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Amigo Holdings PLC
Annual report and accounts 2023
Amigo Holdings PLC Annual report and accounts 2023
The current Board came into Amigo because we believe passionately
that there is a need in the market for a regulated mid-cost lender that
meets the demand of ﬁnancially excluded people who deserve access
to regulated credit. We have fought hard as we sought to deliver the
best outcome for creditors, colleagues and shareholders.
It is with great sadness that the Board took the decision in March 2023
to commence the solvent wind down of the business. This will regrettably
result in no value for our shareholders. The Board is deeply sorry for
this outcome.
The economic and market environment moved against us considerably
after May 2022 when our Scheme of Arrangement, formulated between
late 2021 and early 2022, was sanctioned. This severely impacted our
ability to raise capital.
Our priority now is to undertake an orderly wind down of both the
Amigo Loans Ltd business and the wider Group, in which we maximise
returns for Scheme creditors and look after our people as we move
through the process. I would like to thank my colleagues for the
considerable commitment they have shown over a long and dicult
period and all our shareholders and wider stakeholders who have
supported us.
Danny Malone
Chief Executive Officer
1
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Strategic report
1 About Amigo
2 Headlines
3 Business model
4 Chair’s statement
6 Chief Executive Ocer’s review
9 Strategy
10 Stakeholder engagement and section 172
16 Sustainability
24 Financial review
26 KPIs
28 Risk management
29 Our risks
32 Emerging risks
34 Going concern and viability statement
Corporate governance
35 Chair’s introduction
36 Board of Directors and Company Secretary
38 Executive Committee (“ExCo”) members
39 Corporate governance statement
40 Governance report
46 Audit Committee report
50 Nomination Committee report
52 Risk Committee report
54 Directors’ remuneration report
73 Directors’ report
79 Directors’ responsibilities statement
Financial statements
81 Independent auditor’s report to the
members of Amigo Holdings PLC
88 Consolidated statement of
comprehensiveincome
89 Consolidated statement of ﬁnancial position
90 Consolidated statement of changes in equity
91 Consolidated statement of cash ﬂows
92 Notes to the consolidated ﬁnancial statements
118 Company statement of ﬁnancial position
119 Company statement of changes in equity
120 Company statement of cash ﬂows
121 Notes to the ﬁnancial statements – Company
123 Appendix: alternative performance
measures (unaudited)
123 Glossary
126 Information for shareholders
About Amigo
Amigo provided mid-cost credit in the
UKto those who would otherwise ﬁnd
itdicult to access ﬁnancial services.
On23 March 2023 Amigo stopped
oering new loans and started an 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, oering
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 o 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.
Operational headlines
•
On 23 March 2023 Amigo’s Scheme of Arrangement
(“Scheme”), sanctioned by the High Court in May 2022,
switched to the Fallback Solution, which is an orderly
wind down of the Amigo Loans Ltd business. All new
lending ceased with immediate effect. As a result, the
Board has determined that the financial statements will
no longer be prepared on a going concern basis (see
note 1 of the financial statements).
•
This followed the Board concluding that it would not be
able to raise sufficient commitments for funds to meet
both the Scheme requirement of an additional £15m
redress payment and to provide working capital to
enable the business to continue as agoing concern
by26 May 2023.
•
The existing loan books, including both the legacy loans
and new RewardRate loans, will continue to be collected
or will be sold. This is expected to be substantively
completed by early 2024.
•
The FCA Enforcement action concluded on 14 February 2023
with a fine of £72.9m reduced to £nil by the FCA in order
to not threaten Amigo’s ability to meet its commitments
to redress creditors identified under the Scheme.
•
The priorities now are to ensure the orderly wind down
of the business as outlined under the Fallback Solution,
and the realisation of assets to maximise return for
scheme creditors, whilst looking after the wellbeing
of our employees. A number of roles will be required
as wecontinue to service our existing customers and
manage the wind down. Consultation for the redundancy
of all roles is ongoing.
•
The wind down will leave no value for shareholders.
While we have continued to engage with potential
providers of finance to allow the business to restart,
theBoard considers the likelihood of success tobe low.
•
Post period end, in line with the wind down strategy,
Chief Executive (“CEO”) Danny Malone resigned from
hisrole as CEO and Director, subject to a six month
notice period, ending 15 November 2023.
Financial headlines
•
Net loan book reduction of 67.1% to £45.4m
(FY22:£138.0m) and revenue reduction of 78.4%
to£19.3m (FY22: £89.5m), due to the ongoing
run-off of the legacy loan book and very limited new
lending during the period. All new lending has now
stopped in line with the wind down strategy and
FallbackScheme requirements.
•
Complaints provision year-on-year increase of 8.9% to
£195.9m at 31 March 2023 (FY22: £179.8m). Thisreflects
the higher final number of claims received and higher
expected uphold rate which has been revised in line with
observed third-party decisioning. Theincrease in the
provision substantially accounts for the income statement
charge of £19.1m.
•
Year-on-year costs increase of £11.6m owing primarily
toRewardRate development and restructuring costs.
•
The reduction in revenue as the book runs off, alongside
the increase in complaints provision, led to a reported
lossbefore tax of £34.7m, (FY22: profit of £167.9m).
Loss after tax was £34.8m (FY22: profit of £169.6m).
Thesignificant profit in the prior year related to the
release of a substantial proportion of the complaints
provision, following the sanctioning of the Scheme.
•
Overall, collections have remained robust despite the
increased cost of living and the continued, but expected,
rise in delinquency as the book runs-off. This has been
driven by continued strong post-charge-off recoveries.
•
The remaining £50m of senior secured notes was repaid
in full, at par, in March 2023.
•
Net unrestricted cash of £62.4m at 31 March 2023
(FY22:net unrestricted cash of £83.9m) driven by the
continued collection of the back book and limited
originations in theperiod. The reduction from the
prior year reflects the payment of the £97m Scheme
contribution, £51m of which has been repaid to Amigo
post year-end as part of the Fallback Solution. Allnet
cash is committed to the Scheme, othercreditors
and expenses, with no residual value attributable
toshareholders.
Headlines
Strategic report
2
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Business model
Amigo’s business model, driven by our purpose of
providing those with few options to borrow the opportunity to
achieve financial mobility, offered accessible and affordable
loans to customers who have limited access to mainstream
finance. Through our customer-first approach, digital platform
and online or telephone customer journey, and in the context
of a robust conduct and risk framework, we sought to create
value for our stakeholders with strong cash generation and
efficient operations. We also aimed to support our customers
in improving their financial mobility through products that
rewarded regular, on-time payments, designed in collaboration
with a respected debt charity and with the FCA’s
Consumer Duty regulation in mind.
In October 2022, Amigo returned to lending with a new
brand and innovative lending proposition, significantly
improved processes, and a culture of responsible operation
todrive positive outcomes for all stakeholders. Unfortunately,
due to the inability to raise sufficient funds to meet the
conditions of Amigo’s Scheme of Arrangement, the Company
was placed into an orderly wind down on 23March 2023,
and new lending was stopped. The orderly wind down is
expected to be substantively complete within approximately
twelve months from its initiation. During this time, Amigo
will remain guided by its values and committed to strong
governance and regulatory compliance. We continue to
focus on delivering the best outcomes possible for our
customers, supporting our people and managing costs
tomaximise redress for our Scheme creditors.
3
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Our values
1 3
42
We put customers first
We are passionate about delivering
positive outcomesthatmeet our
customers’ needs.
We act with integrity
We are open and honest.
We aim to do what is right
andfair. Always.
We own the outcome
We find solutions and
deliverexcellence.
We question and challenge
thestatus quo.
We are human
We are welcoming and
embracediversity.
We respect and listen
toeach other.
4
Amigo Holdings PLC
Annual report and accounts 2023
Chair’s statement
Strategic report
It is with great sadness that I introduce
this year’s annual financial results
for the year ended 31 March 2023.
Thepast twelve months have
beenan extraordinarily challenging
period.
Wemade significant progress
during
the first nine months, firstly
achieving sanction for our Scheme
of Arrangement (“Scheme”) and
then securing permission from our
regulator, the Financial Conduct
Authority (“FCA”), to return to lending
with
the pilot launch of our new RewardRate
products. Unfortunately, market
conditions moved against us and,
despite securing offers for the required
debt funding, we were unable to raise
sufficient interest to underwrite the
required equity funding to pay a
further £15m contribution to Scheme
creditors and continue as a going
concern. As a result, on 23March
2023, the Board announced that it had
taken the difficult decision to switch the
Scheme from its Preferred Solution to
the Fallback Solution, which requires
Amigo to wind down itsAmigo Loans
Ltd business. As this is the only
revenue-generating business within
the Group, it is envisaged that the
whole Group will be liquidated. The
Board is deeply sorry for the impact
this will have on Scheme creditors
(who will receive less compensation),
our shareholders and employees.
While an agreement has been signed
with a shareholder who approached
management regarding seeking
investment in the Company or its
subsidiaries, the Board considers
that establishing a new business
and potentially creating value for
shareholders in the longer term
has significant execution risks and
would require regulatory approval.
We are pursuing all avenues in line
with our Directors’ duties, under
the Companies Act, to consider the
interests of all stakeholders, including
creditors, shareholders and employees.
However, as a result of Amigo’s Scheme
of Arrangement switch to the Fallback
Solution (the orderly wind down of the
Amigo Loans Ltd business), the Board
has determined that the financial
statements will no longer be prepared
on a going concern basis (note 1 of
the financial statements). Under the
Fallback Solution there is no expected
residual value for shareholders.
The Board currently intends to ask
shareholders to vote at the AGM in
September on proposals to delist the
PLC shares unless discussions with
potential investors progress towards
asuccessful conclusion.
Culture and conduct
In February, the FCA Enforcement
proceedings into the Group’s historic
lending practices and complaints
handling were concluded. Although
Amigo was not required to pay a
financial penalty, were it not for Amigo’s
financial position, we would have
been subject to a penalty of £72.9m.
In reaching agreement on the level of
the final penalty, the FCA recognised
that any penalty would cause Amigo
serious financial hardship and would
threaten the Company’s ability to meet
its
commitments to its Scheme creditors.
We are cognisant of the time afforded
to Amigo by the FCA throughout
the Scheme process and grateful
for its recognition of the significant
programme of change Amigo has
undertaken to deliver improvements
to the way in which our business
operates, including providing fair
outcomes to customers. Amigo has
made great strides in setting a culture
where the needs of our customers
are paramount, where we operate
inan open and constructive manner,
and monitor and measure conduct
and outcomes. As we move through
the wind down process, we remain
committed to delivering the highest
standards of corporate oversight with
diligence and integrity.
Jonathan Roe
Chair
Strategic report
5
Amigo Holdings PLC
Annual report and accounts 2023
Our people
Our people are our greatest asset and
the resilience and adaptability they
have shown has been remarkable. On
behalf of the Board, I would like to thank
all our teams, both current and those
that have left the business already, for
their unerring commitment and energy
over an 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 to preparing
our colleagues for their onward journey
as they leave the business.
Board
On 23 September 2022, Gary Jennison
stepped down from his role as Chief
Executive Officer (“CEO”) and as
aDirector of the Board. In order to
provide an appropriate transition,
Garyremained employed by Amigo
until 31 December 2022. Gary was
replaced as CEO by Danny Malone,
then Chief Financial Officer (“CFO”), who
in turn was replaced by Kerry Penfold
as CFO. Kerry moved from the internal
position of Head of Finance and has
previously held senior positions at
other financial institutions.
On 27 March 2023, Senior Independent
Director, MariaDarby-Walker and
Non-Executive Director Jerry Loy,
both resigned from the Board with
immediate effect, following the wind
down announcement. In line withthe
wind down strategy, on 15May 2023
Danny Malone resigned from his role as
CEO and Director, subject to serving out
his six month notice period to support
the orderly wind down of the business.
I would like to thank each for their
considerable contributions, support,
insight and counsel.
Looking ahead
The orderly wind down of the
Amigo business is expected to be
substantively completed by the end
of the coming financial year. During
the wind down process, we will
remain guided by our values with
a strong focus on governance and
oversight as we seek to support all
our stakeholders through the process.
It is with deep regret that there will
be no residual value from the wind
down for our shareholders. We will
seek to maximise returns for Scheme
creditors, support our customers for
the remainder of their relationship
withus and safeguard the wellbeing
ofour employees.
The economic environment
andresultant tightening of credit
availability, coupled with the ongoing
cost-of-living crisis, means there is
an increasing need for companies
like Amigo to provide mid-cost
financial products to the financially
underserved. With more and more
companies in the sector failing, action
needs to be taken to fill this gap and
provide the opportunity of financial
mobility to all.
Jonathan Roe
Chair
27 July 2023
Danny Malone
Chief Executive Officer
6
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Chief Executive Ocer’s review
Performance
Amigo’s legacy book continued
to unwind over the year, resulting
in a reduction in revenue and
number of customers of 78.4% and
60.3% respectively, compared to
the prior year. The net loan book,
at 31March2023, was £45.4m.
Collections have remained resilient,
driven in part by recoveries achieved
on charged off accounts. Increases
to the expected final number of
claims and uphold rate within the
Scheme resulted in an increase in the
complaints provision. The associated
uplift in complaints expense in the
income statement, coupled with
the reduction in revenue, led to a
reported loss after tax for the period
of £34.8m, (FY22:profit of £169.6m).
The significant profit in the prior year
reflected the release of a substantial
proportion of the complaints provision
following the sanctioning of the
Scheme in May 2022. As a result of
the wind down decision, the Board
considers that Amigo is no longer a
going concern (note 1 of the financial
statements). However, we are
effecting a solvent wind down of the
Amigo business and at 31 March2023
the business had unrestricted cash
of £62.4m. Current unrestricted cash
is over £121m. Substantially all net
assets are committed to the Scheme
with, regrettably, no value attributable
toshareholders.
Scheme of Arrangement
Amigo’s Scheme contained both
aPreferred Solution and a Fallback
Solution. The Preferred Solution
included an initial payment of
£97m toScheme creditors and was
conditional on Amigo returning
to lending by 26 February 2023
and the completion of a minimum
19:1 capital raise by 26 May 2023,
followed by the contribution of
a minimum £15m payment to the
Scheme fund for creditor redress.
Ifthese conditions were not met, or
there was no expectation that they
could be met, the Fallback Solution
would be triggered. The Fallback
Solution requires an orderly wind
down of thebusiness. Both scenarios
includeamechanism to return all
residual cash from the business to
Scheme creditors.
On 13 October 2022, Amigo received
permission from the FCA to return
to lending with its new RewardRate
products under a pilot test phase.
This fulfilled the first Preferred Solution
condition. Once Amigo returned to
lending, we were able to commence
marketing to fulfil the second Preferred
Solution condition. The Board fought
hard to complete a successful capital
raise with the strong belief that doing
so, and continuing with the Preferred
Scheme, would be in the best interests
of not only its shareholders, but also
Scheme creditors, employees and
wider stakeholders, including those
in society that do not have access
to mainstream credit options. With
the help of our financial advisors,
over 200 private and institutional
investors were approached to
support a capital raise of £45m,
which comprised the Scheme
contribution of £15m and £30m of
working capital, without which we
would be unable to continue as a
going concern. This was undertaken
against an increasingly challenging
economic backdrop in the UK which,
in turn, negatively impacted capital
markets and the outlook for consumer
credit. Despite receiving indicative
proposals sufficient to finance our
debt requirements, we were only
able to secure indications of interest
for £11m in ordinary share capital and
£10m in exchangeable notes. On
10 March 2023, having lost the last
material potential investor from the
process, the Board announced that
it believed it could not raise the total
£45m equity requirement by 26 May
2023. The main concerns investors
cited included: current affordability
challenges for UK households,
particularly in our sector of the
market; the history of regulatory
intervention in the non-standard
credit market and the proposed
implementation of a consumer duty
of care; the ability to write the loan
7
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
volumes in the business plan given
the market backdrop; and the impact
of having to make a significant upfront
payment to Scheme creditors as part
of the capital raise.
We have been asked many times why
we did not seek investment from our
existing shareholder base. We looked
into ways in which we might be able
toascertain the amount our almost
entirely retail shareholder base would
be able and willing to provide. The first
challenge was to identify the c.8,000
shareholders who hold their share
interests predominantly through
third-party brokers. Even with this
information, we would have been
unable to approach our investors to
solicit investment without producing
aprospectus. Without underwriters
forthe raise, we were unable to produce
a prospectus with an unqualified
working capital statement. We
considered capturing indications of
interest through a survey of our retail
investors but had no way to verify
responses. A Board decision to pursue
the capital raise, with its associated
high costs, with no certainty of success
and based on unverifiable survey
responses could have contravened
the Directors’ duties to creditors. The
indication that we were given by market
experts was that existing shareholders
might contribute approximately £5m to
the raise. This was the best estimate
that we could attain andwas not
sufficient to continue the process.
Itexcludes one shareholder who
hadmade a significant offer,
alreadyfactored into the £11m
ofindicated interest.
To enable a continuation of the
Preferred Solution, the Board then
explored the potential of pursuing
anew scheme, to eliminate the
£15m Scheme commitment. A new
scheme would be the only way
possible of making amendments to
the existing Scheme. Cognisant of
our duties to shareholders and our
wider stakeholders, including Scheme
creditors, the Board was resolute
that we must explore all options to
find a go-forward solution that would
retain some value for shareholders
and where Scheme creditors would
benefit to a greater degree than
within the Fallback Solution.
In exploring the possibility of
successfully completing a new
scheme, the Board took legal advice
from several firms of solicitors and
King’s Counsel in its consideration
of a number of factors including the
ability to implement a new scheme
which secures creditor approval, is not
objected to by the FCA and receives
High Court sanction, all within the
required time. It also considered the
additional costs of implementing a
new scheme and the confidence that
the capital, albeit a lower quantum,
could still be raised against the
challenging ongoing market backdrop
and sentiment around the sector in
which Amigo operates. As part of
that, it also took into account that
the indications of interest for £11m
of equity and £10m of exchangeable
notes received were indications only
and not firm commitments. In light of
the advice that it received, and the
significant potential costs, the Board
reluctantly concluded that pursuing
a new Scheme and subsequent
capital raise had such a low chance
of success it could not be considered
to be in the best interests of Scheme
creditors. We also considered that
while conversion rates under the
RewardRate pilot lending scheme had
improved as we progressed through
the pilot, the business model was not
yet proven and, although there was
strong potential demand, affordability
challenges for UK households meant
most customer applications were
rejected. As a result, on 23 March 2023,
the Board announced that it had taken
the very difficult decision to switch
the Scheme from the Preferred to the
Fallback Solution.
The Fallback Solution requires
thatthe trading subsidiary, Amigo
Loans Ltd (“ALL”) stopped lending with
immediate effect and was placed into
an orderly wind down, with the Court
order requirement that all surplus assets
after the wind down are transferred to
the Scheme creditors. In due course,
ALL will be liquidated. As ALL is the
only revenue-generating business
within the Group, it is envisaged that
the whole Group will be liquidated,
with significant inter-group debts due
to ALL being unpaid. Amigo’s two
authorised businesses, ALL and
Amigo Management Services Ltd
(“AMSL”), will ultimately require their
authorised status to be removed by
the FCA. The authorised status must
be retained for the duration of any
regulated activities including collections
from the existing loan book.
The wind down of the business,
during which the existing loan book
will continue to be collected, will last
for approximately twelve months
and, as such, will require a number
of existing roles. All employees were
placed at risk of redundancy and
consultation began on 24March2023.
This is a solvent wind down and any
services provided by our suppliers
will be paid for in accordance with
contractual terms.
The Scheme claims process is
unaffected. However, as noted
previously, there will be an impact
to the total compensation Scheme
creditors will receive in terms of
pence in the pound as they will not
receive a share of the minimum
£15m Scheme contribution that was
to be raised from investors, and the
turnover provision from the New
Business Scheme will be replaced
by the residual surplus under the
Fallback Solution, which will result in
a smaller pool of distributable funds.
Regrettably, there will be no value
attributable to the ordinary shares of
the Company in the Fallback Solution.
On 9 June 2023, we announced that
the Company had been approached by
shareholder Michael Fleming seeking
an exclusivity agreement in relation
to the business (the “Agreement”)
which Amigo agreed to. This is to
allow Mr Fleming to explore finding
and completing investment in the
Company or its subsidiaries. The
period of exclusivity expires on
6September 2023. TheAgreement
will not stop the Company or its
subsidiaries progressing with the
disposal of assets under its wind down
plan or acting on any transaction
governed by the Takeover Code.
Shareholders should note that there
remain significant impediments to any
new capital beingmade available to
the business. In addition, establishing
anew business and potentially creating
value for shareholders in the longer
term, has significant execution risks
and will require regulatory approval.
Strategic report
8
Amigo Holdings PLC
Annual report and accounts 2023
Chief Executive Ocer’s review continued
Scheme of Arrangement
continued
The Board believes there to be a low
likelihood of a successful conclusion
to any discussions arising from
this Agreement but is pursuing the
Agreement in line with its duties
under the Companies Act to consider
the interests of all stakeholders,
including creditors, shareholders
andemployees.
Wind down strategy
As Amigo is now progressing
with theorderly wind down of the
business, our strategic objectives
have changed. However, our previously
reported strategic pillars remain relevant
within the wind down strategy, as we
seek to maximise returns to Scheme
creditors with a strong focus on costs,
whilst maintaining good governance
and operating responsibly tomeet
our customers’ needs for the
remainder of their relationship with
us. The wellbeing of our people will
also remain a focus throughout the
wind down, as we retain key roles
and provide support for our people
throughout the process.
As at the end of March 2023, we
had c.29k legacy borrowers with
open loan positions, the average
loan balance being c.£2.2k, and
c.500 RewardRate borrowers with
an average loan balance of c.£5.2k.
By optimising collections activity
and other value realisation options,
including the sale of all residual loans,
we will seek to maximise the amount
payable to Scheme creditors. Claims
assessment, adjudication and the
payment of redress is unaffected
bythe wind down.
In order to maximise returns
toScheme creditors, specific
cashconservation measures have
been, and will continue to be, taken.
Non-critical supplier contracts have
been terminated and a head office move
to smaller premises was completed
inMay 2023. The redemption in full
ofAmigo’s senior secured notes in
March2023 was executed to save
interest payments and the management
buy-out of Amigo’s Irish business was
completed in February 2023. While
proceeds of the buy-out were nominal
(£1), Ireland was not actively lending,
and the sale resulted in an ultimate
saving to Amigo by eliminating
premises and operational costs.
Effective governance and open
dialogue with our Regulator will be
maintained throughout the wind down
process as we focus on delivering
the best outcome possible for all
ourstakeholders.
Our people
Our people have always been
what make Amigo special. Many
of our teams have been with us for
a significant part of, if not all, their
careers. It is our priority to support
ourcolleagues, both while they remain
with us and in their preparation and
search for their next role outside
Amigo. I am incredibly proud of, and
grateful for, the resilience they have
shown and their determination to
continue to perform at their best in
support of our customers and each
other. On behalf of the Board, I should
like to thank all our people for their
continued efforts.
Summary and outlook
The current Board came into Amigo
because we believe passionately
thatthere is a need in the market
foraregulated mid-cost lender that
meets the demand of financially
excluded people who deserve access
to regulated credit. We have fought
hard to deliver the best outcome for
creditors, colleagues and shareholders
and have left no stone unturned. I am
deeply sorry that we have been unable
to successfully complete the capital
raise and continue as a going concern,
and for the outcome for shareholders
who have supported us.
Our priority now is to complete an
orderly wind down of both the Amigo
Loans Ltd business and the wider
Group in which we maximise returns
for Scheme creditors and support
our customers and our people as
wemove through the process.
Danny Malone
Chief Executive Officer
27 July 2023
Strategic report
As at the end of March 2023, ALL
had c.29k borrowers with open loan
positions, the average loan balance
being c.£2.2k, and c.500 RewardRate
borrowers with an average loan balance
of c.£5.2k. A focus throughout
the wind down process will be to
identify and mitigate any adverse
impacts on our customers. Continued
communication with borrowers will
ensure collection processes remain
transparent and fair to borrowers and
encourage positive outcomes in the
management of theiraccounts.
Our people have always been what
makes Amigo special. The strong
engagement scores that we achieved
up to our last survey in January 2023,
are remarkable given the incredibly
difficult period our colleagues have
worked through. The wind down
is expected to take approximately
twelve months from its start in March
2023. It will be important to retain a
number of key roles and capabilities
over this period to support our
customers through the remainder
of their loan term, to complete the
Scheme and to manage the wind
down itself. However, in order to
maximise returns to creditors, the
Group will need to progressively
reduce its costs and we will sadly
need to make redundancies. This
process has already started and will
continue over the coming financial
year. Many of our teams have been
with us for a significant part of, if not
all, their careers. It is our priority to
support our colleagues, both while
they remain with us and in their
preparation and search for their
nextrole outside of Amigo.
Read more about our people
onpages 11 and 16
Amigo has always maintained a strong
focus on cost management. Inorder
to maximise returns to Scheme
creditors, specific cash conservation
measures have been, and will be,
taken. Non-critical supplier contracts
have been terminated and a head
office move to smaller premises
was completed in May 2023. The
redemption in full of Amigo’s senior
secured notes in March 2023 was
executed to save interest payments
and the management buy-out of
Amigo’s Irish business was completed
in February 2023. While proceeds of
the buy-out were nominal (£1), Ireland
was not actively lending, and the
sale resulted in an ultimate saving to
Amigo by eliminating premises and
operational costs.
Throughout 2022, historic control
gaps were addressed, new policies,
procedures and training were
introduced and new risk management
tools and systems implemented.
We revised our approach to risk
management, recruited specialist and
experienced employees and worked
with other external experts across the
lending sector. Operational resilience
measures were embedded throughout
the organisation and robust lending
rules were introduced to ensure all
customers could afford the loan they
were requesting.
Effective governance and open
dialogue with our Regulator will be
maintained throughout the wind down
process as we focus on delivering
the best outcome possible for all our
stakeholders. We will ensure Amigo
remains compliant with its obligations
as a listed company and regulated
lender and with all obligations under
the Senior Managers and Certification
Regime for as long as Amigo retains
authorisation. The request to remove
authorised status is expected to be
submitted after all collection activity
has ceased. The Board also expects
to issue proposals to delist the shares
of Amigo Holdings PLC from the
London Stock Exchange.
The specialist support team that helps
vulnerable customers will remain in
place to ensure continuity of service
to these customers.
By optimising collections activity
andother value realisation options,
whilst continuing to deliver good
customer outcomes, we will seek
to maximise the amount payable
toScheme creditors. At the same
time, we will look to make those
payments in a timely manner. Claims
assessment, adjudication and the
payment of redress is unaffected
bythe wind down.
Read more about our customers
onpages 10 and 16
9
Amigo Holdings PLC
Annual report and accounts 2023
Strategy
Meet our customers’ needs
Invest in our people
Enhance efficiencies
Operate responsibly
Strategic report
In March 2023, Amigo announced
that it was unable to secure adequate
capital investment to meet the
conditions of its Court sanctioned
Scheme of Arrangement and to
continue with its strategy to rebuild
a responsible, mid-cost lending
business. No viable alternative was
identified to enable the progression of
the Scheme’s Preferred Solution. As a
result, the business switched from the
Preferred Solution to the Scheme’s
Fallback Solution on 23March 2023.
Following the triggering of the
Fallback Solution, Amigo is required
bylaw to wind down the business
andoperations of Amigo Loans Ltd
(“ALL”). As a result, all new lending was
stopped at the end of March2023. All
surplus assets after the wind down will
be transferred to Scheme creditors.
The Scheme wind down requirement
applies only to ALL but with no other
revenue-generating activities in the
Group it is ultimately envisaged that
all Group companies will be liquidated.
The wind down is expected to be
substantively complete approximately
twelve months from its initiation in
March 2023.
The strategic priorities of the business
have therefore changed since our
last Annual Report was published
and the focus is now on maximising
collections to support creditor redress,
delivery of compensation to Scheme
claimants with upheld claims and an
orderly wind down of the business.
Our previously reported strategic
pillars remain relevant within the wind
down strategy.
Strategic report
10
Amigo Holdings PLC
Annual report and accounts 2023
Our section 172 statement
Section 172 of the Companies Act 2006 normally requires
adirector of a company to act in the way they consider, ingood
faith, would be most likely to promote the success of the company
for the benefit of its members as a whole. The situation for the
Board was made more challenging following the approval of
aScheme of Arrangement in May 2022. From this point the
Board was tasked with the need to attract suitable new finance
toallowAmigo to meet the requirements of the conditions laid
out by the High Court, when it approved the Scheme in May 2022.
Inparticular, this required the Board to balance the costs and
benefits of pursuing new capital, whilst protecting the cash
available to creditors of the business. In March 2023, the Board
concluded that it was no longer viable to continue with the
capitalraise and Amigo reverted to the Fallback Solution; being
the orderly wind down of the business on behalf of creditors.
Inreverting to the wind down, the Board had to prefer the
interests of creditors over shareholders.
In considering section 172, the Directors are required to have
regard, among other matters, to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business relationships
withsuppliers, customers and others;
Stakeholder engagement and section 172
Our customers
Why they are important
•
Our customers are at the centre of our purpose. By understanding
what’s important to our customers and making this the focus for
all that we do, we can deliver outcomes that meet their needs
inafair, respectful and responsible way.
Our priorities
•
To meet customer needs and, over the past two years,
to ensure that they fully understand the Scheme of
Arrangement process.
•
To understand how customers’ needs evolve over time, enabling
early identification of when a customer needs extra support.
•
To ensure continuity of service during the wind down process
and encourage good financial management.
•
To realise the value of the loan book in order to maximise
theamount payable to creditors under the Scheme.
How we engage
•
Customer communication is sent via post, SMS or email. We have
adedicated Scheme website and Facebook page and interact with
customers over social media. Regular blogs provided education
resources on financial matters on our consumer websites,
which since wind down, have provided information onthe
winddown and what it means for our customers.
•
The content of the communications is tailored to the customer’s
situation and provide the right level of reassurance.
•
Our systems enable our teams, who are trained to identify
vulnerability triggers, to easily recognise and record vulnerability
concerns, so that calls and outcomes can be tailored to the
customer’s needs. Once a customer is identified as potentially
vulnerable, they are supported by our specialist support team.
•
Customers were provided with affordable products
that met their needs with flexibility given when their
circumstances change.
•
Customers have a good understanding of the Scheme
process, what it means for them and the need to continue
to repay their loan during the wind down.
•
Customers are provided with tailored support throughout
their journey with us.
Outcomes
Community and the environment
Why they are important
•
By playing an active role in our community, we aimed to have
apositive impact on our community and the environment.
Our priorities
•
To help the most vulnerable in our society.
•
To minimise the impact we have on the environment.
How we engage
•
Through our Responsible Business Council we gave a voice
tocommunity and environmental concerns.
•
We have maintained our strong relationships with local
charities and built new relationships as needs, such as the
Ukrainian crisis, have arisen.
•
Our employees have raised money for various charities and
events and provided donations to local food banks to help
those in need.
•
The Amigo Volunteer Scheme provides employees with paid
leave to volunteer.
•
Through fundraising and business donations we raised just
under £7,000 this year.
•
Amigo’s total emissions have increased slightly in the year
as more of our employees returned to the office and the
in-house café resumed full-time operation. However, we
increased our focus on preventing unnecessary waste
with the removal of single-use cutlery, reduced the use of
takeaway boxes in the café and encouraged employees to
stop the use of disposable cups. The café has now closed.
11
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Our section 172 statement continued
(d) the impact of the Company’s operations on the community
andthe environment;
(e) the desirability of the Company maintaining a reputation for
high standards of business conduct; and
(f) the need to act fairly as between members of the Company.
The Directors consider these factors in discharging their duties
under section 172. The key stakeholders we consider in this
regard are our customers, our employees, our shareholders and
creditors, the regulators, our brokers and suppliers, the local
community in which we are located and the environment.
The Board recognises that building strong relationships with
our stakeholders is fundamental to delivering itsstrategy and
to operating the business in a sustainable way. This remains the
case as the business progresses through its wind down strategy
with the same care and diligence being given to engaging with,
and supporting, our various stakeholders throughout the process.
While the priorities and how we engage may have changed for
each of the stakeholder groups, the focus on delivering the best
outcome possible remains. One of the key aims of Amigo’s wind
down strategy is to ensure that, to the greatest extent possible,
allcustomers are protected, staff are treated fairly and that the
impact on businesses that rely on us is minimal.
Our people
Why they are important
•
The skills and commitment of our employees have been key
to delivering and maintaining a fair and rewarding customer
experience throughout a difficult period.
•
The wind down will require a significant number of roles tobe
retained as we continue to support our existing customersfor
the duration of their loans, complete the Scheme and maintain
leadership and oversight in line with good governance
andcompliance.
Our priorities
•
To retain talented, appropriately qualified and engaged
employees in key roles throughout the wind down process.
•
To provide an inclusive environment, where all employees feel
valued and are kept informed of the issues that impact them
and the broader business.
•
To encourage challenge and diversity of thought.
•
To support our employees while they remain with us.
•
To help ready our colleagues for their next career steps
astheyprepare to leave Amigo.
How we engage
•
Regular employee engagement surveys to gauge sentiment
were issued throughout the financial year.
•
All-employee calls, hosted by the CEO, were held to update
colleagues on the latest information and provide an opportunity
to ask questions of management and the Board. These will be
supplemented with regular one-to-one engagement at team
level and redundancy consultations during the wind down
process. FAQs related to the wind down and redundancies
areregularly updated on Amigo’s intranet.
•
All communication with our employees aims to be fully
transparent and provide an estimate of timescales of the wind
down and redundancy processes.
•
Internal promotion of potential new roles, both within Amigo to
support the wind down process and external positions to help
those being made redundant. Provision of an outplacement
service to support through redundancy and career transition,
enabling our employees to swiftly secure a new role.
•
24/7 confidential employee assistance line available to all
employees to provide individual support where needed.
•
Mandatory training to ensure regulatory compliance.
•
The Board receives regular employee updates from the
ChiefPeople Officer.
•
We have retained key people through a period of significant uncertainty for the business. Despite the difficulties, we have
maintained an engagement score of 7.9, which is around industry average.
•
Our employees are engaged, have a solid understanding of our values and of our regulatory obligations.
•
Employees are supported to reach their full potential both at Amigo and in their ongoing career.
Read more about our people onpage 16
Outcomes
Strategic report
12
Amigo Holdings PLC
Annual report and accounts 2023
Stakeholder engagement and section 172 continued
Investors
Why they are important
•
Our investors have provided funding in the form of debt
andequity over the years, and we had hoped would provide
funding again in the future.
Our priorities
•
To provide clear, timely and transparent updates on our
business to all investors in line with regulatory requirements
and best practice.
•
To manage expectations and foster a good understanding
ofour business, its financial position and resultant challenges.
How we engage
•
Amigo conducted its Annual General Meeting on 28 September
2022, providing an online facility as well as the opportunity to
attend in person. A General Meeting was held on 8 March 2023
to address issues raised under s.656 of the Companies Act.
Bothmeetings provided shareholders with the opportunity
toask questions of the Board and senior management.
•
Financial results were reported quarterly whilst the senior
secured notes were in issue, and presentations webcast to
enable access to all. During the wind down, results will be
made available on the London Stock Exchange’s Regulatory
News System and on Amigo’s corporate website.
•
Open calls for all shareholders were held on 16 January 2023
and 24 March 2023 to provide shareholders with updates on
Amigo’s position and its Scheme of Arrangement. Other calls
were held during the year with shareholder groups or individuals,
hosted by the CEO, CFO, Board members and Investor Relations.
A dedicated email for investors’ enquiries is available and the
PLC website provides share information and FAQs on Amigo’s
current situation.
•
Board members attend ad hoc investor meetings and receive
regular updates from our Investor Relations Director.
•
Financial advisors were appointed to attract new investment
partners and underwriters for a proposed capital raise.
Over 200 prospective investors, both debt and equity, were
approached. Investor meetings were led by representatives
from Amigo’s Executive Committee. Unfortunately, the capital
raising exercise was unsuccessful.
•
After year end, on 9 June 2023, Amigo entered into
anexclusivity agreement with shareholder Michael Fleming,
athisrequest, for him to seek investment to allow the business
to continue. The Board considers that establishing a new business
and potentially creating value for shareholders in the longer term
has significant execution risks and that there is only a very low
likelihood of success.
•
Investors are provided with information required to enable
informed investment decisions.
•
Unfortunately, we were unable to attract sufficient new
investment or interest to underwrite a new capital raising
to support the continuation of the business. The difficult
decision to switch the Scheme to the Fallback Solution and
wind down the business was therefore taken, as required
bythe High Court.
•
All surplus assets after the wind down will be transferred to
Amigo’s Scheme creditors. The remaining senior secured
notes were repaid at par in full during March 2023.
•
Regrettably, there is expected to be no value attributed to
the Company’s ordinary shares under the Fallback Solution.
Outcomes
13
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Suppliers
Why they are important
•
Our suppliers support our operation, enabling us to deliver
our service and meet customer, employee, investor and
regulator needs.
Our priorities
•
To ensure continuity of service through retention of key
suppliers to minimise disruption to operations, maintain an
outstanding customer service and to ensure an orderly wind
down of the business.
•
To provide comfort to our suppliers that Amigo has sufficient
liquidity and that services will continue to be paid for in full
under normal terms.
How we engage
•
A thorough procurement process ensures a good fit with the
organisation and provides a good foundation from which to
build strong supplier relationships.
•
Individual heads of business divisions maintain relevant
relationships. All suppliers were contacted following the wind
down announcement, with all communications emphasising
thesolvent nature of the wind down and Amigo’s commitment
to honour all contractual agreements.
•
The Board receives updates on any issues or proposals
concerning suppliers, for example, where outsourcing
isconsidered.
•
Collaborative, transparent and effective relationships
with partners.
•
Supplier services are maintained as required to the end
ofthe wind down process.
Regulators
Why they are important
•
Adhering to regulatory requirements enables us to protect
consumers by providing fair and responsible finance to the
growing population of people who are unable to access credit
through mainstream lenders, and to protect all stakeholders’
interests during the wind down process.
•
Maintaining our licence to operate is imperative while we
continue to collect our legacy and RewardRate loan books.
Our priorities
•
To maintain a proactive and transparent relationship with
ourRegulators.
•
To ensure we meet regulatory standards at all times.
•
To ensure the FCA is kept informed of the wind down process
and its progress.
How we engage
•
We have maintained an open and regular dialogue with our
Regulators with respect to all regulatory and risk matters,
including resolution of the Enforcement Action.
•
We worked closely with the Regulators to share new
approaches and gain consent to initiate pilot lending.
•
RewardRate products were designed with the forthcoming
Consumer Duty in mind, including training employees.
•
We provide weekly and monthly updates to the FCA on Amigo’s
financial position and on the wind down strategy, its progress
and impact on our various stakeholders.
•
A thorough understanding of all regulatory requirements
isreflected in behaviours throughout Amigo.
•
Recognition of the need for companies in the specialist
lending sector to provide financial services to the millions
excluded by mainstream lenders, resulting in Amigo
receiving permission to return to lending, initially on a
pilot basis. Subsequent to the decision by the Board on
23March 2023, all new lending activity ceased.
•
A comprehensive wind down strategy that meets regulatory
requirements with consideration of all stakeholders.
Outcomes
Strategic report
14
Amigo Holdings PLC
Annual report and accounts 2023
Stakeholder engagement and section 172 continued
Decision to cease with pursuit of the additional capital raise and the switch from the Preferred
Solution to the Fallback Solution under the Scheme of Arrangement agreed in May 2022
Amigo’s Scheme of Arrangement (the “Scheme”) was sanctioned by the High Court in May 2022. The Board had always
been clear that the Preferred Solution in which Amigo rebuilds a new, more responsible, mid-cost lending offer would
be in the best interests of not only its shareholders, but also Scheme creditors, employees and wider stakeholders,
including those in society that do not have access to mainstream credit options. As such, following the announcement
issued on 10 March 2023 that the Company had not received sufficient aggregate indications of interest from potential
equity investors to cover the total £45m equity capital required, the Board explored whether a potential new scheme,
which eliminated the £15m capital commitment to Scheme creditors, was likely to succeed. In seeking to amend the
terms of the Scheme, Amigo would have been required to pursue a new replacement scheme. After taking extensive
advice from its professional advisers, the Board concluded that successfully executing a new scheme followed by a
lower capital raise was highly unlikely, and the significant associated costs would therefore cause avoidable detriment
to its Scheme creditors in the event the new scheme and capital raise are unsuccessful. As a result, the Board took the
decision to switch the Scheme from the Preferred to the Fallback Solution.
Stakeholders Considerations
Our
customers
The switch from the Preferred Solution to the Fallback Solution had immediate impacts on our customers;
both historic and new. The move to wind down meant that the ongoing pilot lending programme for the
RewardRate product was immediately curtailed, meaning no new customers could apply for the product. Existing
RewardRate loans would continue to operate as planned and those RewardRate customers with near final
applications were completed. Legacy customers, not in the Scheme of Arrangement but with existing loans,
were reassured through messages on our website and via our call centre that the status of their loans, and their
agreed repayments would stay the same. The Board also considered that the decision would impact those with
a validclaim in the Scheme as the decision to not progress the fund raise reduced the funds payable to the
Scheme by at least £15m.
Investors
With the Scheme of Arrangement agreed in May 2022, Amigo was no longer insolvent. This allowed the Board to
operate the business for all stakeholders, whilst there remained reasonable prospects for the business. The switch
to the Fallback Solution in March 2023, because of the failure to raise additional capital, meant that under the terms
of the Scheme the Amigo lending business had to be wound down in an orderly fashion, with all assets transferred
to the Scheme for distribution to Scheme creditors. This meant that shareholders would be unlikely to receive any
value from their shareholding in the Company.
Regulators
The FCA wished to ensure that the interests of customers were upheld and that any customer harm, from past
and future actions of Amigo, could be resolved in the best manner possible for customers, notwithstanding the
switch to the orderly wind down of the business. The Board recognised that the FCA would be concerned about
the reputational impact to the market of a disorderly wind down hence took steps to keep them appraised at all
stages of the process.
Our people
The immediate impact of switching from the Preferred Solution to the Fallback Solution was the realisation that all
employees and Directors would lose their jobs when Amigo completed its orderly solvent wind down. The Board
instigated the development of a wind down plan, including a phased redundancy programme so that resources
and costs were appropriately matched with the need to preserve Scheme creditors cash, whilst continuing to
support the processing of the Scheme of Arrangement and the wind down of remaining customers’ loans.
Decision to accept the findings of the Enforcement Action
Since the Enforcement Action commenced in 2020 Amigo has had to devote considerable time and resource to support
the investigation work by the FCA. The outcome of the Enforcement Action was deemed, by the Board and the advisers
working on the planned capital raise, to be an important milestone to be achieved as part of Amigo’s return to active
lending. In February 2023, the Company accepted the findings of the Enforcement proceedings.
Principal Board decisions taken during the year under review
15
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Stakeholders Considerations
Our
customers
The Board accepting the findings of the Enforcement Action was an important step for existing customers
who believed Amigo had not delivered the appropriate service, for existing customers who had ongoing loan
arrangements with Amigo and for potential new customers who, not being able to fully access other loan
providers, could be served appropriately by RewardRate.
Investors
Completing the open Enforcement Action was a vital step that had to be completed prior to seeking new investors
and/or investments from existing shareholders. Until the Enforcement Action was closed, together with the waiving
of a potential penalty by the FCA, the Board and advisers did not believe that new investment would be provided
tomeet the proposed capital raise requirements, due to the uncertainty associated with an open investigation.
Regulators
The FCA were able to fulfil its commitment to ensuring proper standards are maintained and to demonstrate that
failures will be investigated, and remedies imposed where appropriate.
Our people
The completion of the Enforcement Action and the work that went alongside it to learn from past failures
allowed the employees to develop their own understanding of what is now the required standard for lending.
Thedecision to accept the findings of the Enforcement Action allowed the whole team to focus on delivering
better outcomes for customers and the launch of RewardRate.
Decision to develop our new proposition, RewardRate, a path to financial mobility for those who
have few options to borrow
The Board has been very clear that the new Amigo will be unrecognisable from its predecessor. The vision was to break
down the barriers to financial mobility, creating a community where people are rewarded and empowered to achieve
financial mobility. We wished to be dedicated to constantly innovating and building ways to make sure our customers
had access to fair and affordable finance so they could make their life plans possible. Our new proposition was designed
to serve a large section of society that remains in real need of better access to affordable credit. It was designed to be
inclusive, provide flexibility and help our customers build a brighter financial future. Our mantra was ‘if it works for you,
itworks for us’.
Stakeholders Considerations
Our
customers
Customers who used Amigo and similar products are not well served by the existing consumer credit propositions
which typically do not include ‘our’ customers when credit access is assessed. The RewardRate product was
designed to responsibly meet the requirements of this demographic. The RewardRate proposition was designed
to be flexible and help the financial mobility of the proposed customer base.
Investors
A condition precedent of the New Business Scheme was the requirement to raise additional capital to contribute
to the compensation pool to redress customers with a valid complaint against Amigo for past lending practices.
RewardRate was intended to provide a viable, new product which it was hoped would allow Amigo to raise the
necessary capital to meet the requirement. RewardRate provided Amigo with the opportunity to start re-lending,
which it was hoped would increase the size ofthe loan book, which in turn would facilitate a future return to shareholders.
Regulators
RewardRate was a product that would help fill a gap in the market for customers who are underserved by existing
lending propositions. The issue has been made more impactful due to the withdrawal of many of the participants
lending to this customer base.
Our people
RewardRate provided an opportunity for Amigo to return to lending. It facilitated the continued employment
ofstaff working for the business.
Distribution
network
RewardRate allowed Amigo to restart lending again.
16
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Sustainability
Our customers
Our people
We put customers first in all our decisioning and actions.
We returned to lending between October 2022 and
March 2023 with a new lending proposition designed, in
conjunction with a leading debt charity, to provide a path
to financial mobility to those with few options to borrow.
We introduced robust lending rules to ensure we lent
responsibly and that all customers could afford the loans
they were requesting, and we took significant steps to
implement the FCA’s new Consumer Duty regulation,
focused on positive customer outcomes. Due to the wind
down decision that was taken in March 2023, all new
lending was stopped. During the wind down period, we
will continue to support our customers to the end of their
journey with us. Collections staff are trained to identify
potential vulnerability in our customers and to discuss the
customer’s situation so that calls can be tailored and the
relevant support provided. This could include referral to
our specialist support team or signposting customers to
external support services.
A key priority now is to complete the Scheme of Arrangement
as soon as possible, managing costs in order to maximise
redress for Scheme creditors. The Scheme’s claim
assessment process is unaffected by the wind down.
However, there will be an impact to the total compensation
Scheme creditors will receive as it was not possible to
raise the additional £15m Scheme contribution from the
proposed Capital Raise.
At Amigo we have always recognised that it is our people
who make the difference, who go the extra mile to deliver
the right outcomes for our customers and who embody
Amigo’s culture and purpose. The past two years have
been exceptionally challenging, and we are now faced with
the task of winding down the business. As we progress
through the wind down process, we are committed to
supporting our employees’ health and wellbeing, retaining
the necessary staff to fulfil our ongoing obligations, and
to providing all employees with the tools they need to
transition to whatever path they choose next.
Engagement, retention and wellbeing
Despite the uncertainty around Amigo’s future that we
faced throughout the financial year, the engagement
survey carried out in January 2023 recorded a score
of 7.9. We gathered responses to our engagement and
driver questions on an 11-point scale ranging from 0 to 10
(0indicates a low score and 10 is a high score). The 7.9
result is not only above the benchmark (a comparison with
similar sized companies) but also shows that our employees’
engagement is still high despite challenging times. This is
a remarkable achievement and testament to the incredible
resilience of our teams and those who lead them. Although
we will measure engagement in a less formal manner, we will
ensure we continue to listen and respond to colleagues to
maintain engagement as we progress through the wind down.
During the wind down process, it will be important to
retain key roles and functions to support our customers,
complete the Scheme and manage the wind down itself.
With all employees being placed at risk of redundancy
immediately following the wind down announcement,
we were pleased to be able to minimise the first round
of redundancies by reducing outsourced requirements
and redeploying colleagues internally. An outplacement
service is available for all employees to support them
through the redundancy process and in their career
transition, helping our employees to swiftly secure a new
role if that is what they want to do. Our HR function has
also been proactive in approaching local businesses
regarding open vacancies they might be seeking to fill.
A 24/7 employee assistance line is available to all
employees who may need additional support and our
in-house Mental First Aiders are trained to offer help and
advice. Our hybrid working policy remains in place. Our
teams are asked to attend the office at least two times
aweek, subject to individual circumstances.
Diversity
Delivering equality and supporting diversity to create an
inclusive workplace where all our people feel valued and
able to fulfil their potential, regardless of their race, gender,
age, religion or disabilities, reflects our fundamental value
of being human. The importance of diversity, equity and
inclusion (“DEI”) is highlighted in our equity and diversity
policy which applies to all employees in Amigo, and the
mandatory DEI e-learning module that all colleagues are
required to complete annually.
The graphics opposite show our employee base at
yearend, split by gender, using the definition used in the
Hampton-Alexander Review
1
(namely the most senior level
of management (“ExCo”) plus those of its direct reports
that are at Director level).
Human rights and modern slavery
Amigo respects and supports human rights and is
committed to the highest level of ethical standards and
sound governance arrangements. We act ethically and with
integrity in all our business dealings. In accordance with
the UK Modern Slavery Act, our Modern Slavery Statement
isapproved by our Board and published on our website.
1 Hampton-Alexander Review – Improving gender balance in FTSE
leadership, November 2019.
17
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Our community
Being a positive part of our local and wider community
is important to us. The causes we contribute to matter
to our employees and impact the community in which
we operate.
Amigo gives something back
Amigo played an important role in the lives of our
customers and our approach to charity was built around
this. Over the past year, Amigo’s Buzz committee, which
organises social and charitable events continued to fundraise
for our employees’ chosen charities, helping tosupport our
local community and charities around the world. Unfortunately,
owing to our financial position, Amigo was not able to support
these charities as much as we would have liked. However,
our employees continued to come together to raise money
between them for some great causes. We are extremely
proud of the way they worked together to support both
thelocal community and each other.
Training
Performance management was successfully rolled out with
every employee receiving feedback on their performance
against objectives and Company values. Mandatory
training to ensure compliance with our regulatory
obligations and familiarity with our values is performed
throughout the year.

