Maiden half year results from loan provider Amigo (AMGO) are getting a lukewarm reaction from the market with the shares down 1.1% to 262p.

As a result, the shares are now 5% lower than the 275p issue price from its June IPO.

There are no real nasty shocks in the numbers, which is probably a relief give the problems facing other firms in the sub-prime lending space. Notably Wonga which went bust earlier this year.

You can read a detailed article on Amigo’s business model here, though many readers may already be familiar with the basics of the company’s approach from its adverts.

'PHONE A FRIEND'

Amigo offers guarantor loans, where friends or family with a better credit history stand behind the person lending the money.

At a headline level the results (covering the six months to 30 September) show pre-tax profit up 62.4% on revenue ahead by 40.5% and this puts the company on course to meet full year expectations.

However, notably the risk-adjusted margin was down a little against previous guidance it would be flat. More positively, the level of impairments (relative to revenue) was lower than expected.

Shore Capital analyst Gary Greenwood says: ‘We initiated coverage on Amigo earlier this month in a note entitled “Phone a friend” in which we highlighted the group’s dominant position in the fast-growing guarantor lending market, but also noted the risks posed by an economic downturn and potential for increased regulatory scrutiny.’

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