25 July 2024
Amigo Holdings
PLC
Financial Results for
the year ended 31 March 2024
Amigo Holdings PLC, ("Amigo",
"Amigo PLC" or the "Company"), offered mid-cost credit in
the UK. The lending business is currently progressing through
an orderly solvent wind down. Today it announces results for the
year ended 31 March 2024.
Kerry Penfold, Chief Executive Officer
commented:
"With initial Scheme payments underway and with the sale of
the loan books almost complete, we are nearing completion of the
operational wind down of the business. I am very proud of and
grateful for the resilience of all our staff and their
determination to support customers and each other through this
process."
While it is disappointing to be executing the wind down of
Amigo's lending business, we are continuing our search for a
reverse takeover partner, following our equity raise earlier this
year and the appointment of Jim McColl as strategic consultant. If
a reverse takeover were to go ahead, it would deliver some value to
shareholders that would otherwise not be
possible."
Operational Headlines
·
On 23 March 2023, Amigo PLC switched to the
Fallback Solution under the Group's Scheme of
Arrangement.
·
Subsequently, the Board determined that the
financial statements will no longer be prepared on a going concern
basis (see note 1 of the Financial Statements).
·
The priorities now are to complete the orderly
wind down of the business as outlined under the Scheme's Fallback
Solution, to realise assets to maximise return for Scheme
creditors, and to look after the wellbeing of our remaining
employees.
·
Collection or sale of all loan books is
substantively complete.
·
Initial processing of claims made under the
Group's Scheme of Arrangement is now almost complete.
·
Staff numbers have reduced accordingly throughout
the year under a planned redundancy programme.
·
Amigo PLC has recently raised capital to extend
the life of the PLC while the Board investigates possibilities for
an RTO that could benefit shareholders. Unless an RTO of Amigo PLC
takes place, the wind down will leave no value for
shareholders.
·
Chief Executive Officer Danny Malone left the
business in December 2023, having served his notice period.
His role was merged with that of Kerry Penfold, Chief Financial
Officer.
Financial headlines
|
Figures in £m, unless
otherwise stated
|
|
Year ended
31 March
2024
|
Year ended
31 March
2023
|
Change %
|
|
Number of
customers1
|
'000
|
12.0
|
29.0
|
(58.6)
|
|
Net loan
book2
|
|
-
|
45.4
|
NM
|
|
Revenue
|
|
3.5
|
19.3
|
(81.9)
|
|
Complaints provision (balance
sheet)
|
|
(169.4)
|
(195.9)
|
(13.5)
|
|
Complaints charge (income
statement)
|
|
(12.1)
|
(19.1)
|
(36.6)
|
|
(Loss) before tax
|
|
(12.7)
|
(34.7)
|
(63.4)
|
|
(Loss) after
tax3
|
|
(12.6)
|
(34.8)
|
(63.8)
|
|
Adjusted profit/(loss) after
tax4
|
|
3.9
|
(9.3)
|
NM
|
|
Basic EPS
|
Pence
|
(2.7)
|
(7.3)
|
(63.0)
|
|
EPS (Basic,
adjusted)5
|
Pence
|
0.8
|
(2.0)
|
NM
|
|
Net unrestricted
cash6
|
|
90.4
|
62.4
|
44.9
|
|
Shareholders' equity
|
|
£0.0m
|
£12.6m
|
(100)
|
|
|
|
|
|
|
*NM = not meaningful
·
Reflecting the wind down of operations, and the
accrual of all future business wind down overheads, net assets have
decreased to £0.0m (FY23: £12.6m).
·
All net assets remaining after the wind down of
operations are pledged to Scheme creditors.
·
Revenue declined 81.9% as all new
lending ceased, and the remaining loan book substantially
reached the end of its term.
·
An impairment credit was recognised in the period
of £7.2m due to sales of previously charged-off loans as well
as net recoveries post charge-off.
·
Administrative and other costs decreased 50.8%
year on year, leading to a loss before tax of £12.7m (FY23:
£34.7m).
·
All debt, other than standard trade creditors,
was repaid in the previous year. Cash held at 31 March 2024
was £174.9m, of which £84.5m was restricted, primarily to pay
Scheme creditors.
Notes to summary financial table:
1 Number of customers
represents the number of accounts with a balance greater than zero,
exclusive of charged off accounts.
2 Net loan book represents
total outstanding loans less provision for impairment excluding
deferred broker costs. In the current year the net loan book is
zero as treated as remaining loans treated as available for sale
assets.
3 (Loss) after tax otherwise
known as (loss) and total comprehensive (loss) to equity
shareholders of the Group as per the financial
statements.
4 Adjusted profit/(loss) after tax excludes items due to their
exceptional nature including: write-back of complaints provision,
restructuring and onerous contract provisions. None are
business-as-usual transactions. Hence, removing these items is
deemed to give a view of underlying profit adjusting for
non-business-as-usual items within the financial
year.
5 Basic adjusted (loss)/earnings per share is a non-IFRS
measure and the calculation is shown in note 12 of the financial
statements. Adjustments to (loss)/profit are described in footnote
4 above.
6Net unrestricted cash is
defined as unrestricted cash and cash equivalents less borrowings
and unamortised fees.
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014. The person responsible for this
announcement is Nicholas Beal, Company Secretary.
Analyst and investor conference call and
webcast
Amigo will be hosting a Zoom
meeting for shareholders today (Thursday 25th July)
at 1.00pm (BST).
The Zoom details are:
Meeting ID: 857 6484
5967
Passcode: 036184
The presentation pack will be
available at: https://www.amigoplc.com/investors/results-centre.
Contacts:
Amigo
Kerry Penfold, CEO &
CFO
Nick Beal, Company
Secretary
investors@amigo.me
Lansons amigoloans@lansons.com
Tony Langham
Ed Hooper
About Amigo Loans
Amigo is a public limited company registered
in England and Wales with registered number
10024479. The Amigo Shares are listed on the Official List of
the London Stock Exchange. On 23 March 2023 Amigo
announced that it has ceased offering new loans, with immediate
effect, and would start the orderly solvent wind down of the
business. Amigo provided guarantor loans in
the UK from 2005 to 2020 and unsecured loans under the
RewardRate brand from October 2022 to March 2023,
offering access to mid‐cost credit to those who
are unable to borrow from traditional lenders due to their credit
histories. Amigo's back book of loans is in the process of being
run off or sold with all net proceeds due to creditors under a
Court approved Scheme of Arrangement. Amigo Loans
Ltd and Amigo Management Services Ltd are authorised
and regulated in the UK by the Financial Conduct
Authority.
Forward looking statements
This report contains certain forward-looking statements.
These include statements regarding Amigo Holdings
PLC's intentions, beliefs or current expectations and those of
our officers, Directors and employees concerning, amongst other
things, our financial condition, results of operations, liquidity,
prospects, growth, strategies, and the business we operate. These
statements and forecasts involve risk, uncertainty, and assumptions
because they relate to events and depend upon circumstances that
will or may occur in the future. There are a number of factors that
could cause actual results or developments to differ materially
from those expressed or implied by these forward-looking
statements. These forward-looking statements are made only as at
the date of this announcement. Nothing in this announcement should
be construed as a profit forecast. Except as required by
law, Amigo Holdings PLC has no obligation to update the
forward-looking statements or to correct any inaccuracies
therein.
Chair's Statement
In March 2023, we made the
incredibly difficult decision to switch to the Fallback Solution
under the Group's Scheme of Arrangement. This was the end of a
long struggle to revive the lending business and the start of a
difficult wind down. Initially, we thought wind down would take 12
months, but we came across unexpected complexity during the
process. However, we are now nearing the end and on course to
exceed our forecast of the amount available for Scheme creditor
redress.
By the end of our financial year,
we had paid over £33m in refunds to over 15,000 consumers as part
of the Scheme process. Between April and June 2024, we paid another
£47m in refunds to over 18,000 consumers. For completeness,
these refunds are for customers with a valid Scheme claim who
made loan payments to Amigo after the Scheme took effect (26 May
2022) and (in some cases) between 1 December 2021 and the date the
Scheme took effect. I am pleased that separate from this, the
Scheme Supervisors have recently declared
an Initial Scheme Payment of 12.5p per
pound. We are in the process of paying
that Initial Scheme Payment to Scheme creditors, and
by the end of June, we had paid £66.5m of this initial
amount. A final Scheme payment will be made when all assets
and liabilities of the Amigo Loans business have been realised, and
we still expect that the total of the Scheme payments
(initial and final payments) will not be less than 17p
per pound.
Amigo PLC
Meanwhile, in line with our duties
under the Companies Act, we have continued to explore all avenues
for the benefit of Amigo PLC shareholders and all stakeholders by
speaking to a number of parties about a potential
transaction.
In June 2023, Amigo PLC entered
into a period of exclusivity to allow Michael Fleming, a financier
and existing shareholder, to explore finding and completing a debt
investment in the Company or its subsidiaries. We are grateful for
Mr Fleming's enthusiasm and persistence in this.
Unfortunately, despite everyone's
best efforts, we were unable to secure investment to continue our
new (RewardRate) lending business. This reflected the increasingly
challenging conditions for UK lenders. The backdrop of interest
rate uncertainty, continued regulatory change, and the
cost-of-living crisis, made the environment to establish
sustainable and profitable mid-cost lending almost impossible, and
this situation continues today.
We began to seek opportunities for
a Reverse takeover ("RTO") as the only possible prospect of
delivering any future value for Amigo PLC shareholders.
Shares were suspended from trading
in October 2023 to explore a potential RTO with Craven House
Capital plc and others. This would have involved the Group
acquiring early-stage businesses involved in music and film
streaming, a worldwide digital magazine platform, and a payments
provider along with a cash subscription. Unfortunately, this was
unsuccessful for reasons outside Amigo's control, and in November,
the share trading suspension was lifted.
In March 2024, we announced a
proposal to place 95,019,200 new ordinary shares at an issue price
of 0.25p per share. As part of this, Jim McColl was appointed as a
Strategic Consultant to the Board.
Jim brings nearly thirty years of
experience creating value for investors by building businesses and
has been helping identify potential opportunities for Amigo to
continue as a listed company using a RTO. Although any such deal
will likely result in a significant dilution for shareholders, we
feel a RTO would be in their best interests, given the wind down of
the existing Group (Amigo Holdings PLC and its
subsidiaries).
In April, shortly after the end of
the accounting period, we held a General Meeting to approve the
necessary waiver of pre-emption rights. These new shares have been
issued and raised just over £235,000 before expenses. Based on
Amigo PLC's current estimates, the new capital is expected to
extend its runway to the end of the financial year until Amigo PLC
itself requires further funding.
It is important to state that a
RTO cannot be guaranteed at this stage. Any such transaction will
require shareholder approval and a new application for
listing.
Unfortunately, if this strategy
does not succeed, there will be no remaining value in the Company
for shareholders. The Company will need to convene a separate
General Meeting to seek approval to delist the Company and enter
Amigo PLC into a Member's Voluntary Liquidation.
Culture and
Conduct
As I noted last year, we
recognised the failings of the past and worked hard to develop a
culture that put customers first. This has continued during wind
down and the sale of our remaining loan books. There have been
significant challenges in implementing a complex Scheme at scale
and recognising the diverse circumstances of claimants. The
complexities are largely derived from the guarantor lending model
that Amigo innovated and the interactions between borrowers and
guarantors. However, our team has strived to deliver excellent
service in these difficult circumstances.
Our People
Our people are our greatest asset,
and the resilience and adaptability they have shown continue to be
remarkable. All our employees have operated knowing they will be
made redundant as part of the Scheme process. Yet, they have
continued to keep a clear focus on serving Amigo and its customers.
On behalf of the Board, I would like to thank our current staff and
those who have already left the business for their unerring
commitment and energy over this immensely difficult period. A key
priority for us is the wellbeing of our teams. We are committed to
looking after those that remain with us as we progress through the
wind down and complete the Scheme, and preparing them for their
onward journey as they leave the business.
Board
Throughout the year, we have
operated with a reduced number of Directors. This has been
appropriate in the circumstances considering the need to manage
costs.
At the end of December, Danny
Malone stepped down as CEO, having progressed the business well
into wind down. This was another sad day for Amigo. Danny was a
tireless leader of the executive team in our search to secure
commitments for new financing, and he was integral to getting our
RewardRate product into the market.
Danny resigned and worked his
notice period, and received no redundancy or compensation for loss
of office. In January 2024, Kerry Penfold assumed his role in
addition to her responsibilities as Chief Financial Officer. Nick
Beal, Chief Restructuring Officer and General Counsel, was
appointed Company Secretary following the departure of Roger
Bennett, who had been in the role since 2019.
Looking
ahead
Operational wind down is nearly
complete.