Male 5
Female 3
Executive Committee
Total
8

Male 5
Female 4
Senior management
Total
9

Male 86
Female 83
Other employees
Total
169
Strategic report
18
Amigo Holdings PLC
Annual report and accounts 2023
At Amigo we believe that by looking after our people
and the planet, we can contribute to a better world. In
line with government guidelines for Streamlined Energy
and Carbon Reporting (“SECR”), the following pages
present our energy usage, associated emissions, energy
efficiency actions and energy performance of our two
UK offices. In May 2023, Amigo closed its larger main
office and moved to its smaller second office located
inBournemouth.
Energy efficiency and carbon reduction initiatives
There are a number of ways in which we seek to reduce
our energy and carbon usage and overall carbon footprint.
Food waste from our in-house café was sent to combustion
sites where it was transformed into energy, we use energy
efficient light bulbs in our offices and we have a “Cycle
toWork” benefit scheme to encourage our employees
toreduce the carbon footprint from their commute. Amigo
operates a hybrid working policy with employees asked
towork from the office at least two days a week, subject to
each of their personal circumstances. As our employees
have returned to the office, following the enforced lockdowns
of the Covid-19 pandemic, we have seen an increase in
ourenergy usage. However, 75% of our electricity usage
isgenerated from renewable sources and the other 25%
from nuclear. This means we no longer use energy
generated from fossil fuels.
Lastly, and since 2022, our Annual Reports are certified by
the World Land Trust. Our reports are printed on Carbon
Balanced Paper which reduces 245kg of carbon dioxide
and supports the Trust in protecting 47m
2
of critically
threatened tropical forest.
Greenhouse gas emissions
This is the fourth year for which Amigo has reported on
emissions in compliance with the Streamlined Energy and
Carbon Reporting (“SECR”) requirement. For the year
ended 31 March 2023, our total emissions for Scope 1 and 2
have accounted for 26.57 tonnes of CO
2
e.
Indicator Metric / / / /
Scope  Tonnes CO

