Amigo’s strategy shift puts off investors

FTSE 250 loan guarantor company Amigo Holdings (LON:AMGO) has seen its share price plunge by 51.33% to 71.16p (as 14:25 BST) after publishing results for the first quarter. Revenues for the three months were up by 13.7%, but the company said that it would be shifting its lending model and taking a more conservative stance in light of shifting economic conditions.

CEO Hamish Paton commented: “New customers continue to choose Amigo as we provide a valuable product that improves their lives by giving them fair and transparent access to credit – to buy a car, to put down a rental deposit or to consolidate expensive debts. Our guarantor loan product occupies a space in society that is making a real difference to the lives of our customers, many of whom cannot access credit from their bank or building society.

“Amigo is both a responsible and profitable lender. We are focused on our future returns and building a sustainable business for the long term. We are accelerating investment in our operations to enable continued delivery of best in class customer service and further enhancing credit and conduct policies.

“This positive action means that we are hitting the ground running ahead of what we recognise is a changing regulatory and economic landscape. By doing this, we are being proactive and pragmatic. We are focused on achieving the best customer outcomes – all with long-term returns as a key driver“.