(Alliance News) - Embattled lender Amigo Holdings on Friday said it has "learnt the lessons of the past" as it saw revenue almost halve in its recently ended financial year.
Revenue for the financial year ended March 31 dropped to GBP89.5 million from GBP170.8 million the year before.
Despite this, the the guarantor loans provider swung to a pretax profit of GBP167.9 million from a loss of GBP283.6 million. This was due to it taking a GBP156.6 million complaints provision release following the sanction of its latest scheme to settle customer claims after probes from UK regulators into mis-sold loans.
It cautioned the profit figure "should not be taken as an indication of company performance or shareholder benefit."
"It's important to make clear that the shareholder equity we have reported today will be substantially absorbed by future costs of the scheme and administering the legacy portfolio, leaving working capital of circa GBP8 million," it added.
The sanctioning of the scheme marks a "turning point" for Amigo, it said, as it works to restart lending.
"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," said Chief Executive Gary Jennison.
Amigo shares were down 8.5% in early trade.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,165.11
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Hang Seng: up 0.2% at 21,692.11
Nikkei 225: closed up 0.1% at 26,517.19
S&P/ASX 200: closed up 0.5% at 6,678.00
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DJIA: closed up 346.87 points, or 1.1%, at 31,384.55
S&P 500: closed up 57.54 points, or 1.5%, at 3,902.62
Nasdaq Composite: closed up 259.49 points, or 2.3%, at 11,621.35
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EUR: down at USD1.0148 (USD1.0172)
GBP: down at USD1.1992 (USD1.2002)
USD: down at JPY135.77 (JPY135.91)
Gold: flat at USD1,742.81 per ounce (USD1,742.44)
Oil (Brent): down at USD104.97 a barrel (USD105.66)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's key economic events still to come
08:30 EDT US jobs report for June
10:00 EDT US wholesale trade
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Japan's former premier Shinzo Abe was fighting for his life on Friday after being shot at a campaign event, the prime minister said, condemning the "absolutely unforgivable" attack. The shooting of the country's best-known politician comes despite Japan's strict gun laws and with campaigning under way ahead of upper house elections on Sunday. "Former prime minister Shinzo Abe was shot in Nara and I have been informed he is in a very grave condition," Prime Minister Fumio Kishida told reporters after arriving in Tokyo by helicopter from the campaign trail. "I pray that former prime minister Abe will survive," the visibly emotional leader said. "It is a barbaric act during election campaigning, which is the foundation of democracy, and it is absolutely unforgivable. I condemn this act in the strongest terms."
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Would-be contenders to claim the Tory crown are assessing whether they have the support to mount leadership bids following the dramatic resignation of UK Prime Minister Boris Johnson. With no clear frontrunner, around a dozen potential candidates – including backbenchers as well as ministers – are thought to be weighing a challenge. Meanwhile there is growing pressure from senior Conservatives for Johnson to immediately step down as prime minister and not wait for the election of a new leader. Following the tumultuous events in Westminster, some MPs fear a summer of "chaos" if Johnson remains in Number 10 while the leadership contest – which could run for weeks or even months – plays out. Former prime minister John Major was among those backing calls for Deputy Prime Minister Dominic Raab to be installed as a caretaker premier until a permanent successor is in place. Alternatively, he suggested a foreshortened leadership contest with Tory MPs electing the new leader who would then take office while party members in the country would be asked to endorse their choice.
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UK retail sales have grown at their lowest rate since February 2021 as high inflation and the deepening cost-of-living crisis deter consumers, figures show. Total like-for-like sales in June increased by 8.4% compared with a year ago, with an 8.8% drop in homeware sales suggesting that consumers are postponing large purchases, according to the BDO High Street Sales Tracker. However, the fashion sector continued to outperform the lifestyle and homeware sectors, recording total sales growth of 15% – the 16th consecutive month of positive figures. In contrast, lifestyle sales through online channels fell for the eighth consecutive month, sparking concerns that consumers are reducing their discretionary spending in the sector.
