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Guarantor loans provider Amigo reported a rise in fiscal first-quarter profit amid cost cuts and 'broadly unchanged' provisions for bad debt.
For the three-month period ended 30 June 2021, pre-tax profit rose to £15.0 million from £1.4 million year-on-year as revenue fell 33.4% to £32.5 million.
The provision for settling complaints 'had been left broadly unchanged from the end of the previous fiscal year at £338 million, the company said.
The net loan book fell 47.8% to £288.7 million.
'The extremely challenging situation facing Amigo, resulting from the significant liability for compensation payments for historical lending, provides the context for our first quarter results,'the company said. Looking ahead, the company said it will pursuit a new scheme that would seek to address the concerns of the FCA and the High Court.
'If successful, the Scheme would provide greater certainty over the total complaints liability and will enable Amigo to continue to provide vital financial inclusion, a need in society made more apparent by the economic impact of Covid-19,' the company said.
'Without an approved Scheme, the value of Amigo's assets is less than the amount of its liabilities, resulting in an insolvent balance sheet,' it added.