e . . . .
Scope  (location-based) Tonnes CO

e . .
. .
Scope  (market-based) Tonnes CO

e — —
— .
Total CO

e emissions (Scope +) (location-based) Tonnes CO

e . .
. .
Total CO

e emissions (Scope +) (market-based) Tonnes CO

e — —
— .
Carbon emissions intensity (location-based) Tonnes CO

e/per FTE . . . .
Carbon emissions intensity (market-based) Tonnes CO

e/per FTE — — — .
Total energy consumption kWh , , , ,
Methodology
Amigo collects and reports data in accordance with the Greenhouse Gas Protocol. Data is based on energy and fuel
consumption of Amigo Management Services Ltd for the period 1 April 2022 to 31 March 2023, using an operational
control boundary.
UK CO
2
emissions were calculated using Defra (2022) greenhouse gas reporting conversion factors. Our GHG emissions
are calculated using energy usage data provided by our energy suppliers, employee expense data and records of fuel
use. Some energy consumption was estimated where primary data was unavailable due to tenancy arrangements.
Environment
Sustainability continued
19
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Summary of changes
In summary, our total emissions have increased compared to FY22. This is a result of the increase in our electricity
consumption. As part of our commitments to sustainability and to reduce our impact on the environment, our purchased
electricity is from a renewable energy source. Our offices use 75% to 100% renewable electricity with the total renewable
energy consumption of 425,692 kWh. This reduces our total non-renewable energy consumption to 136,854 kWh.
This year we have disclosed our carbon footprint using both location-based and market-based approaches. Presenting
both methods together shows the impact of renewable energy on carbon emissions. Our total CO
2
emissions from
location-based and market-based approaches show that switching to renewables resulted in carbon savings of 82 tCO
2
.
1 2
0.51
tonnes of CO
2
e
(0.02 in 2021/22)
26.06
tonnes of CO
2
e
(market-based)
(65.45 tCO
2
e in 2021/22)
425,692
kWh
Amount of renewable
energy used
108.38
tonnes of CO
2
e
(location-based)
Company facilities
26.57
total emissions
tonnes of CO
2
e
(82.21 in 2021/22)
Company-owned vehicles Purchased electricity
Scope 1
(Direct CO
2
e emissions)
Scope 2
(Indirect CO
2
e emissions)
0.13(0.27 in 2021/22)
tonnes of CO
2
e per FTE (accounting
for renewableelectricity)
Environment intensity indicators
Strategic report
20
Amigo Holdings PLC
Annual report and accounts 2023
Sustainability continued
Taskforce on Climate-related Financial Disclosures (“TCFD”)
Last year we reported against TCFD recommendations for the first time. This year, we were working towards our
second-year reporting and had progressed well along our projected roadmap to compliance, before the Board took
thedecision to initiate the wind down of the Amigo Loans Ltd business and the wider Group.
The following report details the governance structure that was in place during the financial year ended March 2023
and the steps we had taken on our path to compliance and towards integrating TCFD recommendations into Amigo’s
strategy, including an overview of the conducted climate scenario analysis. However, as a consequence of the Board’s
decision to place the business into wind down, work towards assessing and responding to the risks and opportunities
that climate change presents was stopped. This was considered appropriate in view of the short time horizon over which
the business will continue to operate and the nature of climate-related events. For this reason, Amigo has not complied
in full with the TCFD recommendations and will not continue on its path to TCFD compliance.
Governance
Disclose the
organisation’s governance
around climate-related
risks and opportunities.
a
Describe the
Board’s oversight of
climate-related risks
and opportunities.
b
Describe management’s
role in assessing
andmanaging
climate-related risks
and opportunities.
The Board has overall responsibility for Amigo’s ESG strategy, in which climate-related
matters are included. The Board met on a monthly basis and was presented with ESG
matters integrated across Operational, People and Risk reporting. Climate-related
matters were championed by Senior Independent Director Maria Darby-Walker, who
also formed part of the Audit and Risk Committees. However, on 27 March 2023, Maria
resigned from the Board. Given the move to wind down the business, a new Board-level
climate champion has not been appointed.
The Responsible Business Council was established in May 2022 with a broad remit
to provide guidance and recommendations to the Board in respect of Amigo’s ESG
strategy, objectives and metrics, including climate-related impact and initiatives. The
Responsible Business Council (“RBC”) consisted of eight elected employees and one
secretary and met monthly, with its Chair reporting quarterly into the Board. The RBC
was employee led, with members and Chair voted into position.
Representatives from the Responsible Business Council, Risk, Finance and Investor
Relations made up Amigo’s Climate Task Force (“CTF”). The CTF met monthly and was
responsible for reviewing climate-related risks and opportunities and implementing
mitigation strategies. It reported into both the Chief Risk Officer (“CRO”) and Chief
Financial Officer (“CFO”) who were ultimately responsible for establishing a process
fora more comprehensive climate-related risk assessment. Amigo sought to integrate
climate-related risks into the Company’s risk management register, its strategy and
toformulate action plans and environmental targets as Amigo progressed on its
roadmap to full TCFD adoption.
Both the RBC and CTF were disbanded following the wind down announcement.
21
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Risk management
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
a
Describe the
organisation’s
processes for
identifying
and assessing
climate-related risks.
b
Describe the
organisation’s
processes
for managing
climate-related risks.
c
Describe how
processes for
identifying, assessing,
and managing
climate-related risks
are integrated into the
organisation’s overall
riskmanagement.
Amigo takes a holistic approach to managing risk, operating a defined risk management
framework, which accounts for both financial and non-financial risks. The principal risks
impacting Amigo are captured within the Company’s risk register. Amigo has six defined
Principal Risk categories, and reviews emerging risks every quarter. Climate-related risk
is included in the latter.
The climate-related risks are considered based on the following risk subcategories:
•
physical climate-related risks; and
•
transitional climate-related risks.
During the year, we worked with external consultants to map out our material climate-
related risks and opportunities, taking into account three different climate pathways,
anoverview of the process and risks is provided within the Strategy section.
The Risk function is responsible for developing and maintaining the Risk Register and
the Register is reviewed by the CRO, Executive Committee and the Board. The CRO
holds responsibility for maintaining and developing the risk taxonomy for Amigo and
the Executive Committee and Risk Committee need to be updated regularly as changes
are made.
A Risk Report is prepared by the Risk Function on a monthly basis, providing an overview
of the material risks, the control environment, risk transformation plans, Key Risk Indicator
data, assurance updates and any other notable discussion points. The report is approved
by the CRO before being presented to the Executive Committee during the monthly
riskmeetings.
Our Risk Committee, attended by members of the Board and Executive Committee,
meets on a quarterly basis to review our overall risk strategy, risk management policies
and procedures. The Committee also reviews principal risks, discusses any emerging
risks and their potential impact on Amigo’s financial planning and business strategy.
In addition, we regularly review our risk appetite, which is defined as the amount
and nature of risk Amigo is willing to take in the pursuit of its strategy and business
objectives. The CRO is responsible for developing and maintaining the Risk Appetite
Statement Framework. The associated risk appetite statements are reviewed by the
Executive Risk Committee and ratified by the Board at least annually, although the
CROcan propose more frequent changes if the circumstances call for it.
Risks are continually evolving, and we perform regular horizon scanning to account
for any changes in exposure and the emergence of any new risks. The scanning is
performed on a six monthly basis with the output shared with our Executive Committee
and the Board. Particular attention is paid to both current and emerging risks.
Strategic report
22
Amigo Holdings PLC
Annual report and accounts 2023
Strategy
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on Amigo’s
business, strategy,
and financial planning
where such information
is material.
a
Describe the
climate-related risks
and opportunities
the organisation
has identified over
the short, medium,
andlong term.
b
Describe the impact
ofclimate-related risks
and opportunities on
the organisation’s
businesses, strategy,
and financial planning.
c
Describe the
resilience ofthe
strategy, taking into
consideration different
climate-related
scenarios, including
agreateror less
than2°C scenario.
As a small financial services business, with two offices in one city location, reduced to
one office in May 2023, Amigo’s direct carbon footprint is relatively small. Furthermore,
as our business model is centred around helping customers who would otherwise have
difficulties accessing financial services, we lend to individuals and not businesses.
Thereby, we do not have lending products that are exposed to sectors particularly
impacted by physical or transitional climate-related risks nor do we hold any assets
with such exposure. Our climate risk analysis is based on the evaluation of potential
risks to our direct business and risks with potential to affect our customer base’s
creditexposure.
In Autumn 2022, we carried out a climate scenario analysis evaluating the climate-related
risks and opportunities Amigo would be exposed to under three different climate pathways:
a low-emissions scenario, in which global warming is limited to around 1.5°C (Divergent
Net-Zero Scenario, devised by the Network for Greening the Financial System (“NGFS”)),
a medium-emissions scenario, in which global warming reaches 2.6°C (Nationally Determined
Contributions scenario, devised by NGFS) and a high-emissions scenario, in which global
warming reaches approximately 4°C (Representative Concentration Pathway 8.5,
devised by the Intergovernmental Panel onClimate Change).
The scenario analysis combined quantitative and qualitative analysis to gain a better
understanding of the risks’ potential impact on Amigo’s financial planning. The time horizons
considered were short term (0-3 years), medium term (3-10 years) and long term(10+ years).
The material risks and opportunities were identified based on their likelihood of occurrence
within the set time horizons, the potential financial impact andcost of response.
Climate-related opportunities
The scenario analysis identified a number of potential climate-related opportunities.
Financially material opportunities identified included the potential to further decrease
Amigo’s Greenhouse Gas (“GHG”) emissions, the development of ‘green’ products
such as loans related to energy efficiency projects and the achievement of competitive
advantage through the development of an ambitious sustainability strategy.
Climate-related risks
Top material physical and transitional climate-related risks included the increased risk of
apandemic-type event, additional compliance obligations and the risk to reputation should
Amigo be unable to achieve its ESG commitments. Additional material climate-related risks
identified were physical risks, such as operational disruptions due to extreme weather events
and transitional risks, such as decreased access to capital if net-zero commitments are not
set and fulfilled due to increased interest in ESG investment.
Resilience
The climate scenario analysis we carried out suggested that our business model
and strategy, in place at the time, were resilient to the identified climate-related risks
under the three considered climate pathways. If the business had been continuing, we
would, in the short and medium term, face low residual financial risks mainly related to
increased compliance obligations, volatile energy market and transition to renewable
energy sources and the potential for another pandemic-type event. Control measures,
either in place or planned, decreased the residual risk level further and our ESG
governance structure and risk management system would have ensured continual
monitoring and management of the material climate-related risks.
Taskforce on Climate-related Financial Disclosures (“TCFD”) continued
Sustainability continued
23
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Metrics and targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
a
Disclose the
metrics used by the
organisation to assess
climate-related risks
and opportunities
in line with its
strategy and risk
management process.
b
Disclose Scope 1,
Scope 2 and, if
appropriate, Scope
3 greenhouse gas
(“GHG”) emissions
andthe related risks.
c
Describe the
targets used by
the organisationto
manage climate-related
risks and opportunities
and performance
against targets.
Prior to the wind down announcement, in order to align with the Climate Change Act
and the UK government’s ambition to achieve net-zero by 2050, we had intended to set
GHG emissions reduction targets to reduce our business’s carbon footprint. While we
had progressed well along the Climate Strategy Roadmap outlined in last year’s Annual
Report, because of the Board’s decision to place the business into wind down Amigo will
not continue on its path to TCFD compliance. Therefore, while we were in the process
of setting targets, informed by the identified climate-related risks, we will withdraw the
Roadmap and will not progress further with our target setting.
Mandatory disclosure of Scope 1 and Scope 2 carbon emissions can be found on page 18.
Scope 3 calculations have not been included.
Strategic report
24
Amigo Holdings PLC
Annual report and accounts 2023
Financial review
The decision to wind down the Amigo
Loans Ltd business (“ALL”), in line
with the Court order associated with
the Fallback Solution of Amigo’s
Scheme of Arrangement, was
announced on 23 March 2023. As
ALL is the only revenue-generating
business within the Group, it is
envisaged that all businesses within
the Group will be liquidated. This
process has begun and is likely to
be substantially completed by the
first quarter of calendar year 2024,
following completion of the Scheme
redress process. Over the course of
the wind down, we will continue to
either collect out or dispose of both
the remaining legacy loan book and
newer RewardRate loans. The wind
down is an orderly, solvent process
and the business remains in a positive
net asset position. However, all net
assets, after the cost of collecting
theloan book, are committed to
Scheme creditors.
Overall performance
In the year to 31 March 2023, the
net loan book reduced by 67.1% to
£45.4m (FY22: £138.0). Revenue fell
by 78.4% year-on-year to £19.3m
(FY22: £89.5m), reflecting the loan
book reduction with limited new
lending over the period. Collections
continue to perform well, and ahead
of expectations, despite the wind
down announcement and cost of
living backdrop. The complaints
provision increased from the prior
year, primarily due to the expected
higher uphold rate as claims are
assessed. The associated increase in
complaints cost, alongside diminishing
revenues and higher operational
costs, led to a reported loss before
taxof£34.7m (FY22: profit of £167.9m).
Thesignificant profit in the prior year
reflected the release of a substantial
proportion of the complaints provision
following the sanctioning of the
Scheme in May 2022.
Revenue
Revenue declined 78.4% to £19.3m
over the twelve month period, owing
primarily to the pause in lending until
October 2022 and minimal lending
thereafter. All lending was stopped
on 23 March 2023, following the wind
down announcement. The decline
in revenue is reflected in customer
numbers which fell 60.3% to 29,000
(FY22: 73,000).
The pause in lending drove a 65.8%
reduction in the gross loan book
year-on-year to £63.4m (FY22: £185.4m).
The net loan book reduced by 67.1%
year-on-year to £45.4m (FY22: £138.0m).
This reduction is reflective of both
the decline in the gross loan book
and impairment coverage which
increased to 28.4% (FY22: 25.6%)
atthe year end.
Revenue yield in the year decreased
significantly from the prior year to 15.5%
(FY22: 29.4%), primarily due to the
non-recognition of estimated interest
generated from prospective upheld
Scheme complaints. The Group defines
revenue yield as annualised revenue
over the average of the opening and
closing gross loan book for the period.
Impairment
A credit in the period was
recognised of £3.4m (Q3 FY22:
charge of £37.0m) primarily due to
post-charge-off recoveries, which
have improved throughout the period,
and continuedrobust standard
collections, alongside the gross loan
book beingincreasingly provided
forunderlifetime lossassumptions.
The impairment provision
decreased to £18.0m (FY22: £47.4m),
representing 28.4% of the gross loan
book (FY22: 25.6%). This reduction
reflects the amortisation of the loan
book over the period.
Kerry Penfold
Chief Financial Officer
Strategic report
Strategic report
25
Amigo Holdings PLC
Annual report and accounts 2023
Scheme provision
The Scheme provision has increased
from the prior year to £195.9m
(FY22:£179.8m), owing both to the
now known final number of claims
received which was higher than
originally anticipated and to the
increase in the projected uphold rate
to just over 80%. Approximately 90%
of the claims’ population have now
been assessed by a third party and
we therefore have greater certainty
in this figure. Following the passing
of the Scheme deadline to submit
aclaim, the final volume of claims
isknown to be just under 210k.
Thisincludes some duplication where
both guarantor and borrower have
claimed on the same loan agreement.
The provision includes both cash
redress and balance adjustments.
Scheme creditors are expected to
receive cash redress toward the
end of this calendar year which we
estimate to be in the region of 17p
to the pound. With claims still to be
reviewed, this remains an estimate
and the final outcome is subject
to change.
The increase in the provision has
resulted in a corresponding charge
to the income statement of £19.1m
(FY22:credit of £156.6m). There
remains a degree of uncertainty
in thefinal complaints outturn.
Sensitivity analysis of the key
assumptions is set out in note 2.2
tothese financial statements.
Cost management
Administrative and other operating
costs of £36.2m increased by £11.6m,
(47.2%) year-on-year. The main
categories of expenditure included
in administrative and other operating
expenses are employee costs
of £17.3m (2022: £13.6m), legal,
professional and consultancy fees
of £10.9m (2022: £5.1m) and licence
fees of £2.5m (2022: £1.9m). The
substantial increase year-on-year
relates both to higher employee costs
and development requirements for
the RewardRate platform. Employee
costs increased by £3.7m to £17.3m
due to the provision of £4.2m for
estimated staff exit costs arising
fromthe orderly wind down, in which
all employees will exit the business.
RewardRate development spend
in the year was composed of both
incremental licence spend alongside
internal staff and external developer
costs. The level of spend was required
to facilitate an accelerated lending
platform with which to begin lending,
as we did in October 2022. A flexible
and scalable IT platform was key to
demonstrating proof-of-concept for
prospective investors in the capital
raise process. An onerous contract
provision of £1.3m (related expense
of £1.8m), has been made in relation
to the RewardRate product, which
has a number of associated supplier
contracts that either cannot be
terminated or a termination fee has
been negotiated to end the contract
early. As at 31 March 2023, £0.5m had
been paid and £1.3m remains payable.
Increased expenditure was partially
offset by reductions in variable costs,
including communications, print, post
and stationery, and bank charges
with declining volumes aligned to
thereducing customer base.
Tax
A tax charge for the year ended
31March 2023 of £0.1m relates to
Amigo’s Luxembourg entity.
Profit
Loss before tax was £34.7m for the year
(FY22: profit of £167.9m) with loss after
tax of £34.8m (FY22:profit of £169.6m)
driven primarily by the increase in
complaints provision over the financial
year. Excluding the complaints charge,
restructuring expense and onerous
contract provision, adjusted loss after
tax was £9.3m (FY22:profitof £13.3m).
Our adjusted basic loss per share
for the year was loss of 2.0p
(FY22:earnings of 2.8p), and basic
loss per share for the year was loss
of7.3p (FY22: earnings of 35.7p).
Funding and liquidity
The Group’s remaining £50m of
outstanding 7.625% senior secured
notes were redeemed, at par, in
March2023, ahead of expiration
inJanuary 2024, resulting in a net
interest saving. Funding to the
Groupisnow entirely in cash.
The proposed capital raise to fulfil
the Scheme condition of a further
minimum £15m payment to Scheme
creditors and to provide working
capital necessary for the continuation
of the business was unsuccessful.
TheScheme was switched to the
Fallback Solution as a result.
Net unrestricted cash/(debt)
(£m)
 March

