The company behind subprime lender Amigo Loans said that it had seen a massive drop in profit as its founder eyes a return in what could prove to be a drawn-out battle with the board.
Amigo Holdings made a £3 million pre-tax profit in the three months to June 30, an 83% drop from its £18.1 million profit this time last year, it said on Friday.
Investors had been expecting a fall, as the company paused most new lending and extended payments holiday to 47,000 customers during parts of the Covid-19 pandemic.
Amid warnings that it may not be able to continue trading, the struggling lender has been thrown into a battle over its future with founder James Benamor.
On Monday, the board urged Mr Benamor not to insist on calling a shareholder vote on a series of proposals which would, among other things, fire many of the directors and install him as chief executive again.
Mr Benamor had appeared to back off from the company he founded in June after losing a fight to oust several board members.
Only about one in 10 of Amigo’s independent shareholders voted with him that time, meaning his 61% stake was not enough to win the day.
Mr Benamor says his actions have been prompted by board members who he claims “mismanaged” Amigo.
Among other issues, the company is facing a battle to slash its thousands-long backlog of complaints from customers.
After missing an original June 26 to clear up its backlog so that complaints are dealt with in eight weeks, Amigo was granted an extension until October 30 by the Financial Conduct Authority (FCA).
On Friday the business said it was on track to meet the target.
Finance director Nayan Kisnadwala said: “The whole team at Amigo is focused on addressing our legacy issues and building a sustainable business for the long term.
“Operationally we have turned a corner in our handling of complaints.
“We are on track to meet the agreement reached with the FCA to resolve our complaints backlog and continue to work with the FCA on its ongoing investigation.
“We have adequate liquidity and funding to support our ongoing business activity.”
Revenue dropped 31.7% to £48.8 million.