Guaranteed loans specialist Amigo PLC (LON:AMGO) has promised to work harder to dispel ‘urban myths’ about the way it operates.
The strength of the guarantor lending market has prompted concerns from UK financial regulator the FCA over how the affordability of borrowers was being assessed.
Questions have also been raised about Amigo’s past business practices but chairman Stephen Wilcke, batted those away when reporting maiden full-year results on Tuesday saying the group provided a ‘great service’ to customers.
The FTSE 250-listed group said it will continue to engage with the FCA to ensure that its approach, systems and processes remain compliant.
Guarantor loans are where someone else agrees to step in and cover repayments in the event of a missed payment or default.
The Amigo chairman said the proportion of payments made by a guarantor remained broadly constant during the last year at just under 10%.
Loans where the guarantor makes one or more payments in a given year also remained broadly constant over the same period.
Amigo’s loan book jumped by 17% to £707mln in the year to March as customer numbers rose 23% to 224,000. Bad debts/impairments were £64.2mln or around 9.1% of the loan book.
Revenue jumped by 28% to £271mln, while adjusted after-tax profits were 38% better at £100mln.
The firm is paying a final dividend of 7.45p, making a total payout of 9.32p for the year.
Founder and chief executive Glen Crawford is standing down due to ill health and will be replaced by Hamish Paton, the former CEO of rent-to-own group Brighthouse.
Amigo shares rose 4% to 233.5p, which is still some way short of 275p it floated at on the main market almost a year ago.