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BROKER RATING CHANGES
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Barclays raises Ferrexpo to 'equal weight' (underweight) - price target 215 (265) pence
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Goldman cuts Marks & Spencer to 'sell' (neutral) - price target 140 (165) pence
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Jefferies raises Energean to 'buy' (hold) - price target 1,300 pence
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COMPANIES - FTSE 100
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Unite Group hailed its "good progress in sales" during the second quarter, noting decent demand from both domestic and international students. The student accommodation manager said 90% of its rooms are now sold for the 2022/23 academic year, compared to 81% at this stage a year earlier. It is also ahead of the 89% at this stage ahead of the 2019/20 year, prior to the onset of the pandemic. Unite added: "We have also seen positive progress in pricing, particularly in the second half of the sales cycle as concerns around the impact of the Omicron Covid-19 variant have eased. This progress has been driven by inflation-linked rental uplifts for our multi-year nomination agreements and the strength of demand for direct-let beds. Given the strong sales performance to date, we are increasingly confident in delivering occupancy of 97% for the 2022/23 academic year and achieving rental growth at or just above the top end of our guidance of 3.0-3.5%." The company is mindful of the Covid-19 situation in China and the potential of tighter travel curbs for international students. At the moment, however, there are no Covid-19 restrictions in UK higher education.
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Athleisure retailer JD Sports said it has named Andy Higginson as chair, following an "extensive search process". Higginson was formerly chair of supermarket chain Wm Morrison, from 2015 until its private equity takeover in November. He is also currently a senior independent director at Flutter. In June, the firm shared that the process to recruit a new non-executive chair was "progressing at pace", and "a number of high calibre candidates" for chief executive are under consideration In May, Peter Cowgill left as executive chair with immediate effect. JD Sports in July 2021 had bowed to shareholder pressure over its corporate governance, agreeing to split its chair and CEO roles. Cowgill had served as both executive chair and CEO of JD Sports, since taking up the latter position in 2014.
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COMPANIES - FTSE 250
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Housebuilder Vistry reported an "excellent first half performance" which topped expectations. "Demand has been strong across all areas of the business and our forward sales positions further strengthened," CEO Greg Fitzgerald commented. "Whilst mindful of the wider economic uncertainties, we are positive on the outlook for the group and expect to see significant margin progression in the full year." Adjusted pretax profit is expected to be at the top end of market forecasts, around GBP417.0 million. Its adjusted gross margin is expected to be ahead of its 23% target. First half completions increased to 3,219 units from 3,126 a year earlier. Vistry said planning "remains the single most significant constraint on the business". It noted a tricky political and regulatory environment, particularly around nutrient neutrality. "We are responding proactively by factoring longer lead times into our site forecasting, which enhances our control, and increasing our senior expertise in these areas. Our strong balance sheet and breadth of operations provide confidence and resilience to cope with any specific issues," Vistry added.
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COMPANIES - SMALL CAP
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Healthcare software maker Emis said trading in the six months to June 30 went in line with board expectations. "In Emis Health, the group is continuing to support its customers across the NHS while accelerating investment in its technology and cloud refresh strategy as well as in improved internal systems. As expected, revenue growth was held back by a planned reduction in lower margin resale partner activities. However, the business will benefit from a number of digitisation contracts which were secured for delivery in the second half of the year," Emis explained. "In Emis Enterprise, the group continues to execute in the areas of analytics, patient-facing services and pharmacy, with encouraging contributions from the two acquisitions completed in the period adding to double-digit organic growth in revenues in the first half." Emis in June agreed to a GBP1.24 billion takeover offer from Minnesota, US-based healthcare and insurance company UnitedHealth Group.
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COMPANIES - GLOBAL
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Twitter shares slid late Thursday after a Washington Post report that Elon Musk's USD44 billion deal to buy the social media giant is in danger. The world's richest man has previously expressed misgivings and even implied he could walk away from the deal over concerns about what he believes are an abundance of fake accounts. According to the Post, however, Musk has been unable to pin down the percentage of Twitter accounts that are not genuine, despite being given access to internal data. While Musk has already made comments putting his commitment to the deal in doubt, the latest report cited an anonymous source saying his team is preparing for a "change in direction." Twitter shares, which were already trading lower than the price offered by Musk, sank about 4% on the news in after-market trades
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Boeing's CEO said the company could cancel the 737 MAX 10 if regulators don't certify the jet before new crew alerting system standards take effect in December, according to a report Thursday. The airplane manufacturer confirmed comments by Boeing Chief Executive Dave Calhoun, who told Aviation Week that shelving the MAX 10 "is not that threatening" in light of some of the other challenges the company has faced in recent years. "The (737-10) is a little bit of an all-or-nothing," he told the publication. The US Federal Aviation Administration has been taking longer to approve Boeing planes after criticism of the agency in the wake of two fatal crashes of earlier versions of the 737 MAX that left the plane grounded globally for more than a year.
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Friday's shareholder meetings
Kavango Resources PLC - AGM
Value & Indexed Property Income Trust PLC - AGM
JPMorgan Multi-Asset Growth & Income PLC - AGM
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By Lucy Heming; lucyheming@alliancenews.com
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Amigo (AMGO)