The Group has changed beyond
recognition since wind down began. However, recent investment
offers the hope of a positive future for the Amigo PLC separate
from its current subsidiaries.
Jonathan Roe
Chair
24 July 2024
Chief Executive's Financial and Non-Financial
Review
Amigo's Scheme of Arrangement
contained both a Preferred Solution (allowing the business to
continue lending) and a Fallback Solution. On 23 March 2023, the
Board announced that it had taken the very difficult decision to
switch the Scheme from the Preferred Solution to the Fallback
Solution. This meant we entered an orderly wind down process. The
trading subsidiary, Amigo Loans Ltd ("ALL"), immediately ceased new
lending and began realising all assets, in line with the Court
order requirement that all surplus after the wind down is
transferred to the Scheme creditors. This is reflected in the
consolidated balance sheet, which shows no shareholder equity in
the current business.
In due course, ALL will be
liquidated, as required by the Fallback Solution. As ALL is the
only revenue-generating business within the Group, it is expected
that other subsidiaries in the Group will be liquidated alongside
it. After year end, Amigo PLC raised a small amount of capital that
would allow it to meet some costs independent of the trading
business, potentially providing an alternative to
liquidation.
Wind down
strategy
While our objectives changed as we
entered Fallback, our previously reported strategic pillars
remained relevant throughout this period with a strong focus on
costs, maintaining good governance and operating responsibly to
meet our customers' needs for the remainder of their relationship
with us.
We sought to maximise returns to
Scheme creditors by collecting our remaining loan books
efficiently. Our strategy included reduced settlement offers to
customers and selling portfolios of debt and remaining live loans
through a competitive tender process. This included selling
all the RewardRate loans in January 2024.
As at the end of March 2024, we
had c.12,000 legacy borrowers with open loan positions, with the
average loan balance being c.£1,300. In May 2024, after the end of
the accounting period, we sold the bulk of our remaining live loan
'Amigo Loans' portfolio and have effectively ceased
collections activity.
Specific cash conservation
measures have been taken to maximise returns to Scheme creditors.
This included two moves to smaller premises, the first in May 2023
and the second in July 2024. We have continued to carefully monitor
overheads with the cancellation of non-essential contracts.
However, this is a solvent wind down, and any services provided by
our suppliers will continue to be paid for in accordance with
contractual terms.
The wellbeing of our people will
also remain a focus throughout the wind down. While it has been
necessary to cut costs through planned staff reductions, it is
equally necessary that we retain key roles and provide support for
our people throughout the process.
Effective governance and open
dialogue with our Regulator have been maintained throughout the
wind down process as we focus on delivering the best outcome
possible for all our stakeholders. In March 2024, we applied for
cancellation of regulatory permissions for both ALL and Amigo
Management Services Limited ("AMSL") as required under our wind
down plan. This application remains in process.
The Scheme
Our focus has been on the
completion of the Scheme, but this has been beset by complexity and
challenge. We received over 209,000 claims, significantly more than
anticipated. More of those claims were fully or partially upheld
than we predicted. This has naturally led to a greater volume of
administration and complexity in dealing with the claims than we
originally expected. This stretched our resources and regretfully
led to delays in resolving claims and returning monies to
claimants.
We are pleased to report that the
determination of Scheme claims has now been largely completed. As
at 30 June 2024, £66.5m had been returned to claimants within the
Scheme, with a further £118m written off from loan
balances.
Amigo PLC
We also seek to add value to Amigo
PLC, which is in line with our duties under companies' legislation
to consider the interests of all stakeholders.
Since the Group started the
orderly wind down of its lending business, the Company has remained
open to any expression of interest from third parties in all or any
assets of the business. In the year 2023/4, this involved a period
where shares were suspended to allow discussions under an
exclusivity agreement with a potential RTO candidate.
Unfortunately, this was unsuccessful for reasons outside Amigo
PLC's control.
In March, we announced the
proposed placing of 95,019,200 new ordinary shares at an issue
price of 0.25p per share. In April 2024 (after the year-end), we
held a General Meeting to approve the necessary waiver of
pre-emption. These new shares have been issued and raised just over
£235,000 before expenses. Based on Amigo PLC's current estimates,
the new capital is expected to extend its runway until the end of
the current financial year, after which Amigo PLC would require
further funding to avoid insolvency.
As part of this fundraising, we
also announced that we had engaged Jim McColl as a Board Consultant
to help identify potential strategic RTO opportunities.
However, should a viable
alternative solution not emerge within this extended runway period,
there will be no remaining value in the Company for shareholders,
and the Company will need to convene a separate General Meeting.
During this meeting, shareholder approval will be sought to delist
the Company from the London Stock Exchange and to enter Amigo PLC
into a Members Voluntary Liquidation.
Our People
Our people have always been what
makes Amigo special. Within the Fallback Solution, we require a
reducing number of existing roles. On 24 March 2023, just before
the end of the last financial year, all employees were placed at
risk of redundancy, and we entered a period of consultation, which
continues for everyone remaining. Many of these colleagues had been
with us for a significant part of, if not all, their careers. It
was our priority to support them, both while they remained with us
and in their preparation and search for their next role outside
Amigo. Over the year, we reduced staff numbers from 193 to 94, and
after the year-end, we have continued this process, with just 41
remaining at the end of June 2024.
Financial Review
Overall financial
performance
This year's financial performance
reflects the active winding down of operations. Net assets
decreased to £0.0m (FY 2023: £12.6m). All net assets remaining
after the wind down of operations are pledged to Scheme creditors.
Net loss after tax was £12.6m compared to a loss of £34.8m in the prior year.
This reflects the decreasing size of the business, with the fall in
expenditure largely due to reduced staff costs.
Revenue
Revenue declined 81.9% to £3.5m
over the 12 months as all new lending ceased and the
remaining loan book substantially reached
the end of its term. The decline in revenue is reflected in
customer numbers, which fell 58.6% to 12,000 (FY 2023:
29,000).
Impairment
An impairment credit of £7.2m was
recognised in the period (FY 2023: credit of £3.4m). The credit was
primarily due to sales of previously charged-off loans in the
period, as well as post-charge-off recoveries.
At 31 March 2024, the loan book
was recognised as a held-for-sale asset valued at £2.7m, unlike
previous years in which the loan book carried an IFRS9 valuation
(2023: £45.7m). No provision was made for future impairment as the
loan book was held at fair value based on the expected proceeds
from the sale. In May and July 2024, after the year end, the
remaining loan book not subject to Scheme claims, was sold to a
third party following a competitive tender process.
The Scheme provision has decreased
from the prior year to £169.4m (FY 2023: £195.9m). The provision
substantially comprises three elements: (i) cash redress due to be
paid by Scheme Co at pence in the pound; (ii) cash refunds, or loan
balance adjustments, due to be received from ALL in full; (iii)
costs to be incurred wholly in conjunction with completing the
Scheme.
Delays in processing Scheme claims
meant that payments to claimants commenced in February 2024, later
than anticipated. At the year-end Amigo had made cash payments of
£33.2m to a portion of claimants who were due refunds in full from
ALL. Since the year-end, a further £47m has been refunded,
amounting substantially to all refunds owing under the
Scheme.
In May 2024, an Interim Scheme
Payment of 12.5p in the pound was declared and has now been
substantially paid to all eligible claimants. We anticipate that a
second and final payment will be declared later this financial
year, and in the region of £200m will have been paid out to Scheme
creditors.
The income statement charge of
£12.1m (2023: £19.1m) reflects:
● an underlying
increase in our estimate of the cash available to redress claimants
(2024: £ 106.5m; 2023: £97.1m);
● the utilisation and
re-estimation of overheads and wind down provisions.
● the reclassification
of impairment provision on loans that will receive a balance
adjustment in the Scheme.
Although substantial progress has
been made through the year on the decisioning of claims and
calculation of redress due, an element of estimation remains in
both the final redress number and the cost to complete the Scheme.
Further information and sensitivity analysis can be found in note
2.2 to the Financial Statements.
Cost management
Administrative and other operating
costs decreased by £18.4m (50.8%) to £17.8m. The main categories of
expenditure included in administrative and other operating expenses
are employee costs of £10.5m (2023: £17.3m), licence fees of £1.4m
(2023: £2.5m) and legal, professional and consultancy fees of
(£0.1m) (2023: £10.9m).
Last financial year, these figures
were elevated due to the costs incurred in developing the
RewardRate product. In addition, in recognition of the wind down,
extensive cost-cutting has taken place across the business,
including a reduction in staff numbers from 193 to 94. The savings
from this continue in the current financial year.
This year, operating costs have
been elevated by an accrual for future business overheads to reduce
net assets to zero, reflecting that there is no underlying value
for existing shareholders.
Tax
A tax credit for the year ended 31
March 2024 of £0.1m relates to Amigo's Luxembourg
entity.
Loss for the
year
Despite a substantial reduction in
revenue, Amigo made a far smaller loss in 2023/4 than the previous
financial year. Loss before tax was £12.7m (FY 2023: £34.7m) with
loss after tax of £12.6m (FY 2023: loss of £34.8m). This is due to
reduced costs, earnings on cash deposits and recoveries on
previously charged-off debt from sale and collection.
Our basic loss per share for the
year was a loss of 2.7p (FY 2023: loss of 7.3p). Our adjusted basic
profit per share for the year was 0.8p (FY 2023: loss of
2.0p).
Funding and
liquidity
All Group debt, save trade credit
incurred in the ordinary course of business, was repaid in the
prior financial year. Funding to the Group is now entirely in
cash.
There was an increase in total
cash over the year despite the commencement of redress payments to
Scheme creditors (see table below). This was a result of strong
collections on the remaining loan book and inflows from the debt
sale programme and was helped by strong cost control. In April
2023, in accordance with the conditions of the Fallback Solution,
Scheme Co returned funds to ALL to ensure it remains well funded
for an orderly wind down of operations, providing a movement of
cash from restricted to unrestricted accounts. Through the year,
surplus collections have been paid to Scheme Co, a process that
will continue throughout the wind down period until the liquidation
of ALL.
All cash is held in AAA deposit
accounts or highly liquid funds. Rising interest rates and the
repayment of all financing debt in the prior period led to a
year-on-year increase in net interest receivable of £5.0m to
£6.5m
Summary
It is extremely disappointing to
be executing the wind down of the lending business; it is not the
outcome I or any of the Board wanted to see.
However, with the sale of the loan
books and the operational wind down nearing completion, we can take
some comfort from being on track to deliver redress to Scheme
claimants above our original forecasts. That is thanks in no small
part to the tremendous effort of our people.
I am very proud of and grateful
for the resilience of all our staff and their determination to
support customers and each other.
Kerry Penfold
Chief Executive Officer
24 July 2024
Consolidated statement of
comprehensive income
for the year ended 31 March 2024
|
|
|
|
Year to
|
Year
to
|
|
|
|
|
31 Mar 24
|
31 Mar
23
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
3.5
|
19.3
|
|
|
Interest payable and funding
facility fees
|
5
|
-
|
(3.6)
|
|
|
Interest receivable
|
|
6.5
|
1.5
|
|
|
Impairment of amounts receivable
from customers
|
|
|
|
|
|
Administrative and other operating
expenses
|
7
|
(17.8)
|
(36.2)
|
|
|
Complaints provision
expense
|
|
|
|
|
|
Total operating expense
|
|
(29.9)
|
(55.3)
|
|
|
(Loss) before tax
|
|
(12.7)
|
(34.7)
|
|
|
Tax credit/(charge) on
(loss)
|
10
|
0.1
|
(0.1)
|
|
(Loss) and total comprehensive (loss) attributable to equity
shareholders of the Group1
|
|
(12.6)
|
(34.8)
|
|
|
|
|
|
|
|
|
|
|
The (loss) is derived from
continuing activities.
|
|
|
|
|
|
|
|
Basic (loss) per share
(pence)
|
12
|
(2.7)
|
(7.3)
|
|
|
Diluted (loss) per share
(pence)
|
12
|
(2.7)
|
(7.3)
|
|
|
|
|
|
|
The accompanying notes form part of
these financial statements.
1 There was
less than £0.1m of other comprehensive income during the relevant
periods, and hence no consolidated statement of other comprehensive
income is presented.
Consolidated statement of
financial position
as at 31 March 2024
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Customer loans and
receivables
|
13
|
-
|
45.7
|
|
Property, plant and
equipment
|
|
-
|
0.3
|
|
Right-of-use lease
assets
|
19
|
-
|
0.1
|
|
Other receivables
|
16
|
0.5
|
1.5
|
|
Current tax asset
|
|
0.1
|
0.8
|
|
Cash and cash equivalents
(restricted)1
|
|
84.5
|
107.2
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
Available for sale
assets
|
14
|
2.7
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
17
|
(3.1)
|
(6.0)
|
|
Lease liabilities
|
19
|
-
|
(0.1)
|
|
Complaints provision
|
18
|
(169.4)
|
(195.9)
|
|
Restructuring provision
|
18
|
(5.7)
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
20
|
1.2
|
1.2
|
|
Share premium
|
|
207.9
|
207.9
|
|
Merger reserve
|
|
(295.2)
|
(295.2)
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes form part of
these financial statements.
