Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Guarantor loans provider Amigo warned on its financial future after swinging to a loss as provisions for loan impairments jumped following a material impact form the Covid-19 pandemic.
The board notes that a 'material uncertainty exists relating to going concern due to Covid-19 and the potential for either a sustained high level of customer complaints redress or a negative outcome of the FCA investigation,' the company warned.
The Financial Conduct Authority's investigation into the company's credit worthiness could reuslt in a number of potential outcomes including a significant fine and the requirement to perform a mandatory back-book remediation exercise, the latter of which could 'reasonably be expected to exhaust the group's available liquid resources,' it added.
For the year ended 31 March 2020, the company reported a pre-tax loss of £37.9m, compared with a profit of £111m on-year, while revenue rose 8.7% to £294.2m.
The impairment over revenue ratio rose to 38.5% from 23.7%.
The company reported complaints cost of £126.8m and complaints provision of £117.5m as at 31 March 2020 driven by an increase in complaints volumes.
The company did not declare a final dividend for the year, taking the total dividend to 3.1p, up from 1.87p on-year.