Amigo Holdings PLC Financial Results: Q1 FY20

Amigo Holdings PLC, (Amigo), the leading provider of guarantor loans in the UK, announces results for the three month period ended 30 June 2019. In the quarter Amigo saw customer numbers and revenue increase by 17.3% and 13.7% respectively. A rise in impairment and increased investment delivered adjusted profit after tax of £20.4m. The balance sheet has been further strengthened with a £100m increase in the securitisation facility and cash generation remains strong.

Financial Highlights

  • Net loan book of £728.4m, a 14.1% increase year on year (Q1 FY19: £638.2m) driven by a 17.3% rise in customers. Net loan book as at Q4 FY19 was £707.6m
  • Significant growth in revenue to £71.5m, an increase of 13.7% (Q1 FY19: £62.9m)
  • Impairment:revenue ratio of 30.5% (Q1 FY19: 25.4%). The increase in impairments is due to operational challenges within collections, the impact of higher originations and the increased day 1 provisions and more cautious IFRS 9 assumptions around the economy
  • 94.1% of balances are fully up to date or within 31 days overdue (Q1 FY19: 95.7%)
  • Cost:income ratio increased to 23.4% due to accelerated investment and a provision for complaints (Q1 FY19: 17.5%)
  • Adjusted profit after tax for the period was £20.4m (Q1 FY19: £21.8m)
  • Net borrowings/adjusted tangible equity stayed within expectations at 1.8x (Q1 FY19 2.5x)
  • £100m increase in securitisation facility in June 2019 further diversifying funding sources
  • The available size of the revolving credit facility was reduced in May 2019 from £159.5m to £109.5m
  • Reduced costs of funding from securitisation increase, additional bond repurchases of £28.0m at quarter end and a further £2.9m post quarter end
  • Amigo Ireland achieved a net loan book approaching €2.3m as at 30 June 2019, having made its first loans to customers in February 2019

Hamish Paton, CEO of Amigo, commented: “New customers continue to choose Amigo as we provide a valuable product that improves their lives by giving them fair and transparent access to credit – to buy a car, to put down a rental deposit or to consolidate expensive debts. Our guarantor loan product occupies a space in society that is making a real difference to the lives of our customers, many of whom cannot access credit from their bank or building society.

“Amigo is both a responsible and profitable lender. We are focused on our future returns and building a sustainable business for the long term. We are accelerating investment in our operations to enable continued delivery of best in class customer service and further enhancing credit and conduct policies.

“This positive action means that we are hitting the ground running ahead of what we recognise is a changing regulatory and economic landscape. By doing this, we are being proactive and pragmatic. We are focused on achieving the best customer outcomes – all with long-term returns as a key driver.”