1 Cash and cash equivalents (restricted) of £ 84.5m (2023:
£107.2m) materially relates to cash held for the benefit of
customers in relation to payments arising out of the Scheme of
Arrangement.
The financial statements of Amigo
Holdings PLC were approved and authorised for issue by the Board
and were signed on its behalf by:
Kerry
Penfold
Director
24 July 2024
Company no. 10024479
Consolidated statement of changes
in equity
for the year ended 31 March 2024
|
|
Share
|
Share
|
Translation
|
Merger
|
Retained
|
Total
|
|
|
capital
|
premium
|
reserve1
|
reserve2
|
earnings
|
equity
|
|
|
|
|
|
|
|
|
|
At 1 April 2022
|
1.2
|
207.9
|
0.1
|
(295.2)
|
133.9
|
47.9
|
|
Total comprehensive loss
|
-
|
-
|
-
|
-
|
(34.8)
|
(34.8)
|
|
Translation reserve
|
-
|
-
|
(0.1)
|
-
|
-
|
(0.1)
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
(0.4)
|
(0.4)
|
|
At 31 March 2023
|
1.2
|
207.9
|
-
|
(295.2)
|
98.7
|
12.6
|
|
Total comprehensive loss
|
-
|
-
|
-
|
-
|
(12.6)
|
(12.6)
|
|
|
|
|
|
|
|
|
The accompanying notes form part of
these financial statements.
1 The
translation reserve is due to the effect of foreign exchange rate
changes on translation of financial statements of the Irish
entities.
2 The
merger reserve was created as a result of a Group reorganisation in
2017 to create an appropriate holding company structure. The
restructure was within a wholly owned group, constituting a common
control transaction.
Consolidated statement of cash
flows
for the year ended 31 March 2024
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
(Loss) for the period
|
(12.6)
|
(34.8)
|
|
Adjustments for:
|
|
|
|
Impairment movement
|
(7.2)
|
(3.4)
|
|
Complaints provision
|
13.9
|
28.8
|
|
Restructuring provision
|
3.1
|
4.5
|
|
Tax charge/(credit)
|
(0.1)
|
0.1
|
|
Interest expense
|
-
|
3.6
|
|
Interest receivable
|
(6.5)
|
(1.5)
|
|
Interest recognised on loan
book
|
(4.8)
|
(30.8)
|
|
Share-based payment
|
-
|
(0.4)
|
|
Loss on sale of Fixed
Assets
|
0.1
|
-
|
Depreciation of property, plant and
equipment
|
|
|
|
Operating cash flows before
movements in working capital
|
(13.8)
|
(33.4)
|
|
Decrease in receivables
|
1.0
|
-
|
|
(Decrease)/increase in
payables
|
(2.8)
|
0.6
|
|
Complaints cash expense
|
(39.6)
|
(12.7)
|
|
Restructuring cash
expense
|
(1.9)
|
-
|
|
Tax refunds/(paid)
|
0.8
|
(0.2)
|
|
Interest received
|
6.5
|
-
|
|
Interest paid
|
-
|
(3.4)
|
|
Net cash (used in) operating
activities before loans issued and collections on loans
|
(49.8)
|
(49.1)
|
|
Loans issued
|
-
|
(2.5)
|
|
Collections
|
48.1
|
130.6
|
|
Other loan book
movements
|
6.8
|
(2.1)
|
Decrease in deferred brokers'
costs
|
|
|
Net cash from operating
activities
|
|
|
|
Financing activities
|
|
|
|
Lease principal payments
|
(0.1)
|
(0.3)
|
Repayment of external
funding
|
|
|
Net cash (used in) financing
activities
|
|
|
|
Net increase in cash and cash
equivalents
|
5.3
|
28.5
|
|
Effects of movement in foreign
exchange
|
-
|
(0.1)
|
Cash and cash equivalents at
beginning of period
|
|
|
Cash and cash equivalents at end of
period1
|
|
|
The accompanying notes form part of
these financial statements.
1 Total
cash is inclusive of cash and cash equivalents (restricted) of
£84.5m (2023: £107.2m). This restricted
cash materially relates to cash held for the benefit of customers
in relation to payments arising out of the Scheme of
Arrangement.
Notes to the consolidated financial
statements
for the year ended 31 March 2024
1. Material accounting
policies
1.1 Basis of preparation of
financial statements
Amigo Holdings PLC is a public
company limited by shares (following IPO on 4 July 2018), listed on
the London Stock Exchange (LSE: AMGO). The Company is incorporated
and domiciled in England and Wales. With effect from 15 June 2023
the Company's registered office is Unit 11a, The Avenue Centre,
Bournemouth, Dorset, United Kingdom BH2 5RP.
The principal activity of the
Company is to act as a holding company for the Amigo Loans Group of
companies. Previously, the principal activity of the Amigo Loans
Group was to provide individuals with guarantor loans from £2,000
to £10,000 over one to five years. No new advances on these
products have been made since November 2020. Following FCA approval
to return to lending, in October 2022, Amigo launched, on a pilot
basis, a new guarantor loan as well as an unsecured loan product
under the RewardRate brand. With the Fallback Solution, arising
from the Scheme of Arrangement ("Scheme") being implemented,
leading to a cessation of trade and implementation of a wind down
plan in March 2023, there has been no new
lending in the twelve months to 31 March 2024. The Group continues
to collect its assets and settle liabilities in line with
obligations under the Scheme.
These consolidated Group and
Company financial statements have been prepared on a basis other
than going concern and approved by the Directors in conformity with
the requirements of the Companies Act 2006 and these Group and
Company financial statements were also in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the UK. There has been no departure from the required IFRS
standards.
The consolidated financial
statements have been prepared under the historical cost convention
except for financial instruments measured at fair value.
The presentational currency of the
Group is GBP, the functional currency of the Company is GBP, and
these financial statements are presented in GBP. All values are
stated in £ million (£m) except where otherwise stated.
In preparing the financial
statements, the Directors are required to use certain critical
accounting estimates and are required to exercise judgement in the
application of the Group and Company's accounting policies. See
note 2 for further details.
Going concern
In determining the
appropriate basis of preparation for these financial statements,
the Board has undertaken an assessment of the Group and Company's
ability to continue as a going concern for a period of at least
twelve months from the date of approval of the financial
statements.
In undertaking a Going Concern
review, the Directors considered the Group's implementation of the
Fallback Solution, announced on 23 March 2023, under the Scheme.
The Fallback Solution required that the Group's sole trading
subsidiary, Amigo Loans Ltd ("ALL") stop lending immediately and be
placed in an orderly wind down, with any surplus cash following the
wind down to be transferred to Scheme creditors. ALL would then be
liquidated within two months of the final Scheme dividend. No
residual value would be attributed to the ordinary shares of the
Company. Throughout the year to 31 March 2024 the Fallback Solution
has progressed. Amigo's back book of loans has now been
substantially run off or sold, an interim dividend is being paid to
Scheme creditors, and approximately 75% of the Group's staff have
exited the business since implementation.
Given the cessation of trading on 23
March 2023, alongside no apparent realistic strategic capital raise
or viable alternative solutions, and the requirement dictated by
the Scheme to ultimately liquidate ALL (the Group's sole
cash-generating unit), the Board have determined that the Annual
Report and Financial Statements for the year ended 31 March 2024
will be prepared on a basis other than going concern, consistent
with the prior year. In making this assessment consideration was
given to the potential for the PLC to attract a reverse takeover or
similar transaction. However, such an outcome, whilst the
strategic intention of the Directors, does not have sufficient
certainty in either cashflow or ability to trade to change the
basis of preparation from that adopted in FY23.
The Directors believe there is no
general dispensation from the measurement, recognition and
disclosure requirements of IFRS despite the Group not continuing as
a going concern. Therefore, IFRS is applied accordingly throughout
the financial statements. No material adjustments to the carrying
value of consolidated assets or liabilities was required. In light
of the wind down, and there being no value attributable to
shareholders from the ongoing business, an adjustment has been
applied to the carrying value of the investment in subsidiary of
the holding company. Refer to note 2a.
The relevant accounting standards
for each part of the Financial Statements have been applied on the
conditions that existed and decisions that had been taken by the
Board as at or prior to 31 March 2024.
The Board has prepared a set of
financial projections for continued solvent wind down. Alongside a
base scenario which indicates ample liquidity available through the
course of wind down, a downside scenario has been collated that
stresses the primary cash flow risks to the Group.
Stresses have been applied
to:
• Increased Scheme
liabilities
• Increased overhead
spend
Despite the stresses applied, the
Group maintains sufficient liquidity in the period. It is
therefore considered only a marginal risk that the Group is
unable to remain solvent during the orderly wind down. The key
risks that would prevent this from being achieved are the risks
applied in the downside scenario alongside potential regulatory
action or intervention.
Basis of
consolidation
The consolidated statement of
comprehensive income, consolidated statement of financial position,
consolidated statement of changes in shareholders' equity,
consolidated statement of cash flows and notes to the financial
statements include the financial statements of the Company and all
of its subsidiaries; see note 26 for a full list of subsidiaries.
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns through its involvement with the entity and has
the ability to affect those returns through its power over the
entity. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control
commences until the date that control ceases.
All intercompany balances and
transactions are eliminated fully on consolidation. The financial
statements of the Group's subsidiaries are prepared for the same
reporting period as the Group and Company, using consistent
accounting policies.
1.2 Amounts receivable from
customers
i) Classification
IFRS 9 requires a classification
and measurement approach for financial assets which reflects how
the assets are managed and their cash flow characteristics. IFRS 9
includes three classification categories for financial assets:
measured at amortised cost, fair value through other comprehensive
income ("FVOCI") and fair value through profit and loss ("FVTPL").
Note, the Group does not hold any financial assets that are equity
investments; hence, the below considerations of classification and
measurement only apply to financial assets that are debt
instruments. A financial asset is measured at amortised cost if it
meets both of the following conditions (and is not designated as
FVTPL):
· it
is held within a business model whose objective is to hold assets
to collect contractual cash flows; and
· its
contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest ("SPPI") on the
principal amount outstanding.
Financial assets held within a
business model that is neither held to collect, nor held to collect
and for sale, would be designated as FVTPL. An example would be
financial assets that are available for sale and therefore have
cash flows maximised through sale.
Business model
assessment
In prior years, the Group's
business model comprised primarily loans to customers that were
held for collecting contractual cash flows, a held to collect
business model which classifies those assets as held at amortised
cost. The Group deemed that the contractual cash flows were solely
payments of principal and interest ("SPPI") and hence, amounts
receivable from customers were measured at amortised cost under
IFRS 9, applying a forward-looking expected credit loss model
("ECL").
Historically, customers have been
derecognised when the entity's contractual rights to the financial
asset's cash flows have expired. Default has been defined when an
account is more than three contractual payments past
due.
In light of the decision to enter
into the Fallback Solution and the trigger for an orderly wind down
of the business the Board re-evaluated this business model
assessment. In the prior year, the assessment was no longer
considered appropriate for the RewardRate portfolio for which a
decision had been made to sell as a result of the wind down
strategy and this was classified as held for sale as at 31 March
2023 (see note 14). This asset was measured at fair value
accordingly. The accompanying notes referred to IFRS 5 but should
have referred to IFRS 9, as financial assets are outside the scope
of IFRS 5 but in scope for IFRS 9. However, the asset was correctly
measured at fair value and therefore has not been restated. Sale of
the RewardRate business was completed in January 2024.
As at 31 March 2024, the Board has
reconsidered the objective of the business model relating to the
residual loan book. The primary objective of the strategy now is to
maximise cash flow through sale. In light of this reassessment a
reclassification is required. The remaining loan book is available
for sale and would therefore be classified and measured as FVTPL
(note 14) as opposed to amortised cost.
1.3 Revenue
Revenue comprises interest income
on amounts receivable from customers. Loans are initially measured
at fair value (which is equal to cost at inception) plus directly
attributable transaction costs and are subsequently measured at
amortised cost using the effective interest rate method. Revenue is
presented net of amortised broker fees which are spread over the
expected behavioural lifetime of the loan as part of the effective
interest rate method. Revenue is also presented net of modification
adjustments recognised in the period, where no historical event
suggesting a significant increase in credit risk has occurred on
that asset (see notes 1.10.1.d for further details).
The effective interest rate ("EIR")
is the rate that discounts estimated future cash payments or
receipts through the expected life of the financial instrument (or
a shorter period where appropriate) to the net carrying value of
the financial asset or financial liability. The calculation takes
into account all contractual terms of the financial instrument and
includes any incremental costs that are directly attributable to
the instrument, but not future credit losses.
