Source - Alliance News

Amigo Holdings PLC on Thursday hailed recent progress at its pilot lending programme, and said talks with potential investors for a necessary fundraise are continuing.

Amigo shares traded 7.8% higher at 2.70 pence each in London on Thursday afternoon.

For the nine months to December 31, Amigo said its revenue declined 77% to £17.8 million from £75.7 million a year earlier. It swung to a pretax loss of £21.3 million from a £1.6 milion profit.

The worse financial results reflect ‘very limited new lending during the period’, the mid-cost credit provider explained.

‘In recent weeks we have made progress with the capital raise, despite extremely difficult market conditions, but have yet to secure the equity funding needed and conversations with potential investors are ongoing. Positively, Amigo’s pilot RewardRate lending programme, launched under regulatory supervision, is now building momentum in a market where demand is strong. This is a clear indication of the need for a mid-cost lending solution for people not served by mainstream lender,’ Chief Executive Officer Danny Malone said.

Earlier in February, Amigo avoided a £72.9 million fine from the UK Financial Conduct Authority on the grounds it would cause serious financial hardship.

‘A fine would also have threatened Amigo’s ability to meet its commitments to a High Court-sanctioned scheme of arrangement, which aims to pay redress to customers,’ the FCA explained.

The company noted that this marks an ‘important milestone’ for the company, as it brings the legacy issues to a close.

In May, the High Court sanctioned Amigo’s scheme of arrangement. The scheme allows Amigo to pay compensation to customers with a valid claim for redress for mis-sold loans prior to November 2020.

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