Amigo Share News (AMGO)

(Sharecast News) - Guarantor loans provider Amigo Holdings reported a drop in pre-tax profit for the nine months to the end of December as impairment charges and complaint expenses weighed.
Pre-tax profit fell to ?53.5m from ?79m as ?26m of complaints expenses were recognised and as the provision for complaints was lifted to ?18.7m.

The net loan book was up 3.8% during the period to ?722.3m and revenue rose 8.5% to ?218m. However, the impairment charge as a percentage of revenue increased to 31.5% for the nine months, in line with guidance, from 24.2% in the same period a year ago. Amigo attributed the rise to "resource constraints" within the collections business, as strong demand for its product resulted in a significant increase in customer numbers.

Chief financial officer Nayan Kisnadwala said: "Our financial results over the last nine months have been within guidance across all key operating measures, excluding complaints. We have taken a cautious approach to complaints provisioning as we manage the evolving regulatory environment. We remain committed to delivering fair outcomes to our customers.

"As part of the strategic review we are reviewing our risk appetite for new lending which could lead to materially lower future lending volumes, impacting net loan book growth."

Amigo said that in light of the strategic review, it is withdrawing guidance previously given for this financial year end as it considers it to no longer be valid.

At 1000 GMT, the shares were down 9.6% at 49.44p