Given the intention to sell the
remaining loan book, and the immaterial nature of remaining
modification adjustments and unamortised broker fees, these items
have been fully expensed in the year.
1.4 Operating
expenses
Operating expenses include all
direct and indirect costs. Where loan origination and acquisition
costs can be referenced directly back to individual transactions
(e.g. broker costs), they are included in the effective interest
rate in revenue and amortised over the behavioural life of the loan
rather than recognised in full at the time of
acquisition.
1.5 Interest payable
Interest expense is recognised as
it accrues in the consolidated statement of comprehensive income
using the EIR method so that the amount charged is at a constant
rate on the carrying amount.
1.6 Dividends
Equity dividends payable are
recognised when they become legally payable. Interim equity
dividends are recognised when paid. Final equity dividends are
recognised on the earlier of their approval or payment
date.
1.7 Taxation
Tax on the profit or loss for the
year comprises current and deferred tax. Tax is recognised in the
consolidated statement of comprehensive income except to the extent
that it relates to items recognised directly in equity, in which
case it is recognised in equity.
1.7.1 Current tax
Current tax is the expected tax
payable or receivable on the taxable income or loss for the year,
using tax rates enacted or substantively enacted at the
consolidated statement of financial position date, and any
adjustment to tax payable in respect of previous years. Taxable
profit/loss differs from profit/loss before taxation as reported in
the income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.
1.7.2 Deferred tax
Deferred tax is provided on
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for taxation purposes. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilised.
Should circumstances arise where the Group concludes it is no
longer considered probable that future taxable profits will be
available against which temporary differences can be utilised,
deferred tax assets will be written off and charged to the
consolidated statement of comprehensive income.
The following temporary differences
are not provided for: the initial recognition of goodwill; the
initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination;
and differences relating to investments in subsidiaries to the
extent that they are unlikely to reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner
of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the consolidated statement of financial position date.
1.8 Property, plant and equipment
("PPE")
PPE is stated at cost less
accumulated depreciation and accumulated impairment losses. Cost
includes expenditure that is directly attributable to bringing the
asset to the location and condition necessary for it to be capable
of operating in the manner intended by management. Where parts of
an item of PPE have different useful lives, they are accounted for
as separate items of property, plant and equipment. Repairs and
maintenance are charged to the consolidated statement of
comprehensive income during the period in which they are
incurred.
Depreciation is charged to the
consolidated statement of comprehensive income on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
• Leasehold
improvements
10% straight line
• Fixtures
and fittings
25% straight line
• Computer
equipment
50% straight line
• Office
equipment
50% straight line
• Motor
vehicles
25% straight line
Depreciation methods, useful lives
and residual values are reviewed, and adjusted if appropriate, at
each consolidated statement of financial position date.
1.9 Provisions and contingent
liabilities
Provisions are recognised when a
Group company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Group company will
be required to settle that obligation and a reliable estimate can
be made of the amount of the obligation. The amount recognised as a
provision is the best estimate of the consideration required to
settle the present obligation at the consolidated statement of
financial position date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash
flows. For more details see note 2.2 and note 18.
Since entering wind down, the
Group has made provisions for onerous contracts. During this
financial year, following from the decision to sell all remaining
loans, the scope of this onerous contract provision has been
widened to encompass net future overheads of the business not
otherwise provided for. The result of this extended definition of
onerous contracts is that the net asset value attributable to
shareholders within the statement of financial position is nil.
This is consistent with the Group's obligations under the Scheme to
return all proceeds from the wind down of ALL, the Group's only
trading entity, to Scheme Creditors.
Contingent liabilities are possible
obligations arising from past events, whose existence will be
confirmed only by uncertain future events, or present obligations
arising from past events that are not recognised because either an
outflow of economic benefits is not probable, or the amount of the
obligation cannot be reliably measured. Contingent liabilities are
not recognised in the consolidated statement of financial position
but information about them is disclosed unless the possibility of
any economic outflow in relation to settlement is remote. See note
27 for further details.
1.10 Financial
instruments
The Group primarily enters into
basic financial instruments transactions that result in the
recognition of financial assets and liabilities, the most
significant being amounts receivable from customers.
1.10.1 Financial
assets
a) Other receivables
Other receivables relating to loans
and amounts owed by parent and subsidiary undertakings are measured
at transaction price, less any impairment. Loans and amounts owed
by parent and subsidiary undertakings are unsecured, have no fixed
repayment date, and are repayable on demand. The impact of ECLs on
other receivables has been evaluated and it is
immaterial.
b) Cash and cash
equivalents
Cash is represented by cash in hand
and deposits with financial institutions repayable without penalty
on notice of not more than 24 hours. Cash equivalents are highly
liquid investments that mature in no more than three months from
the date of acquisition and that are readily convertible to known
amounts of cash with insignificant risk of change in value. The
impact of ECLs on cash has been evaluated and it is
immaterial.
c) Cash and cash equivalents
(restricted)
Cash and cash equivalents
(restricted) materially relate to cash held for the benefit of
customers in relation to payments arising out of the Scheme of
Arrangement.
d) Modification of financial
assets
Where modifications to financial
asset terms occur, for example, modified payment terms following
granting of a Covid-19 payment holiday to customers, the Group
evaluates from both quantitative and qualitative perspectives
whether the modifications are deemed substantial. If the cash flows
are deemed substantially different, then the contractual rights to
cash flows from the original asset are deemed to have expired and
the asset is derecognised (see 1.10.1.e) and a new asset is
recognised at fair value plus eligible transaction
costs.
For non-substantial modifications
the Group recalculates the gross carrying amount of a financial
asset based on the revised cash flows and recognises a modification
loss in the consolidated statement of comprehensive income.
The modified gross carrying amount is calculated by discounting the
modified cash flows at the original effective interest rate. For
customer loans and receivables, where the modification event is
deemed to be a trigger for a significant increase in credit risk or
occurs on an asset where there were already indicators of
significant increase in credit risk, the modification loss is
presented together with impairment losses. In other cases, it is
presented within revenue.
e) Derecognition
A financial asset (or, where
applicable, a part of a financial asset or part of a group of
similar financial assets) is derecognised when:
• the
rights to receive cash flows from the asset have expired;
or
• the Group
has transferred its rights to receive cash flows from the asset or
has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a "pass-through"
arrangement and either:
• the Group
has transferred substantially all the risks and rewards of the
asset; or
• the Group
has neither transferred nor retained substantially all the risks
and rewards of the asset but has transferred control of the
asset.
f) Write-off
Customer loans and receivables are
written off the consolidated statement of financial position when
an account is six contractual payments past due, as at this point
it is deemed that there is no reasonable expectation of recovery.
When there is recovery on written-off debts or when cash is
received from the third-party purchaser on the legal purchase date
of the assets, recoveries are recognised in the consolidated
statement of comprehensive income within the impairment
charge.
1.11 Merger reserve
The merger reserve was created as a
result of a Group reorganisation in 2017 to create an appropriate
holding company structure. With the merger accounting method, the
carrying values of the assets and liabilities of the parties to the
combination are not required to be adjusted to fair value, although
appropriate adjustments shall be made through equity to achieve
uniformity of accounting policies in the combining entities. The
restructure was within a wholly owned group, constituting a common
control transaction.
1.12 Leases
IFRS 16 distinguishes between
leases and service contracts on the basis of whether the use of an
identified asset is controlled by the Group. Control is considered
to exist if the Group has:
• the right to obtain substantially
all of the economic benefits from the use of an identified asset;
and
• the right to direct the use of
that asset.
Where control, and therefore a
lease, exists, a right-of-use asset and a corresponding liability
are recognised for all leases where the Group is the lessee, except
for short-term assets and leases of low-value assets. Short-term
assets and leases of low-value assets are expensed to the
consolidated statement of comprehensive income as
incurred.
i) Lease liability
All leases for which the Group is a
lessee, other than those that are less than twelve months in
duration or are low value which the Group has elected to treat as
exempt, require a lease liability to be recognised on the
consolidated statement of financial position on origination of the
lease. For these leases, the lease payment is recognised within
administrative and operating expenses on a straight-line basis over
the lease term. The lease liability is initially measured at the
present value of the lease payments at the commencement date,
discounted using the incremental borrowing rate, as there is no
rate implicit in the lease. This is defined as the rate of interest
that the lessee would have to pay to borrow, over a similar term
and with similar security, the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar economic
environment. The interest expense on the lease liability is to be
presented as a finance cost.
The lease liability is subsequently
measured by increasing the carrying amount to reflect interest on
the lease, using the effective interest rate method, and reducing
the carrying amount to reflect the lease payments made.
ii) Right-of-use
asset
For each lease liability a
corresponding right-of-use asset is recorded in the consolidated
statement of financial position.
The right-of-use asset is initially
measured at cost and subsequently measured at cost less accumulated
depreciation and impairment losses, adjusted for any remeasurement
of the lease liability. Right-of-use assets are depreciated over
the shorter period of lease term and useful life of the underlying
asset, with the depreciation charge presented under administrative
and operating expenses. The Group's right-of-use assets related to
two property leases for offices in Bournemouth.
1.13 Foreign currency
translation
Items included in the financial
statements of each of the Group's subsidiaries are measured using
the currency of the primary economic environment in which the
subsidiary operates (the functional currency). The Group's
subsidiaries primarily operate in the UK. The Irish subsidiaries
were disposed of in February 2023. The consolidated and the Company
financial statements are presented in Sterling, which is the Group
and Company's presentational currency.
Transactions that are not
denominated in the Group's presentational currency are recorded, on
initial recognition, by applying the spot exchange rate at the date
of transaction. Monetary assets and liabilities denominated in
foreign currencies are translated into the relevant presentational
currency at the exchange rates prevailing at the consolidated
statement of financial position date. Non-monetary items carried at
historical cost are translated using the exchange rate at the date
of the transaction. Differences arising on translation are charged
or credited to the consolidated statement of comprehensive
income.
1.14 Defined contribution pension
scheme
The Group operates a defined
contribution pension scheme. Contributions payable to the Group's
pension scheme are charged to the consolidated statement of
comprehensive income on an accruals basis.
1.15 Items presented separately
within the consolidated statement of comprehensive
income
Complaints expense is presented
separately on the face of the consolidated statement of
comprehensive income. This item is deemed exceptional because of
its size, nature or incidence and which the Directors consider
should be disclosed separately to enable a full understanding of
the Group's results.
1.16 Share capital
Financial instruments issued by the
Group are classified as equity only to the extent that they do not
meet the definition of a financial liability or financial
asset. The Group's ordinary shares are classified as equity
instruments.
2. Critical accounting
assumptions and key sources of estimation uncertainty
Preparation of the financial
statements requires management to make significant judgements and
estimates.
Judgements
The preparation of the consolidated
Group financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that
affect the reported amounts of assets and liabilities at the
consolidated statement of financial position date and the reported
amounts of income and expenses during the reporting period. The
most significant uses of judgements and estimates are explained in
more detail in the following sections:
· Complaints provision:
· Estimating the probability, timing and amount of any outflows
(note 2.2.1).
· Restructuring provision:
· Required resource plan and subsequent timing of staff
exits
· Assessing supplier requirements and recognition of onerous
contracts
· Available for sale assets:
· Assessing probability and timing of an asset's prospective
sale (note 14)
Estimates
Areas which include a degree of
estimation uncertainty are:
· Complaints provisions:
· Upheld
Scheme claimants that have made payments post the Scheme Effective
Date which will be due a refund in full. This estimate evaluates
historical data and applies future assumptions for the timing of
refunds (note 2.2.1).
· Estimation of the cash liability is based on assumptions
around prospective debt sales and future operating
expenses.
· Valuation of the investment in subsidiaries held by parent
company Amigo Holdings PLC (note 2a of Company financial
statements).
· Restructuring provision:
· Severance costs of staff exits which are contingent on the
timing of exit and therefore contingent on future resource
required.
· Available for sale assets:
· Estimate of expected fair value, valued via an income approach
(note 14).
2.1 Credit impairment
Credit impairment is not applicable
in the current year since the customer loan book has been
reclassified as available for sale assets but was applicable for
the year ended 31 March 2023.
In the prior year judgements were
required to assess whether the credit risk of an instrument has
increased significantly since initial recognition and what
constituted a definition of default. Estimation uncertainty existed
around calculation of probability of default, the expected balance
at default, the loss arising when default occurs and the
incorporation of the impacts forward looking information and
macroeconomic factors have on the credit impairment
calculation.
2.2 Complaints
provisions
2.2.1 Complaints provision - estimation
uncertainty
The provision represents an
accounting estimate of the expected future outflows arising from
certain customer-initiated complaints, using information available
as at the date of signing these financial statements.
