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amigo holdings plc

Amigo Holdings PLC Significant growth in revenue to £270.7m, an increase of 28.4%

Amigo Holdings PLC (LON:AMGO) today announced unaudited financial results for the year ended 31 March 2019.

Figures in £m, unless otherwise stated Year to
 31 March 2019
Year to
31 March 2018
Change %
  IFRS 9 1IAS 39 1
Number of customers2‘000224.0182.023.1%
Revenue 270.7210.828.4%
Net loan book3 707.6602.717.4%
Impairment:revenue ratio 23.7%21.3%14.3%
Cost:income ratio 17.5%21.9%18.2%
Adjusted profit after tax4 100.172.438.3%
Profit after tax 88.650.675.1%
EPS (Basic, adjusted)5pence22.018.121.5%
Basic EPSpence19.412.752.8%
Net borrowings/adjusted tangible equity 61.9x2.3x17.4%


1 Please note in the above KPI table, all 2019 figures show the full impact of IFRS 9 implementation. All prior figures are under IAS 39 accounting and have not been restated

2 Number of customers represents accounts with a balance greater than zero

3 Net loan book represents total outstanding loans less provision for impairment excluding deferred broker costs. The opening loan book has been adjusted for the IFRS 9 transitional movement to show true like-for-like growth figures

4 Adjusted profit is a non-IFRS measure. Adjusted profit after tax is adjusted for (a) the IPO related costs, (b) bond buyback-related costs and (c) shareholder loan notes. For the full reconciliation see the alternative performance measures (APMs) appendix

5 This is a non-IFRS measure and the calculation is shown in note 10. Shareholder loan note interest is excluded as the loan notes were converted to equity immediately before admission while IPO costs and bond buyback costs are not underlying in nature. By excluding these items from the adjusted profit and EPS metrics, the Directors are of the opinion that these measures give a better understanding of the underlying performance of the business

6 Net borrowings is defined as borrowings, excluding shareholder loan notes, less cash at bank and in hand. Adjusted tangible equity is defined as shareholder equity less intangible assets plus shareholder loan notes

Financial highlights
§ Net loan book of £707.6m, a 17.4% increase year on year (when the opening loan book is restated with the IFRS 9 transitional adjustment)

§ Significant growth in revenue to £270.7m, an increase of 28.4% (2018: £210.8m)

§ Impairment charge as a percentage of revenue at year end of 23.7% on an IFRS 9 basis

§ 95% of balances are fully up to date or within 31 days overdue, reflecting the underlying credit quality of the loan book

§ Low cost:income ratio maintained at 17.5%, a decrease of 4.4% (2018: 21.9%)

§ Adjusted profit after tax of £100.1m, an increase of 38.3% (2018: £72.4m)

§ Statutory profit after tax of £88.6m, an increase of 75.1% (2018: £50.6m)

§ Basic EPS increased 52.8% to 19.4p, adjusted basic EPS increased 21.5% to 22.0p

§ Final proposed dividend of 7.45p payable on 31 July 2019, total annual dividend of 9.32p, 50% of the last twelve months statutory profit

§ Net borrowings/adjusted tangible equity stayed within expectations at 1.9x

§ Customer base of 224,000 (2018: 182,000), an increase of 23.1% year on year

§ We continue to monitor potential effects of Brexit

Company highlights
§ Initial public offering completed in July 2018 and joined the FTSE 250 in September 2018

§ £150m securitisation in November 2018 with facility increased to £200m, providing greater balance sheet flexibility

§ Executed opportunistic bond repurchase in the open market for £80m in the year, reducing Amigo’s average cost of funding

§ Amigo Ireland made its first loans to customers in the Republic of Ireland in February 2019, the first step in testing the transferability of the “Amigo in a box” concept in a new geographic sector

§ Board strengthened through appointments of Clare Salmon as independent Chair of the Remuneration Committee and Nayan Kisnadwala as new CFO

§ Appointment of Hamish Paton as CEO designate in May 2019; Glen Crawford will step down during summer 2019 to undertake urgent medical treatment for a degenerating spinal condition

Industry recognition

§ “Treating Customers Fairly Champion” at the Consumer Credit Awards in July 2018

§ “UK Contact Centre of the Year” at the UK Contact Centre Forum Awards in November 2018

§ “Best Credit Builder” winner in the Moneynet Awards in January 2019 for the sixth year running

§ Fairer Finance named Amigo as the highest-rated lender for transparency of information on personal loans during 2019

Commenting on the results, Stephan Wilcke, Chairman of Amigo, said:
“Amigo exists to help provide financial inclusion to those potential borrowers excluded by mainstream lenders. The involvement of a third-party guarantor helps both the borrower and the lender, allowing this service to be delivered as a mid-cost rather than a high-cost solution.

I am pleased to report that the business has been able to deliver on our principal IPO commitments this year and propose a larger than expected full year dividend of 9.32p due to our increased balance sheet flexibility. This was all delivered against a challenging external environment and much internal change.

Arguably, Amigo being a publicly listed company has raised the profile of the guarantor loan product and fuelled some urban myths about us and our customers. In future we will work harder to dispel those myths and take the time to ensure our evolving stakeholder universe fully understands the service we offer.”

Commenting on the results, Glen Crawford, CEO of Amigo, said:
“The year to 31 March 2019 has been perhaps the most significant in the history of our business, we have successfully listed Amigo on the London Stock Exchange and gained a place in the FTSE 250 index. No small achievement for a business started from nothing in Bournemouth by our founder in 2005. Amigo continues to lead the provision of the guarantor product, which is a niche offering within the wider mid-cost credit sector, at a time when the demand for guarantor loans, as well as other mid-cost products, is growing.
Amigo retains its beautiful simplicity through a transparent product and business model. It has a clear focus on serving the needs of people excluded from mainstream finance who deserved a second chance. We pride ourselves on doing the right thing by our customers (as for every borrower, there will also be a guarantor) in a compliant manner and ensuring that the right customer outcomes are achieved based on a rigorous affordability and underwriting process, which is then combined with an ethical collections methodology that includes a detailed understanding of individual customer circumstances.
These principles remain at the heart of Amigo’s business model and are the foundations of our continued success. Success that has resulted in the financial results announced today. Amigo has a substantial market opportunity and we intend to focus our financial resources on realising our potential in full. We continue to be highly cash generative and the increased balance sheet flexibility due to our securitisation means the Board is recommending a final dividend of 7.45 pence, making a total of 9.32 pence for the year as a whole. As we progress our strategy and our financial performance, we will look to move to increase the dividend in future years.
It has been an honour to lead Amigo and I will continue to be a supportive shareholder of this amazing company. I would like to thank all of the staff at Amigo for their hard work, commitment to the business and constant focus on doing the right thing for our customers.”

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