By Lars Mucklejohn
Amigo Loans has today said it expects to have finalised its liquidation by the beginning of next year, as the company continued to wind down its historic lending business.
The embattled subprime lender reported a pretax loss of £6.7m in the six months to 30 September 2023, compared to a loss of £12.7m in the same period last year.
Revenue fell 82.3 per cent year-on-year to £2.8m, reflecting the impact of no new lending in the period.
Customer numbers plunged 59.2 per cent to 20,000, while Amigo’s net loan book reduced by 69.6 per cent to £24.5m.
Amigo has been on life support since it was suspended from lending by the City watchdog in 2020 for failing to perform adequate checks on consumers it lent to.
It specialised in offering struggling people very high loans at high interest rates, often referred to as payday loans.
Chief executive Danny Malone has been looking for ways to give some payout to shareholders as the lending business (ALL) winds down.
“A number of tentative indications of interest have been received, but none of these has as yet resulted in an executable proposal. We believe that a reverse takeover is the only possible prospect of delivering any future value for shareholders,” Malone said on Monday.
The firm announced last month that plans to move into music streaming had fallen through after it terminated talks with investor Craven House Capital to buy four businesses in exchange for new shares.
Amigo confirmed today that liquidation was all but certain.
“As ALL is the only revenue-generating business within the group, it is envisaged that all businesses within the group will be liquidated,” the company said. “This process has begun and is likely to be substantially completed in the first half of calendar year 2024.”
The loan business’ back book is being run off with all proceeds due to creditors under a court-approved scheme.
More than 200,000 claims have been made under the scheme, with some 99 per cent being determined and around 60 per cent of claimants informed of their outcome. Amigo expects to issue nearly all outcomes by the end of January 2024.
Malone is due to step down as CEO on 31 December 2023 and will be succeeded by Kerry Penfold.
Amigo has laid off more than a third of its 195 staff between March and September in an effort to reduce costs.
Shares have collapsed more than 96 per cent this year.