Identifying whether a present
obligation exists and estimating the probability, timing, nature
and quantum of the redress payments that may arise from past events
require judgements to be made on the specific facts and
circumstances relating to the individual complaints. Management
evaluates on an ongoing basis, revising previous judgements and
estimates as appropriate.
The calculation of the complaints
provision as at 31 March 2024 is based on Amigo's best estimate of
the future obligation. The Scheme cash redress provision is £106.5m
and is estimated based on future financial projections of the
orderly wind down of the Group, which therefore inherently carries
a degree of uncertainty. This estimate assumes, as per the Scheme,
that all assets of the business are committed to Scheme
claimants.
As at 31 March 2024, the Group has
recognised a complaints provision totalling £169.4m in respect of
customer complaints redress and associated costs. Utilisation in
the period totalled £38.6m. The total Scheme liability has
decreased by £26.5m compared to prior year, largely due to £33.2m
of cash refunds to Scheme creditors being made during the year,
partly offset by increases in cost estimates and the release of
overlap with prior IFRS 9 provision. The closing provision is
comprised of an estimate of cash liability, and an estimate of
refunds to upheld Scheme claimants for collections made since
Scheme effective date, which will be redressed in full and attract
compensatory interest.
The following table details the
effect on the complaints provision considering incremental changes
on the key assumptions, should current estimates prove too high or
too low.
|
|
Assumption used
|
Sensitivity applied
|
Sensitivity (£m)
|
|
Cash refunds to upheld Scheme
claimants1
|
£38.0m
|
+/- 10
ppts
|
+3.8
|
-3.8
|
|
Future
overheads1
|
£13.0m
|
+/- 10
ppts
|
+1.3
|
-1.3
|
1.
Sensitivity analysis shows the impact of a 10 percentage point
change in the main component assumptions in the cash redress
provision.
The Board considers that this
sensitivity analysis covers the full range of likely
outcomes.
3. Segment reporting
The Group has one operating segment
based on the geographical location of its operations, being the UK.
IFRS 8 requires segment reporting to be based on the internal
financial information reported to the chief operating decision
maker. The Group's chief operating decision maker is deemed to be
the Group's Executive Committee ("ExCo") whose primary
responsibility is to support the Chief Executive Officer ("CEO") in
managing the Group's day-to-day operations and analyse trading
performance.
In the prior year, Amigo Loans
Ireland Limited, registered in Ireland, was not a reportable
operating segment, as it was not separately included in the reports
provided to the strategic steering committee. The results of these
operations were included in the "other segments" column in the
prior year. Amigo Loans Ireland Limited was sold by the Group to
the CEO of the business in a management buy-out on 28 February
2023.
In the current year all the Group's
performance came from its UK operations.
The table below presents the
Group's performance on a segmental basis for the year to 31 March
2023 in line with reporting to the chief operating decision
maker:
|
|
|
Year
to
|
Year
to
|
Year
to
|
|
|
|
31 Mar
23
|
31 Mar
23
|
31 Mar
23
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payable and funding
facility fees
|
(3.6)
|
-
|
(3.6)
|
|
|
Interest receivable
|
1.5
|
-
|
1.5
|
|
|
Impairment of amounts receivable
from customers
|
|
|
|
|
|
Administrative and other operating
expenses
|
(37.5)
|
1.3
|
(36.2)
|
|
|
Complaints provision
expense
|
|
|
|
|
|
Total operating
(expense)/income
|
(56.6)
|
1.3
|
(55.3)
|
|
|
(Loss)/profit before tax
|
(36.1)
|
1.4
|
(34.7)
|
|
|
Tax credit on
(loss)/profit1
|
|
|
|
|
|
(Loss)/profit and total
comprehensive income attributable to equity shareholders of the
Group
|
|
|
|
|
|
|
31 Mar
23
|
31 Mar
23
|
31 Mar
23
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less impairment
provision
|
|
|
|
|
|
|
|
|
|
1 Gross loan book represents total outstanding loans and
excludes deferred broker costs.
2 Net loan book represents gross loan book less provision for
impairment.
In the prior year the carrying
value of property, plant and equipment and intangible assets
included in the consolidated statement of financial position
materially all relates to the UK. The results of each segment have
been prepared using accounting policies consistent with those of
the Group as a whole.
4. Revenue
Revenue consists of interest income
and is derived from a single segment in the UK. In the prior year a
small proportion of revenue came from Irish entity Amigo Loans
Ireland Limited (see note 3 for further details).
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Interest under effective interest
rate method
|
2.7
|
19.0
|
|
Other income
|
0.9
|
0.3
|
|
Modification of financial assets
(note 6)
|
(0.1)
|
-
|
|
|
3.5
|
19.3
|
5. Interest payable and funding
facility fees
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Senior secured notes interest
payable
|
-
|
3.7
|
|
Funding facility fees
|
-
|
(0.1)
|
|
|
|
|
All debt and funding facilities
were repaid by the Group in the prior year. Funding facility fees
in prior years include non-utilisation fees and amortisation of
initial costs of the Group's senior secured notes.
6. Modification of financial
assets
Covid-19 payment holidays and any
subsequent extensions were assessed as non-substantial financial
asset modifications under IFRS 9. The carrying value of historical
modification losses at the year-end was £nil (2023:
£0.6m).
|
|
|
Year
to
|
Year
to
|
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
£m
|
£m
|
|
Modification (loss) recognised in
revenue
|
|
(0.1)
|
-
|
|
Modification (loss)/ release
recognised in impairment
|
|
(0.1)
|
0.1
|
|
Total modification (loss)
/release
|
|
(0.2)
|
0.1
|
7. Operating expenses
The main categories of expenditure
included in administrative and other operating expenses are
employee costs £10.5m (2023: £17.3m), insurance £1.7m (2023:
£0.7m), licence fees £1.4m (2023: £2.5m) and legal, professional
and consultancy fees (£0.1m) (2023: £10.9m). In the current
financial year net future overheads of £1.9m have been provided for
in line with the extended definition of onerous contracts (see note
1.9). The significant variation in expenditure in these categories
reflects the changed circumstances of the Group and the wind down
programme of the operating subsidiaries.
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
Other operating expenses
include:
|
|
|
|
Fees payable to the Company's
auditor and its associates for:
|
|
|
|
- audit of these financial
statements
|
-
|
0.2
|
|
- audit of financial statements of
subsidiaries
|
0.1
|
0.4
|
|
- audit-related assurance
services1
|
-
|
0.1
|
|
Depreciation of property, plant and
equipment
|
0.3
|
0.5
|
|
Depreciation and interest expense
on leased assets
|
0.1
|
0.3
|
Defined contribution pension
cost
|
|
|
1 Other
assurance services include reviews of interim financial statements
and other assurance services.
8. Employees
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Employee costs
|
|
|
|
Wages and salaries
|
6.7
|
10.9
|
|
Social security costs
|
0.5
|
1.4
|
|
Cost of defined contribution
pension scheme (note 22)
|
0.3
|
0.4
|
|
Share-based payments (note
21)
|
-
|
(0.2)
|
|
Restructuring provision1
(note 18)
|
3.1
|
4.2
|
-Other (termination
payments)
|
|
|
|
|
|
|
1 Restructuring
provision relates to the cost of redundancies (see note 18 for
further details)
The average monthly number of
employees employed by the Group (including the Directors) during
the year, analysed by category, was as follows:
|
|
Year
to
|
Year
to
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
31 Mar
23
|
31 Mar
23
|
|
|
|
|
|
|
|
Employee numbers
|
|
|
|
|
|
Operations
|
70
|
101
|
7
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations roles are customer
supporting roles such as collections and complaints handling teams.
Support teams include but are not limited to: IT, HR, finance and
legal.
Average headcount decreased by 79
in the current year as compared to prior year, reflecting the
orderly wind down of the business. Headcount at 31 March 2024 was
94.
9.
Key management remuneration
The remuneration of the Executive
and Non-Executive Directors, who are the key management personnel
of the Group, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party
Disclosures.
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Key management emoluments including
employers' National Insurance costs
|
0.8
|
1.8
|
|
Termination payments
|
-
|
0.6
|
|
|
|
|
During the year retirement benefits
were accruing for one Director (2023: one) in respect of defined
contribution pension schemes. There are no other benefits relating
to key management personnel except for those disclosed
above.
The highest paid Director in the
current year received remuneration of £356,179 inclusive of
employers' National Insurance payments (2023: £1,417,007 inclusive
of employers' National Insurance payments, of which £630,000
related to loss of office payments).
The value of the Group's
contributions paid to a defined contribution pension scheme in
respect of the highest-paid Director amounted to £nil due to an
election being made for payment in lieu of pension (2023:
£nil).
10. Taxation
The applicable corporation tax rate
for the period to 31 March 2024 was 25.0% (2023: 19.0%) and the
effective tax rate is 1.5% (2023: negative 0.3%).
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Corporation tax
|
|
|
|
Current tax (credit)/ charge on
(loss) for the year
|
(0.1)
|
0.1
|
Taxation (credit)/ charge on
(loss)
|
|
|
A reconciliation of the actual tax
charge, shown above, and the (loss) before tax multiplied by the
standard rate of tax, is as follows:
|
|
Year
to
|
Year
to
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
|
|
|
|
(Loss) before tax multiplied by the
standard rate of corporation tax in the UK of 25% (2023:
19%)
|
(3.2)
|
(6.6)
|
|
Effects of:
|
|
|
|
Expenses not deductible for tax
purposes
|
0.7
|
0.8
|
|
Other
|
(0.6)
|
(0.1)
|
Current-year losses for which no
deferred tax asset is recognised
|
|
|
Total tax charge for the
year
|
|
|
|
|
|
|
The Finance Act 2021 increased the
UK corporation tax rate from 19% to 25% with effect from 1 April
2023.
11. Deferred tax
A deferred tax asset is recognised
to the extent that it is expected that it will be recovered in the
form of economic benefits that will flow to the Group in future
periods. In recognising the asset, management judgement on the
future profitability and any uncertainties surrounding the
profitability is required to determine that future economic
benefits will flow to the Group in which to recover the deferred
tax asset that has been recognised. Further details of the
assessment performed by management and the key factors included in
this assessment can be found under the going concern considerations
in note 1.1.
A deferred tax asset of £46.3m at
the substantively enacted rate of 25% (FY23: £41.8m at 25%) has not
been recognised given that the Group is now being wound down, and
there is no expectation of suitable future taxable profits. This is
comprised of £40.4m (FY23: £36.3m) in relation to £161.8m (FY23:
£145m) of unutilised tax losses and £5.9m (FY23: £5.6m) in relation
to other timing differences of £23.6m (FY23: £22.3m).
The UK statutory rate for FY24 is
25% (FY23: 19%). Finance Act 2021 increased the UK corporation tax
rate from 19% to 25% with effect from 1 April 2023, which impacts
the deferred tax position in the current period.
12. Profit/(loss) per share
Basic (loss) per share is
calculated by dividing the (loss) for the period attributable to
equity shareholders by the weighted average number of ordinary
shares outstanding during the period.
Diluted (loss) per share calculates
the effect on (loss) per share assuming conversion of all dilutive
potential ordinary shares. Following the closure of the
performance-related share incentive plans and
non-performance-related schemes, there are no dilutive potential
ordinary shares.
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Basic (loss) per share
|
(2.7)
|
(7.3)
|
|
Diluted (loss) per
share1
|
(2.7)
|
(7.3)
|
Adjusted profit/(loss) per share
(basic and diluted)2
|
|
|
1
The effects of anti-dilutive potential ordinary shares are ignored
in calculating diluted loss per share.
2
Adjusted basic profit/(loss) per share and earnings for adjusted
basic earnings(loss) per share are non-GAAP measures.
Consistent with prior years, the
Directors publish an adjusted profit/(loss) per share for
comparison purposes only. There are no profits attributable to
shareholders as net assets, after the cost of collecting the loan
book, are committed to Scheme creditors. Reconciliations of the
earnings used in the calculations are set out below.
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
(Loss) for basic EPS
|
(12.6)
|
(34.8)
|
|
Complaints provision
expense
|
12.1
|
19.1
|
|
Restructuring expense
|
3.1
|
4.5
|
|
Onerous contract expense
|
1.3
|
1.9
|
Profit/(loss) for adjusted basic
EPS1
|
|
|
Basic weighted average number of
shares (m)
|
|
|
Dilutive potential ordinary shares
(m)
|
|
|
Diluted weighted average number of
shares (m)
|
|
|
1.
Adjusted basic profit/(loss) per share and earnings for adjusted
basic profit/(loss) per share are non-GAAP measures.
13.
Customer loans and receivables
As at 31 March 2024 it is
considered that, under IFRS 9, the customer loan book satisfies the
criteria to be reclassified as an available for sale asset (note
14).
