Guarantor loans provider Amigo said on Thursday that it will be “resetting” expectations for its current financial year.
Shares in Amigo (LON:AMGO) were sent crashing on the announcement.
The company said in its results for the three month period ended 30 June that loan book growth is expected to be broadly flat.
Additionally, it said that impairment to revenue ratio will be low to mid 30% and cost to income ratio is expected to be in the low 20% range.
Its net debt/tangible equity remains unaffected, as does its dividend.
“The change in economic outlook, and the potential for regulatory change, means we are taking a more cautious approach to lending and have increased provisioning,” Amigo said in its results.
Amigo said that given the deteriorating economic outlook, it expects impairment to remain at a higher level than it previously expected.
Amigo’s warning of deteriorating economic conditions comes just after the pound took a hit yesterday when news broke that Boris Johnson had asked the Queen to suspend parliament ahead of the extended Brexit date.
“New customers continue to choose Amigo as we provide a valuable product that improves their lives by giving them fair and transparent access to credit – to buy a car, to put down a rental deposit or to consolidate expensive debts,” Hamish Paton, CEO of Amigo, said in the results.
“Our guarantor loan product occupies a space in society that is making a real difference to the lives of our customers, many of whom cannot access credit from their bank or building society,” the CEO continued.
“Amigo is both a responsible and profitable lender. We are focused on our future returns and building a sustainable business for the long term.”
“We are accelerating investment in our operations to enable continued delivery of best in class customer service and further enhancing credit and conduct policies.”
Amigo is based in Bournemouth and provides loans of up to £10,000 to those with poor credit histories.
Shares in Amigo Holdings PLC (LON:AMGO) were down 36.69% as of 10:14 BST Thursday.
