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British sub-prime lender Amigo posts Q1 profit

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By Reuters

LONDON -British subprime lender Amigo posted a steep rise in first-quarter profit on Friday, days after reporting a sharp loss for its last financial year, though the company reiterated there was “material uncertainty” about its ability to continue as a going concern.

Amigo’s pretax profit rose to 15 million pounds ($20.55 million) versus 1.4 million a year earlier.

It said this week it suffered a pretax loss of 284 million pounds for the year ending March 2021.

The company’s future has been in the balance since receiving a deluge of customer complaints that it missold them loans in recent years.

A proposal by the company which would have resulted in customer compensation being cut was rejected by London’s High Court, after watchdog the Financial Conduct Authority objected.

Amigo said on Friday it had a complaints provision of 338 million pounds as at June 30, after using only 4.9 million pounds of its provision over the quarter.

“The performance of the business in the first quarter has been better than anticipated,” said CFO Mike Corcoran.

“As Amigo is not currently lending, the business is cash-generative and our cost reduction programme has been effective.”

($1 = 0.7300 pounds)