 March

Senior secured notes

— (.)
Cash and cash
equivalents . .
Net cash/(debt) . .
Cash and cash
equivalents (restricted) . .
1 Figures presented above are net
ofunamortised fees.
With no remaining debt, net
unrestricted cash was £62.4m at
31 March 2023 (FY22: £83.9m),
comprising unrestricted cash and
cash equivalents, as the back
book continued to be collected
and originations were limited.
Theyear-on-year reduction of cash
and cash equivalents reflects the
payment of the full £97m Scheme
contribution intoa Scheme fund
and the repayment of the senior
secured notes, offset by continued
strong collections. Restricted cash
is £107.2m, which includes the £97m
Scheme contribution paid to the
Scheme Fund as well as estimated
set-off held in escrow for customers
with existing complaints who
continued to make payments up to
the Scheme Effective Date. Since the
year end, and in accordance with the
Fallback Scheme conditions, Scheme
Co has returned funds to ALL to
ensure it is well funded for an orderly
wind down of operations. Current
unrestricted cash is over £121m after
repayment of the senior secured
notes and withdrawal from Scheme
Co and current restricted cash is
over £62m.
Summary
It is extremely disappointing to be
executing the wind down of the Amigo
business. Despite this, collections are
performing well and the wind down
strategy, whilst early in its execution,
is on track to deliver the expected
contribution to Scheme creditors.
Thisis a testament to the dedication
and hard work of all teams at Amigo
ofwhich I am immensely proud.
Kerry Penfold
Chief Financial Officer
27 July 2023
Strategic report
26
Amigo Holdings PLC
Annual report and accounts 2023
Number of customers
(’000)
Description
Number of customers represents accounts
with a balance greater than zero, exclusive of
charged off accounts at the year end. It is the
key non-financial KPI used within the business
toreview current performance.
Performance
Customer numbers have fallen by 60.3% to
29,000 (2022: 73,000), driven by two factors.
Firstly, minimal new lending in the year to
31March 2023. Secondly continued collections
on the back-book.
29 2023
2023
2023
2022
2022
2022
2021
2021
2021
73
136
Description
Revenue comprises interest income onamounts
receivable from customers. It isprimarily derived
from a single segment in theUK.
Performance
As a result of decreased customer numbers and
limited new lending, revenue has declined by
78.4% to £19.3m from£89.5m.
Impairment: revenue ratio
(%)
Description
This ratio represents the Group’s impairment
charge for the period divided by revenue for
theperiod. This is a key measure for the Group
in monitoring risk within the business.
Performance
A credit in the period was recognised, primarily
due to post-charge-off recoveries, which have
improved throughout the period, and continued
robust standard collections, alongside the gross
loan book being increasingly provided for under
lifetime loss assumptions.
2023
2022
2021
(17.6)
41.3
35.5
Description
Net loan book represents the gross loan
bookless the IFRS 9 impairment provision
andmodification loss, excluding deferred
brokercosts.
Performance
Net loan book has reduced by 67.1% to £45.4m
(2022: £138.0m); the decline is due to the pause
in lending since March 2020, recognition of
modification losses and balance adjustments
for upheld customer complaints. Impairment
provision coverage increased year-on-year to
28.4% (2022: 25.6%) reflecting the amortisation
of the loan book over the period.
Net loan book
(£m)
138.0
340.9
Statutory (loss)/proﬁt
before tax (£m)
Description
This KPI represents statutory profit/loss before
tax and is one of the measures used to review
performance in the year within the business.
Performance
Statutory loss before tax was £34.7m for the
period (2022: profit of £167.9m); this is primarily
driven byan increase in the complaints expense
primarily due to the expected higher uphold
rates as claims are assessed. This, alongside
diminishing revenue and higher operating costs,
led to the loss in the year.
167.9
(283.6)
(34.7)
KPIs
Summary results andKPIs
The key performance indicators (“KPIs”) presented here
are helpful in assessing the Group’s progress against its
strategy and are the KPIs which were closely monitored
internally prior to wind down. The KPIs reflect the lack of
new lending and run off of the back book. However, they
are not exhaustive as management also takes account of
awide range of other measures in assessing underlying
performance. See the Financial Review on pages 24 and 25
for further detail on the Group’s financial performance
throughout theyear.
2023
2022
2021
Revenue
(£m)
89.5
170.8
19.3
45.4
27
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
2023
2023
2023
2023
2022
2022
2022
2022
2021
2021
2021
2021
Description
This KPI represents statutory profit/loss after
taxand is reviewed in conjunction with adjusted
loss/profit after tax within the business.
Performance
Statutory loss after tax was £34.8m (2022:profit
of £169.6m). Due to losses bought forward
there is no tax charge on profits for the year.
A small tax charge is shown in relation to the
Luxembourg entity.
Description
Adjusted profit/loss after tax is a non-IFRS
measure, adjusting for non-recurring transactions.
The Directors believe that adjusting for these items
is useful in making year-on-year comparisons.
Performance
Adjusted loss after tax was £9.3m (2022:profit
of £13.3m); In the current financial year, itadjusts
for the complaints provision and restructuring
expenses and onerous contracts in relation
tothe wind down.
Statutory (loss)/proﬁt
aftertax (£m)
Adjusted (loss)/proﬁt
aftertax (£m)
Basic (loss)/earnings
pershare (pence)
Description
This measure calculates earnings/loss
(profit/loss) after tax per share (weighted
average number of shares).
Performance
Basic loss per share was 7.3p compared
toprior year profit per share of 35.7p, driven
by the decrease in statutory profit after
taxyear-on-year.
Adjusted basic (loss)/
earnings per share (pence)
Description
This non-IFRS measure is shown in note 13.
Basic earnings/loss per share is adjusted for
items consistent with adjusted profit/loss
after tax to give a better understanding of
theunderlying performance of the business.
Performance
Adjusted loss per share was 2.0p compared to
aprofit of 2.8p in the prior year. This is due to the
adjusted profit after tax decrease year-on-year
driven by the increase of complaints provision,
reduction in revenue and increase in
operating costs.
169.6
(289.1)
(279.8)
13.3
(9.3)
(7.3)
2.8
(2.0)
35.7
(60.8)
(58.9)
(34.8)
Strategic report
28
Amigo Holdings PLC
Annual report and accounts 2023
Risk management
Three lines of defence
Amigo uses a three lines of defence model to both structure its risk management framework and togive
oversight of its effectiveness. This helps us define clear priorities, roles and responsibilities.
A Group-wide risk
management framework
Overview
Risk management has remained a key
objective for Amigo throughout 2023.
We have continued to operate in a
complex environment with ongoing
uncertainty. Over the last twelve
months, we have further strengthened
our risk capability, improved our
controls and implemented a robust
centralised risk management toolset.
The launch of pilot lending in October
2022, reflects the significant amount
of work that had been completed and
adoption of a “consumer” focused
culture to address the previous poor
historic lending practices.
Our approach is founded upon a
robust risk management framework,
articulated risk appetites and
supporting policies and procedures
which help us manage risks in
a resilient manner. Training and
awareness are targeted to embed
behaviours that support the
identification and escalation of risks
and issues that threaten the delivery
of desired outcomes. The Board is
ultimately responsible for our risk
management framework and its
effectiveness. The Board works
alongside senior management to
promote a responsible culture of
risk management by emphasising
the importance of balancing risk
with strategic objectives, whilst also
ensuring compliance with regulatory
requirements and internal policies. At
Amigo, every employee is empowered
to make risk-aware, purposeful decisions.
Throughout the wind down process,
the governance of the business will
remain fundamentally important.
We are committed to delivering
the highest standards of corporate
oversight with diligence and integrity,
a robust risk management framework
and strong ethical culture.
Emma Stirland
Chief Risk Officer
First line of defence
This is where day-to-day decisions are made. Business teams identify and track
risks, managing and resolving any issues found.
Third line of defence
Trusted third parties undertake regular independent assurance on key
risks and controls. This gives confidence over first and second line
riskmanagement.
•
Business units
and functions
•
Self-assurance teams
•
Risk and
compliance functions
•
Compliance
monitoring team
•
Internal Audit function
•
Trusted external subject
matter experts
Second line of defence
Amigo’s Chief Risk Officer has dedicated teams that monitor and challenge the first
line to ensure risks are identified and managed effectively on an ongoing basis.
29
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Our principal risks
Principal risks are those that can
seriously affect performance, future
prospects or reputation of the
Company. Amigo recognises that
taking risk is necessary, but we seek
at all times to ensure that the risk
we take is well informed, deliberate
and that controls are in place to
mitigate its impact. Our risk profile is
reviewed regularly at all levels in the
organisation to keep us risk aware
and our decision making aligned
toappetite.
Each principal risk has a defined
appetite which sets out the baseline
level of risk that we are willing to
accept. The risk appetite takes
into consideration the level of risk
exposure and our strategic goals.
Our assessment during the year
remained relatively static, with conduct
remaining a core focus as we resolved
legacy issues and worked to meet
regulatory commitments ahead of the
pilot lending in October 2022. Following
the invocation of wind down, we have
adjusted our risk appetite statements
to meet the revised strategic goals;
successful delivery of the Scheme of
Arrangement and controlled wind down
of the business. We remain averse
to risks that impact good customer
outcomes. While Amigo has ceased
lending, it continues to collect loan
repayments. We will continue to drive
aculture that puts customers first and is
focused on achieving positive outcomes
for all stakeholders. Amigo has a clear
and defined wind down strategy which
is tracked regularly by the leadership
team. The Company is averse to risks
that will impact or delay delivery against
the wind down plan.
Our risks
Outcomes
Good outcomes are at
the heart of our business
objectives. By managing
our risks effectively, we
support the delivery
ofgood outcomes.
Conduct
Inappropriate actions
taken by individuals or
the Company could lead
to customer detriment
or negatively impact
marketstability.
Strategic
The risk that we fail to achieve
our objectives, including an
orderly wind down, due to poor
decisions, a failure to adapt to
changes or through adverse
external conditions.
Operational
This relates to the
possibility of business
operations failing due to
inefficiencies or breakdown
in internal processes,
people and systems.
Treasury
A failure to properly manage
liquidity, capital or investments,
could lead to financial losses
which may result in reduced
funds available to the scheme or
in a more severe case, an inability
to complete the forecasted
orderly wind down.
Regutor
If the regutor environment
chnges or we don’t meet
the requirements, it coud
detriment impct our
business through regutor
ction, incuding investigtion,
fines, or oss of uthoristion
to operte.
Credit
Debtors may fail to meet
their debt obligations
in full or on time. There
may also be exposure to
concentrations in credit.
Strategic report
30
Amigo Holdings PLC
Annual report and accounts 2023
Our risks continued
Our principal risks continued
Conduct
Risk appetite
Amigo has an averse appetite for
taking action or inaction that leads
to customer harm and failure to
pay due regard to the particular
needs and circumstances of
individual customers in our
post-sale activities.
Risk drivers and threats
Amigo recognises that the vulnerability
of its target market poses higher than
average conduct risks.
We are mindful of the impact of high
inflation and the cost of living on borrowers
which will put additional strain on customer
finances and affordability.
Key mitigating actions
Amigo has put significant effort
into improving its conduct risk
managementapproach in parallel with
resolving its legacy lending issues.
Throughout our pilot lending
phase,there was a strong focus
onaffordability and identification
ofvulnerability. Amigo continues to
provide ongoing support to vulnerable
customers, including forbearance and
access to specialised debt support.
Operational
Risk appetite
Amigo takes a proportionate
approach to operational
risks, balancing the need to
provide resilient operational
performance with the need to
remain nimble. We will reduce
our operations as we progress
through the wind down process
in a safe and orderly way. Amigo
aims to have the quantity and
quality of people necessary to
meet its objectives throughout
this period.
Risk drivers and threats
While some instability was seen with
the new lending platform (RewardRate
and Open Banking), these facilities are
no longer actively used for customer
onboarding. The Amigo infrastructure
has remained stable with no significant
outage that has impacted customers.
As the organisation reduces and
the number of processes operated
decreases, Amigo will reduce
suppliers and staff numbers, whilst
also considering appropriate physical
locations and infrastructure.
The risk of cyber attacks continues
tobea threat across all industries.
Key mitigating actions
Amigo partners with trusted
third-party cyber experts to manage
evolving cyber risks. Operational
riskscontinue to be monitored to
protect the controlled wind down
ofthe business. Retention of key
personnel has an increased focus
tothis purpose.
Regulatory
Risk appetite
Amigo is in a sector (financial
services) and sub-sector
(alternative finance) that are
inherently subject to significant
regulatory risk, but we take all
reasonable steps to reduce that
risk as it applies to us.
Risk drivers and threats
Amigo maintains a constructive and
open relationship with the Financial
Conduct Authority and other regulators
and agencies. While lending has ceased,
Amigo continues to be a regulated
entity as it collects payments from the
existing loan book and progresses
with the scheme and customer redress
activity. Regulated permissions will not
be removed until all regulated activity,
including collections, has stopped.
Amigo is still subject to two regulatory
interventions including two Asset VREQs
and S166 but has been removed from the
FCA Watchlist.
Key mitigating actions
Amigo continues to work closely
with all regulatory stakeholders
toeffectively execute the Scheme
of Arrangement and wind down
inacontrolled way.
31
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Strategic
Risk appetite
Amigo has a minimalist approach
to Strategic Risk now that the
organisation is in wind down.
Strategic focus has switched to the
orderly wind down of the business,
collection of funds to contribute to
customer redress, processing of
scheme claims and the application
of redress due.
Risk drivers and threats
The Company needs to maintain
theability to evolve, adapt, and
beresponsive, in the short term,
tochanges in the internal and
external operating environment.
Key mitigating actions
Business transformation is now
focused on simplifying the loan
bookinfrastructure and supporting
delivery of the scheme whilst
minimising costs.
Treasury
Risk appetite
Amigo operates its treasury function
to support the functioning of its
lending business. Treasury is not a
profit centre and avoids or hedges
any material risk.
Risk drivers and threats
Our current focus is to support
customer redress, rather than
generate proprietary profit as
wemove through wind down.
Amigo remains exposed through
changes to interest rates on the
Group’s financials.
Key mitigating actions
Maintaining adequate liquidity
isa priority as we move into wind
down, providing assurance for our
remainingsuppliers and employees.
The main focus for market risk
reduction is to monitor Amigo’s
potential losses on financial
investments caused by adverse
pricemovements.
Credit
Risk appetite
Amigo is a mid-cost lender, and
historically, we have taken a degree
of credit risk that was consistent
with our pricing.
Risk drivers and threats
With Amigo no longer lending,
thereis no further exposure to
creditacquisition risk. We expect
tosee increased credit operational
risk as the level of delinquency on
theexisting loan book will increase
withtime. This may be compounded
by customers’ awareness that the
business is in wind down. The
organisation is also subject to risks
arising from changes in the cost of
living which may impact existing
loanrecovery rates.
Key mitigating actions
Ongoing monitoring of credit risk.
Strategic report
32
Amigo Holdings PLC
Annual report and accounts 2023
At Amigo, we constantly monitor our internal and external
environment to identify new and evolving risks. Emerging
risks are newly developing or evolving risks which are
potentially significant but are generally characterised by
a high degree of uncertainty and are therefore difficult
to quantify. These could be trends, innovations or
developments that have the potential to adversely impact
the delivery of our strategy.
While some risks emerge slowly, such as changing
demography, others may change faster with more severe
disruption, for example, the recent Covid-19 experience.
Tobe successful, Amigo understands the importance of
monitoring the evolution of risks and continually scans
the horizon to identify future risks that could impact our
success or opportunities, enabling us to better prepare
for the unexpected. Horizon scanning is performed on a
six month basis through a process involving scanning and
evaluation (which considers both relevance and speed
to materialise). Where we identify new risks, we engage
with subject matter experts to ensure all aspects are
understood. The outputs of horizon scanning areshared
with senior managers and the Board for consideration
during strategic planning and decision making.
The following section covers the key emerging risk categories.
Economic
Environmental
Technological
Geopolitical/
legal/regulatory
Societal
Emerging
risk
categories
Emerging risks
33
Amigo Holdings PLC
Annual report and accounts 2023
Strategic report
Technological
Emerging trend Description
Cyber threats While cyber attacks exist and are a recognised risk to Amigo, they are also considered an emerging risk due
to their rapid speed of change and nature and potential impact including digital disruption.
Business disruption The pandemic has been a major driver of awareness around the risks associated with business interruption,
including supply chain disruption.
Environmental
Emerging trend Description
Pandemics With Amigo’s hybrid working policy, the impact of Covid-19 and increased remote working has not had
amaterial impact on the organisation’s ability to operate. The potential for further pandemics, a shifting
range of pathogens and antimicrobial resistance, however, remains an emerging risk.
Climate change With growing awareness of the impacts of climate change, increasing investor and regulatory focus has
been placed on environmental, social and governance (“ESG”), including climate-related issues.
Economic
Emerging trend Description
Increasing inflation risk Increased rate of inflation and cost of living will likely impact loan repayments and increase the proportion
ofvulnerable customers.
Geopolitical/legal/regulatory
Emerging trend Description
Speed of
regulatorychange
2023 continues to bring high levels of regulatory supervision and oversight. Regulatory requirements
continue to expand, and regulatory expectations are rapidly increasing.
New political landscape The potential remains that changes within government policies, business requirements, or other political
decisions may have a detrimental impact on business decisions or outcomes.
Societal
Emerging trend Description
Growing customer
indebtedness and
wealth gap
With the current economic environment, there is increasing potential for those that are financially vulnerable
to become further indebted.
Growing levels of
economic abuse
The potential remains for increasing and undetected prevalence of economic abuse within households.
Going concern and viability statement
Basis of preparation
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.
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 will be applied accordingly throughout the
financial statements. 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 2023.
Going concern
In undertaking a going concern review, the Directors considered the Group’s decision to switch the Scheme from the
Preferred to the Fallback Solution, announced on 23 March 2023.
The switch to the Fallback Solution required that the trading subsidiary,Amigo Loans Ltd(“ALL”), stopped lending with
immediate effect and be placed into an orderly wind down, with the result that all surplus assets after the wind down
will be transferred to the Scheme creditors. A further requirement of the Fallback Solution is that ALL be placed into
liquidation within two months of payment of the final Scheme dividend. No value will be attributed to the ordinary shares
of the Company in this scenario.
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 Amigo Loans Ltd (the Group’s
sole cash-generating unit), the Board has determined that the Annual Report and financial statements for FY23 will be
prepared on a basis other than going concern.
The Board has prepared aset of financial projections for the solvent wind down following the cessation of new lendingin
March. 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 that are considered severe but plausible.
Stresses have been applied to:
•
the collect out of the legacy Amigo loan book;
•
removal of any prospectivedebt sales;
•
increased Scheme liabilities; and
•
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 can be considered the risks applied in the downside scenario alongside potential regulatory
action or intervention.
Viability statement
In accordance with Provision 31 of the UK Corporate Governance Code, the Board assessed the viability of the Group.
Following the unsuccessful capital raise and cessation of new business, the Board announced on 23 March 2023 that
theGroup would be placed into an orderly solvent wind down.
Strategic report
34
Amigo Holdings PLC
Annual report and accounts 2023
Jonathan Roe
Chair
35
Corporate governance
Amigo Holdings PLC
Annual report and accounts 2023
The reports following detail how the
Board operates from a governance
and control perspective to ensure
that we comply with the principles
and relevant provisions of the UK
Corporate Governance Code. As a
Board we take corporate governance
very seriously, and I will continue
to ensure that we maintain high
standards throughout my tenure.
In this Governance section we set out:
•
our Board of Directors and
Executive Committee of senior
managers responsible for delivering
the desired outcomes for our
customers and stakeholders;
•
the role of the Board, its operation
and an assessment of the
Board’seffectiveness;
•
the Report of the Audit Committee;
•
the Report of the
NominationCommittee;
•
the Report of the Risk Committee;
•
the Directors’ Remuneration
Report; and
•
the Directors’ Report.
During the 2022/23 financial year
the business focus was very much on
ensuring continuity and progression
ofthe business in the face of a number
of headwinds that challenged the very
survival of the business, as well as
maintained an effective governance
structure that was appropriate for the
Company. The focus changed from
23March 2023, with the business
moving into wind down.
At Board level we continued to strive
for a well-balanced and effective Board,
strong oversight of risk management
and open stakeholder relationships.
Earlier in the year, the Board made
strenuous efforts to develop and
expand Board membership, resulting
in Jerry Loy joining the Board, so it
had the necessary skills composition
to deal with the serious and challenging
issues facing the Company and had the
necessary depth of skills to relaunch
the business, should permission to do
so be granted. Since the 27 March 2023,
the size of the Board has reduced as
two Non-Executive Directors stood
down as the business moved to
delivering an orderly wind down.
In September 2022 Danny Malone
stepped up to the role of CEO, following
the resignation of Gary Jennison as
CEO, with Kerry Penfold stepping up
in turn to CFO, to replace Danny.
I remain delighted with the quality of
the Directors who served throughout
the year. Every member of the Board
had a common belief in the societal
purpose that Amigo has and the role
it can play in providing finance and
hope to its customers. All were deeply
upset that the business was not able
to find the necessary backing to
continue onwards.
By any measures this has been a
tumultuous year for the Board as
evidenced by the number of meetings
for the Board and Committee (see
page 40). Everyone has played
their part.
I would like to thank my fellow
Directors past and present for their
support and commitment to Amigo
during this difficult time.
Jonathan Roe
Chair of the Board
27 July 2023
Chair’s introduction
Corporate governance
36
Amigo Holdings PLC
Annual report and accounts 2023
Board of Directors and Company Secretary
A N R Ri
Age: 67 Tenure: 3 years
Profile
Jonathan joined the Board on
1August 2020 as a Non-Executive
Director and became Non-Executive
Chair of the Board following
approval by the FCA under the
Senior Managers Regime on
13October 2020.
Background and
externalappointments
Jonathan has extensive experience
of advising listed and regulated
companies and is a qualified
Chartered Accountant. His experience
includes 25 years’ advising public
companies on major corporate
transactions, principally with Dresdner
Kleinwort as a senior member of its
Equity Capital Markets team, where his
clients included Norwich Union, Orange,
Rosneft, HBOS and M&A, and related
fundraising activity for BAE Systems,
3i Group, Provident Financial and Avis
Europe. Jonathan was Non-Executive
Chairman of Vanquis Bank for three
and ahalf years to mid 2019, having
been a Non-Executive
Director for
fouryears prior to his appointment
as
Non-Executive Chairman.
Brings to the Board
Jonathan has experience of chairing
the Vanquis Bank board, and at times,
the Remuneration, Audit, Nomination
and Risk Committees of Vanquis
Bank. Jonathan was a Non-Executive
Director for Automobile Association
Insurance Services Limited for six
years where he chaired its Audit,
Risk & Compliance Committee and
Remuneration Committee.
Age: 59 Tenure: 1 year
Profile
Danny joined the Board on
6 June 2022 as Chief Financial
Officer (“CFO”) and was appointed
as Chief Executive Officer (“CEO”)
on23September 2022.
Background and
externalappointments
Danny is a qualified chartered
accountant and has extensive
business and regulatory experience
gained across multiple financial
services companies and banks at
Board level, mostly operating in the
non-standard consumer finance
sector. He co-founded Everyday
Loans in 2006 and was Finance
Director until 2013, when, following
its acquisition by Secure Trust
Bank, he became CEO through to
2018. Previously he was European
CFO of CitiFinancial Europe PLC,
part of Citigroup. Danny is also a
Non-Executive Chairman of Floan
Limited, a start-up fintech business
operating in the Buy Now Pay Later
sector and a Non-Executive Director
of The Personal Finance Centre
Limited, asecured loan broker.
Brings to the Board
Danny is an experienced CEO,
CFOand senior manager with
direct hands-on experience with the
non-standard finance and consumer
credit sector. Danny has a record for
delivering solutions in a fast moving
FCA regulated environment.
Age: 46 Tenure: Less than 1 year
Profile
Kerry joined the Board on
23September 2022 as Chief
FinancialOfficer (“CFO”).
Background and
externalappointments
Kerry has 20 years’ financial services
gained in banking and consumer
credit companies and has held a
number of senior roles. Prior to joining
Amigo, Kerry held positions as Head
of Motor Finance at United Trust
Bank and a range of roles at Lenlyn
Group including Operations Director
at Raphaels Bank and Head of Group
Financial Control. Kerry is a Chartered
Accountant and holds a diploma from
the Chartered Bankers Institute.
Brings to the Board
Kerry is an experienced CFO and
senior manager with direct hands-on
experience with the non-standard
finance and consumer credit sector.
Jonathan Roe
Chair of the Board
Non-ExecutiveDirector
Danny Malone
Chief Executive Officer
Kerry Penfold
Chief Financial Officer
37
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Committee key:
A
Audit
N
Nomination
R
Remuneration
Ri
Risk
Committee Chair
A N R Ri
Gary Jennison was a Director of the
Company during the year until he
resigned on 23 September 2022.
Maria Darby-Walker was a Director
of the Company during the year until
she resigned on 27 March 2023.
Jerry Loy was a Director of the
Company from 3 October 2022
untilhe resigned on 27 March 2023.
Other Directors holding office in the year
Age: 65 Tenure: 2 years
Profile
Michael joined the Board as
aNon-Executive Director on
19November 2020 and becameChair
of the Risk Committee on 19July 2021.
He currently is also the Chair ofthe
Audit Committee.
Background and
externalappointments
Michael is a qualified Chartered
Accountant and has held senior
management and board level
positions with GE Capital Europe,
AIG UK, Prudential UK and Flood
Re as well as at Abbey National
and Santander UK, and acting as
a senior consultant for KPMG and
Promontory. He was Chief Risk
Officer at AIG UK and Flood Re and
the Regulatory and Conduct Risk
Director at Prudential UK. Heis
also currently a Non-Executive
Director of SICSIC Advisory Ltd a
London based boutique consultancy,
focusing on financial services risk
and regulation. Michael became
Chair of the Risk Committee at
Amigo on 19 July 2021 and the Audit
Committee on 16September 2022,
following approval by the Financial
Conduct Authority. Michael is a
Certified Member of the Institute
ofRiskManagement.
Brings to the Board
Michael brings to the Board a wealth
of risk management and regulatory
advisory expertise with over 35 years
of experience at executive and
non-executive director level, in a variety
offinancial services companies.
Age: 60 Tenure: 4 years
Profile
Roger joined Amigo in June 2018, in
preparation for the Company joining
the London Stock Exchange, acting
as Head of Company Secretariat.
Roger became Company Secretary
on12July 2019.
Background and
externalappointments
Prior to joining the Group, Roger was
Group Company Secretary and Head
of Governance at Miton Group plc
since 2007. Roger has performed
board level roles, including that
of Finance Director and Company
Secretary at various investment
management, wealth management,
stockbroking and Lloyds of London
underwriting agencies. Roger is a
qualified Chartered Accountant and
has a BA (Hons) in Accountancy
Studies from Exeter University.
Brings to the Board
Roger has extensive experience
acting as Company Secretary
oflistedand unlisted regulated
financial sector companies.
Michael Bartholomeusz
Independent
Non-ExecutiveDirector
Roger Bennett
Company Secretary
Corporate governance
38
Amigo Holdings PLC
Annual report and accounts 2023
Executive Committee (“ExCo”) members
In addition to Danny Malone and Kerry Penfold, whose biographies are shown on page 36, the following senior
managers sit on the ExecutiveCommittee:
Profile
Lucie joined Amigo in July 2022 as our Chartered Institute
of Personnel Directors (“CIPD”) qualified Director of HR.
Lucie leads the HR function with extensive global experience
in performance management, talent and succession strategies
alongside engagement. Before joining Amigo, Lucie worked
as the Senior HR business partner at Barclays and was
responsible for delivering key strategic projects including
succession regulatory work for the Bank of England.
Lucie’s passions are empowering leaders to create
aninclusive working environment and culture.
Profile
Emma joined Amigo in September 2021 as Head of Risk
before taking up the role of interim Chief Risk Officer in
November 2022. Emma has over 20 years of experience
working in Risk and within financial services. Prior to
joining Amigo, Emma was Risk Director for Barclays and
has held international roles with teams across the UK,
Africa and Europe, working in Technology, Payments
and Financial Crime disciplines. Emma is a member of
the Institute of Risk Management. She graduated with
ascience degree from the University of Exeter and
latercompleted a PhD atLeicesterUniversity.
Lucie Baraclough
Chief People Officer
Emma Stirland
Chief Risk Officer
Profile
Paul Dyer originally joined Amigo as Chief Risk Officer
inNovember 2020, he then became Chief. Operations
Officer in November 2022. Paul has a wealth of risk and
regulatory experience, including being a member of the
FCA’s senior leadership team for two years and in heading up
Regulatory Risk and Assurance at Huntswood Compliance
Consulting. Paul has held a number of leadership positions
in regulated financial services firms, previously ran his
ownconsultancy and was the CEO of the Association of
Professional Compliance Consultants. Paul is a member
ofthe Institute of Risk Management and an advisor to the
BarStandards Board. Paul holds a Master’s degree with
distinction in Innovation, Creativity, Leadership
fromCASSuniversity.
Paul Dyer
Chief Operating Officer
Profile
Nick held the position of Director of Legal and Compliance
for Amigo from February 2016 until March 2019, and was
Company Secretary for the Group between November
2013 and June 2019 and Chief Regulatory and Public
Affairs Officer from April 2019 to October 2020. He has
served as Director of Legal and Compliance for various
Group companies since September 2011. Nick became
Chief Restructuring Officer in October 2020. Prior to
joining the Group, Nick was Head of Legal for UK Secured
Lending at Barclays from 2007 to 2011 and before that was
a Solicitor at Bradford & Bingley plc and Yorkshire Building
Society. Nick is admitted as a Solicitor of England and
Wales and holds an LLB from Nottingham Law School.
Nicholas Beal
Chief Restructuring Officer
Other senior managers holding office during the year
Jake Ranson, who was Chief Customer Officer and
amember of the Executive Committee, left the business
on 14 April 2023.
Murray Bailey, who was Chief Credit Risk Officer and
amember of the Executive Committee, left the business
on 28 April 2023.
Candice Openshaw, who was Head of Human Resources
and a member of the Executive Committee, left the
business on 26 June 2022.
Andy Smith, who was Chief Technology Officer (Interim)
and a member of the Executive Committee, left the
business on 30 September 2022.
James Tattersall, who was Operations Director and
amember of the Executive Committee, left the business
on 5May 2023.
Corporate governance statement
39
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Statement of compliance with the 2018 UK
Corporate Governance Code
Amigo is subject to the 2018 UK Corporate Governance
Code (the “UK Corporate Governance Code”) which was
issued in July 2018 by the Financial Reporting Council and
which is available at www.frc.org.uk. The UK Corporate
Governance Code sets out guidance in the form of
principles and provisions on how companies should
be directed and controlled to follow good governance
practice. Companies listed in the UK are required to
disclose how they have applied the main principles and
whether they have complied with its provisions throughout
the financial year. Where the provisions have not been
complied with, companies must provide an explanation.
Throughout the year to 31 March 2023, the Company has
complied with the provisions set out in the UK Corporate
Governance Code, except for the following matters:
Per provision 11, at least half the Board, excluding the
Chair, should be Non-Executive Directors whom the Board
considers to be independent. For the period 1 April 2022
to 3 October 2022, the Board of five Directors had a majority
of Independent Non-Executive Directors, one of whom
was the Chair, Jonathan Roe. From 3 October 2022, when
JerryLoy joined the Board, the Board of six Directors had
amajority of four Independent Non-Executive Directors,
ofwhich one was the Chair. Following the resignation
ofMaria Darby-Walker and Jerry Loy, both Independent
Non-Executive Directors, the Board has consisted of only
four Directors, two of which, including the Chair, are classified
as Independent Non-Executive Directors. Whilst the Board
is aware that this is not in compliance with the Code, it is
ofthe belief that due to the commencement of the wind
down of the Group that the composition of the Board
isappropriate.
Per provision 12, the Board should appoint one of the
Independent Non-Executive Directors to be the Senior
Independent Director to provide a sounding board for
theChair and serve as an intermediary for the other
Directorsand shareholders. The Company appointed
MariaDarby-Walker as the Senior Independent Director
on6June 2022. Since Maria resigned as a Director
on27March 2023 the Company has not had a Senior
Independent Director. Whilst the Board is aware that this
isnot in compliance with the Code, it is of the belief that
due to the commencement of the wind down of the Group,
and the small size of the Board, that the appointment of
anew Senior Independent Director is not required.
Board of
Amigo
Holdings PLC
Audit
Committee
Risk
Committee
Nomination
Committee
Policies and
procedures
Remuneration
Committee
ExCo
Oversight of
all business,
operating,
conduct and
reputation risks
The right people,
incentivised to be
in the right place
at the right time
todeliver what our
customers want
Doing what we can
forour customers,
as we could,
when we should
Leadership and effectiveness
Governance structure
Per provision 24, the Board should establish an Audit
Committee of Independent Non-Executive Directors, with
a minimum membership of three, or in the case of smaller
companies, two. The Chair of the Board should not be a
member. Throughout the year, the Committee had three
Non-Executive Directors. Jonathan Roe was a member
of the Committee and also was the Chair of the Board,
from 1 April 2022 until 3 October 202, when Jerry Loy was
appointed to the Committee. Following the resignation
of Maria Darby-Walker and Jerry Loy on 27 March 2023,
Jonathan Roe was co-opted onto the Committee, despite
being the Chair of the Board, to ensure the Committee
had at least two Non-Executive Director members. Whilst
the Board is aware that this is not in compliance with the
Code, it is of the belief that due to the commencement of
the wind down of the Group that the composition of the
Committee is appropriate.
Per provision 32, the Board should establish a
Remuneration Committee of Independent Non-Executive
Directors, with a minimum membership of three, or in the
case of smaller companies, two. In addition, the Chair of
the Board can only be a member if they were independent
on appointment and cannot chair the Committee.
Throughout the year, until her resignation as a Director
on 27 March 2023, the Committee was chaired by Maria
Darby-Walker. Following the resignation of Maria, Jonathan
Roe, the Chair of the Board, assumed the role of Chair of
the Committee. Whilst the Board is aware that this is not in
compliance with the Code, it is of the belief that due to the
commencement of the wind down of the Group that the
composition of the Committee is appropriate.
Corporate governance
40
Amigo Holdings PLC
Annual report and accounts 2023
The Board has collective responsibility for the long-term
success of Amigo and for its leadership, strategy, control
and management. The purpose of the Company and its
subsidiaries is to offer affordable credit to individuals who
are not able to readily access credit through the mainstream
banking and financial sector. Often our customers have
had problems with credit in the past. The offices of Chair
and Chief Executive Officer (“CEO”) are separate and
distinct and the division of responsibilities between them
has been clearly established, set out in writing and agreed
by the Board. The Chair is responsible for the leadership
and effectiveness of the Board and for ensuring that
eachNon-Executive Director is able to make an effective
contribution to the Board through debate and discussion
with the Executive Directors. The Chair is also responsible
for setting the style and tone of Board discussions. The CEO’s
role is to develop Amigo’s strategic direction (subject to the
Articles of Association and to approval of the shareholders in
general meetings as may be required from time to time) and
to lead senior management in executing Amigo’s strategy
and managing the conduct riskand operational requirements
of the business.
The Non-Executive Directors have a particular responsibility
to ensure that the strategies proposed by the Executive
Directors are carefully examined and fully discussed, that
the performance of the Group is monitored and challenged
against the Company’s risk appetite and formal objectives
and that the financial and management information provided
is comprehensive and accurate. They are also responsible
for ensuring, through the Remuneration Committee, that
appropriate remuneration arrangements are in place for
the Executive Directors.
Operation of the Board
The Board has a formal schedule of matters which are
reserved for its consideration, including approval of the
long-term objectives and strategy, approval of budgets and
financial statements, including the production of the Annual
Report and Accounts, acquisitions and disposals, changes to
the structure of the Group, setting and monitoring the firm’s
culture, and overall conduct and corporate governance issues.
It reviews trading performance and considers major capital
expenditure andthe funding arrangements of the Group.
The Board has delegated certain responsibilities to
formally constituted Committees, details of which are set
out on pages 44 and 45. By delegating key responsibilities
to these Committees, the Board is able to ensure that
adequate time is devoted by Board members tothe
oversight of key areas within their responsibility.
Day-to-day management and control of the business is
undertaken by the Executive Directors together with other
senior managers, who sit on the Executive Committee
(“ExCo”). The ExCo normally meets formally on a monthly
basis together with other senior managers as appropriate.
Board meetings are scheduled to be held ten times a year,
with main meetings frequently linked to key events in the
Group’s financial calendar, with the annual results being
approved at the Annual General Meeting (“AGM”). The
Board meets to approve reports for the financial reporting
periods for the half year ending in September and the full
year ending in March.
Regular agenda items include an overview of the market
and current trading, a detailed review of financial performance
against agreed targets and detailed compliance reports
and risk data, including information on complaints. The
Board, along with key senior managers from the business,
considered future strategy throughout the year. A key
feature over the year has been the ongoing solvency and
conduct issues facing the business. When considering the
business of the Group, the Board is aware of the need
Governance report
Leadership and effectiveness
Role of the Board
Table detailing number of meetings attended (note composition of membership of Committees changed
inthe period; full detail of attendance shown in the individual Committee’s report)
Meeting type
Total meetings
in year
Jonathan
Roe

