Amigo Holdings PLC (lon:amgo)
Amigo – Will Gary Jennison Push Back?

Amigo Holdings PLC Financials

ItemCurrent PeriodPrevious Period
Year20192018
Period12 Months12 Months
Revenue£294m£270m
Earnings
Adjusted Earnings
EBITDA
Adjusted EBITDA
Statutory Profit(£27m)£89m
Adjusted Profit
Total Debt
Net Debt

Commentary History
Amigo Holdings PLC Share Price
Grade:The Pink Grade - A Pure Slightly Informed Gamble, The Market Doesn't Like The Company But I Think That I Understand Why.
Title: Amigo – Will Gary Jennison Push Back?
Company: AMGO - Amigo Holdings PLC
Share Price Then: 11p
Author: Ian Smith
Date: Wed 14 Oct 2020
Comments: Interesting comment from the new CEO, There are undoubtably cases where we have done the wrong thing, but a significant number of the claims that we are getting are not genuine claims.

This is the first time that I have seen public comments that suggest that the board is starting to push back against the claims made against the company.

I get the idea that the regulators FOS/FCA are government employees in pretty secure jobs who live in their own bubble, but it won’t help your case if you rant and rave against them and say that you want to take you capital and lend it out in an unregulated market as JB has been doing.

I have had a good relationship with the Financial Conduct Authority and the Prudential Regulatory Authority in my previous roles. I am going to spend my time building relationships with the key people in the regulator; to discuss …

So GJ may be able to say substantially the same things as JB, but where JB might be ignored because he seems to have decided the best approach was to dispute the regulators authority GJ may be more one of the club. So he will be both better understood because he presents the arguments in the "right" way and trusted more because he accepts that the market is regulated.

The one area that I do expect there to be an issue with, if there is a future, is the role of the guarantor.

The original Amigo model seems to be that the guarantor is a provider of payments as a second resort, if the borrower misses one payment then the guarantor must step in and make the payment.

Traditionally the guarantor was the last resort, only expected to step in when many payments have been missed and court action taken and ignored.

I see nothing wrong with the original model and it is easy to believe that many guarantors thought that they had signed up to the last resort model and that thought was not totally unreasonable.

Again there are two ways of presenting this to the regulators for both new and existing customers and GJ may be successful in this. So with better documentation the original model may still be available.

Amigo have a very strong case and it may be that letting that case speak for itself is the way forward, regulators know that they can’t just decide to declare agreements invalid and expect any industry to survive.
Although I don’t know where it is, there is definitely a point where it becomes clear to everyone that the complaints are not genuine.

Unlike PPI there it is not the case that Amigo are almost automatically in the wrong, the complaints are based on “I asked for and was given a loan and Amigo shouldn’t have given it to me”, which should be a pretty tough sell.

When the JB v The Board public spat started I tended to side with JB, someone being picked on by the establishment, but the more tweets that he made and his actions in dumping his shares and the presentation of those actions and then the buy back offer have made suspect that I was wrong.
Read Count: 117/14188

Buy/No Buy In A Nutshell
NegativesA combination of making risky loans and an unwillingness to tell complainants and regulators that the borrower and guarantor has the majority of the responsibility as they asked for and accepted the loan. Claims companies have joined tge bandwagon.
PositivesNew management could get much more aggressive with people complaining that they asked for and were given loans but they can't afford them.
Initial Review Price7p
Last Review Price9.3p
Last Review Date20-Nov-2020
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