(Alliance News) - Amigo Holdings PLC on Monday posted a swing to loss for financial 2020 as it said it has hired Jonathan Roe as a non-executive director and chair designate.
Shares in the subprime lender were trading 14% lower at 8.39 pence each on Monday morning in London, falling from 165.20p a year ago.
For its financial year ended March 31, Amigo posted revenue of GBP294.2 million, up 8.7% from GBP270.7 million recorded the year prior. However, pretax loss was GBP37.9 million swinging from a profit of GBP111.0 million. Net loan book was GBP643.1 million, down 9.1% from GBP707.6 million.
The Bournemouth-based company said the deterioration in its financials was driven by an increase in complaint volumes, resulting in a complaints cost of GBP126.8 million compared to a cost of GBP100,000 in financial 2019. It added that it has set aside a complaints provision of GBP117.5 million to handle complaints compared to no provision as at the end of financial 2019.
No final dividend was declared in order to conserve cash resulting in a total annual payout of 3.1p, down significantly from 9.32p paid for the year prior.
Looking ahead, Amigo said the economic impact of Covid-19, a potential increase in the level of complaints received and the possible outcome of the UK Financial Conduct Authority's investigation into whether or not Amigo's creditworthiness assessment process was compliant with regulatory requirements, have led to a "material uncertainty surrounding going concern".
However, it said it believes it has adequate liquidity to support itself. It added that all new lending has been paused since March except to key workers in exceptional circumstances. It also stated it has also begun a strategic review after it formal sales process was terminated following the withdrawal of potential acquirer.
As at June 30, the company had cash of GBP64.3 million.
In a separate statement, Amigo said it has hired Jonathan Roe as a non-executive director from August 1 and chair designate.
Roe was recently non-executive chair of Vanquis Bank, a role he held for three and a half years having been a non-executive director for four years prior.
He has extensive experience of advising listed and regulated companies, with 25 years of experience advising public companies on major corporate transactions, Amigo highlighted.
"We are delighted to welcome Jonathan to Amigo and also to the board. His tremendous commercial, regulatory and public listed experience, including with customer focused businesses, will be a valuable addition to our board," said Acting Chair Roger Lovering.
Following Roe's appointment, the total number of directors on the company's board will comprise three independent non-executive directors, including the chair designate and two executive directors. Amigo noted discussions are ongoing with several potential candidates about further non-executive appointments.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Amigo (AMGO)