Amigo Holdings’ profit slides more than 80% in the fiscal first quarter

Written by: Wajeeh Khan
August 28, 2020
  • Amigo Holdings' profit slides more than 80% in the fiscal first quarter.
  • The lender's former CEO James Benamor wishes to be reinstated in his role.
  • Amigo Holdings' is currently under investigation by Britain's FCA.

Amigo Holdings (LON: AMGO) jumped over 30% in the stock market on Friday as its founder James Benamor approached private investors to support his reinstatement in the company as the Chief Executive Officer. Benamor has been involved in a squabble with the British firm since last year.

Following the initial jump, Amigo’s stock has now tanked more than 10% on Friday. The guarantor loans lender is currently trading at 13.16 pence per share that represents a massive 80% decline as compared to its per-share price of 70 pence per share at the start of 2020. Choosing a reliable stockbroker to trade online can be tricky. Here’s a comparison of a top few to get you started.

Benamor seeks to oust Amigo’s CFO and a board member

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In a tweet, Benamor revealed an irrevocable bid on Thursday for 29% of Amigo Holdings at a per-share price of 20 pence. The bid, he added, will be executed if he takes over the role of the CEO. Via a shareholder vote, Benamor also wishes to oust Nayan Kisnadwala (current CFO) and Roger Lovering (board member).

Benamor stepped down as the chief executive of the UK-based lender following its initial public offering (IPO) in 2018. In late 2019, he engaged in a bitter spat with Amigo’s management over strategy; a public row that continues to date. Earlier in August, the company named financial services veteran, Gary Jennison, as an executive director.

Amigo Holdings also published its financial results for the fiscal first quarter on Friday that highlighted the company to have seen an over 80% slide in profit. The company attributed the decline to an ongoing probe launched by the United Kingdom’s Financial Conduct Authority that aims to evaluate how Amigo judges customers’ creditworthiness.

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Amigo suspends all lending amidst the Coronavirus pandemic

The British firm also reported to have suspended all lending in recent months due to the Coronavirus pandemic that has so far infected more than 330 thousand people in Britain and caused over 41 thousand deaths, that further weighed on its profit in Q1.

Citing the investigation and COVID-19 uncertainty, Amigo refrained from giving its financial guidance for the full year on Friday. In related news, Amigo’s peer, Provident Financial plc revealed to have swung to a loss in the fiscal first half on Wednesday.

At the time of writing, Amigo Holdings has a market cap of £62.55 million.