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Amigo Holdings PLC (LON:AMGO) swung to a first-half loss as it made a £159.1mln provision for customer complaints.
The guarantor loan provider reported a loss before tax of £62.6mln for the six months to end-September, 2020, compared to a £42.3mln pre-tax profit a year earlier.
At the start of this month, the company had warned that it was expecting to lift its provision for complaints to above £150mln, having already settled around £47mln of redress to customers and reviewed 25,571 complaints as agreed with the Financial Conduct Authority, with more than 300 staff said to be working solely on complaints.
As it works with the FCA and its advisers on addressing its backlog of complaints, Amigo said it is looking at an “early-stage” proposal to assess the use of a scheme of arrangement as a potential vehicle for customer redress.
The group had £134.2mln of cash as of the end of September after a reduction in net borrowings to £265.5mln from £396.3mln at the end of March, with cash up to around £160mln as of November 25 amid strong cash generation and after a tax refund.
In a statement, Amigo chief executive Gary Jennison, who has been in place since the board made a U-turn on another appointment in September, said: “We are much better placed operationally to manage complaints and we now understand our position better. We have appointed professional advisors to help us look at all the available options; this work is at a very early stage.”
He said the main focus was on ensuring the company can remain “a viable unsecured lending platform for the 10-12m adults who are excluded from mainstream bank lending”.
Amigo shares fell 3% to 8.89p on Thursday morning.
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