Updates from Amigo Holdings PLC
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Amigo Loans increased revenue by 40% in the first half of its fiscal year, encouraging the recently listed lender to announce its first dividend payment.
Glen Crawford, chief executive of Amigo, said “all is positive” as the company prepares to continue to grow and expand internationally despite concerns over economic uncertainty and regulatory crackdowns elsewhere in the industry, and information showing a break with the founder of the company.
The FTSE 250 group, which provides personal loans with family members or friends acting as guarantors, has been criticized by some activists for its high rates, but Amigo said it benefited from regulatory efforts to encourage alternatives to more expensive products.
Amigo charges interest rates of 49.9%, higher than traditional bank loans or credit cards, but lower than expensive products like payday loans or leasing with an option to buy. Mr Crawford added that the number of his clients was increasing as street lenders tightened lending standards.
The lender said turnover of £ 130million for the six months to September 30, up from £ 93million in the same period last year. Profit before tax rose from £ 30m to £ 48m, despite costs related to its IPO in June and a slight increase in write-downs.
Write-offs as a share of revenue fell from 19% to 23% due to a change in accounting rules that requires companies to recognize bad debts earlier, but the company said collections were “slightly ahead of schedule on expectations “during the period.
Amigo has said he will pay an interim dividend of 1.87 pence per share.
In September, Amigo founder James Benamor stepped down from the company’s board, prompting reports that he was considering starting a rival company despite still owning a controlling stake in Amigo. The Richmond group family office of Mr. Benamor is contractually prohibited from competing with Amigo in the United Kingdom or Ireland, but could create its own lending activity in other European markets.
Mr Crawford said “we are not at all baffled by anything the Richmond Group could do,” adding that it is “not in its best interests to do anything, whether it be competition or any other thing. something else that would have a detrimental effect on the value of Amigo. “
Amigo was recently licensed to start lending in Ireland and plans to start operations in the country before the end of March 2019.