LONDON (Reuters) - British subprime lender Amigo reported a 36.5% fall in first half revenues and flagged "material uncertainty" about its future operations, citing worries over the pandemic, complaint volumes and the outcome of an ongoing regulatory investigation.
The company, which saw revenues drop to 92.3 million pounds over the six months to end-September, also posted a pretax loss of 62.6 million pounds.
One of Britain's biggest subprime lenders, COVID-19 has pummeled the economic resilience of its core customer base, forcing the firm to offer approximately 56,000 loan payment holidays as at Sept. 30.
It has also paused all new lending except to key workers, a move that has slashed its net loan book by 33.6% to 485 million pounds.
The pandemic has compounded Amigo's problems with managing a surge in customer complaints, which topped 25,000 in its fiscal first half and has now tied up more 300 of its workforce, the company said.
The overall number of complaints received has been higher than initially expected, pushing up the balance sheet provision to 159.1 million pounds.
"It's undoubtedly been a difficult period for Amigo but as a team we have made significant progress towards quantifying and addressing the challenges we face," Chief Executive Gary Jennison said, adding that the firm has appointed professional advisors to help the firm manage these.
Amigo said it was actively engaging with the Financial Conduct Authority in the regulator's investigation into Amigo's lending practices, and participating in the Woolard Review of Britain's unsecured lending market.
"There are millions of people that cannot access mainstream finance today but deserve a chance to be able to access it tomorrow," Jennison said.
"We want to be part of the solution for increasing financial inclusion in the UK, that is our purpose and what we are working towards delivering in 2021."