Amigo shares jump as it boosts customer numbers and loan book
Shares in lender Amigo jumped 15 per cent this morning after it posted a rise in customer numbers and a beefed up loan book in the first half of the year.
In the six months to the end of September, the firm’s net loan book increased 8.8 per cent to £730.7m, driven by customer growth of 17.9 per cent. It also boosted revenue from £130.1m to £145.4m.
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However, top-line growth was offset by increased impairment and investment costs, as well as a provision for complaints.
As a result, the loan guarantor suffered a 12 per cent decline in pre-tax profit to £42.3m over the period.
Chief executive Hamish Paton said the figures proved there was “continued demand” for the company’s product.
“We are making encouraging progress as we roll out the operational and strategic initiatives outlined in August,” he said. “While it will take some time to see the full benefits, we are pleased with the positive start we have made.”
It comes a day after Amigo received some friendly advice from the financial regulator about how it explains the risks to people who act as a guarantor to the borrower’s family or friends.
The company yesterday said that the Financial Conduct Authority had outlined areas where its service could be improved, including more explanation of key information and more disclosure about the likelihood that a guarantor could be required to make payments.
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But Amigo said that the watchdog had not raised any concerns about the lender’s product or its underlying business model.
The London-listed firm proposed an interim dividend of 3.1p and said its full-year guidance remained unchanged.