Michael
Bartholomeusz

Maria
Darby-Walker

Jerry
Loy

Gary
Jennison

Danny
Malone

Kerry
Penfold

Board – scheduled        
Board – ad hoc        
Audit      n/a n/a n/a
Risk      n/a n/a n/a
Remuneration     n/a n/a n/a n/a
Nomination      n/a n/a n/a
1 Jonathan Roe was a Director throughout the year.
2 Michael Bartholomeusz was a Director throughout the year.
3 Maria Darby-Walker was a Director until she stood down as a Director
on27 March 2023.
4 Jerry Loy was appointed as a Director on 3 October 2022 and stood
down as a Director on 27 March 2023.
5 Gary Jennison was a Director until he stood down as a Director on
23September 2022.
6 Danny Malone was appointed as a Director on 6 June 2022 and
announced his resignation subject to working his six months’ notice
period and leaves on 15 November2023.
7 Kerry Penfold was appointed as a Director on 23 September 2022.
41
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
to have regard to the matters set out in section 172 of the
Companies Act 2006 (see pages 10 to 15) as well as the
significance of environmental, social and governance
(“ESG”) matters.
Budgets are prepared for the next financial year, which
are reviewed and approved by the Board in March.
Therelevant functional head may be asked to attend
such meetings to present relevant reports and deal
withquestions for Board members.
Key focus areas for the Board during the year included:
the implementation of a Scheme of Arrangement to
address historic liabilities arising from the Group’s prior
lending activities; the return to lending; the intensive
search for new funding; meeting the challenges of the
ongoing regulatory scrutiny together with concluding
theenforcement action; and the impact of a deteriorating
economic back drop on the remaining customer base.
Between scheduled meetings the Board is in frequent
contact to progress Amigo’s business and, if necessary,
adhoc Board meetings are held at short notice. It is
expected that all Directors attend Board and relevant
Committee meetings, unless they are prevented from
doing so by prior notified commitments.
Generally, it is Company policy to hold meetings in person
but due to the need to hold many of the meetings at short
notice, given the pressing issues facing the Company,
many of the meetings in the year have been held virtually.
Forthose Directors who are unable to attend meetings
inperson or virtually, they are given the opportunity to
beconsulted and comment in advance of the meeting.
Papers are generally circulated in the week prior to each
Board or Committee meeting to ensure that Directors
have sufficient time to review them before the meeting.
Documentation includes detailed management accounts,
reports on current trading, reports from the main functional
areas including regulation, corporate governance and matters
where the Board is required to give its approval. The Chair
holds regular, informal meetings with the Non-Executive
Directors without the Executive Directors being present.
Board effectiveness
Board performance and evaluation
The UK Corporate Governance Code requires the Board
to conduct an annual evaluation of its own performance
and that of its Committees and Directors. The Company
completed a review this year, using The Chartered
Governance Institute of UK and Ireland, which required
Board members and senior managers to take part in
interviews and to rate their own performance, together
with the performance of the Board and wider management
team together, through the completion of questionnaires.
The Board considered the report in November 2022 and
agreed to work with the recommendations put forward.
Areas covered by the review included the composition
and processes to be followed at the Board and Committee
meetings, topics discussed, behaviours of Board members,
diversity and challenge by members and effectiveness
of the Board in stress situations. In addition to the annual
evaluation exercise there remains an ongoing dialogue
within the Board to ensure that it operates effectively and
that any matters raised are addressed in a timely manner.
The performance of the Executive Directors and senior
managers is considered annually, or at appointment, by
theRemuneration Committee.
Training and support
The training needs of the Board and its Committees are
reviewed and each Director is responsible for ensuring
their skills and knowledge of the Group remains up to
date. Particular emphasis is placed on ensuring that
Directors are aware of proposed legislative and regulatory
changes in areas such as corporate governance, financial
reporting and consumer finance specific issues through
the issue of briefing papers at Board meetings and through
direct training undertaken by our corporate advisors.
AllDirectors visit Amigo’s main office on a regular basis
and areencouraged to familiarise themselves on aspects
ofthe day-to-day business.
Newly appointed Directors would be provided with
induction materials on joining the Board to acquaint them
with the Group. This normally includes meetings with other
Board members and senior management, and general
information on the Group, its policies and procedures,
financial and operational information. There is an agreed
written procedure for Directors, in furtherance of their
duties, to take independent professional advice at the
Group’s expense, if required. Directors also have access
to the services of the Company Secretary. The Group
maintained Directors’ and Officers’ liability insurance
throughout the year and is maintained at the signing
dateof these Report and Accounts.
During the year all Board members, in line with all
employees,were required to complete the online e-learning
modules that have been prepared specifically for the Group.
The e-learning modules cover a wide spectrum of activities,
including compliance, conduct, Consumer Duty, culture,
anti-money laundering, anti-bribery and corruption,
employment-related matters, health and safety, data
protection and cybersecurity. In addition, the Board
received specific refresher training on the Market
AbuseRegulationresponsibilities.
Accountability
The Board has responsibility for determining, with the
assistance of the Audit and Risk Committees, whether
the Annual Report, taken as a whole, is fair, balanced
and understandable to enable shareholders to assess
the Group’s performance, business model and strategy.
In coming to its view, the Board took into account the
views of the Audit and Risk Committees, as well as its own
knowledge of the Group, its strategy and performance
in the year, the guidance given by all contributors to
the Annual Report and a detailed review by senior
management of the overall content.
Corporate governance
Governance report continued
42
Amigo Holdings PLC
Annual report and accounts 2023
Board composition, structure and diversity
As at the year end the Board comprised the Independent
Non-Executive Chair, two Executive Directors and one
Independent Non-Executive Director. The Chair was
Jonathan Roe and the CEO was Danny Malone. The
Directors’ biographies are on pages 36 and 37. During the
year, Gary Jennison, stepped down as an Executive Director
and CEO on 23 September 2022. He was replaced as CEO
by Amigo’s then CFO, Danny Malone, who in turn was
replaced as CFO by Kerry Penfold, previously the Head
ofFinance at Amigo. During the year, Jerry Loy joined the
Board as a Non-Executive Director, which temporarily
allowed Committee composition to be brought fully into
line with the UK Corporate Governance Code. Following
the announcement of the move into wind down, both
MariaDarby-Walker and Jerry Loy resigned asDirectors
on27March 2023.
Amigo’s policy and approach to diversity at Board level is
described in the Nomination Committee Report on page
50, while Amigo’s commitment to diversity and inclusion
within the workforce, and how it has been implemented,
can be found on page 16.
The change in Directors in the year and the move into
winddown has meant that the measurement of Board’s
diversity and inclusivity has been more challenging than
ifit had a stable Board throughout the period. During
theyear the Company did achieve the target for at least
40% of the Board of Directors to be women (as defined by
themselves) but as at the year end, the female representation
on the Board had dropped to 25%. Given the Amigo business
has moved into wind down, the Board does not believe it
ispracticable to try to attain the target for female Board
representation of 40%. During the year the positions of
Senior Independent Director and CFO were held by
separate women. Throughout the year at least one
member of the Board was from a minority ethnic
background (as defined by themselves).
The Board believes the information disclosed in the
tablesbelow are a fair way to disclose information about
theCompany’s effort to comply with the FCA’s guidance
on Diversity, Equity and Inclusion, as at 31March 2023.
Reporting on sex/gender representation at Board and Executive Management level
Gender
Number of
Board members % of the Board
Number of
senior positions
on the Board
Number in executive
management (excluding
Executive Directors)
% of
Executive
Committee
Men  %   .%
Women  %   .%
Reporting on ethnicity categories at Board and Executive Management level
ONS ethnicity category
Number of
Board members % of the Board
Number of
senior positions
on the Board
Number in executive
management (excluding
Executive Directors)
% of
Executive
Committee
White British or White other  %   .%
Mixed Ethnic  %   .%
Independence
After careful consideration the Board is confident that all of
the Non-Executive Directors during the year satisfied the
independence criteria of the UK Corporate Governance Code
on their appointment and continued to satisfy those criteria.
Jonathan Roe was independent on appointment, having
never been employed by the Group and having diverse
business interests beyond the Group, and in the opinion
ofthe Board has remained independent during his time as
Chair. Maria Darby-Walker was Senior Independent Director
until her resignation as a Director on 27March2023. As well
as supporting the Chair and acting as a sounding board for
the Chair and an intermediary for other Directors, a key
responsibility for the Senior Independent Director is to be
available for direct contact from shareholders should they
wish to do so.
Prior to his appointment as a Non-Executive Director, Michael
Bartholomeusz engaged in a one-off short-term consultation
exercise to identify possible improvements to the risk
function of the Company. The Board is satisfied that Michael
Bartholomeusz has remained independent throughout the
period of his appointment as a Director. Jerry Loy joined the
Board during the year and was adjudged to be independent
on appointment, and throughout the period until his
resignation on 27March 2023.
Commitment and conflicts of interest
All significant commitments which the Directors have
outside Amigo are disclosed prior to appointment and on
an ongoing basis when there are any changes. The Board
is satisfied that each of the Non-Executive Directors commits
sufficient time to their duties and fulfils their obligations
toAmigo. The Board has the right, under the Articles of
Association, to approve potential situational conflicts of
interest. During the year, a small number of such potential
conflicts relating to Directors’ own remuneration arrangements
were considered, in each case with the relevant Director
not taking part in any decision relating to their
own position.
43
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Directors are also aware that the disclosure and authorisation of any potential conflict situation does not detract from their
requirement to notify the Board separately of an actual or potential conflict in relation to a proposed transaction by the Group.
Board independence and Committee membership – Directors as at 31 March 2023
Name Independent
Audit
Committee
Nomination
Committee
Remuneration
Committee
Risk
Committee
Jonathan Roe Ye s
Michael Bartholomeusz Ye s
Danny Malone No
Kerry Penfold No
Key: Member Chair
Internal controls and risk management framework
The Board follows an internal control and risk management
framework, which includes the following key elements:
•
a clear schedule of matters which require approval at
Board level;
•
a policy in relation to delegation of authority and the
limitations which apply;
•
comprehensive costs budget prepared for the Group,
and individual business units;
•
ongoing monitoring of the performance of the Group,
and individual business units, against budgets with
reports given to the Board on a regular basis;
•
internal audit assessments, both with respect to
financial matters and business matters, discussed with
management and the Audit Committee together with
corrective actions agreed and monitored;
•
a centralised financial reporting system and process,
with controls and reconciliation procedures designed to
facilitate the production of the consolidated accounts;
•
assessment of accounting standard changes with both
the external auditor and the Audit Committee;
•
documented policies made widely available to employees
in relation to anti-bribery and corruption, anti-money
laundering, data export controls and whistleblowing;
•
an ongoing review of the principal risks which face
the Group, in addition to the assessment undertaken
by the Audit Committee in preparing the viability
statement; and
•
regular reports in relation to finance, tax and treasury
given to the Audit Committee.
Relations with shareholders
The Board is keen to ensure that our shareholders have a
good understanding of the business and its performance,
and that the Directors are aware of any issues or concerns
which shareholders may have. Communication with
shareholders takes a variety of forms. The Company has
a dedicated Investor Relations Director who regularly
corresponds with all shareholders. In reality the share
register is dominated by retail shareholders, the majority
of whom invest into the Company through well known
shareholding aggregators: such as Hargreaves Lansdown,
Interactive Investor and Halifax Share Dealing to name the
three largest on our share register at the year end.
For institutional shareholders and analysts
During the year there was dialogue with shareholders,
holders of the Senior Secured Notes and analysts
including dial-in and individual meetings after the
announcement of the year-end, half year and quarterly
results. The investor presentations prepared for the
periodic results are placed on the Company’s website
forall investors to see.
The Board receives reports and feedback on the meetings
held between the Executive Directors and shareholders,
and internally circulates copies of analysts’ reports on the
Group. The Chair of the Board and the Senior Independent
Director are available to shareholders if they have concerns
about governance issues which the normal channels of
contact fail to resolve.
For retail shareholders
The Board is aware that as at the signing date the
Company’s shares are nearly all owned by retail investors.
As a consequence of this transition from institutional to
retail investor ownership the Board has spent time and
resources liaising with shareholder groups representing
retail investors and made efforts to ensure the investor
presentations prepared for the periodic results are
understandable and accessible by retail investors.
Corporate governance
Governance report continued
44
Amigo Holdings PLC
Annual report and accounts 2023
Annual General Meeting (“AGM”)
Amigo will hold its fifth AGM on 27 September 2023. The notice of the AGM will be sent to shareholders at least
14days before the meeting. All substantive items of business at shareholders’ meetings are dealt with under separate
resolutions, including a resolution to receive the Annual Report and Accounts. Shareholders will be able to submit
individual questions as part of the AGM process.
Website
The Group maintains a website (www.amigoplc.com) with a dedicated investor relations section. All Company
announcements are available on this site, as are copies of slides used for presentations to investment analysts.
Queriesfrom investors should be sent by email to investors@amigo.me.
Board Committees
The Board has delegated certain responsibilities to standing Committees, details of which are set out below. By delegating
key responsibilities to these Committees, the Board is able to ensure that adequate time is devoted by Board members
to the oversight of key areas within their responsibility.
Committee Key function, responsibility and area of expertise
Audit
•
Oversees the remit of, appoints, decides remuneration of, monitors and reviews the effectiveness
of the Company’s Internal Audit provider in the context of the Company’s overall risk management
system. Ensures findings are investigated and actioned appropriately.
•
Oversees the remit of, appoints, decides remuneration of, monitors and reviews the effectiveness
ofthe Company’s external audit provider.
•
Assists the Board in monitoring the Group’s financial reporting process and the integrity of the
Group’s periodic financial statements, including reporting of financial performance to the market.
•
Advises the Board whether the Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the necessary information for shareholders to assess the Company’s
position, performance, business model and strategy.
•
In conjunction with the Risk Committee, reviews the effectiveness of the Group’s system of internal
controls and ensures adequate whistleblowing procedures are in place.
Nomination
•
Regularly reviews the structure, size, composition and skill set of both the Executive and Non-Executive
Directors. Considers succession planning, Director resignation and re-election at AGMs, including
identification of appropriate candidates to fill vacant or new roles.
•
Develops, regularly reviews and makes recommendations on the Company’s approach to
governance practices including monitoring any conflicts of interest.
•
Considers ongoing educational and training needs of the Board in relation to changing requirements
in the market.
45
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Committee Key function, responsibility and area of expertise
Risk
•
Advises the Board on the Company’s overall risk appetite, tolerance and strategy taking into
account the factors influencing the approach to risk. Considers the risk policies in place and ensures
they form part of a robust assessment of the risks including those affecting our business model,
future performance, solvency, liquidity, operational resilience, business continuity and business
disaster recovery.
•
Regularly reviews and approves the parameters used in measuring risk and the methodology used to
assess such risks. Considers procedures and in conjunction with the Audit Committee sets standards
for accurate and timely reporting of large exposures and risks adjudged to be of critical importance.
•
Considers fraud matters and ensures procedures are in place to deal with applicable legal and
regulatory requirements including consideration of anti-money laundering practices and customer
and conduct risk. Reviews systems and controls for determining correct ethical behaviour and the
prevention of bribery, corruption and modern slavery.
•
On an ad hoc basis, considers matters on behalf of the Board including acquisitions, disposals and
new products.
•
Reviews the activities of the Chief Risk Officer including considering the appointment and removal
ofsai d officer.
•
In conjunction with the Audit Committee, reviews the effectiveness of the Group’s system of internal
controls and ensures the adequacy of the Group’s Compliance function.
Remuneration
•
Determines the terms and conditions of employment of each of the Board, Executive Directors,
senior management and Company Secretary. Determines the remuneration policy, which includes
termination and compensation payments, pension arrangements and expenses, taking into account
relevant laws and regulations.
•
Determines all aspects of share incentive arrangements in consultation with shareholders. Sets and
designs appropriate performance targets and criteria including determining when payments should
be withheld or clawed back from an Executive Director.
•
Liaises with the Nomination Committee to ensure remuneration for newly appointed Executive
Directors fits within the remuneration policy.
•
Oversees workforce policies and practices to make recommendations to the Board to promote
thelong-term success of the Group and align with strategies and values.
•
Responds to matters raised during the AGM by shareholders in relation to the remuneration policy.
Formal terms of reference for the Audit Committee, Nomination Committee, Risk Committee and Remuneration
Committee have been approved by the Board and are available on request or to download from the Group’s website.
The Group also has a Disclosure Committee, which is responsible for managing the disclosure of information by the
Group in compliance with its obligations under the Market Abuse Regulation, the Financial Conduct Authority’s Listing
Rules, and the Disclosure Guidance and Transparency Rules. The Disclosure Committee is comprised of the members
of the Board and other senior managers, if appropriate, but due to the time pressures associated with considering such
disclosure matters, may at times not include all Directors. Given the small size of the Board, most matters covered by the
Disclosure Committee were dealt with by ad hoc Board meetings. Where it was not possible to hold a Board meeting,
anad hoc Disclosure Committee meeting was held. During the year to 31 March 2023 the Disclosure Committee held
twomeetings.
Disclosure Guidance and Transparency Rules disclosure
The information required by DTR 7.2 is set out in this report, the Nomination Committee Report, the Risk Committee
Report and the Audit Committee Report, except for information required under DTR 7.2.6, which is set out in the
Directors’ Report.
Corporate governance
46
Amigo Holdings PLC
Annual report and accounts 2023
Audit Committee report
Overview
I am pleased to present the Audit Committee Report. The
Committee’s key responsibilities include monitoring the integrity
of the Group’s financial reporting and internal controls and
overseeing the internal and external audit processes and
arange of other corporate governance activities.
During the year, the Committee devoted particular
attention to significant financial reporting areas including:
the Group’s published financial statements, being the
Quarterly, Interim and Annual Reports and Accounts;
provisioning for complaints, loan impairment, going
concern and viability statements issues.
The Committee has devoted much time to consideration of
the provisioning methodology to be used when considering
the evaluation of potential redress for complaints. The
Committee also continued with the evaluation of IFRS 9
issues and the implications for our continuing impairment
rate calculations. This work has been undertaken in
conjunction with the Risk Committee.
Over the year the Committee considered implications
ofthe complaints situation and the impact of a Scheme
ofArrangement on the long-term financial viability of the
business. The Committee had to consider the implications
of both the success and failure of the proposed Schemes of
Arrangement to be sanctioned by the Courts, on financial
reporting and in terms of whether the going concern basis
was the correct basis on which to prepare this report. The
Committee will continue to monitor the financial performance
and position of Amigo, ensuring reporting remains fair,
balanced and understandable as well as reflective of the
underlying evolving economic environment in which
Amigooperates.
The Committee has followed and considered the
continuing long-term impacts of Covid-19, the worsening
underlying economic situation including the substantial
rise in inflation and, in conjunction with the Risk Committee,
devoted time to the potential impact on impairment rates.
Another key role of the Committee has been the
management of the Internal Audit function provided by
Pricewaterhouse Coopers LLP (“PwC”). Work undertaken
has included the approval of the overall Internal Audit plan,
consideration of individual areas of work and the review
of findings from the reports undertaken, including work
undertaken on agreed management actions.
I would like to thank the members of the Committee for
their hard work and commitment over the last year.
Michael Bartholomeusz
Chair of the Audit Committee
27 July 2023
Committee members
Members at the year end Meetings Attendance
Michael Bartholomeusz

 
Jonathan Roe

 
Members during the year
Maria Darby-Walker

 
Jerry Loy

 
1 Michael Bartholomeusz was a member throughout the year.
2 Jonathan Roes was a member until he stood down on
7October2022. He was re-appointed on 27 March 2023.
3 Maria Darby-Walker was a member until she stood down
on27March 2023.
4 Jerry Loy was appointed on 3 October 2022 and stood down
asa member on 27 March 2023.
Focus areas for 2023
•
Considering the impact of the commencement
ofwind down.
•
Considering the impact of the worsening economic
environment on the loan book.
•
Continuation of assurance reporting.
•
Ensuring the internal whistleblowing safeguards
are visibly aligned with the requirements of
the business.
•
Merging the activities of the Audit and Risk
Committees going forward now that wind down
has commenced.
Text to be supplied
Audit Committee report
Michael Bartholomeusz
Chair of the AuditCommittee
47
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Committee composition
The members of the Committee during the year were
Michael Bartholomeusz, who acted as Chair, Jonathan
Roe, and Maria Darby-Walker and Jerry Low. The year saw
considerable changes to the Committee membership.
The changes initially resulted from the Board’s desire to
address the requirements of the UK Corporate Governance
Code and increase the differentiation between the Audit
and Risk Committee by ensuring each Committee had
a separate Chair. The Board actively sought a suitable
replacement seeking to recruit a replacement Chair of the
Committee and Jerry Loy was recruited to the Committee
on 3 October 2022, with the intention that Jerry would be
appointed as Chair of the Committee following approval
from the FCA. Following Jerry Loy’s appointment,
Jonathan Roe stepped down from the Committee.
Following the announcement that Amigo had moved
into wind down, both Jerry Loy and Maria Darby-Walker
resigned from the Board and the Audit Committee. The
Committee currently consists of Michael Bartholomeusz
and Jonathan Roe, who was co-opted to the Committee
upon the resignation of Jerry and Maria.
The Board considers all members of the Committee
tobeindependent.
Roles and responsibilities
The principal duties of the Audit Committee were:
Financial reporting
•
Monitor the integrity of the Annual, Interim and Quarterly
Reports and Accounts.
•
Review and report to the Board on significant financial
reporting issues, estimates and judgements, particularly
in relation to accounting for complaints and IFRS 9.
•
Review the assessment of viability following the
unsuccessful capital raise and the cessation of new
business and on whether the basis for preparing Amigo’s
financial statements is not on a going concern basis.
•
Review the reporting implications on the financial
statements based on the status of the two separate
Scheme of Arrangement applications, and consider any
implications arising from the sanctioning of the Scheme
of Arrangement in May 2022.
•
Review of reporting on ESG and Task Force on
Climate-related Financial Disclosure (“TCFD”) related
matters within the Annual Report.
Internal controls
•
Keep Amigo’s internal financial controls under review.
•
Consider the effectiveness of internal control systems.
•
Direct and review the activities of the Internal Audit
function provided by PwC.
Whistleblowing
•
Review the adequacy and security of Amigo’s
whistleblowing arrangements, ensuring appropriate
arrangements are in place for employees to raise
concerns confidentially and to have those concerns
adequately investigated without repercussion to them,
and to ensure there is a mechanism in place to deal
proportionately with outcomes from those investigations.
External audit
•
Consider and make recommendations to the Board,
to be put to shareholders for approval at the Annual
General Meeting (“AGM”), in relation to the appointment
or re-appointment of Amigo’s external auditor.
During the year, KPMG resigned as auditor, and was
replaced by MHA.
•
Oversee the relationship with the external auditor,
approve the remuneration for audit services and develop
the policy governing the use of the external auditor to
provide non-audit services.
•
Approve the external auditor’s terms of engagement.
•
Assess annually the external auditor’s independence
and objectivity.
•
Discuss with the external auditor the factors that could
affect the audit quality and review and approve the
annual audit plan.
•
Review the findings of the external audit engagement.
•
Provide the opportunity for the external auditor to meet
with the Committee without the executive management
present in order to raise any concerns or discuss matters
relating to the audit work.
The Committee receives regular updates on regulatory,
accounting and reporting developments and their
application to Amigo.
Meetings and attendance
The Committee held five meetings during the year.
Attendance at these meetings by the Committee members
is shown in the table on page 40. On each occasion the
CEO, CFO other senior members of the executive team
attended, including the Chief Risk Officer. The external
auditor attended meetings when matters relating to the
financial reporting cycle were discussed. Attendance
byrepresentatives of the internal auditor occurred on
anadhoc basis when Internal Audit output was reviewed.
Text to be supplied
Corporate governance
Audit Committee report continued
48
Amigo Holdings PLC
Annual report and accounts 2023
Meetings and attendance continued
There is an opportunity at each meeting for the Committee
to discuss matters privately with the internal and external
auditors without management present. Outside of scheduled
meeting times, the Chair of the Committee maintains regular
contact with both the internal and external audit partners, to
discuss matters relevant to Amigo. The Committee’s terms
of reference are available on Amigo’s website and these are
reviewed annually and updated where necessary to reflect
changes in the responsibilities of the Committee. In addition,
the Committee will conduct a review of its own performance
on an annual basis and considers steps for future improvement
taking input from the members of the Committee, the
internal and external auditors and senior members of
theexecutive team.
Key priorities for the coming year are the: continuation of
the wind down of the business, the oversight of any external
assurance reporting and the firm’s own assurance reporting,
especially in relation to ensuring customer interests and
conduct risk is considered; oversight of the impact of the
worsening economic environment on the wind down of
the loan book; and ensuring the internal whistleblowing
safeguards are visibly maintained. Given the aforementioned
financial issues, the Committee will continue to monitor
whether the Group continues to operate on a solvent
basis and continue to consider the implications of the
commencement of wind down on the preparation of the
financial statements.
Key activities of the Audit Committee
in2022/23
The Committee met five times during the year and the
following activities were undertaken:
•
reviewed and considered significant issues relevant
to the Annual Report and Accounts for the year ended
31March 2022 including confirmation of the application
of Amigo’s accounting policies and any material changes
to financial reporting requirements;
•
reviewed and considered significant issues relevant
to the unaudited Quarterly Report and Accounts to
30June 2022;
•
reviewed and considered significant issues relevant
to the unaudited Interim Report and Accounts to
30September 2022;
•
reviewed and considered significant issues relevant
to the unaudited Quarterly Report and Accounts to
31December 2022;
•
reviewed and approved Amigo’s method for the
assessment of adequate provisions to cover the
ongoing costs of complaints. Work included challenge
of assumptions used by management in preparing the
complaints’ provisions and on the implementation of the
appropriate methodology for calculating the provision
given the change in approach to the calculation of
the provision for complaints at the year end after
commencement of wind down;
•
reviewed and approved Amigo’s method for the
assessment of impairment provisions in accordance
with IFRS 9. Work included challenge of management
assumptions used when preparing IFRS 9 provisions,
and its relationship to the remaining Covid-19
forbearance provisioning undertaken;
•
reviewed, considered and agreed the need for an
impairment in the carrying value of subsidiaries within
the Group;
•
reviewed the external auditor’s audit planning report
for the year ended 31 March 2023. Work included
discussion with the audit team about the ongoing audit
and level of scrutiny required during the audit process;
•
reviewed and approved the audit fee for the interim
and final audit work resulting from the agreed external
auditor’s strategy and plan;
•
in conjunction with the Risk Committee, reviewed the
effectiveness of the Group’s system of internal control
(including financial and operational);
•
reviewed the going concern and viability statements,
focusing on key judgements, assumptions and estimates
underlying the Group’s plans. Work included challenge
of management assumptions used in determining going
concern and viability and took into consideration the likely
possible outcomes, including whether the FCA would
approve the return of Amigo to lending and support a new
Scheme of Arrangement. The work included considering
ifthe Company had reasonable prospects of continuing
asa viable business or as an orderly wind down or could
berequired to enter into an insolvency arrangement;
•
reviewed and considered significant issues relevant
to the Annual Report and Accounts for the year ended
31March 2023 including confirmation of the application
of Amigo’s accounting policies and any material changes
to financial reporting requirements, especially given the
move into wind down from March 2023;
•
reviewed and approved the Internal Audit plan from PwC
and reviewed various reports throughout the year;
•
reviewed and maintained the whistleblowing policy
and ensured any reports made under the policy were
appropriately investigated and followed through to
conclusion; and
•
assessed the effectiveness of the Internal Audit function
by reference to the quality, experience and expertise of
the team provided by PwC, and by reviewing periodic
and individual reports on specific areas of interest.
During the year, Internal Audit focused on:
–
fraud and anti-money laundering;
–
underwriting, affordability and creditworthiness;
–
financial promotions, including product governance;
–
IT general controls and cyber governance; and
–
pre and post-assurance reports on strategy, target
operating model, compliance, risk assessment,
arrears management, TCF and dealing with
vulnerablecustomers.
Text to be supplied
49
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Auditor effectiveness and independence
The Committee considered MHA’s effectiveness by reference to the audit plan, including the key risks identified and
the materiality adopted, its performance against that plan and its relevant experience of both the non-standard finance
sector and Amigo’s business and operations. MHA’s current internal quality control measures were also evaluated.
Further details of the audit engagement partner, engagement date and length of tenure are provided in the Independent
Auditor’s Report on pages 81 to 87.
The Committee has also considered the objectivity and independence of the external audit, noting both the statement
of independence provided by MHA and the absence of any known conflict of interest between Amigo and MHA.
TheCommittee’s policy is that MHA will only be engaged to perform non-audit services in exceptional circumstances
and, even then, only with the prior approval of the Committee. In the year ended 31 March 2023 MHA were asked to
undertake work on the Financial Position and Prospects Procedures (‘FPPP’), as part of the work required to support
thefund raise, which was abandoned when Amigo went into wind down. The total cost of this work was £38,000.
Detailsof audit fees paid to MHA are provided in note 7 to the consolidated financial statements.
There was a tender of audit services in Summer 2022 when MHA was appointed as auditor to the Group.
Financial reporting
The Committee reviewed and provided input into the audit scope and audit plan provided by MHA. In evaluating key
issues and areas of judgement relevant to the consolidated financial statements, the Committee reviewed MHA’s audit
findings and observations and considered the following significant issues:
Issue How the Committee addressed the issues
IFRS 
•
Determination of a “significant increase” in credit risk.
•
Consideration of expected credit loss profiles and rationale provided by management.
•
Consideration of the impact of present value discounting on Expected Credit Loss
(“ECL”)reporting.
Conduct risk
(includingcomplaints)
•
Consideration of impact of regulatory scrutiny on activities of the business.
•
Consideration of regulatory redress payable from complaints, taking into account the impact
ofthe Scheme of Arrangement.
•
Consideration of changes required to meet changes in regulatory requirements and environment
over the period, including output from the increased third-party assurance work undertaken.
•
Considered uncertainties surrounding the outcomes associated with the provision.
Going concern
•
Consideration of a risk to going concern resulting from the financial commitments due to
redress payable on upheld complaints.
•
Consideration of the impact of not being a going concern on the basis of preparation of the
AnnualReport and Accounts.
•
Consideration of short, medium and long-term funding requirements considering complaints
andimpact of the deteriorating economic situation on impairment levels.
Recoverability of parent
company investment
insubsidiaries
•
Annual review of carrying value of investment in subsidiaries against forward-looking
economic valuation of subsidiaries.
•
Consideration of likely movements and changes in valuation resulting from future originations
andfuture debt recoverability.
•
Consideration of the cash-generating unit associated with subsidiary undertakings.
Text to be supplied
Corporate governance
Nomination Committee report
50
Amigo Holdings PLC
Annual report and accounts 2023
Overview
I am pleased to introduce our Nomination Committee
Report for 2022/23, which explains the Committee’s
focus and activities during the year, which by anyone’s
standard has been a challenging period for Directors and
management. The focus of the Committee has continued
to be on seeking to ensure that the size, composition and
structure of the Board are appropriate for the delivery of
the Group’s strategic objectives and dealing with the many
challenges it is facing. A task not made any easier by the
fluctuating progress with obtaining an approved Scheme
of Arrangement over the period and the commencement
ofwind down from March 2023.
Committee composition
I have been Chair of the Nomination Committee
throughout the review period. The members of the
Committee during the year were Jonathan Roe, who acted
as Chair, Michael Bartholomeusz, Maria Darby-Walker
andJerry Low. The year saw considerable change to the
Committee membership. The changes initially resulted
from the Board’s desire to increase the differentiation
between the various Committee memberships. Following
Jerry Loy’s appointment, Michael Bartholomeusz stepped
down from the Committee. Following the announcement
that Amigo had moved into wind down, both Jerry Loy
andMaria Darby-Walker resigned from the Board and the
Nomination Committee. The Committee currently consists
of Jonathan Roe and Michael Bartholomeusz, who was
co-opted to the Committee upon the resignation of Jerry
andMaria. All the current Committee members are
considered by the Board to be independent.
Roles and responsibilities
The key responsibilities of the Nomination Committee are
to identify, evaluate and nominate candidates for appointment
to the Board, to review regularly the structure, size and
composition (including skills, knowledge and experience)
of the Board and to make recommendations to the Board
with regard to any adjustments that are deemed necessary.
The Committee is also responsible for considering the
Company’s succession plans for Board members and
senior management, taking into account the challenges
and opportunities facing the Company and the skills and
expertise that are needed on the Board in the future. The
Committee is responsible for reviewing membership of
theBoard’s Committees to ensure sufficient resource is
available for the Board Committees to operate effectively.
Committee members
Members at the year end Meetings Attendance
Jonathan Roe

