay those AND their loan repayment. That’s how debt spirals start.
If that is NSF’s model, they’re in trouble. I don’t think that’s how Amigo works so I’d expect their redress bills to be lower.
Yuri prior to the introduction of GDPR the most the ICO had ever fined a company was £500,000 so £184m is still a huge departure. £20M is still their largest fine to date and this was brought down about by mitigating factors including co-operation with the regulator. Some of it was also due to COVID impact and ability to pay.
So going back to my point for Hound Pup the regulator does not serve a purpose to put a company out of business that is directly engaging with the regulator to effect redress for past transgressions.
Morning all. As I said yesterday, I was advised (email reply from Amigo), that they would report in early November after end of October deadline. The report will be on the conclusion of Complaint s VReq. A full update will follow in half year results end of November. Probably Monday for this RNS, would be nice to a director buy one today though. GLA
NSF - Grantor loan division:
...
Guarantor loans
Since being introduced into the UK market in 2006, guarantor loans have proven to be an attractive source of credit
for those with a thin or impaired credit file as the presence of a guarantor often means that the borrower is able to
secure credit at a much lower rate of interest than would be the case were they to try and borrow on their own. At
the same time, by keeping up with their regular repayments, the borrower can repair or rebuild their credit score.
However, of the Group’s three divisions, guarantor loans has experienced the greatest impact from the pandemic. As
evidenced by the latest unemployment statistics, COVID-19 has had a disproportionate economic impact on younger
adults and it is this demographic that makes up the majority of the division’s customer base. The result has been that
by the end of June 2020 approximately 23% of the division’s customers had been affected and this in turn impacted
both collections and the rate of impairment
...
by the way, just read full report (although still partially), they decided to write-off goodwill afterall, with formal equity down to just 22m, (bringing NAV down to 7p), then there's this thing:
...
Given the prevailing uncertainties regarding the macroeconomic outlook, the future
trading performance of the Group and the level of customer redress that will ultimately become payable, there
remains a material uncertainty as to the Group’s ability to remain as a going concern and to continue to operate
within its financial covenants. The Group is in active discussions with its lenders regarding possible covenant
waivers in the future
...
and of course:
...
It is possible that the actual amount of redress may differ, perhaps materially from the current estimate and that this could materially impact the financial
statements. This is due to the risks and inherent uncertainties surrounding the assumptions used in the provision
calculation, as well as the fact that the FCA has not yet reviewed the methodology proposed. In addition, whilst
the Group believes that the scope and scale of the operational changes made will not have a material impact on
the future profitability of the Group, this may prove to be incorrect and could result in the Group incurring
significant financial costs and may mean that the Guarantor Loans Division is no longer able to deliver the level
of returns required by the Group’s management and equity shareholders.
...
HotDog is not replying on here because his in the middle of applying for an Amigo loan to cover his losses on NSF :)
WOOF WOOF
You can t draw direct parallels between NSf and Amigo as we have a capital cushion and they don t. They need to raise money fast and can t. We do not. If nothing changed in 12 months we would be in the same place but thats a long time. Nsf risk of default is high.
I suspect there's announcement pending about lending restart which was initially planned to commence prior end of year after end of October.
But tbh - In these uncertain times I would prefer them working just for collections and with payment holidays un-freeze (restoring interest charge)..
Original vreq was end of Oct so it would be logical to get an RNS to say it’s been met or extended ... earliest you would get that would me Monday am.
RNS on Monday? How do you know?