Amigo squeezed as borrowers take pandemic payment breaks

Michael O’dwyer

PROFITS at Amigo collapsed as the high-interest lender was forced to allow payment holidays to 47,000 customers during the pandemic.

The Bournemouth-based company reported a 31.7pc slump in revenues to £49m in the three months to June, which it blamed primarily on customers pausing repayments during the pandemic and on its decision to halt new lending except for key workers.

Pre-tax profit in the three months to June fell to £1.4m from £22.6m in the same period last year.

Total customer numbers dropped 5.2pc to below 200,000. The fall contributed to a reduction of almost a quarter in the value of Amigo’s loan book compared with a year ago.

Nayan Kisnadwala, chief financial officer, said Amigo aimed to restart lending by the end of the year and had enough liquidity to carry on. He is one of the directors facing removal from the board at a shareholder vote called on Thursday by James Benamor, Amigo’s founder. Mr Benamor said this week he wanted to oust interim chairman Roger Lovering and install himself as chief executive in a move that would see returning boss Glen Crawford become his understudy.

Mr Crawford has told the board he is not prepared to work for the founder under any circumstances, in comments Mr Benamor branded “personally hurtful”.

Amigo yesterday said Mr Benamor’s Richmond Group had withdrawn its resolution to remove Mr Crawford as a director.

The shareholder showdown will be the latest episode in a running battle between Mr Benamor and the board of the company he helped lead to a £1.3bn flotation in 2018.

A 13pc share price jump yesterday lifted the ailing lender’s value to £66m.

Mr Benamor accuses the board of mismanaging Amigo and racking up huge bills for customer complaints, including a £127m charge, which dragged it to a loss for the 12 months to March.

Mr Kisnadwala said the firm had turned a corner in its handling of complaints and was “focused on addressing our legacy issues and building a sustainable business for the long term”.

Amigo was on track to meet the extended Oct 30 deadline to deal with a backlog of complaints identified by the Financial Conduct Authority, which is investigating the firm, he added.