For the prior year the table shows
the gross loan book and deferred broker costs by stage, within the
scope of the IFRS 9 ECL framework.
|
|
|
31 Mar
23
|
|
|
|
|
|
Stage 1
|
|
42.2
|
|
Stage 2
|
|
11.0
|
|
|
|
|
|
Gross loan book
|
|
63.4
|
|
Deferred broker costs1 - stage 1
|
|
0.2
|
|
Deferred broker costs1 - stage 2
|
|
0.1
|
|
Loan book inclusive of deferred
broker costs
|
|
63.7
|
|
|
|
|
Customer loans and
receivables
|
|
|
1Deferred broker costs are recognised within customer loans
and receivables and are amortised over the expected life of those
assets using the effective interest rate ("EIR") method.
Ageing of gross loan book
(excluding deferred brokers' fees and provision) by days overdue
for year ended 31 March 2023:
|
|
|
31 Mar
23
|
|
|
|
|
|
Current
|
|
43.7
|
|
1-30 days
|
|
6.7
|
|
31-60 days
|
|
2.7
|
|
|
|
|
|
|
|
|
The following table further
explains changes in the gross carrying amount of loans receivable
from customers to explain their significance to the changes in the
loss allowance for the same portfolios.
|
|
Stage
1
|
Stage
2
|
Stage
3
|
Total
|
|
|
|
|
|
Gross carrying amount at 1 April
2022
|
|
|
|
|
|
|
|
|
|
|
Loan book inclusive of deferred
broker costs at 1 April 2022
|
|
|
|
|
|
Changes in gross carrying amount
attributable to:
|
|
|
|
|
|
Transfer of loans receivable to
stage 1
|
3.1
|
(3.0)
|
(0.1)
|
-
|
|
Transfer of loans receivable to
stage 2
|
(9.5)
|
10.1
|
(0.6)
|
-
|
|
Transfer of loans receivable to
stage 3
|
(6.9)
|
(3.2)
|
10.1
|
-
|
|
Passage of time1
|
(28.4)
|
(7.8)
|
(3.0)
|
(39.2)
|
|
Customer settlements
|
(37.6)
|
(5.9)
|
(1.3)
|
(44.8)
|
|
Loans charged off
|
(11.4)
|
(11.9)
|
(20.0)
|
(43.3)
|
|
Modification loss relating to
Covid-19 payment holidays (note 6)
|
4.1
|
0.3
|
0.9
|
5.3
|
Net movement in deferred broker
fees
|
|
|
|
|
Loan book inclusive of deferred
broker costs as at 31 March 2023
|
|
|
|
|
1
Passage of time relates to amortisation of loan balances over the
course of the financial year, due to cash payments partially offset
by interest accruals.
The following tables explain the
changes in the loan loss provision between the beginning and the
end of the prior period:
|
|
Stage
1
|
Stage
2
|
Stage
3
|
Total
|
|
|
|
|
|
|
Loan loss provision as at 1 April
2022
|
18.1
|
8.9
|
20.4
|
47.4
|
|
Changes in loan loss provision
attributable to:
|
|
|
|
|
|
Transfer of loans receivable to
stage 1
|
0.5
|
(0.5)
|
(0.1)
|
(0.1)
|
|
Transfer of loans receivable to
stage 2
|
(1.3)
|
2.9
|
(0.5)
|
1.1
|
|
Transfer of loans receivable to
stage 3
|
(1.0)
|
(0.9)
|
8.2
|
6.3
|
|
Passage of time1
|
(4.0)
|
(2.0)
|
(2.4)
|
(8.4)
|
|
Customer settlements
|
(5.2)
|
(1.4)
|
(1.0)
|
(7.6)
|
|
Loans charged off
|
(1.6)
|
(3.9)
|
(16.6)
|
(22.1)
|
|
Management overlay
|
0.1
|
0.1
|
0.6
|
0.8
|
|
Modification loss relating to
Covid-19 payment holidays (note 6)
|
0.5
|
0.1
|
-
|
0.6
|
Loan loss provision as at 31 March
2023
|
|
|
|
|
1
Passage of time relates to amortisation of loan balances over the
course of the financial year, due to cash payments partially offset
by interest accruals.
The following table splits the
gross loan book by arrears status, and then by stage respectively
for the year ended 31 March 2023.
|
|
Stage
1
|
Stage
2
|
Stage
3
|
Total
|
|
|
|
|
|
|
|
Up to date
|
39.7
|
4.0
|
-
|
43.7
|
|
1-30 days
|
2.5
|
4.2
|
-
|
6.7
|
|
31-60 days
|
-
|
2.8
|
-
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table further
explains changes in the net carrying amount of loans receivable
from customers to explain their significance to the changes in the
loss allowance for the same portfolios.
|
|
|
31 Mar
23
|
Customer loans and
receivables
|
|
|
|
Due within one year
|
|
45.4
|
|
Net loan book
|
|
45.4
|
|
Deferred broker
costs1
|
|
|
|
Due within one year
|
|
0.3
|
Customer loans and
receivables
|
|
|
1
Deferred broker costs are recognised within customer loans and
receivables and are amortised over the expected life of those
assets using the effective interest rate ("EIR") method.
14.
Available for sale assets
Within the scope of IFRS 9,
previously the Amigo loan book has been classified under a business
model that is 'held to collect' with the asset's contractual cash
flows solely principal and interest, subsequently the asset was
classified and measured under amortised cost. As per IFRS 9 a
reclassification is required when the objective of the business
model changes.
To balance speed of delivery and
value to creditors, it was determined by management that a sale of
the residual loan book, broadly when collections break even with
overheads, would be an optimal strategy in the winding down of the
business. This is a marked change in the business model, from held
to collect to 'other' as net cash flows after costs are to be
maximised through sale.
As a result, the financial
statements are impacted through the loan book being reclassified
and measured under fair value as opposed to amortised cost, the
difference between amortised cost and the new carrying amount being
recognised in the P&L. This also means that no expected credit
loss calculation is necessary. The financial statements are not
impacted in any other way. The gross amount reclassified within
IFRS 9 was £5.1m. Customer loans not considered to be immediately
available for sale, primarily those having an unresolved Scheme
claim, have been valued at £nil.
The reclassification was dated March
2024 when the prospective sale of the loan book materialised. The
loan book sale was completed shortly after the reporting date
on 19 April
2024.
The simplest method to value the
asset at 31 March 2024 is to use the income approach taking the
expected final proceeds less costs to sell. As the completion date
was on 19 April 2024, any collections on the loan book in April up
to that date would remain within The Group. Any collections post 19
April 2024 would be paid in full to the purchaser and therefore be
cash neutral. Actual receipts were broadly in line with the
contract valuation prior to concluding the contract.
In the prior year the Group held a
distinct portfolio of loans, those originated under the RewardRate
brand, which were classified as held for sale. Valuation in the
balance sheet was at fair value with accompanying references
incorrectly referring to IFRS 5. Given the asset was measured
correctly at fair value as required by IFRS 9, there is no
restatement necessary. The sale of this portfolio of loans was
completed in January 2024.
15.
Financial instruments
The below tables show the carrying
amounts and fair values of financial assets and financial
liabilities, including the levels in the fair value hierarchy. The
tables analyse financial instruments into a fair value hierarchy
based on the valuation technique used to determine fair
value:
a) Level 1:
quoted prices (unadjusted) in active markets for identical assets
or liabilities.
b) Level 2:
inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
c) Level 3:
inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
|
|
|
|
|
|
|
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|
|
Fair
value
|
amount
|
value
|
amount
|
Value
|
|
|
|
|
|
|
|
|
Financial assets held at amortised
cost1
|
|
|
|
|
|
|
Amounts receivable from
customers2
|
Level
3
|
-
|
--
|
45.7
|
-17.2
|
|
Other receivables
|
Level
3
|
0.5
|
0.5
|
1.5
|
1.5
|
|
Cash and cash equivalents
(restricted)
|
Level
1
|
84.5
|
84.5
|
107.2
|
107.2
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets measured at fair
value
|
|
|
|
|
|
|
Available for sale
assets3
|
Level
1
|
2.7
|
2.7
|
1.1
|
1.1
|
|
|
|
2.7
|
2.7
|
1.1
|
1.1
|
|
Financial liabilities held at
amortised cost1
|
|
|
|
|
|
|
Other liabilities
|
Level
3
|
(3.1)
|
(3.1)
|
(6.0)
|
(6.0)
|
|
|
|
|
|
|
|
1 The Group
has disclosed the fair values of financial instruments such as
short-term trade receivables and payables at their carrying value
because it considers this is a reasonable approximation of fair
value.
2
The unobservable inputs in the fair value
calculation of amounts receivable from customers are balance
adjustments arising from upheld Scheme claims, expected credit
losses, forecast cash flows and discount rate. As both balance
adjustments and lifetime expected credit losses are embedded in the
calculation, this results in a fair value lower than the carrying
amount.
3 With the
sale being completed on 19 April 2024, these assets were valued
using the income approach taking the expected final proceeds less
costs to sell (note 14),
Financial instruments held at
amortised cost
The fair value of amounts
receivable from customers has been estimated using a net present
value calculation using discount rates derived from the blended
effective interest rate of the instruments. As these loans are not
traded on an active market and the fair value is therefore
determined through future cash flows, they are classed as Level 3
under IFRS 13: Fair Value
Measurement.
All financial instruments are held
at amortised cost. There are no derivative assets in the current or
prior period.
The Group's activities expose it to
a variety of financial risks, which are categorised under credit
risk and market risk. The objective of the Group's risk management
framework is to identify and assess the risks facing the Group and
to minimise the potential adverse effects of these risks on the
Group's performance. Financial risk management is overseen by the
Group Risk Committee alongside other principal risks: operational,
regulatory, strategic and conduct risks.
Credit risk
Credit risk is the risk that the
Group will suffer loss in the event of a default by a customer or a
bank counterparty. A default occurs when the customer or bank fails
to honour repayments as they fall due. Amigo defines both borrowers
and, where applicable, guarantors as customers.
a) Amounts receivable from customers
Since Amigo stopped issuing new
loans, the predominant credit risk relates to customer repayments
where a customer fails to make one or more payments. As Amigo
continues to sell its historic book, the credit risk has been
decreasing in parallel.
To minimise financial exposure, in
the last six months, the organisation implemented a discounted
settlement strategy which has successfully secured increased
collections and provided increased financial return over debt sales
for some loan populations. This has in turn, increased funds
available for claimants within the Scheme of
Arrangement.
Exposure to credit risk on customer
receivables is now considered very low, with the sale of the
majority of the loan book in the year and post year end.
b) Bank counterparties
This credit risk is managed by the
Group's key management personnel. This risk is deemed to be low;
cash deposits are only placed with high quality counterparties such
as tier 1 bank institutions.
Market risk
Interest rate risk
Interest rate risk is the risk of a
change in external interest rates which leads to an increase in the
Group's cost of borrowing. The Group is no
longer exposed to interest rate risk as all debt was repaid in the
prior year.
Foreign exchange risk
Foreign exchange rate risk is the
risk of a change in foreign currency exchange rates leading to a
reduction in profits or equity. There is no significant foreign
exchange risk to the Group. Foreign currency transactions and
balances within the Group are minimal so foreign exchange risk is
deemed immaterial.
Liquidity risk
Liquidity risk is the risk that the
Group will have insufficient liquid resources to fulfil its
operational plans and/or meet its financial obligations as they
fall due. Liquidity risk is managed by the Group's central finance
department through daily monitoring of expected cash flows and
ensuring sufficient funds are available to meet obligations as they
fall due. The unrestricted cash and cash equivalents balance at 31
March 2024 was £90.4m.
Since entering the Fallback
Solution the management of cash balances has changed substantially
in line with obligations under the Court approved Scheme of
Arrangement. The Scheme was designed to ensure the Group
could carry out an orderly wind down, which includes having access
to sufficient liquidity from previously restricted balances.
This sufficiently mitigates the risk that would otherwise arise due
to the Group having no immediately accessible debt
facilities.
Capital management
The wind down of the business is
fully funded from cash resources and will result in no value for
shareholders.