 
Michael Bartholomeusz

 
Members during the year
Maria Darby-Walker

 
Jerry Loy

 
1 Jonathan Roe was a member throughout the year.
2 Michael Bartholomeusz stepped down as a member of
theCommittee on 3 October 2022 but was re-appointed
on27March 2023.
3 Maria Darby-Walker was a member throughout the year until
shestood down on 27 March 2023.
4 Jerry Loy was appointed as a member on 3 October 2022
andstood down as a Director on 27 March 2023.
Focus areas for 2023
•
Maintenance of the Board with the appropriate
skillset to manage the orderly wind down of the
Amigo businesses.
•
Replacement of the CEO, when Danny Malone
completes serving out the notice period on his contract.
Text to be supplied
Jonathan Roe
Chair of the Nomination Committee
51
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Key activities of the Nomination Committee
inthe year
The Committee held seven meetings during the year.
Attendance at these meetings by the Committee members
is shown in the table on this page.
This year has not been without its challenges for the
Committee. Key activities during the year included:
•
reviewing the composition of the various Board Committees;
•
supporting the appointment of Danny Malone as CEO,
and Kerry Penfold, as CFO; and
•
reviewing the skill set of the Board and senior
management and initiating a training programme to
meet identified training requirements, particularly in
relation to the maintenance of the Senior Managers and
Certification Regime, treatment of preferential creditors
and Schemes of Arrangement.
The issues of succession planning and Board structure
will remain the ongoing focus of the Committee during the
course of the forthcoming year with the commencement
ofwind down.
The Committee had been actively seeking to build
the Board and identify skills shortages and had made
significant headway in attaining the targets on Board
gender and ethnicity but was hampered in its ability to
meet the continuing requirements following the start of
wind down. Maintaining the skills composition will be
akeyconsideration as we develop over the next year.
The Group has asked all Directors to stand for re-election
at this year’s AGM. This is in accordance with best practice
identified in the UK Corporate Governance Code. On
15May 2023, Danny Malone resigned as Director and
CEO. Danny is currently working out his six months’
periodof notice.
The Committee completed an external evaluation of
the Board this year, using the Corporate Governance
Institute of UK and Ireland. The Committee considered
theoutcomes of the review in November 2022.
Diversity
The Company’s policy is not to discriminate against any
individual on any basis. The Board members are aware
from their own experiences that a wider, diverse pool of
talent is more likely to result in the Company making better
informed decisions. The Board has actively sought to meet
the objective of trying to recruit more women and individuals
from diverse backgrounds for both senior management and
Director roles and had made significant headway in attaining
the listed company targets for Board gender and ethnic
diversity. Unfortunately, the commencement of wind down
resulted in resignations to the Board and given the size of
the remaining Board, the Committee will find it difficult to
prepare plans to bring the Company back into line with the
diversity targets for listed companies for the Board and
senior management team.
The Board currently consists of only four people. The
Board believes that Amigo would be best served by
maintaining a diverse Board with a suitable range of skills,
experience and knowledge across all the Board members
but given the wind down is underway, the Board does not
believe it is practicable or appropriate to actively expand
the Board at this time.
Jonathan Roe
Chair of the Nomination Committee
27 July 2023
Text to be supplied
Corporate governance
52
Amigo Holdings PLC
Annual report and accounts 2023
Risk Committee report
Specifically,as a Committee we have taken a closer look at
areas such as responsible lending (including affordability)
and the treatment of vulnerable individuals. In relation
to lending to customers we have taken into account the
regulatory landscape when developing a strategy for the
responsible return to lending, albeit, that return proved
short lived.
The Committee has also extensively monitored the
Group’sliquidity position during the year, to ensure that
theGroup maintained adequate access to funds and
astrong cash position. At the end of the year, the Group
had net unrestricted cash of £62.4m.
The Committee has continued to enhance and embed an
appropriate risk culture as the Group evolves. Areas of focus
have included building a robust platform for the return to
lending, business continuity planning, consideration of
operational resilience and data and cyber risk.
The Committee reviewed and updated the Company’s
riskappetite statement for formal approval by the Board.
The Committee oversaw regular reviews of the risk report
and quarterly credit loss forecasts.
One of the areas of uncertainty facing the business was
thedeteriorating underlying economic conditions, the
returnof significant inflationary pressures and the continuing
fallout from Covid-19 and Brexit. This deterioration has had
a significant adverse effect on many of our stakeholders,
especially our customers and employees. In this regard,
we have considered the appropriate scenarios and stress
tests that should be applied and the potential impact
onthebusiness.
Increasingly over the year the Committee, in tandem
with the Audit Committee, considered the implications
of the complaints situation. The Committee had to also
consider the implications of the move into the fallback
Scheme following the failure to meet the conditions
precedent of the Scheme of Arrangement approved by
the Court in May2022. This presented real challenges
for the Committee and the Board to consider, with the
implicationson solvency and viability.
Moving forward, the Committee will continue to monitor
and assess the risks facing the Group and provide valuable
insight into what is looking to be a challenging operating
environment as it completes the wind down. Iwould like
to thank my colleagues and members of the Committee
for their hard work and commitment over the last
twelve months.
Risk Committee
The principal purpose of the Committee is to assist the
Board in its oversight of risk within Amigo, with particular
focus on risk appetite, risk profile and the effectiveness
ofAmigo’s internal controls and risk management systems
from both the Company’s and customers’ perspective.
Overview
I am pleased to present the Risk Committee Report.
The Committee’s key role is to provide oversight of and
advice to the Board on the management of risk across
theorganisation, balancing the agenda between risk
exposure and the future risk strategy of the Group.
The Committee had a full agenda in the year which
involved oversight of ongoing risks associated with
lending to Amigo’s customers, managing the impact of
a deteriorating economic backdrop, residual Covid-19
issues and Covid-19 forbearance on the business, and
dealing with the consequences of historic complaints
activity against Amigo, including the possible impact and
subsequent fallout arising from the move into the fallback
Scheme of Arrangement, together with resolving and
settling the investigations by the FCA.
A key part of the Committee’s work was to oversee the:
continued development of an enhanced risk management
framework, building on a detailed root cause analysis
exercise performed to identify the reasons for past
failings; and the assessment of impairment across the
various loan cohorts. We also had a full regulatory agenda.
Committee members
Member Meetings Attendance
Michael Bartholomeusz

 
Jonathan Roe

 
Members in the period
Maria Darby-Walker

 
Jerry Loy

 
1 Michael Bartholomeusz was Chair and a member throughout
the period.
2 Jonathan Roe was a member throughout the period.
3 Maria Darby-Walker was appointed on 12 October 2020
andstepped down from the Committee on 7 October 2022.
4 Jerry Loy was appointed to the Committee on 3 October 2022
and stood down from the Committee on 27 March 2023.
Focus areas for 2023
•
Review of emerging risks.
•
Enhancement of the policies and standard framework
•
Management of risk management and reporting
system and the wind down of CAMMS system.
•
That risks associated with the wind down and
cessation of lending are properly considered
and overseen.
•
That appropriate actions are taken to mitigate
risks to customers and the firms arising from
aworsening economic environment.
Text to be supplied
Michael Bartholomeusz
Chair of the RiskCommittee
53
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Membership and attendance
The Committee is drawn from the Non-Executive Directors.
The CEO, CFO, Chief Risk Officer, Chief Restructuring
Officer and Company Secretary normally attend all Risk
Committee meetings. Other interested parties are also
invited to attend Committee meetings, as appropriate.
TheCommittee met 4 times during the year. Attendance
atRisk Committee meetings is set out on page 40.
Cross-membership between each of the Board’s
Committees ensures that all material risks and related
issues are appropriately identified, communicated and
taken into account in the decisions taken by each
Committee and the Board.
Role and responsibilities
The Board has delegated the oversight of risk management
to the Committee, although the Board retains overall
accountability for Amigo’s risk profile.
The Committee’s primary functions include:
•
considering the risks to consumers (conduct) as well
asrisks to the business (prudential);
•
advising the Board on the Group’s overall risk appetite,
tolerance and strategy taking into account the factors
influencing the approach to risk;
•
considering the risk policies in place and ensuring they
form part of a robust assessment of the risks including
those affecting our business model, future performance,
solvency, liquidity, operational continuity, business
continuity and business disaster recovery;
•
regularly reviewing and approving the parameters used
in measuring risk and the methodology used to assess
such risks;
•
considering fraud matters and ensuring procedures
arein place to deal with applicable legal and regulatory
requirements including consideration of anti-money
laundering practices and customer and conduct risk; and
•
reviewing the activities of the Chief Risk Officer
including considering appointment and removal.
Key activities of the Risk Committee
during2022/23
During the year, the Committee reviewed all material,
financial, operational and compliance controls, identified
key risks affecting the Company and reassessed and
confirmed the Group’s risk appetite statement and target
residual ratings for each of the principal risks. The principal
risks are set out on pages 29 to 33.
The Committee has focused on ensuring that appropriate
risk management strategies were implemented, monitored
and reported effectively within the overarching Group-wide
risk management framework. The Committee continued
to develop an effective enterprise risk management
framework, improving the detailed analysis of the principal
risks faced by the business. During the period the
Committee focused on the following matters:
•
in consideration of the changed regulatory
environment,the need for improved risk maturity
andculture assessments development and review
ofthe risk management framework and risk appetite
aspart of a risk transformation exercise, including
improvedKRI identification and management;
•
the ongoing review and identification of action plans
put in place to mitigate risks, resulting in strengthened
three lines of defence, including the development and
implementation of a new Group wide risk management
systems (called CAMMS);
•
considering the assurance plan, including the
management of overdue audit and assurance issues;
•
considering the conduct risks, identified through a
Root Cause Analysis, impacting the return to lending
by Amigo, with enhanced monitoring of vulnerability,
affordability, responsible lending and arrears
management issues;
•
considering the impacts of inflation, worsening
economic situation and legacy issues from Covid-19
andthe application of Covid-19 forbearance measures;
•
considering the impacts and implications arising out
ofany non-lending related complaints activity;
•
a regular review of the loan loss forecast data for input
into provisioning under IFRS 9 for the impairment rate;
•
considering financial crime and fraud related risks; and
•
review of Operational Resilience Report and monitoring
people attrition rates.
Areas of focus in 2023/24
The Committee will continue to monitor the Company’s
risk management framework during 2023/24. Key tasks
include: monitoring the risks associated with wind down;
review emerging risks that may impact on the orderly
wind down of the business; the maintenance of the
policies and standard risk framework; the continued
management and reporting through the CAMMS system;
and that appropriate actions are taken to mitigate risks
to customers and the firm arising from a worsening
economic environment. Ensuring the merged Risk and
Audit Committees address and maintain appropriate
reporting lines.
Michael Bartholomeusz
Chair of the Risk Committee
27 July 2023
Text to be supplied
Corporate governance
54
Amigo Holdings PLC
Annual report and accounts 2023
Directors’ remuneration report
Business context for 2022/23
The fifth year of Amigo as a public company has continued
to be a period of significant change and major challenge
for the business. At a headline level many of the financial
measures were improved substantially by the sanctioning
of the New Business Scheme in May 2022. As noted in the
Financial Review on pages 24 and 25, the move into the
Fallback Scheme facilitated a fundamental change to the
business, as it moved into an orderly wind down. This change
in approach continued the trend that had seen the business
reduce in size in the year to 31 March 2023: the net loan book
reduced by 67.1% to £45.4m (FY22: £138.0) and Revenues fell
by 78.4% year-on-year to £19.3m (FY22: £89.5m), reflecting
the loan book reduction with limited new lending over the
period, which terminated in March 2023.
Director changes in the period
As announced on 6 June 2022, Danny Malone
wasappointed as a Director and CFO. Gary Jennison
stepped down as a Director and as CEO of the Company
on 23September 2022. On the same date, following the
resignation of Gary Jennison, Danny Malone was appointed
as CEO and Kerry Penfold was appointed as aDirector
andas CFO, both subject to FCA approval.
Details regarding the terms of Gary Jennison’s departure
and the new remuneration terms for Danny Malone and
Kerry Penfold are set out in this report. All of these terms
were agreed within the scope of the Company’s current
Directors’ Remuneration Policy.
Remuneration decisions and outcomes
for2022/23
The Committee’s activities focused on the application of
the Policy in the year including adjustments to base pay
with effect from 1 April 2022 and the formal details of any
bonus plan, the outcomes of which are described below,
as well as awards under the LTIP.
As noted above, the change in CEO and CFO required
theCommittee to consider the appropriateness of the
existing remuneration arrangements for the departing
CEO, the terms offered as part of the departure process,
and the terms for Danny Malone and Kerry Penfold.
TheCommittee was also asked to consider the terms for
JerryLoy, who was appointed as a Non-Executive Director
on 3October 2022. There was no compensation paid to
Maria Darby-Walker and Jerry Loy when they stepped
down as Directors in March 2023.
When making Board level remuneration decisions the
Committee must keep in mind the need to have a sufficient
numbers of Directors who satisfy the regulatory requirements
for relevant skill and experience, together with a history
ofacceptable conduct. The pool of suitable candidates is
therefore small, and further limited to only those prepared
to take on the legal and regulatory responsibilities of a
company in Amigo’s circumstances, with the associated
personal financial and reputational risks.
Committee members
Member Meetings Attendance
Jonathan Roe

 
Michael Bartholomeusz

 
Maria Darby-Walker

 
1 Jonathan Roe was a member throughout the year.
2 Michael Bartholomeusz was a member throughout the year.
3 Maria Darby-Walker was a member and Chair of the Committee
throughout the year until she stood down on 27 March 2023.
Focus areas for 2023
•
Maintaining appropriate remuneration levels for
the senior executives during an orderly wind down
of the business.
•
Implementation of appropriate recommendations
resulting from the benchmarking exercise.
Report from the Chair of the
RemunerationCommittee
I am pleased to present the Remuneration Committee
Report for the year ended 31 March 2023. The Committee
has a number of accountabilities including responsibility
for assessing and administering the Directors’
Remuneration Policy (“Policy”), reviewing and, where
appropriate, endorsing senior management remuneration
and oversight of the Group Remuneration Policy.
In addition to this letter and a “Remuneration at a glance”
section, this report consists of two key sections as
required by the reporting regulations:
•
Section 1 – Annual Report on Remuneration: this section
details the remuneration receivable by our Executive
and Non-Executive Directors in respect of 2022/23; and
•
Section 2 – Summarises how we intend to implement
theRemuneration Policy in 2023/24.
This Remuneration Report has been prepared in
accordancewith the provisions of the Companies Act 2006
and Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment) Regulations
2013 (the “Regulations”). This report meets the requirements
of the UK Listing Rules and the Disclosure Guidance and
Transparency Rules. The information set out below represents
auditable disclosures referred to in the Auditor’s Report
onpages 81 to 87, as specified by the UK Listing Authority
and the Regulations.
Text to be supplied
Jonathan Roe
Interim Chair of the Remuneration Committee
55
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Throughout the year the Committee was actively involved
in reviewing remuneration for senior management
appointments below Board level. The Committee had to
balance the financial position of the business generally
with the need to recruit and retain the wider team. All
against a backdrop of a deteriorating economic situation,
and at the end of the year, the disruption caused by Amigo
entering into wind down. The Committee agreed a 5% cost
of living rise to all staff below the Executive Director level.
There were no new awards of LTIP during the year to
Executive Directors.
Under the current Policy, the CEO and CFO are technically
eligible for consideration of a bonus award up to 150%
of base salary. Given the Company is in wind down the
Committee and Board have agreed that no bonus will be
payable to current Executive Directors.
Gary Jennison was eligible for a bonus for his work, as
CEO, to deliver a Scheme of Arrangement. As detailed
elsewhere in the report, he was awarded a bonus
of £150,000. The payment of the bonus was made
subsequent to the year end.
Directors Remuneration Policy at the 2023 AGM
At the 2023 AGM, shareholders will be asked to approve
the Directors’ Remuneration Report.
The Directors’ Remuneration for the year will have been
based on the Directors’ Remuneration Policy that was
approved at the 2022 AGM.
The resolutions to approve the Directors’ Remuneration
Report and the Directors’ Remuneration Policy were
approved at the 2022 AGM held on 28 September 2022,
but not without a significant percentage of the votes cast
being cast against the two resolutions.
The Committee accepted, following representation
from shareholders, that the significant reasons for the
negative votes against Directors’ remuneration and the
new policy were the ongoing general poor performance
of the business, particularly reflected in the share price,
and the level of remuneration paid and payable to the
previous CEO.
Gary Jennison joined at a critical time in September
2020. He inherited the remuneration package agreed
with the previous CEO elect. The commercial backdrop
when Gary came out of retirement to lead the business,
was deeply unappealing: an overwhelming number of
complaints pushed through to Amigo by aggressive claims
management companies, with the increasing interest by
the regulator in past conduct and a changing environment
for future lending to customers serviced by Amigo. Gary
was instrumental in pushing all parties towards delivering
a Scheme of Arrangement that was palatable to our
customers, our regulators, and the High Court.
Agreement on the terms of the Scheme allowed the
management team to focus on developing RewardRate,
the product that it was hoped would lead Amigo’s
re-emergence as a viable, valued and respected component
of the consumer credit market servicing those customers,
frequently overlooked by the prime credit providers.
When Gary stepped down, the Board and its advisers
believed it important that Amigo presented a long term
management team for investors to back and that the
managed handover to the new CEO was orderly, in order
to maximise the chances of success for RewardRate and
the required fund raise. The three month handover period
and £30,000 compensation for loss of office were all
made in this context. The £150,000 bonus was awarded
for getting the revised Scheme approved by the High
Court and setting the business up for the next stage
inits growth.
Given that Amigo entered into the fallback solution on
23 March 2023, the Committee and Board determined
that it was not an appropriate use of time and creditors
resources to engage further with third-party remuneration
consultants to update the Directors’ Remuneration
Policy. The Committee agreed it would be appropriate
to not increase Danny Malone’s remuneration when he
changed role from the CFO to CEO. Furthermore, the
notice period for the CEO was reduced to 6 months from
12 months. The basic remuneration for Kerry Penfold
increased to £220,000 when she was appointed CFO,
which is approximately 61% of the previous incumbent’s
remuneration. This had the effect of reducing the
combined remuneration of the current CEO and CFO
toc.60% of those previously carrying out the roles.
Since 1 April 2023, my own basic annual remuneration as
Chair of the Board has reduced to £90,000, from £175,000,
and that of the remaining NED has been reduced to
£60,000, from £94,500. Furthermore, the number
ofNEDshas been reduced from four to two directors.
These changes, made in conjunction with the decision
to not award any bonuses to Executive Directors whilst
Amigo remains in wind down, has reduced the base cost
of the Directors by c.47% going forward. The Committee
believes this better matches the ongoing costs to the wind
down of the business.
We are happy to receive feedback from shareholders at
any time in relation to our remuneration policies and hope
to receive your support for the resolutions referred to
above at our forthcoming AGM. I will be available at the
AGM to answer any questions you may have.
I hope that you find the report informative and that it
provides a clear rationale for the decisions that the
Committee has taken.
Jonathan Roe
Chair of the Remuneration Committee
27 July 2023
Text to be supplied
Corporate governance
Directors’ remuneration report continued
56
Amigo Holdings PLC
Annual report and accounts 2023
Section 1 – Annual Report on Remuneration
1.1 Committee composition during the year
During the year, the Committee comprised:
•
Jonathan Roe, Michael Bartholomeusz and
MariaDarby-Walker. Maria was Chair of the Committee
throughout the year until 27 March 2023. Jonathan
tookover the role of Chair from that date.
There were eight Committee meetings held during the year;
details of attendance are shown in the table on page 40.
All members serving on the Committee in the year are
considered to be independent for the purposes of the UK
Corporate Governance Code. The Company Secretary
generally acts as secretary to the Committee unless
apersonal conflict of interest is apparent.
1.2 Activities during the year
During the year, the Committee has:
•
reviewed and approved the Directors’ Remuneration
Report in the Annual Report and Accounts for the years
ended 31 March 2022 and 2023;
•
discussed and approved remuneration for Danny Malone
as CFO and then CEO and Kerry Penfold as CFO;
•
considered the exit terms for Gary Jennison as CEO; and
•
approved terms of appointment for senior management
joining the business.
1.3 Advisors and other attendees
During the year, the Committee has been supported by the
Chief People Officer and the Company Secretary. The CEO
and CFO also attend Committee meetings on occasion, at
the request of the Committee; but they are never present
when their own remuneration is discussed. In carrying
out its responsibilities, the Committee is authorised to
obtain the advice of external independent remuneration
consultants and is solely responsible for their appointment,
retention and termination. During the year the Committee
continued to use FIT Remuneration Consultants LLP to
provide advice, to consider the appropriate response
to the large negative vote on Remuneration related
resolutions at the 2022 AGM, and to start work on a
benchmarking exercise for Directors’ remuneration.
The Committee considers FIT Remuneration Consultants LLP
advice to be independent and impartial, and is also satisfied
that the team does not have connections with the Company
that might impair its independence. The Committee
considered the potential for conflicts of interest and judged
that there were appropriate safeguards against such conflicts.
This brief section summarises our remuneration
principles which form the foundation for our Policy.
Remuneration principles
The Committee seeks to support the delivery of the
Group’s strategy through establishing appropriate
remuneration arrangements. Up until 23 March 2023
the goal was to build a strong long-term sustainable
business by delivering sales growth and sustainable
shareholder returns through the delivery of transparent
products to our customers by colleagues exhibiting
the best practice and service excellence. Since the
announcement that Amigo would be wound down, the
focus of the Committee is ensuring the orderly wind
down of the business.
Consequently, the overall Remuneration Policy
of the Committee, and of the Board, is to provide
remuneration packages for Executive Directors and
other senior managers within Amigo which:
•
Retain – enable Amigo to retain management of
ahigh calibre with the necessary customer service
focus, and financial and regulatory credentials
required to deliver the orderly wind down of the
business. Remuneration arrangements are set at
levels appropriate to achieving this goal without
paying more than is considered necessary. The
Committee considers market data at appropriate
intervals to inform the positioning of executives’ pay,
without seeking to “match the median”, to identify
and mitigate the risk of losing strong performers.
•
Link variable pay to performance – provide
management with the opportunity to earn
competitive remuneration through arrangements
that are designed to support delivery against key
strategic objectives. Performance measures are
aligned with strategic goals so that remuneration
arrangements are transparent to executives,
shareholders and other stakeholders.
•
Align executives with stakeholders – ensure
management’s interests are aligned with those
ofthe stakeholders.
•
Drive sustainable ethical performance –
remuneration arrangements are designed to support
the sustainable delivery of ethical performance and
to deliver without excessive risk taking.
Remuneration at a glance
Text to be supplied
57
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Implementation of the Remuneration Policy in 2022/23
1.4 Single total figure of remuneration for Executive Directors (audited)
The following table sets out the total remuneration for Executive Directors and Non-Executive Directors for 2022/23 with
prior year comparatives.
Danny Malone

Kerry Penfold

Gary Jennison Mike Corcoran

/ / / / /
Base salary

, , ,,

, ,
Bonus/ex-gratia settlement — — ,

— —
Benefits

,  , , ,
Pension

— , — — ,
Total , , ,, , ,
Total fixed remuneration , , ,, , ,
Total variable remuneration — — , — —
1 This represents cash paid or receivable in respect of the period and includes payment in lieu of notice where applicable.
2 This represents the value, grossed up for tax, of all benefits paid or receivable in respect of the period including: accommodation costs, use
ofhotels, etc.
3 This represents pension contributions paid by the Group on behalf of the individual, not inclusive of payments in lieu of pension. Salary in lieu of pension,
included in the base salary line, was paid for the following individuals: Gary Jennison (£22,500; 2022 was £30,000) and Danny Malone (£14,613).
4 Danny Malone was appointed as a Director of the Company on 6 June 2022 and announced his resignation on 15 May 2023, subject to serving out his
notice period of 6 months.
5 Kerry Penfold was appointed as a Director of the Company on 23 September 2022.
6 Gary Jennison resigned as a Director and CEO on 23 September 2022. The amounts above includes £600,000 of accrued payments in lieu of notice,
of which all was paid in the period to 31 March 2023.
7 The bonus for Gary Jennison has been paid subsequent to the year end as the payment was subject to the approval of the FCA under the terms
oftheAsset Voluntary Requirement. The total bonus payable amounted to £150,000 as bonus and £30,000 as compensation for loss of office.
8 Mike Corcoran was appointed as a Director of the Company on 11 November 2020. He ceased to be a Director of the Company on 19 February 2022.
The amounts above includes £167,918 of accrued payments in lieu of notice, of which £38,370 was paid in the period to 31 March 2022.
1.5 Changes to Executive Directors
Gary Jennison resigned as a Director and CEO on 23 September 2022.
Danny Malone was appointed as a Director and CFO on 6 June 2022. He became CEO on 23 September 2022, on an
annual basic salary of £355,000. This was considered to be reasonable in light of his experience in the sector and with
companies going through significant change. Danny is entitled to receive a pension contribution of 5% of basic salary
and standard benefits, in line with the Policy. Danny’s contracted maximum annual bonus opportunity is 60% of salary in
accordance with the Policy but in light of the challenging financial situation and the move into fallback, the Board agreed
that no bonus would be payable. Danny has been eligible for reimbursement of costs incurred by him for a period of two
years or until he relocates to Bournemouth.
On 15 May 2023, Danny resigned his role as CEO and Director, subject to completion of his contractual period of notice.
As at the date of this report, he is serving out the remainder of his contract, receiving his monthly salary and associated
benefits, including pension, in line with his contractual entitlements, which will run until 15 November 2023.
Kerry Penfold was appointed as CFO, subject to FCA approval, on an annual basic salary of £220,000. This was
considered to be reasonable in light of her experience in the sector and with companies going through significant
change. Kerry is entitled to receive a pension contribution of 5% of basic salary and standard benefits, in line with the
Policy. Kerry’s maximum annual bonus opportunity is 60% of salary in accordance with the Policy but in light of the
challenging financial situation and the move into fallback, the Board agreed that no bonus would be payable.
1.6 Benefits (audited)
Benefits include payments made in relation to life assurance.
1.7 Pension (audited)
Pension payments represent contributions made either to defined contribution pension schemes or as a cash allowance.
The CEO and CFO are entitled to receive a contribution of 5% of base salary in alignment with the wider UK employee
population, and/or cash in lieu in the event of contributions in excess of agreed HMRC contribution rates or lifetime
allowance. The amounts actually received by the CEO and CFO during the year are set out in section 1.4 above.
NoDirector is entitled to a guaranteed pension in the event of severance or early retirement.
Text to be supplied
Corporate governance
Directors’ remuneration report continued
58
Amigo Holdings PLC
Annual report and accounts 2023
1.8 Bonus (audited)
No bonus was considered for Danny Malone or Kerry Penfold for the period of their employment. Further details of the
bonus scheme are set out on page 64.
Measure
Weighting
%
Our strategic priorities %
Our customers and conduct %
Our people and culture %
Our financial performance %
Individual %
Total %
All financial performance targets for the year were withdrawn in the previous year and not re-instated given the changes
in personnel and the cessation of lending activity over the review period. The Company operated, until June 2023,
from a dual office location based in Bournemouth and the Board does not consider the activities of Amigo to be highly
carbon intensive, given its largely e-comms driven communication strategy and in-house environmentally sensitive
approach. The Committee therefore does not believe it is beneficial to include a benchmark for environmental impact
asa remuneration metric.
Measure
Weighting
%
Performance
%
Our strategic priorities % n/a
Our customers and conduct % n/a
Our people and culture % n/a
Our financial performance % n/a
Individual % n/a
Total % n/a
1 All performance targets were withdrawn for the year due to the financial situation of the Company throughout the period.
Director
Maximum bonus
(% of salary)
Actual bonus
(% of salary)
Actual bonus
£
Bonus
deferred
into shares
%
Danny Malone %

