“Material uncertainty” for Amigo following 33% revenue drop
Guarantor loan company Amigo Holdings has said that compensation payments for historical lending is creating an “extremely challenging situation” for the firm.
The business, which has paused lending, reported a 33.4 per cent year-on-year decrease in revenue for its first quarter of this year to June 30 2021.
Mike Corcoran, CFO of Amigo, commented: “The extremely challenging situation facing Amigo, resulting from the significant liability for compensation payments for historical lending, provides the context for our first quarter results. Within this context, the performance of the business in the first quarter has been better than anticipated.
“As Amigo is not currently lending, the business is cash generative and our cost reduction programme has been effective. The level of collections remains robust with the impact of Covid-19 less than originally projected. Our current estimate of the potential liability for claims redress was reflected in the recently issued full year results.
“With no additional complaints provision recognised in the quarter, Amigo generated profits before tax of £15.0m [during] the period. The overall net liability position reflects the remaining complaints provision on the balance sheet. A material uncertainty over the Group’s ability to continue as a going concern remains.”
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