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Maturity analysis of financial
liabilities
|
|
|
|
Analysed as:
|
|
|
|
Due within one year
|
|
|
|
Other liabilities
|
(3.1)
|
(6.0)
|
|
|
|
|
Maturity analysis of contractual
cash flows of financial liabilities
|
|
|
|
|
Carrying
|
|
|
0-1
year
|
1-2
years
|
Total
|
amount
|
|
|
|
|
|
|
|
Other liabilities
|
3.1
|
-
|
3.1
|
3.1
|
|
|
|
|
|
|
|
|
0-1
year
|
2-5
years
|
Total
|
Carrying
|
|
|
|
|
|
|
|
Other liabilities
|
6.0
|
-
|
6.0
|
6.0
|
|
|
|
|
|
|
|
|
|
16. Other receivables
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Current
|
|
|
|
Other receivables
|
0.1
|
0.2
|
|
Prepayments and accrued
income
|
0.4
|
1.3
|
|
|
|
|
17. Trade and other payables
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
Current
|
|
|
|
Trade payables
|
0.2
|
0.9
|
|
Taxation and social
security
|
0.2
|
0.3
|
|
Other
creditors1
|
2.0
|
1.9
|
|
Accruals
|
0.7
|
2.9
|
|
|
|
|
1 Other creditors in the current year includes an onerous
contract of £1.9m to decrease net assets to zero, to reflect the
fact that all net assets of the Group are due to Scheme creditors.
In the prior year, other creditors includes an onerous contract
provision of £1.3m in relation to the RewardRate (RR) product. The
sale of the RR loan book was completed in January 2024. The product
had a number of associated supplier contracts that could not either
be terminated, or a termination fee had been negotiated to end the
contract early. These unavoidable costs were expected to be
greater than the economic benefits of collecting or selling the
potential RR loan book sale.
18. Provisions
Provisions are recognised for
present obligations arising as the consequence of past events where
it is more likely than not that a transfer of economic benefit will
be necessary to settle the obligation, which can be reliably
estimated.
|
|
2024
|
2023
|
|
|
Complaints
|
Restructuring
|
Total
|
Complaints
|
Restructuring
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Opening provision
|
195.9
|
4.5
|
200.4
|
179.8
|
-
|
179.8
|
|
Charge for the year
|
12.1
|
3.1
|
15.2
|
19.1
|
4.5
|
23.6
|
|
Net utilisation of the
provision
|
(38.6)
|
(1.9)
|
(40.5)
|
(3.0)
|
-
|
(3.0)
|
|
Closing provision
|
169.4
|
5.7
|
175.1
|
195.9
|
4.5
|
200.4
|
|
|
|
|
|
|
|
|
|
Non-current
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Current
|
169.4
|
5.7
|
175.1
|
195.9
|
4.5
|
200.4
|
|
|
169.4
|
5.7
|
175.1
|
195.9
|
4.5
|
200.4
|
Customer complaints
redress
As at 31 March 2024, the Group has
recognised a complaints provision totalling £169.4m in respect of
customer complaints redress and associated costs. Utilisation in
the period totalled £38.6m. The total Scheme liability has
decreased by £26.5m compared to prior year. The closing
provision is comprised of an estimate of cash liability, and an
estimate of refunds to upheld Scheme claimants for collections made
since Scheme effective date, which will be redressed in full and
attract compensatory interest. Balance adjustment liability arising
from The Scheme were reclassified as available for sale asset (note
14), this totalled £11.0m.
The Group continues to monitor its
policies and processes to ensure that it responds appropriately to
customer complaints.
The Group will continue to assess
both the underlying assumptions in the calculation and the adequacy
of this provision periodically using actual experience and other
relevant evidence to adjust the provisions where
appropriate.
The Group anticipates the redress
programme will be complete, or substantially complete, within nine
months of the year end. Uncertainties exist around the timing of
completion of the redress programme due to operational complexity
and the potential for customer appeals.
Restructuring provision
As at 31 March 2024, the Group
recognised a restructuring provision totalling £5.7m (2023: £4.5m)
in respect of the expected cost of staff redundancies and
liquidator costs due to wind down of the business. Included within
the expected cost of staff redundancies is an estimate for unpaid
tax on past and future payments.
19. Leases
All right-of-use assets relate to
property leases. For short-term and low-value leases, lease
payments are recognised in the consolidated statement of
comprehensive income on a straight-line basis over the lease term.
Short-term and low-value leases are immaterial to the
Group.
|
|
|
|
|
Cost
|
|
|
|
At 1 April 2023/1 April
2022
|
0.9
|
1.4
|
|
Restatement of lease
term
|
-
|
(0.5)
|
|
|
|
|
At
31 March 2024/31 March 2023
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
As at 1 April 2023/1 April
2022
|
(0.8)
|
(0.6)
|
|
Charged to consolidated statement
of other comprehensive income
|
(0.1)
|
(0.2)
|
|
|
|
|
At
31 March 2024/31 March 2023
|
|
|
Net book value at 31 March 2024/31 March
2023
|
|
|
Lease liabilities
A maturity analysis of the lease
liabilities is shown below:
|
|
2024
|
2023
|
|
|
|
|
|
Due within one year
|
-
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
In the year £0.1m in relation to
depreciation and impairment was charged to the consolidated
statement of comprehensive income in relation to leases (2023:
£0.3m). Lease liabilities related to Amigo's offices in
Bournemouth.
Following the decision to revert to
the Fallback Scheme on 23 March 2023, the right of use assets and
lease liabilities were remeasured to reflect a reduction in useful
life in accordance with IFRS 16.
20.
Share capital
On 4 July 2018 the Company's shares
were admitted to trading on the London Stock Exchange. Immediately
prior to admission the shareholder loan notes were converted to
equity, increasing the share capital of the business to 475.3m
ordinary shares and increasing net assets by £207.2m. No additional
shares were issued subsequent to conversion of the shareholder loan
notes.
Subsequent to the year-end further
shares were issued, see note 28.
Allotted and called up shares at par
value
|
|
|
|
31 Mar
24
|
|
|
|
|
£'000
|
|
|
|
|
|
|
41,000 deferred ordinary shares of
£0.24 each
|
|
|
10
|
475,333,760 ordinary shares of
0.25p each
|
|
|
|
|
|
|
|
|
|
|
|
|
31 Mar
23
|
|
|
|
|
£'000
|
|
|
|
|
|
|
41,000 deferred ordinary shares of
£0.24 each
|
|
|
10
|
475,333,760 ordinary shares of
0.25p each
|
|
|
|
|
|
|
|
|
|
|
Ordinary A
|
Ordinary B
|
Ordinary C
|
Ordinary D
|
Ordinary
|
Total
|
|
|
|
|
|
|
|
|
|
At 31 March 2018
|
803,574
|
41,000
|
97,500
|
57,926
|
-
|
1,000,000
|
|
Subdivision
|
(803,574)
|
(41,000)
|
(97,500)
|
(57,926)
|
400,000,000
|
399,000,000
|
Shareholder loan note
conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are
entitled to one vote per share at general meetings of the Company.
Each ordinary share in the capital of the Company ranks equally in
all respects and no shareholder holds shares carrying special
rights relating to the control of the Company. The nominal value of
shares in issue is shown in share capital, with any additional
consideration for those shares shown in share premium.
Deferred shares
At the time of the IPO and
subdivision the 41,000 ordinary B shares were split into 16,400,000
ordinary shares of 0.25p and 41,000 deferred shares of £0.24. The
deferred shares do not carry any rights to receive any profits of
the Company or any rights to vote at a general meeting. Prior to
the subdivision the ordinary B shares had 1.24 votes per share; all
other shares had one vote per share. The Group plans to cancel
these deferred shares in due course.
Dividends
Dividends are recognised through
equity, on the earlier of their approval by the Company's
shareholders or their payment.
The Board has decided that it will
not propose a final dividend payment for the year ended 31 March
2024 (2023: £nil).
On 28 March 2024, Amigo Holdings
PLC announced that it was seeking to raise £237,548, before
expenses, by the issue in two tranches of an aggregate of
95,019,200 new ordinary shares of 0.25p each at a subscription
price of 0.25p per share fully paid ranking pari passu in all
respects with the existing issued ordinary shares ("Ordinary
Shares") and had engaged James McColl to act as a strategic Board
Consultant. In that role, Mr McColl is assisting the Board in
identifying potential strategic opportunities for the Company to
continue as a listed company by way of a reverse
takeover.
On 5 April 2024, a first tranche of
23,766,400 new Ordinary Shares were issued raising £59,416, before
expenses, utilising the authorisation granted at the Company's
Annual General Meeting held on 27 September 2023 to allot up to an
additional 5 per cent of the Company's issued share capital for
cash without out offering pre-emption rights to existing
shareholders.
At a General Meeting of the
Company's shareholders on 30 April 2024 a resolution was approved
to dis-apply the Companies Acts pre-emption rights over the
proposed Second Tranche.
On 9 May 2024, a second tranche of
71,252,800 new Ordinary Shares (Second Tranche) were issued raising
£178,132, before expenses.
21. Share-based
payment
The Group operated three types of
equity settled share scheme: Long Term Incentive Plan ("LTIP"),
employee savings-related share option schemes referred to as Save
As You Earn ("SAYE") and the Share Incentive Plan
("SIP").
Share-based payment transactions
in which the Group receives goods or services as consideration for
its own equity instruments are accounted for as equity settled
share-based payments. At the grant date, the fair value of the
share-based payment is recognised by the Group as an expense, with
a corresponding entry in equity, over the period in which the
employee becomes unconditionally entitled to the awards. The fair
value of the awards granted is measured based on Company specific
observable market data, considering the terms and conditions upon
which the awards were granted. Following the implementation of the
wind down plan in March 2023, the fair value of all share-based
payments was £nil. The charge to the consolidated statement of
comprehensive income was £nil in the twelve months to 31 March 2024
(2023: credit of £0.4m).
22. Pension
commitments
The Group operates defined
contribution pension schemes for the benefit of its employees. The
assets of the schemes are administered by trustees in funds
independent from those of the Group.
The total contributions charged
during the year amounted to £0.3m (2023: £0.4m).
23. Related party
transactions
The Group had no related party
transactions during the twelve-month period to 31 March 2024 that
would materially affect the performance of the Group.
Intra-group transactions between
the Company and the fully consolidated subsidiaries or between
fully consolidated subsidiaries are eliminated on
consolidation.
Key management of the Group, being
the Executive and Non-Executive Directors of the Board, and the
Executive Committee controlled 0.25% of the voting shares of the
Company as at 31 March 2024 (2023: 0.30%). The remuneration of key
management is disclosed in note 9.
24. New standards and
interpretations
The following standards, amendments
to standards and interpretations are newly effective in the year in
addition to the ones covered in note 1.1. There has been no
significant impact to the Group as a result of their
issue.
· IFRS
17: Insurance Contracts and amendments to IFRS 17
· Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practice Statement 2)
· Definition of Accounting Estimate (Amendments to IAS
8)
· Deferred Tax Related to Assets and Liabilities Arising from a
Single Transaction - Amendments to IAS 12 Income Taxes
· Initial Application of IFRS 17 and IFRS 9 - Comparative
Information (Amendments to IFRS 17)
· International Tax Reform - Pillar Two Model Rules (Amendments
to IAS 12) - application of the exception and disclosure of the
fact
· International Tax Reform - Pillar Two Model Rules (Amendments
to IAS 12 - other disclosure requirements
Other standards
The IASB has also issued the
following standards, amendments to standards and interpretations
that will be effective from 1 January 2024, however these have not
been early adopted by the Group. The Group does not expect any
significant impact on its consolidated financial statements from
these amendments.
· Amendment to IAS 1 - Non-current liabilities with
covenants
· Amendment to IFRS 16 - Leases on sale and leaseback
· Amendment to IAS 7 and IFRS 7 - Supplier finance
· Amendment to IAS 21 - Lack of exchangeability
· IFRS
S1 - General requirements for disclosure of sustainability-related
financial information
25. Immediate and ultimate parent
undertaking
The immediate and ultimate parent
undertaking as at 31 March 2024 is Amigo Holdings PLC, a company
incorporated in England and Wales.
26. Investment in
subsidiaries
The following are subsidiary
undertakings of the Company at 31 March 2024 and include
undertakings registered or incorporated up to the date of the
Directors' Report as indicated. Unless otherwise indicated all
Group owned shares are ordinary. All entities are subsidiaries on
the basis of 100% ownership and shareholding.
As part of the ongoing orderly wind
down of activities the Group commenced proceedings to dissolve
dormant companies in the structure. The formal dissolution of six
previously dormant entities was confirmed on 30 October 2023. Amigo
Loans Luxembourg S.A. was also dissolved on 1 December
2023.
|
|
|
Class
of
|
Ownership
|
Ownership
|
|
|
|
|
|
|
|
|
|
Direct holding
|
|
|
|
|
|
|
Amigo Loans Group Ltd1
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
Holding
company
|
|
ALL Scheme Ltd1
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
Special
purpose
vehicle
|
|
Indirect holdings
|
|
|
|
|
|
|
Amigo Loans Holdings
Ltd1
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
Holding
company
|
|
Amigo Loans Ltd1
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
Trading
company
|
|
Amigo Management Services
Ltd1
|
United
Kingdom
|
Ordinary
|
100%
|
100%
|
Trading
company
|
|
Amigo Luxembourg S.A.
|
Luxembourg
|
Ordinary
|
-
|
100%
|
Financing company
|
|
Amigo Car Loans Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
|
Vanir Financial Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
|
Vanir Business Financial
Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
|
Amigo Store Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
|
Amigo Group Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
|
Amigo Finance Limited
|
United
Kingdom
|
Ordinary
|
-
|
100%
|
Dormant
company
|
1
Registered at Unit 11a, The Avenue Centre, Bournemouth, Dorset, BH2
5RP, England.