% — %
Kerry Penfold %

% — %
Gary Jennison % % £,

%
1 Although the maximum bonus % per contractual terms is 60% of base salary, the Executive Directors waived any right to bonus in the period.
2 Bonus payable for delivering a viable Scheme of Arrangement for the Amigo business.
1.9 Long-term incentives – Awards made in 2022/23 (audited)
No awards of LTIP were made in the year to Executive Directors.
1.10 Other share awards (audited)
Save As You Earn (“SAYE”) and Share Incentive Plan (“SIP”)
No Director participated in either of the SAYE or SIP during the year.
Shareholding guidelines
The Committee believes that it is important that Executive Directors’ interests are aligned with those of our shareholders.
Executive Directors are encouraged to build up and retain shares with a value equal to 200% of their annual base salary.
This requirement was not enforced in the year given the financial position of the Company.
Section 1 – Annual Report on Remuneration continued
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These figures include those of their spouse or civil partner and infant children, or stepchildren, as required by section
822 of the Companies Act 2006. The shareholdings guideline is 200% of base salary for the CEO and CFO. Under the
Remuneration Policy each Director has five years in which to meet the shareholding guideline threshold.
1.11 Outside appointments
Amigo recognises that its Executive Directors may be invited to become Non-Executive Directors of other companies.
Such Non-Executive duties can broaden experience and knowledge which can benefit Amigo. Subject to approval by
theBoard, Executive Directors are allowed to accept Non-Executive appointments and retain the fees received, provided
that these appointments are not likely to lead to conflicts of interest.
1.12 Payments to former Directors
Gary Jennison resigned as CEO and as a Director on 23 September 2022. He continued to be paid in line with his
service contract, receiving his monthly salary and associated benefits, including pension, until 31 December 2022.
At termination on 31 December 2022, he was paid £600,000 as settlement of the twelve month notice period on his
contract. Subsequent tothe year end a bonus of £150,000, together with an ex-gratia payment of £30,000, was paid
toGary Jennison.
Danny Malone resigned as CEO and as a Director on 15 May 2023. As at the date of approval of the Annual Report and
Accounts he is serving out the remainder of his service contract, receiving his monthly salary and associated benefits,
including pension, in line with his contractual entitlements, which will run until 15 November 2023.
No other payments were made to former Directors during the year in respect of their employment by the Company.
1.13 Payments for loss of office
Gary Jennison resigned as CEO and Director on 23 September 2022, but remained employed until 31st December 2022
to provide transition support to the new CEO, during which time he was entitled to receive salary and pension payments
amounting to £171,818. Under the terms of his service contract he also received £600,000 payment in lieu of notice. As at
31st March £30,000 was accrued as compensation for loss of office; this was subsequently paid post year end following
the receipt of approval from the FCA required under the Asset Voluntary Requirements. Amigo made no other payments
within the scope of the disclosure requirement to any past Director of Amigo during the financial year; we have no de
minimis threshold for such disclosures.
1.14 Executive Director service contracts
Contracts for Directors are designed to clearly lay out the responsibilities of the Directors to the Company, specific areas
of expertise required to be demonstrated and the terms of their contractual entitlement. The contracts will include details
of specific performance or objectives if appropriate at the time of appointment.
Due to the specific challenges facing the Company when the contracts for the current CEO and CFO were put in place,
the Committee did not deem it appropriate to include specific corporate performance objectives within the service
contracts other than to work to further the long-term interests of stakeholders.
Notice periods are set at a period appropriate to the function and the need to maintain consistency for top level
leadership across the Group. The Committee will not likely issue a service contract for more than twelve months.
Theservice contract for Danny Malone, CEO, provided for a notice period of six months, by the Company or the individual.
Theservice contract for Kerry Penfold, CFO, provides for a notice period of six months, from the Company or the individual.
Executive Directors’ service contracts allow for termination with contractual notice from the Company or termination by
payment in lieu of notice. Payment in lieu of notice is limited to base salary for the notice period. There is no contractual
entitlement to bonus or LTIP awards in respect of the notice period. Copies of service contracts are available for
inspection at the registered office.
1.15 Non-Executive Director letters of employment
Non-Executive Director appointments are for three years subject to annual review and notice. All Directors are required
to seek annual re-election by shareholders at the Company’s AGM.
Non-Executive Directors are not entitled to compensation in relation to leaving the Board of Directors. Copies of service
contracts are available for inspection at the registered office.
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1.16 Unexpired term of service contract for Directors at AGM re-election
Director Term of service
Jonathan Roe  months
Michael Bartholomeusz  months
Danny Malone (notice period being served with termination date on  November ) <  months
Kerry Penfold  months
The unexpired term of service contracts is based on all Director contracts being on a rolling basis unless notice has
been given.
1.17 Statement of consideration of employment conditions elsewhere in the Company
When making decisions in relation to executive pay the Committee takes into consideration pay and conditions across
the wider workforce.
The Group operates different bonus plans with different performance measures and targets across the business
forthewider workforce. Bonus payments are made quarterly, half yearly or annually, depending on the job role.
1.18 Statement of consideration of shareholder views
The Committee is interested in the views of all of its shareholders and intends to retain an open dialogue
with shareholders on remuneration issues. The Committee welcomes any feedback from our shareholders
onremuneration matters.
1.19 Single total figure of remuneration for Non-Executive Directors
Non-Executive Director single figure comparison (audited)
From 1 April 2023 the remuneration for the two remaining Non-Executive Directors was changed to reflect that the
Company had moved into wind down. The basic remuneration for Jonathan Roe reduced from £175,000 per annum to
£90,000. Jonathan will be paid up to £1,500 per day for each day worked in excess of 22.5 days per quarter, up to a total
maximum total Director fee of £175,000 p.a. The basic remuneration for Michael Bartholomeusz reduced from £94,500
p.a. (being £70,000 basic remuneration, £12,500 for Chairing the Risk Committee and £12,000 for acting as interim Chair
of the Audit Committee) to £60,000 per annum. Michael will also be paid up to £1,500 per day for each worked in excess
of 10 days per quarter, up to a maximum total Director fee of £94,500 p.a.
/
Jonathan
Roe
Maria
Darby-Walker
Michael
Bartholomeusz Jerry Loy
Fees

, , , ,
Bonus — — — —
Benefits , , , 
Pension — — — —
Total , , , ,
Total fixed remuneration , , , ,
Total variable remuneration — — — —
Section 1 – Annual Report on Remuneration continued
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/
Jonathan
Roe

Maria
Darby-Walker

Michael
Bartholomeusz

Fees

, , ,
Bonus — — —
Benefits , , ,
Pension — — —
Total , , ,
Total fixed remuneration , , ,
Total variable remuneration — — —
1 This represents cash paid or receivable in respect of the period.
2 Since 1 July 2021, Michael Bartholomeusz receives an additional £1,000 per month for acting as Interim Chair of the Audit Committee.
MichaelBartholomeusz has been a Director throughout the period.
3 Jonathan Roe has been a Director throughout the period.
4 Maria Darby-Walker had been a Director throughout the period until she stood down as a Director on 27 March 2023.
5 Jerry Loy had been a Director from 3 October 2022 until he stood down as a Director on 27 March 2023.
1.20 Waiver of emoluments
No Director waived their emoluments in the review period.
1.21 Non-Executive Director shareholding as at 31 March 2023
Class of share  
Jonathan Roe Ordinary shares of .p each , ,
Michael Bartholomeusz Ordinary shares of .p each , ,
These figures include those of their spouses, civil partners and infant children, or stepchildren, as required by section 822
of the Companies Act 2006. There was no change in these beneficial interests between 31 March 2023 and 26July 2023.
Non-Executive Directors do not have a shareholding guideline but they are encouraged to hold shares in the Company.
1.22 Performance graph and table
The chart below tracks the hypothetical return on a £100 investment in Amigo Holdings PLC made on listing in July 2018
and measured as of 31 March 2023. TSR has been measured against the FTSE 250 excluding Investment Trusts.
FTSE 250 ex invest trust Amigo TSR
£
140
120
100
80
60
40
20
0
Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 Jun 2020 Sep 2020Dec 2020 Mar 2021 Jun 2021 Sep 2021 Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Mar 2023 Jun 2023
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1.23 Remuneration of the CEO (audited)
The table below sets out the CEO’s total remuneration figure over the review periods, valued using the methodology
applied to the single total figure of remuneration.
Year CEO
Total single figure
of remuneration
£
Annual bonus outturn
as a % of maximum
LTIP outturn
as a % of maximum
/ Gary Jennison , % n/a
/ Gary Jennison ,, % n/a
/ Danny Malone , % n/a
1.24 Change in CEO remuneration compared to employees (audited)
The table below sets out the percentage change in base salary, bonus and taxable benefits for the CEO compared with
the average percentage change for employees. The figures for the CEO compare the 2022/23 CEO remuneration for
Gary Jennison (from 1 April 2022 to 22 September 2022) and Danny Malone (from 23 September 2022 to 31 March 2023)
to the CEO remuneration for Gary Jennison (whole of 2021/22).
Annual percentage change from /
Salary Bonus

Taxable benefits
CEO
-%
n/a% -%
All colleagues %

-%

%

1 Calculated based on wages and salaries expense per average number of employees for the period.
2 Calculated based on average bonus expense, including retention payments, per employee for the period. N/a for the CEO as no bonus paid in the
prior period.
3 Calculated based on average taxable benefits expense per employee for the period.
The comparison for the other Executive Director (CFO) has not been provided as it is not considered meaningful; the
previous CFO stepped down in February 2021 and was not replaced on the Board until June 2022 and therefore there
isno comparator figure.
1.25 CEO pay ratio (audited)
Table and explanatory notes
The below table sets out the ratio of pay for the role of the CEO in 2022/23 to the median, 25th and 75th percentile
full-time equivalent remuneration of the Group’s UK employees. In line with the reporting requirements, the figure for
the role of the CEO in 2022/23 includes the pay for Gary Jennison and Danny Malone in the year (the figure for 2020/21
includes the pro-rate pay for Gary Jennison, Hamish Paton and Glen Crawford).
Year Method
th percentile
pay ratio
Median percentile
pay ratio
th percentile
pay ratio
/ Option A (total  pay for role of CEO) : : :
/ Option A (total  pay for role of CEO) : : :
/ Option A (total  pay for role of CEO) : : :
Without the exceptional effect of the termination payments of the previous CEO in the year, using the current CEO’s
annualised payments, the figures as presented in this note would be: 25th percentile 13:1; 50th percentile 11:1; 75th
percentile 8:1.
Option A under the reporting requirements provides the most accurate method of CEO/colleague pay comparison as
itreplicates the single figure table calculation for all colleagues, and has therefore been chosen to identify the reference
colleagues at the median, 25th and 75th percentiles. The reference colleagues’ total pay and benefits have been
calculated from their salary, bonus, benefits and pension eligibility (annualised and pro-rated to full time, respectively)
over the year, and the business is satisfied that these reference colleagues are representative of the relevant percentiles
across the organisation. The reference date for extracting the data was the last day of the financial year, 31 March 2023.
Section 1 – Annual Report on Remuneration continued
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In line with the Regulations, the following table sets out the total pay and benefits for the colleagues undertaking the role
of the CEO, and colleagues at each percentile.
Salary
£
Total pay
and benefits
£
Combined CEO single figure ,, ,,
th percentile , ,
th percentile , ,
th percentile , ,
The ratio reflects the goal of attracting, retaining and motivating staff in a competitive, but not excessive, way under
Amigo’s Remuneration Policy.
1.26 Relative importance of spend on pay (audited)
The table below sets out the total spend on remuneration in the 2021/22 and 2022/23 financial years compared with
distributions to shareholders.
These measures are consistent with the disclosure in last year’s Annual Report and Accounts, and the Remuneration
Committee considers these measures to be relevant and informative indicators of the business’ costs.
/ /
Total spend on employee remuneration £.m £.m
Profit distributed by way of dividends/share buyback £nil £nil
(Loss)/profit before tax (£.m) £.m
Average headcount  
Average (loss)/profit before tax per employee (£,) £,
1.27 Application of the Remuneration Policy in 2022/23
Throughout the year, Amigo has been faced with considerable challenges which has made the task of the Committee
more difficult and these challenges also impacted on shareholders responses when approving the revised Remuneration
Policy at the 2022 AGM. The Remuneration Policy agreed in September 2022 reflected the belief that it would be the
right course of action to plan remuneration policy on the basis that solutions would be found to the funding issues
impacting the business and furthermore, that all the remaining conditions precedent of the Scheme of Arrangement
would be met, including approval of the RewardRate product and settlement of the FCA’s enforcement actions against
the business. In setting the possible maxima for different types of remuneration, the Committee accepted that failure
to achieve all or some of the relevant targets would result in remuneration being held at levels considerably below
that of the maximum amounts laid out in the revised remuneration policy. The Committee believes that there is greater
transparency on remuneration matters.
The Committee considered the need to balance retention, performance and risk when considering remuneration levels,
particularly when considering making awards under the LTIP during the year. The Committee took the view that there
should be no awards of LTIP made in the year. In part this was pragmatic and reflected the fact that the anticipated
recapitalisation of the business would likely result in a substantial issue of new shares. The Committee took the view that
it would be better to align the attitudes and culture of the awardees with those of shareholders, customers and other
stakeholders based on the recapitalised position. It was also recognised by the Committee that it was entirely possible
new investors would have their own expectations on what would be the appropriate targets over future performance
periods. The introduction of non-financial measures in the previous year had been a welcome step to ensure the right
attitudes and culture permeated across the wider business. The Committee believes that the use of non-financial
performance measures will help to deliver a more rounded performance target when matching incentives to the
deliverance of performance and management of the associated risks.
The year has been extremely challenging for all Directors and employees with factors outlined elsewhere in the
Annual Report impacting substantially on the performance of the business generally. A significant factor and challenge
throughout the review period has been the need to retain key staff. This challenge remains a major focus of the entire
management team.
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1.27 Application of the Remuneration Policy in 2022/23 continued
The Committee undertook a review of its Executive and Non-Executive Director remuneration arrangements during the
year, using FIT Remuneration Consultants LLP to help with this exercise. The Remuneration Committee is satisfied that
the Remuneration Policy contained the flexibility to offer appropriately incentivising remuneration to Directors whilst the
business was the process of trying to find solutions to the funding issues facing the business but also to be able to meet
the requirements of wind down. Accordingly the Committee believes there is no benefit to be had from revisiting the
Remuneration Policy unless the circumstances facing the business change substantially.
Clarity, simplicity and other considerations related to the UK Corporate Governance Code
The Remuneration Committee considers that the scorecard-based approach to setting targets and measuring outcomes
provides great clarity in our ability to engage transparently with shareholders and the wider workforce on remuneration
arrangements and that this is complemented by retaining the key elements of the simple structure of our 2022 policy,
market-aligned fixed pay with annual cash, three year performance share incentives and, where appropriate,
post-vesting holding periods.
Risks are managed through a combination of careful setting of performance measures and targets, the ability of the
Remuneration Committee to exercise overarching discretion in assessing outcomes, and the robust malus and clawback
measures reserved in this Policy.
The Remuneration Committee has sought to introduce some degree of predictability and proportionality by setting
complementary performance targets that work alongside the ethos and ambitions of Amigo.
1.28 Statement of implementation of Remuneration Policy in 2023/24
The table below sets out the detail of how we propose to implement the Executive Directors’ Remuneration Policy
in 2023/24.
Unless otherwise stated, the implementation of each element will be in line with the Policy.
Element Summary of Policy implementation in /
Base salary CEO: £355,000
CFO: £220,000
Annual bonus Maximum:
•
CEO: 60% of salary but agreed as 0% whilst Amigo is in wind down
•
CFO: 60% of salary but agreed as 0% whilst Amigo is in wind down
Performance measures and weightings:
•
50% Group financial
•
15% Group customer and conduct
•
15% people and culture
•
10% Group strategic
•
10% individual
Bonus pay-outs will be subject to satisfactory Company and regulatory performance over the period.
Targets will be disclosed retrospectively.
Long-term
incentive
Maximum (in line with Policy):
The Committee has yet to determine the targets for 2023/24 as no awards of LTIP are anticipated whilst
the Company remains in wind down.
Pension 5% defined contribution pension and/or cash in lieu.
Benefits Private medical insurance (individual and family), life insurance (death in service) of 4x basic salary and
income protection, in event of incapacity, up to 66% of base salary, after 13weeks, for the lesser of five
years or state statutory pension age.
The cost of temporary accommodation for the role of CEO was £22,754.
Other key Policy features: shareholding guidelines and post-exit shareholding requirements will operate in 2023/24
asper the Remuneration Policy.
Section 1 – Annual Report on Remuneration continued
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The table below sets out the detail of how we propose to remunerate the Non-Executive Directors in 2023/24:
NED fees
Non-Executive Chair £,
Other Non-Executive Directors £,
Senior Independent Directors £
Risk and Audit Committee Chair £
Remuneration Committee Chair £
1.29 Statement of voting at the 2022 AGM on the remuneration report
Resolution Number of votes for % for
Number of
votes against % against Total shares voted
Number of
votes withheld
Approve the Directors’
Remuneration Report ,, .% ,, .% ,, ,
Approve the Directors’
Remuneration Policy ,, .% ,, .% ,, ,
As noted in the table above, there were significant votes against each of the resolutions to approve the Directors’
Remuneration Report and the new Directors’ Remuneration Policy at the AGM, held on 28 September 2022. As explained
elsewhere in this report, the Committee acknowledges the issues raised by shareholders; namely the high level of CEO
remuneration and the ongoing costs of the other Directors, given the difficulties facing the business. The Committee has
overseen a reduction in the amount paid to the CEO and CFO, when compared to their respective predecessors, and
theChair and the remaining Non-Executive Director have agreed reduced emoluments for 2023/4. As mentioned in the
Chair of the Committee’s overview, the Committee are of the view that it would not be a useful exercise to devote time
tochanging the Directors’ Remuneration Policy, whilst the Company remains in wind down.
Section 2 – Remuneration Policy
The following table summarises Amigo Holdings PLC’s policies in respect of the key elements of our Directors’
remuneration as agreed by shareholders at our 2022 AGM, held on 28 September 2022.
2.1 Policy table for Executive Directors
Element Summary of remuneration policy
Section A Executive Director remuneration
A1: Salary A1.1: Salary operation
A1.1.1: Base salaries are set taking into account:
•
A1.1.1.1: the individual’s skills, experience and current remuneration package;
•
A1.1.1.2: the size and scope of the role;
•
A1.1.1.3: salary and total remuneration levels at similar sized companies; and
•
A1.1.1.4: remuneration of other executives and Group employees.
A1.1.2: Salary increases will generally be effective from 1 April or the Group’s financial year if it changes.
A1.2: Salary opportunity
A1.2.1: There is no set maximum salary; however, increases will generally be in line with or below the
average salary increase awarded to employees.
A1.2.2: Increases may be made above this level in exceptional circumstances, such as where:
•
A1.2.2.1: an individual is brought in on a lower salary with the intention of increasing the salary level
gradually dependent on performance in the role;
•
A1.2.2.2: there is a material increase in the size and scope of the role; and
•
A1.2.2.3: market practice has evolved to mean that the salary is no longer considered to be competitive.
A1.3: Salary performance assessment
A1.3.1: Personal performance will be taken into account when considering base salary increases.
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Section 2 – Remuneration Policy continued
2.1 Policy table for Executive Directors continued
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Element Summary of remuneration policy
Section A Executive Director remuneration continued
A2: Bonus A2: Annual bonus operation
A2.1: Bonus performance is assessed over one year.
•
A2.1.1: Performance will be assessed over one year. Each year the Committee will determine the
appropriate proportion of bonus to be paid in cash and/or to be deferred, reflecting any regulatory
obligations and market practice. Any deferral of bonus will be a deferral in shares for three years,
andnormally subject to ongoing employment.
A2.2: Bonus opportunity
A2.2.1: Maximum bonus:
•
A2.2.1.1: the ongoing maximum annual bonus policy will be limited to 150% of base salary for the CEO
and the CFO. Whilst Amigo remains in wind down the bonus rate will be 0%; and
•
A2.2.2: on-target bonus will pay out at 50% of maximum. The Threshold Bonus Performance Level
will pay out at up to 25% of the maximum. Whilst Amigo remains in wind down the bonus rate
will be 0%.
A2.3: Bonus performance assessment
A2.3.1: Performance measures, weightings and targets will be set annually. At least 50% of the bonus
willbe based on financial performance measures.
A2.3.2: The Committee retains discretion to reduce pay-outs (including to nil) based on an assessment
of regulatory conduct and general Company performance over the performance period.
A2.3.3: Clawback and malus conditions apply.
A3: Long-term
incentive
A3: Long-term incentive
A3.1: LTIP operation
A3.1.1: Annual awards of awards of shares under the LTIP or other replacement plan approved by
shareholders, up to the maximum possible award opportunity.
A3.1.2: Performance period of three years with a two year post-vesting holding period.
•
Whilst Amigo remains in wind down there will be no awards of LTIP.
A3.2: LTIP opportunity
A3.2.1: Maximum ongoing award:
•
A3.2.1.1: 200% of salary.
A3.2.2: The exceptional award limit is 250% of salary. This may be used in one-off exceptional
circumstances such as the year in which a new executive is recruited, if the Committee considers
itnecessary. Awards will vest at up to 25% of the maximum at the threshold performance level.
A3.3: LTIP performance assessment
A3.3.1: Performance Conditions, weightings, performance hurdles and targets are set annually and which
are determined by the Committee to best support the Company’s objectives in the medium to long term.
A3.3.2: The Committee retains discretion to reduce vesting (including to nil) based on an assessment
ofregulatory conduct and general Company performance over the performance period.
A3.3.3: Awards made under the LTIP will vest on a straight-line basis based on performance against
therelevant Performance conditions.
A3.3.4: Clawback and malus conditions apply.
Text to be supplied
67
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Element Summary of remuneration policy
Section A Executive Director remuneration continued
A4: All-employee
share plans
A4.1: All employee share plans
A4.1.1: To the extent that an all-employee share plan is operated during the life of the policy, Executive
Directors would be eligible to participate on the same terms as other employees.
A5: Pension A5.1: Pension operation
A5.1.1: Defined contribution scheme or cash award at the Committee’s discretion.
A5.2: Pension opportunity
A5.2.1: Pension contributions, aligned to majority of wider UK workforce, at 5% of base salary.
Pensioncontribution, in part or all, can be paid through salary in lieu of pension (“SILOP”), in the event
the ongoing pension contribution exceed agreed HMRC contribution rates or lifetime allowance limits.
A6: Benefits A6.1: Operation
A6.1.1: Benefits are determined by taking into account the circumstances of the individual and benefits
provided to the rest of the executive team and the wider Group.
A6.1.2: The Committee retains the discretion to add or remove benefits from the current benefits in
operation as it considers appropriate (e.g. to include relocation payments).
A6.2: Benefits opportunity
A6.2.1: There is no limit to the value of benefits provided. The value is dependent on the cost to the
Company of providing the benefit.
A7: Shareholder
guidelines
A7: Shareholding guidelines
A7.1: Executive Directors will be expected to retain an appropriate proportion of shares that vest
following the exercise of equity incentives until an amount equal to 200% of salary has been achieved.
The Committee has the ability to waive this requirement if the circumstances are such that the
requirement to meet this level of shareholding would act as a disincentive.
A8: Post-exit
shareholding
requirement
A8: Post-exit shareholding requirement
A8.1: Two year post-cessation shareholding requirement of up to 200% of salary for all Executive Directors.
If lower than that level of shareholding at the time of leaving the Company will apply that level.
Text to be supplied
Corporate governance
Directors’ remuneration report continued
68
Amigo Holdings PLC
Annual report and accounts 2023
Element Summary of remuneration policy
Section A Executive Director remuneration continued
A9: Notes to
thepolicy table
A9.1: Each year the Committee gives careful consideration to the performance metrics that should apply
to incentives.
A9.2: For the annual bonus, the Committee considers that a combination of Group financial; customer,
people and culture; Group strategic; and individual measures is most appropriate for assessing
performance over the short to medium term. The Committee will take into account poor behaviours
inadvertently caused by performance metrics in relation to ESG and TCFD activities.
A9.3: Performance measures for the LTIP are selected in order to provide a robust and transparent
basis on which to measure the Group’s performance, to demonstrably link remuneration outcomes to
delivery of the business strategy over the longer term, and to provide strong alignment between senior
management and shareholders.
When setting performance targets for the annual bonus and LTIP, the Committee will take into account
a number of different reference points, which may include the Group’s business plans and strategy,
external forecasts and the wider economic environment.
The Committee retains discretion to amend the bonus pay-out and to reduce the LTIP vesting level if any
formulaic outcome is not reflective of the Committee’s assessment of overall business performance over
the relevant performance period.
A9.4: Flexibility, discretion and judgement
The Remuneration Committee operates the annual bonus and LTIP according to the rules of each
respective plan which, consistent with market practice, include discretion in a number of respects
inrelation to the operation of each plan. Discretions include:
•
who participates in the plan, the quantum of an award and/or payment and the timing of awards
and/or payments;
•
determining the extent of vesting;
•
treatment of awards and/or payments on a change of control or restructuring of the Group;
•
whether an Executive Director or a senior manager is a good/bad leaver for incentive plan purposes
and whether the proportion of awards that vest do so at the time of leaving or at the normal
vesting date(s);
•
how and whether an award may be adjusted in certain circumstances (e.g. for a rights issue,
acorporate restructuring or for special dividends);
•
what the weighting, measures and targets should be for the annual bonus plan and LTIP awards from
year to year;
•
the Committee also retains the ability, within the Remuneration Policy, if events occur that cause it to
determine that the performance conditions set in relation to an annual bonus plan or a granted LTIP
award are no longer appropriate or unable to fulfil their original intended purpose, to adjust targets
and/or set different measures or weightings for the applicable annual bonus plan and LTIP awards.
Any such changes would be explained in the subsequent Directors’ Remuneration Report and, if
appropriate, be the subject of consultation with the Company’s major shareholders; and
•
the ability to override formulaic outcomes in line with the Remuneration Policy.
All assessments of performance are ultimately subject to the Committee’s judgement. Any discretion
exercised, and the rationale, will be disclosed in the annual remuneration report.
Section 2 – Remuneration Policy continued
2.1 Policy table for Executive Directors continued
Text to be supplied
69
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Element Summary of remuneration policy
Section A Executive Director remuneration continued
A9: Notesto
thepolicy table
continued
Malus and clawback
Both the annual bonus plan and the LTIP include provisions which enable the Committee to recover or
withhold value from these incentive plans in the event of certain defined circumstances (i.e. a material
misstatement of the Company’s financial results, an error of calculation (including on account of inaccurate
or misleading information) or in the event of serious misconduct, serious reputational damage or
corporate failure).
Legacy arrangements
For the avoidance of doubt, in approving this Remuneration Policy, authority is given to the Company
tohonour any previous commitments entered into with current or former Directors (such as the payment
of a pension or the unwinding of legacy share schemes or historic share awards granted before the
approval of this policy) that remain outstanding.
A9.5: The Remuneration Policy is effective until the earlier of a change in Directors Remuneration Policy
at a General Meeting of shareholders or the expected AGM in 2025.
Section B Executive Director recruitment policy
B1: Salary B1.1: Base salary will be set in line with the remuneration policy.
B2: Annual
bonus
B2.1: Annual bonus quantum and performance measures will generally be line with the ongoing
remuneration policy as implemented for other Executives during the year. However, the Committee
reserves the right to vary the performance measures and targets for the year of recruitment if it
considers appropriate (e.g. where a large portion of the year has already elapsed).
B2.2: The annual bonus maximum will generally reflect the ongoing policy for current Executives.
Theannual bonus maximum for a new Executive shall not exceed 150% of base salary.
B3: Long-term
incentive
B3.1: LTIP award quantum, performance measures and targets will be line with the ongoing remuneration
policy as implemented for other Executives during the year.
B3.2: The LTIP award maximum for new Executives will generally reflect the ongoing policy for current
Executives. The Committee may award an exceptional LTIP of up to 250% of base salary on recruitment
if it considers this is necessary.
B4: Incentive
maxima
B4.1: The total incentive maxima for the year of recruitment is 400% of base salary. This limit excludes
buy-out awards.
B5: Buy-out
awards
B5.1: The Committee retains discretion to buy out awards forfeited by Executives on departure from their
previous role.
B5.2: Buy-out awards will be made on a similar basis to those forfeited, taking into account performance
likely to be achieved, the proportion of the performance period remaining and the form of award.
B5.3: Where possible buy-out awards will be made using existing incentive plans; however, the Committee
may use the Listing Rules exemption 9.4.2 in order to make a buy-out award on recruitment.
B6: Pension B6.1: Pension will be in line with the remuneration policy.
B7: Benefits B7.2: Benefits will be in line with the remuneration policy.
B7.3: Additional benefits may be offered for new Executives, such as relocation benefits. Where relocation
costs, including an amount to cover the taxable benefit arising on the relocation costs, are offered they
will be for a maximum period of two years.
Text to be supplied
Corporate governance
Directors’ remuneration report continued
70
Amigo Holdings PLC
Annual report and accounts 2023
Element Summary of remuneration policy
Section C Executive Director leaver policy
C1: Salary C1.1: The Company may terminate employment by providing payment in lieu of notice of base salary
asper contractual terms.
C1.2: Any new Executive Director contracts shall stipulate that payments in lieu of notice be subject
tomitigation.
C2: Annual
bonus
C2.1: Bonus for year of cessation
C2.1.1: Executives may at the discretion of the Committee be eligible for a bonus for the year of
cessation. Any bonus would be pro-rated for time and subject to performance assessment.
C2.1.2: Good leavers through death, ill health or disability (as determined by the Committee), sale of the
employing company and any other reason at the discretion of the Committee including redundancy.
C2.2: Deferred bonus awards
C2.2.1: Unvested deferred awards will lapse unless the Executive is a good leaver. For good leavers
(seedefinitions above), awards will generally continue and vest at the normal time. The Committee
hasthe discretion to allow earlier vesting where it considers this is appropriate, for example in cases
ofdeath, ill health, disability and redundancy.
C2.2.2: On a takeover, change of control or other corporate reorganisation awards will generally vest
early or be exchanged for new awards.
C3: Long-term
incentive
C3.1: Unvested LTIP awards will lapse unless the Executive is a good leaver.
C3.2: Good leavers: death, ill health or disability (as determined by the Committee), sale of the
employing company and any other reason at the discretion of the Committee including redundancy.
C3.3: For good leavers, awards will continue and vest at the normal time subject to an assessment
of performance to the end of the performance period and time prorated for the proportion of the
performance period that has elapsed at the termination date. The Committee has discretion, in
exceptional circumstances, to vary the period of prorating based on time served.
C3.4: The Committee may allow awards to vest earlier in cases of death, ill health, retirement or
disability. Where vesting is before the end of the performance period, an assessment of performance
tothe date of testing will be taken by the Committee.
C3.5: On a takeover, change of control or other corporate reorganisation awards will generally vest early
subject to pro-rating for the time elapsed and be assessed for performance.
C3.6: For vested awards that are subject to a holding period, the awards will continue and be released
at the normal time. The Committee has the discretion to allow earlier release in cases of death, illhealth,
retirement, redundancy or disability. Awards would generally be released early in the event of
atakeover, change of control or other corporate reorganisation.
C4: Pension C4: Not included in payment in lieu of notice.
C5: Benefits C5: Not included in payment in lieu of notice.
C6: Other
payments
C6: Leavers: The Group may pay outplacement and professional legal fees incurred by Executives in
finalising their termination arrangements, where considered appropriate, and may pay any statutory
entitlements or settle compromise claims in connection with a termination of employment, where
considered in the best interests of the Company.
Section 2 – Remuneration Policy continued
2.1 Policy table for Executive Directors continued
Text to be supplied
71
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Element Summary of remuneration policy
Section D Summary of remuneration policy for Non-Executive Directors
D1: Fees
for NEDs
D1: Operation of NED fees
D1.1: Non-Executive Directors receive a basic fee for their Board services.
D1.2: Additional fees are paid in relation to additional responsibilities including:
•
D1.2.1: the role of Senior Independent Director; and
•
D1.2.2: chairing the Audit, Remuneration, Nomination and Risk Committees.
D1.3: The Chair of the Board receives a separate fee for this role (inclusive).
D1.4: The fee for the Chair is set by the Remuneration Committee; the Chair is not present when his
orher own remuneration is discussed. Fees for Non-Executive Directors are set by the CEO and Chair.
D1.5: Fees are reviewed annually.
D1.6: Expenses incurred in the course of duties may be reimbursed by the Company. This includes
thesettlement of any related tax liabilities for travel expenses or hospitality.
D2: Opportunity for NED fees
D2.1: Current fee levels are set out in the Annual Report on Remuneration.
D2.2: Non-Executive Director fees are set taking into account market practice levels.
D2.3: The fee of the Chair of the Board is set taking into account the individual’s circumstances, skills
and experience.
D2.4: The aggregate fees of the Chairman and Non-Executive Directors will not exceed the limit from
time to time prescribed within the Company’s Articles of Association for such fees (currently £1m per
annum in aggregate).
D3: Performance assessment
D3.1: n/a
Text to be supplied
Corporate governance
Directors’ remuneration report continued
72
Amigo Holdings PLC
Annual report and accounts 2023
Element Summary of remuneration policy
Section E Illustration of application of the Remuneration Policy
E1.1 Fixed pay E1: Chief Executive Officer
Salary: £355,000
Benefits: 4 x Life cover, Private Medical
Pension: 5% of salary
E1.2: Annual
bonus
Minimum: n/a
Target: 0% of maximum
Maximum: 0% of salary
Whilst Company remains in wind down no bonus will be awarded
E1.3: Long-term
incentive
Minimum: n/a
Target: 0% of maximum
Maximum: 0% of salary
Whilst Company remains in wind down no long-term incentive will be awarded
E2.1 Fixed pay E1: Chief Financial Officer
Salary: £220,000
Benefits: 4 x Life cover
Pension: 5% of salary
E2.2: Annual
bonus
Minimum: n/a
Target: 0% of maximum
Maximum: 0% of salary
Whilst Company remains in wind down no bonus will be awarded
E2.3: Long-term
incentive
Minimum: n/a
Target: 0% of maximum
Maximum: 0% of salary
Whilst Company remains in wind down no long term incentive will be awarded
Section 2 – Remuneration Policy continued
2.1 Policy table for Executive Directors continued
Text to be supplied
73
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
The Directors present their report and audited accounts for the year ended 31 March 2023.
Additional disclosures
The Strategic Report is a requirement of the UK Companies Act 2006 and can be found on pages 1 to 34 of this
Annual Report.
The Company has chosen, in accordance with section 414C(11) of the Companies Act 2006, to include details of the
following matter in its Strategic Report that would otherwise be disclosed in this Directors’ Report:
Detail Page
Likely future developments in the business 
Stakeholder engagement  – 
Employment of disabled persons 
Greenhouse gas emissions 
The Company is required to disclose certain information under Listing Rule 9.8.4R in the Directors’ Report, or advise
where suchrelevant information is contained. Information required to be disclosed by the Listing Rules, and which is not
included in this Directors’ Report, can be located as follows:
Listing rule Detail Page
LR ..R Employee engagement  and 
LR ..R ()
Capitalised interest

