Amigo Holdings PLC (lon:amgo)
Amigo Loans – I Am Sure That Everyone Else Is Wrong!

Amigo Holdings PLC Financials

ItemCurrent PeriodPrevious Period
Period3 Months3 Months
Adjusted Earnings
Adjusted EBITDA
Statutory Profit£18m£12m
Adjusted Profit
Total Debt£495m£667m
Net Debt

Commentary History
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Amigo Holdings PLC Share Price
Grade:The Pink Grade - A Pure Slightly Informed Gamble, The Market Doesn't Like The Company But I Think That I Understand Why.
Title: Amigo Loans – I Am Sure That Everyone Else Is Wrong!
Company: AMGO - Amigo Holdings PLC
Share Price Then: 72p
Author: Ian Smith
Date: Tue 10 Sep 2019
Comments: A few weeks ago Amigo Loans, one of the big players in the guaranteed loans market, announced its first quarter results and this sent the shares down by about 50%.

This seems to be a result of an increase in expected bad debt up from 25% of the revenue to 30%, whilst this seems horribly high some of this may be a result of accounting changes, accepting bad debt earlier than in the past.

Added to this there are strong concerns that the regulators are going to hit this industry now after Payday Loans and Doorstep Lending.

In particular persistent debt caused by repeat loans and top ups, about 12% of Amigo borrowers have had two or more tops ups.

The other area, loans having to be repaid by the guarantor have remained broadly steady during the last year at just under 10%,

So I went looking at review sites to see what the unhappy customers are saying and there seem to be three types of complaint.

On a blog called Debt Camel there was this question.
I agreed to be the guarantor for a loan for a friend, but he lied to me and couldn’t pay it. Amigo were very difficult, wanting me to stop paying other debts so I could pay them, and got a CCJ. Is it too late for me to complain and ask to be removed as the guarantor?

Which seems to be typical of many complaints by the guarantor, they didn’t really think that they would have to pay. It does appear that Amigo gets into contact with the guarantor very quickly after payments are missed rather than waiting say a year and letting the debt become unmanageable.

The other main complaint is the Amigo ask too many questions before considering a loan and turn some people down, although a few people seem to complain that they or someone else was lent money too easily!

There are also the normal complaints that all financial organisations get; They want me to pay the money back.

The complaints seem to be a combination of what you might expect but to me also suggest that Amigo are very much on top of missed payments.

Given the nature of the business debt has a different meaning to most businesses, the money is borrowed to be lent and the amount out on loan is up to £728.4m from £638.2m and the plan is not to increase this.

So when I consider the above, what look like good numbers and a P/E of about 3.6 I am struggling to see what it is that concerns others so much.

I have looked at Funding Circle and see loses and It’s almost as if people like to invest in companies that are losing money but promise big profits in the future.
Read Count: 344/10084

Buy/No Buy In A Nutshell
NegativesA combination of making risky loans and an unwillingness to tell complainants and regulators that the borrower and guarantor has the majority of the responsibility as they asked for and accepted the loan. Claims companies have joined tge bandwagon.
PositivesNew management could get much more aggressive with people complaining that they asked for and were given loans but they can't afford them.
Initial Review Price7p
Last Review Price9.3p
Last Review Date20-Nov-2020
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