27. Contingent liabilities
Warranties exist in the debt sale
agreements. If Amigo is found to be in breach of these warranties
they must compensate the purchaser by paying the purchaser an
amount equal to the calculated compensation price for the relevant
accounts.
28. Post balance sheet events
Share issue
On 28 March 2024, Amigo Holdings
PLC announced that it was seeking to raise £237,548, before
expenses, by the issue in two tranches of an aggregate of
95,019,200 new ordinary shares of 0.25p each at a subscription
price of 0.25p per share fully paid ranking pari passu in all
respects with the existing issued ordinary shares ("Ordinary
Shares") and had engaged James McColl to act as a strategic Board
Consultant. In that role, Mr McColl is assisting the Board in
identifying potential strategic opportunities for the Company to
continue as a listed company by way of a reverse
takeover.
On 5 April 2024, a first tranche of
23,766,400 new Ordinary Shares were issued raising £59,416, before
expenses, utilising the authorisation granted at the Company's
Annual General Meeting held on 27 September 2023 to allot up to an
additional 5 per cent of the Company's issued share capital for
cash without out offering pre-emption rights to existing
shareholders.
At a General Meeting of the
Company's shareholders on 30 April 2024 a resolution was approved
to dis-apply the Companies Acts pre-emption rights over the
proposed Second Tranche.
On 9 May 2024, a second tranche of
71,252,800 new Ordinary Shares (Second Tranche) were issued raising
£178,132, before expenses.
Scheme of Arrangement
On 28 May 2024, the Supervisors of
Amigo's Scheme of Arrangement declared an interim Scheme payment of
12.5p in the pound. Between April and June 2024 Scheme Co has paid
£66.5m in interim Scheme payments, reducing the Group's restricted
cash balance. In the same period, ALL has continued to pay refunds
of £47.0m due to certain creditors in the Scheme, reducing the
Groups unrestricted cash balance.
Company statement of financial
position
as at 31 March 2024
|
|
|
31 Mar
24
|
31 Mar
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share capital
|
4a
|
1.2
|
1.2
|
|
Share premium
|
|
207.9
|
207.9
|
|
Merger reserve
|
|
4.7
|
4.7
|
Retained earnings (including loss
for the year of £1.4m (2023 :loss of £25.6m)
|
|
|
|
|
|
|
|
|
The parent company financial
statements were approved and authorised for issue by the Board and
were signed on its behalf by:
Kerry
Penfold
Director
24 July 2024
Company no. 10024479
The accompanying notes form part
of these financial statements.
Company statement of changes in
equity
for the year ended 31 March 2024
|
|
Share
|
Share
|
Merger
|
Retained
|
Total
|
|
|
capital
|
premium
|
reserve 1
|
earnings
|
equity
|
|
|
|
|
|
|
|
|
At 1 April 2022
|
1.2
|
207.9
|
4.7
|
(257.5)
|
(43.7)
|
|
Total comprehensive
(loss)
|
-
|
-
|
-
|
(25.6)
|
(25.6)
|
|
|
|
|
|
|
|
|
At 1 April 2023
|
1.2
|
207.9
|
4.7
|
(283.5)
|
(69.7)
|
|
Total comprehensive
(loss)
|
-
|
-
|
-
|
(1.4)
|
(1.4)
|
|
|
|
|
|
|
|
1 The merger reserve was created
as a result of a Group reorganisation to create an appropriate
holding company structure. The restructure was within a wholly
owned group and so merger accounting applied under Group
reconstruction relief.
The accompanying notes form part of
these financial statements.
Company statement of cash
flows
for the year ended 31 March 2024
|
|
Year
to
31 Mar
24
|
Year
to
31 Mar
23
|
|
|
|
|
|
|
|
|
|
(Loss) for the period
|
(1.4)
|
(25.6)
|
|
Adjustments for:
|
|
|
|
Impairment charge
|
0.9
|
25.2
|
|
Income tax
charge/(credit)
|
0.2
|
(0.2)
|
|
|
|
|
|
Operating cash flows before
movements in working capital
|
(0.3)
|
(1.0)
|
|
|
|
|
Net cash (used in) operating
activities
|
|
|
|
Financing activities
|
|
|
|
Proceeds from intercompany
funding
|
0.5
|
1.1
|
Net cash from financing
activities
|
|
|
|
Net movement in cash and cash
equivalents
|
-
|
-
|
Cash and cash equivalents at
beginning of period
|
|
|
Cash and cash equivalents at end of
period
|
|
|
The accompanying notes form part of
these financial statements.
Notes to the financial statements
- Company
for the year ended 31 March 2024
1a. Accounting policies
i) Basis of preparation of
financial statements
Amigo Holdings PLC (the "Company")
is a company limited by shares and incorporated and domiciled in
England and Wales.
The principal activity of the
Company is to act as a holding company for the Amigo Loans Group of
companies. The principal activity of the Amigo Loans Group is to
provide loans to individuals. Previously, its principal activity
was to provide individuals with guarantor loans from £2,000 to
£10,000 over one to five years. No new advances on these products
have been made since November 2020. Following FCA approval to
return to lending, in October 2022, Amigo launched, on a pilot
basis, a new guarantor loan as well as an unsecured loan product
under the RewardRate brand. With the Fallback Solution being
implemented, leading to a cessation of trade and implementation of
a wind down plan in March 2023, there has
been no new lending in the twelve months to 31 March
2024.
The financial statements have been
prepared under the historical cost convention, in accordance with
International Financial Reporting Standards as adopted by the UK,
and in conformity with the requirements of the Companies Act
2006.
In accordance with the exemption
allowed by section 408 of the Companies Act 2006, the Company has
not presented its own income statement or statement of other
comprehensive income.
The functional currency of the
Company is GBP. These financial statements are presented in
GBP.
The following principal accounting
policies have been applied:
ii) Going
concern
In determining the appropriate basis
of preparation for these financial statements, the Board has
undertaken an assessment of the Group and Company's ability to
continue as a going concern for a period of at least twelve months
from the date of approval of the financial statements.
In undertaking a Going Concern
review, the Directors considered the Group's implementation of the
Fallback Solution, announced on 23 March 2023, under the Scheme.
The Fallback Solution required that the Group's sole trading
subsidiary, Amigo Loans Ltd (ALL) stop lending immediately and be
placed in an orderly wind down, with any surplus cash following the
wind down to be transferred to Scheme creditors. ALL would then be
liquidated within two months of the final Scheme dividend. No
residual value would be attributed to the ordinary shares of the
Company. Throughout the year to 31 March 2024 the Fallback Solution
has progressed. Amigo's back book of loans has now been
substantially run off or sold, an interim dividend is being paid to
Scheme creditors, and approximately 75% of the Group's staff have
exited the business since implementation.
Given the cessation of trading on 23
March 2023, alongside no apparent realistic strategic capital raise
or viable alternative solutions, and the requirement dictated by
the Scheme to ultimately liquidate ALL (the Group's sole
cash-generating unit), the Board have determined that the Annual
Report and Financial Statements for the year ended 31 March 2024
will be prepared on a basis other than going concern, consistent
with the prior year. In making this assessment consideration was
given to the potential for the PLC to attract a reverse takeover or
similar transaction. However, such an outcome, whilst the
strategic intention of the Directors, does not have sufficient
certainty in either cashflow or ability to trade to change the
basis of preparation from that adopted in FY23.
The Directors believe there is no
general dispensation from the measurement, recognition and
disclosure requirements of IFRS despite the Group not continuing as
a going concern. Therefore, IFRS is applied accordingly throughout
the financial statements. In light of the wind down, and there
being no value attributable to shareholders from the ongoing
business, adjustment has been applied to the carrying value of the
investment in subsidiary of the holding company. Refer to note
2a.
The relevant accounting standards
for each part of the Financial Statements have been applied on the
conditions that existed and decisions that had been taken by the
Board as at or prior to 31 March 2024.
The Board has prepared a set of
financial projections for continued solvent wind down. Alongside a
base scenario which indicates ample liquidity available through the
course of wind down, a downside scenario has been collated that
stresses the primary cash flow risks to the Group.
Stresses have been applied
to:
• Increased Scheme
liabilities
• Increased overhead
spend
Despite the stresses applied, the
Group maintains sufficient liquidity in the period. It is
therefore considered only a marginal risk that the Group is
unable to remain solvent during the orderly wind down. The key
risks that would prevent this from being achieved are the risks
applied in the downside scenario alongside potential regulatory
action or intervention.
iii) Investments
Investments in subsidiaries are
stated at cost less, where appropriate, provisions for impairment.
Impairment is calculated by comparing the carrying value of the
investment with the higher of an asset's cash-generating units fair
value less costs of disposal and its value in use.
iv) Financial
instruments
See the Group accounting policy in
note 1.10.
2a. Investments
|
|
|
|
|
At 1 April 2023/1 April
2022
|
0.9
|
26.1
|
|
Impairment of
investment
|
(0.9)
|
(24.8)
|
Movement in share-based
payment
|
|
|
At 31 March 2024/31 March
2023
|
|
|
At 31 March 2024 the share price of
Amigo Holdings PLC implied a fair value higher than the carrying
value of net assets on the Group balance sheet.
However, on the basis that there is
no value in the subsidiaries attributable to the shareholders as
result of the wind down, the investment has been reduced to £nil.
The Directors believe this departure from a fair valuation based on
readily identifiable market data better reflects the position of
the Group at this time.
For details of investments in Group
companies, refer to the list of subsidiary companies within note 26
to the consolidated financial statements.
3a. Other payables
|
|
31 Mar
24
|
|
31 Mar
23
|
|
|
|
|
|
|
Amounts owed to Group
undertakings
|
71.0
|
|
70.4
|
Accruals and deferred
income
|
|
|
|
|
|
|
|
|
Amounts owed to Group undertakings
are considered non-recoverable. Following regulatory clearance
these balances were waived by the creditor subsidiaries post year
end in return for agreement by Amigo Management Services Limited
("AMSL") to assign any remaining cash balances to its sister
company ALL prior to liquidation.
4a. Share capital
For details of share capital, see
note 20 to the consolidated financial statements. £nil dividends
were paid in the year (2023: £nil).
5a. Capital commitments
The Company had no capital
commitments as at 31 March 2024 (2023: £nil).
6a. Related party transactions
The Company receives charges from
and makes charges to its 100% owned subsidiaries.
Amounts owed to Group undertakings are considered
non-recoverable. Following regulatory clearance these balances were
waived by the creditor subsidiaries post year end in return for
agreement by Amigo Management Services Limited ("AMSL") to assign
any remaining cash balances to its sister company ALL prior to
liquidation for the benefit of Scheme creditors.
For details of key management
compensation, see note 9 to the consolidated financial
statements.
|
|
Charged
to
|
Charged
from
|
Gross
balance
|
Carrying
Value
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Year to 31 March 2024
|
|
|
|
|
|
Amigo Loans Ltd
|
-
|
(0.3)
|
(66.3)
|
(66.3)
|
|
Amigo Management Services
Ltd
|
-
|
(0.3)
|
(4.7)
|
(4.7)
|
|
Year to 31 March 2023
|
|
|
|
|
|
Amigo Loans Ltd
|
|
(0.6)
|
(66.0)
|
(66.0)
|
|
Amigo Management Services
Ltd
|
-
|
(0.3)
|
(4.4)
|
(4.4)
|
7a. Post balance sheet events
See note 28 to the Group financial
statements for further details.
Under the terms of the Fallback
Solution of the Scheme, ALL has to be wound up and liquidated in an
orderly manner, with all the liquidation proceeds being paid to
creditors under the Scheme. The Company and ALL were indebted to
their subsidiaries under intercompany loan arrangements between
Group companies (intercompany loans). The debtor companies had no
resources to repay the amounts owed. If the loans were called
in, the debtor companies would have been insolvent. A
condition of the arrangement involving the issue of new shares was
that the intercompany loans were waived and released in full. As
part of the arrangement, Amigo Management Services Ltd agreed to
transfer to ALL all cash and assets it holds before the liquidation
of ALL.
On 10 May 2024, all the Intercompany
Loans were discharged and released.
Appendix: alternative performance
measures
Given the implementation of the
Fallback Scheme and the winding down of the Group's business, the
Board believes that disclosure of alternative performance measures
("APMs") are no longer relevant, and therefore they are no longer
disclosed.