LR ..R () Long-term incentive schemes  – 
LR ..R () Emoluments  – 
LR ..R () and () Related party contracts 
LR ..R
Task Force on Climate-related Financial
Disclosures
 – 
Other information that is relevant to this report, and which isalso incorporated by reference, can be located as follows:
Detail Page
Governance  – 
Credit, market and liquidity risks  – 
Companies Act  s. () 
Corporate details
The Company was incorporated and registered in England and Wales on 24 February 2016 as a private company
limited by shares under the Companies Act 2006 with the name Amigo Holdings Limited and with the registered
number 10024479.
On 8 June 2018, the Company re-registered as a public company under the name Amigo Holdings PLC. The Company
has a Premium Listing on the London Stock Exchange Main Market for listed securities (LON: AMGO). The principal
activity of the Company is to act as a holding company for the Amigo Loans Group of companies.
The Company has no branches outside the UK at the balance sheet date. Amigo Loans International Limited and
AmigoLoans Ireland Limited, companies based in Dublin, were disposed of on 28 February 2023.
Amigo Luxembourg S.A., a wholly owned subsidiary of Amigo Loans Holdings Ltd, incorporated as a public limited
liability company under the laws of the Grand Duchy of Luxembourg was established, on 18 October 2016, for the
principal purpose of issuing the Senior Secured Notes due 2024. The Senior Secured Notes were redeemed at par
infullon 17 March 2023.
Disclaimer
The purpose of this Annual Report is to provide information to the members of the Company and it has been prepared for,
and only for, the members of the Company as a body and no other persons. The Company, its Directors and employees,
agents and advisors do not accept or assume responsibility to any other person to whom this document is shown or into
whose hands it may come and any such responsibility or liability is expressly disclaimed.
A cautionary statement in respect of forward-looking statements contained in this Annual Report is set out on page 100.
Directors’ report
Corporate governance
Directors’ report continued
74
Amigo Holdings PLC
Annual report and accounts 2023
Results and dividends
The results for the year are set out in the financial statements on pages 90 to 93. The Company did not pay a half year
dividend in the period (2022: nil). In light of the continued solvency issues facing the Company given the announcement
on 23 March 2023 that the Company is in wind down, the Board decided that it is appropriate to not recommend the
payment of a final dividend.
Dividend policy
Under the terms of a Voluntary Requirement agreed between the regulated companies within the Amigo Group and the
FCA, Amigo has agreed not to pay a dividend to shareholders unless permission has been obtained. In addition, given
the announcement on 23 March 2023 that the Company is in wind down, the Directors are of the view that no dividend
can be paid.
Events since the balance sheet date
In April 2023 £50.7m of Scheme restricted cash was transferred to unrestricted cash as permitted under the Fallback
Solution to support the orderly wind down of the business.
On 15 May 2023 Danny Malone resigned from his role as CEO and Director, subject to serving out his six month notice
period to ensure the continuation of the solvent and orderly wind down of the business.
On 9 June 2023 the Board announced that the Company had been approached by Michael Fleming, a financier and
shareholder, to request an exclusivity arrangement in relation to the business, which Amigo agreed to. This is to
allow Mr Fleming to explore finding and completing an investment in the Company or its subsidiaries. The period of
exclusivity expires on 6 September 2023. The Agreement will not stop the Company or its subsidiaries progressing
withthe disposal of assets under its wind down plan or acting on any transaction governed by the Takeover Code.
Thereremain significant impediments to any new capital being made available to the business. In addition, establishing
a new business and potentially creating value for shareholders in the longer term, has significant execution risks and
willrequire regulatory approval.
Directors
The names and biographical details of the current Directors and the Board Committees of which they are members are
set out on pages 36 to 37.
Current Directors
Name Role Appointment date
Jonathan Roe

Independent Non-Executive Chair  August 
Michael Bartholomeusz Independent Non-Executive Director  November 
Danny Malone CEO  June 
Kerry Penfold CFO  September 
Directors resigned in the year
Gary Jennison
,
CEO  August 
Maria Darby-Walker
,
Independent Non-Executive Director  October 
Jerry Loy
,
Independent Non-Executive Director  October 
1 Jonathan Roe was originally appointed as a Non-Executive Director on 1 August 2020 and was authorised by the FCA as Chair on 13 October 2020.
2 Gary Jennison was originally appointed as a Non-Executive Director on 17 August 2020 and was authorised by the FCA as CEO on 7 December 2020.
3 Danny Malone tendered his resignation as a Director on 15 May 2023 but will remain a Director until completion of his six month notice period on
5 November 2023.
4 Gary Jennison resigned as a Director on 23 September 2022.
5 Maria Darby-Walker and Jerry Loy resigned as Directors on 27 March 2023.
The service agreements of the current Executive Directors and the letters of appointment of the Non-Executive Directors
are available for inspection at the Company’s registered office.
75
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Appointment and removal of Directors
The appointment and replacement of Directors is governed by the Company’s Articles of Association, relevant UK
legislation, the UK Corporate Governance Code. There is no maximum number of Directors who can serve on the Board,
but the number of Directors cannot be less than two.
The Board may appoint a Director either to fill a casual vacancy or as an addition to the Board. An appointed Director
must retire and seek election to office at the next AGM of the Company. In addition to any powers of removal conferred
by the UK Companies Act 2006, the Company may by ordinary resolution remove any Director before the expiry of his
orher period of office and may, subject to the constitutional documents, by ordinary resolution appoint another person
who is willing to act as a Director in their place.
Articles of Association
The Articles of Association of the Company were adopted by special resolution on 28 June 2018, as amended on
29September 2021. Any amendment to the Articles of Association may be made in accordance with the provisions
oftheCompanies Act 2006, by way of special resolution.
Powers of Directors
The powers of the Directors are described in the formal schedule of matters reserved for the Board which is available
onrequest from the Company Secretary and is summarised in the Corporate Governance Report on pages 40 to 45.
The Board manages the business of the Company under the powers set out in the Articles of Association. These powers
include the Directors’ ability to issue or buy back shares. Shareholders’ authority to empower the Directors to purchase
the Company’s own ordinary shares is sought at the AGM each year.
Directors’ interests
Save as disclosed in the Directors’ Remuneration Report, none of the Directors, nor any person connected with them,
has any interest in the share or loan capital of the Company or any of its subsidiaries.
At no time during the year ended 31 March 2023 did any Director hold a material interest, directly or indirectly, in any
contract of significance with the Company or any subsidiary undertaking other than the Executive Directors in relation
totheir service agreements. Danny Malone was engaged on a contractual basis, from 7 February 2022 for four months,
as Interim CFO. On 6 June 2022, he was appointed CFO, subject to approval by the FCA, and on 23 September 2022
was appointed CEO.
Directors’ indemnities and insurance
The Directors have the benefit of a qualifying third-party indemnity from the Company as permitted by the Company’s Articles
of Association (the terms of which are in accordance with the Companies Act 2006). At the year ended 31March2023, the
Company had in place Directors’ and Officers’ liability insurance.
Share capital
The Company has share capital which is divided into ordinary shares of nominal value of 0.25p each, all ranking pari
passu and 41,000 issued and fully paid up deferred shares to £0.24 each. At 31 March 2023, there were 475,333,760
ordinary shares in issue, all fully paid, and 41,000 deferred shares in issue, all fully paid. The Company intends to cancel
all the 41,000 deferred shares of £0.24 each, which are currently held in treasury. Please see note 21 for further details.
Shareholder voting rights, the restrictions on voting rights and the restrictions on the transfer of shares
All of the issued and outstanding ordinary shares of the Company have equal voting rights with one vote per share.
Thedeferred ordinary shares have no voting rights.
The Directors are not aware of any other agreements between holders of the Company’s shares that may result in
restrictions on the transfer of securities or on voting rights.
Corporate governance
Directors’ report continued
76
Amigo Holdings PLC
Annual report and accounts 2023
Substantial shareholders
As at 31 March 2023, the Company has been made aware of or was notified under the Disclosure and Transparency
Rules (DTR 5) of the following holdings of voting rights in its issued share capital:
Shareholders holding 3% or more of the Company’s issued share capital
Shareholder name Investment style
Number of
ordinary shares
Percentage of total voting
rights attaching to issued
share capital
Hargreaves Lansdown Asset Management Private client broker ,, .%
Interactive Investor Private client broker ,, .%
Halifax Share Dealing Private client broker ,, .%
Barclays Wealth Private client broker ,, .%
I G Markets Private client broker ,, .%
Mr Wolfgang Grabher Private individual ,, .%
The Company has not been notified by any of the private client brokers, holding shares as at 31 March 2023, that any
one individual or organisation holding shares through them, had a reportable shareholding in excess of 3% of the
Company’s issued share capital. During the period between 31 March 2023 and 25 July 2023 (the last practicable date
ofnotification), the Company was not notified under DTR 5 of any other changes to holdings of its issued share capital.
Shareholders with significant influence
The Company seeks to engender a culture where it is responsive to views of its shareholders. During the year, the Chair
and other senior executives sought engagement with the largest shareholders and groups representing shareholders
tounderstand its views on various matters relating to ongoing performance and future strategy.
The Chairs of each of the Board Committees would also expect to engage with shareholders on significant matters
related to their areas of responsibility, if appropriate.
Restriction on the transfer of shares
Save as outlined above, there are no specific restrictions on the transfer of the Company’s shares, although pursuant to
the Articles of Association the Board may refuse to register any transfer of shares which is not a fully paid share provided
that such discretion may not be exercised in a way which the Financial Conduct Authority or the London Stock Exchange
regards as preventing dealings in the shares of the relevant class or classes from taking place on an open and proper
basis. The Board may also refuse to register a transfer where the instrument of transfer is: (i) in favour of more than four
persons jointly; (ii) not left at the registered office of the Company, or at such other place as the Board may from time to
time determine, accompanied by the certificate(s) of the shares to which the instrument relates and such other evidence
as the Directors may reasonably require to show the right of the transferor to make the transfer; and (iii) the instrument
oftransfer is in respect of more than one class of share. In addition, pursuant to the Listing Rules, the Directors of the
Company and persons discharging managerial responsibility are required to obtain prior approval from the Company
todeal in the Company’s securities, and are prohibited from dealing during close periods.
Voting rights
On a poll, votes may be given personally or by proxy. Subject to any rights or restrictions attached to any class or
classes of shares and to any other provisions of the Articles of Association: if a vote is taken on a show of hands, every
member or proxy present in person shall have one vote; and if a vote is taken on a poll, every member present in person
or by proxy shall have one vote for each share held by him. All resolutions put to the members at electronic general
meetings will be voted on by a poll. All resolutions put to the members at a physical general meeting will be voted on
a show of hands unless a poll is demanded: by the Chair of the meeting; or by at least five members present in person
or by proxy and having the right to vote on the resolution; or by any member or members present in person or by proxy
and representing not less than one-tenth of the total voting rights of all the members having the right to vote on the
resolution; or by a member or members present in person or by proxy holding shares in the Company conferring a right
to vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than one-tenth of
the total sum paid up on all shares conferring that right. During the year the Company held an Annual General Meeting.
Authority to purchase its own shares
The Company is permitted pursuant to the terms of its Articles of Association to purchase its own shares subject to
shareholder approval. At the AGM on 28 September 2022, the Company was authorised by shareholders to make market
purchases of up to 10% of its ordinary shares. This authority will expire at the end of the 2023 AGM. The Company did not
repurchase any of its shares during the financial year 2022/23.
77
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Authority to issue shares
The Company is permitted pursuant to the terms of its Articles of Association to allot, grant options over, offer or
otherwise deal with or dispose of shares in the Company to such persons at such times and generally on such terms and
conditions as they may determine. At the AGM on 28 September 2022, the Company was given authority to allot shares
in the Company and to grant rights to subscribe for or to convert any security into shares in the Company:
(i) up to an aggregate nominal amount of £396,072 (such amount to be reduced by the nominal amount of any
shares in the Company or rights to subscribe for or convert any security into shares in the Company granted under
sub-paragraph (ii) below in excess of such sum); and
(ii) comprising equity securities (as defined in section 560(1) of the UK Companies Act 2006) up to an aggregate nominal
amount of £792,215 (such amount to be reduced by any allotments of any shares in the Company or grants of rights to
subscribe for or convert any security into shares in the Company made under sub-paragraph (i) above) in connection
with an offer by way of a rights issue.
This authority will expire at the end of the 2023 AGM.
Employee participation in share schemes
In autumn 2019 the Company implemented a Company-wide Share Incentive Plan (“SIP”) and a Save As You Earn scheme
(“SAYE”). The Company also has a Long Term Incentive Plan (“LTIP”) and Deferred Bonus Plan (“DBP”) for certain employees.
Further details of the LTIP and DBP can be found in the Directors’ Remuneration Report on pages 54 to 72.
Share Incentive Plan: This is an HMRC approved all employee share incentive scheme. Under the SIP, a trustee holds
Amigo shares on bare trust for the participants. These Amigo shares are categorised for the purposes of the SIP as
either: (i) partnership shares; (ii) matching shares; or (iii) dividend shares. The matching shares are subject to a holding
period but participants can instruct the trustee to agree to certain transactions.
Save As You Earn 2019: This is an HMRC approved all employee share incentive scheme. Employees can make a monthly
subscription to a savings account with, at the end of three years, an option to subscribe for shares at £0.6368 per share,
using the funds in the savings account. During the year the SAYE 2019 was closed with no employee exercising the
option to acquire shares in the Company at £0.6368.
Save As You Earn 2020: This is an HMRC approved all employee share incentive scheme. Employees can make a monthly
subscription to a savings account with, at the end of three years, an option to subscribe for shares at £0.097 per share,
using the funds in the savings account. On 31 March 2023 the SAYE 2020 was closed to all new subscriptions and all
participants were advised that the SAYE 2020 would be closed.
Long Term Incentive Plan: This is a long-term share incentive plan which seeks to incentivise senior managers to deliver
the strategic plans of the wider business in accordance with the requirements of the business. Grant awards are made over
shares at nil cost and are subject to performance conditions, which are detailed in the Directors’ Remuneration Report on
pages 54 to 72. On 31 March 2023 the LTIP was closed and all participants were advised that their respective LTIP awards
had lapsed.
Deferred Bonus Plan: Net proceeds of any annual bonus awards for the Executive Directors are used to purchase Amigo
shares, which are held in an employee benefit trust for release over a three year period. There are malus and clawback
provisions for the share awards.
Going concern
As described on page 34.
Financial risk management
Details of financial risk management and financial instruments are disclosed in note 15 of the Group financial statements.
Significant agreements and change of control
There are a number of agreements that take effect, alter or terminate upon change of control of the Company following
atakeover. Except as disclosed below, none of these are considered significant.
Pursuant to the terms of the 7.625% senior secured notes due 2024, issued by Amigo Luxembourg S.A. (the “Issuer”),
awholly owned subsidiary of the Company, the Issuer was obliged to make an offer to repurchase the senior secured
notes at a price of 101%, subject to a one-time exception if the consolidated net leverage ratio of the Group would be less
than 3.3:1.0 after giving effect to the change of control. On 17 March 2023 the Company redeemed at par the remaining
issued Senior Secured Loan Notes.
As at the signing date, the largest notified shareholding position, was 3.31% of the issued share capital of the Company.
As part of the orderly wind down of the business, the business has agreed an enhanced redundancy programme for all
employees, including the Executive Directors.
Corporate governance
78
Amigo Holdings PLC
Annual report and accounts 2023
Political donations
The Group did not make any political donations or incur any political expenditure (each as defined by the Companies Act
2006) in the EU or elsewhere in the year ended 31 March 2023.
Equal opportunities
The Company has an equal opportunities policy which is followed by all Directors, ExCo members and employees, and
which ensures the Company employs a diverse workforce with regard to aspects such as age, gender and educational
and professional backgrounds. The objectives of the policy include ensuring that: recruitment criteria and procedures
are designed to ensure that individuals are selected solely based on their merits and abilities; employment practices
are regularly reviewed in order to avoid unlawful discrimination; and training is provided to ensure compliance with
the policy.
Companies Act 2006 s.656(1) Disclosure
On 8 March 2023 the Company held a General Meeting to consider whether any, and if so what, steps should be taken to
address the net assets of the Company being half or less of its called-up share capital, pursuant to section 656(1) of the
Companies Act 2006. The Company has been attempting to raise additional capital, which if raised, could have led to the
Company resolving the issue. On 23 March 2023 the Company announced that it had ceased to pursue the fund raise
and the Amigo business would be put into an orderly wind down. The Board are of the view that there is no reasonable
likelihood of the Company being able to resolve this issue at this time.
Disclosure of information to the auditor
The Directors in office at the date of this report have each confirmed that:
•
so far as they are aware, there is no relevant audit information of which the Group’s auditor is unaware; and
•
they have taken all steps that they ought to have taken as a Director to make themselves aware of any relevant audit
information and to establish that the Group’s auditor is aware of that information.
For the purposes of compliance with DTR 4.1.5R(2) and DTR 4.1.8R, the required content of the management report
can be found in the Strategic Report and these regulatory disclosures including the sections of the Annual Report and
Accounts incorporated by reference.
The Directors’ Report was approved by the Board on 27 July 2023.
By Order of the Board
Roger Bennett
Company Secretary
Amigo Holdings PLC
Directors’ report continued
79
Amigo Holdings PLC
Annual report and accounts 2023
Corporate governance
Directors’ responsibilities statement
Statement of Directors’ responsibilities
inrespect of the Annual Report and the
financialstatements
The Directors are responsible for preparing the Annual
Report and the Group and parent company financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group
andparent company financial statements for each financial
year. Under that law they are required to prepare the Group
financial statements in accordance with international
accounting standards. In addition the Group financial
statements are required under the UK Disclosure Guidance
and Transparency Rules to be prepared in accordance with
International Financial Reporting Standards adopted
in the UK.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Group and parent company and of the Group’s profit or
loss for that period. In preparing each of the Group and
parent company financial statements, the Directors are
required to:
•
select suitable accounting policies and then apply
themconsistently;
•
make judgements and estimates that are reasonable,
relevant and reliable; and
•
state whether they have been prepared in accordance
with international accounting standards.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the parent company and enable them to ensure that its
financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they
determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement that comply with that
law and those regulations.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors
inrespect of the Annual Report
We confirm that to the best of our knowledge:
1. the financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
2. the management report includes a fair review of the
development or performance of the business and
the position of the Company and the undertakings
included in the consolidation taken as a whole,
together with a description of the principal risks
anduncertainties.
We consider the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess
the Group’s position and performance, business model
and strategy.
Danny Malone
Director
27 July 2023
Corporate governance
80
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
81 Independent auditor’s report
88 Consolidated statement of
comprehensiveincome
89 Consolidated statement of ﬁnancial position
90 Consolidated statement of changes in equity
91 Consolidated statement of cash ﬂows
92 Notes to the consolidated ﬁnancial statements
118 Company statement of ﬁnancial position
119 Company statement of changes in equity
120 Company statement of cash ﬂows
121 Notes to the ﬁnancial statements – Company
123 Appendix: alternative performance
measures(unaudited)
123 Glossary
126 Information for shareholders
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
81
Independent auditor’s report to the members of Amigo Holdings PLC
For the purpose of this report, the terms “we” and “our” denote
MHA in relation to UK legal, professional and regulatory responsibilities
and reporting obligations to the members of Amigo Holdings
PLC. For the purposes of the table on pages 82 to 83 that sets
out the key audit matters and how our audit addressed the key
audit matters, the terms “we” and “our” refer to MHA. The Group
financial statements, as defined below, consolidate the accounts
ofAmigo Holdings PLC and its subsidiaries (the “Group”). The
“Parent Company” is defined as Amigo Holdings PLC, as an
individual entity. The relevant legislation governing the Company is
the United Kingdom Companies Act 2006 (“Companies Act 2006”).
Opinion
We have audited the financial statements of Amigo Holdings PLC
for the year ended 31 March 2023.
The financial statements that we have audited comprise:
•
the Consolidated Statement of Comprehensive Income;
•
the Consolidated Statement of Financial Position;
•
the consolidated statement of changes in equity;
•
the Consolidated Statement of Cash Flows;
•
Notes 1 to 29 to the consolidated financial statements, including
significant accounting policies;
•
the Company Statement of Financial Position;
•
the Company Statement of Changes in Equity;
•
the Company Statement of Cash Flows; and
•
notes 1a to 8a to the Company financial statements, including
significant accounting policies.
The financial reporting framework that has been applied in
the preparation of the Group and Parent Company’s financial
statements is applicable law and International Financial Reporting
Standards as adopted by the UK (“IFRS”).
In our opinion the financial statements:
•
give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 March 2023 and of the Group’s
loss for the year then ended;
•
have been properly prepared in accordance with International
Financial Reporting Standards as adopted by the UK
(“IFRS”); and
•
have been prepared in accordance with the requirements of the
Companies Act 2006.
Our opinion is consistent with our reporting to the AuditCommittee.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Ourresponsibilities
under those standards are further described in theAuditor’s
Responsibilities for the Audit of the Financial Statements section
of our report. We are independent of the Group in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have fulfilled
ourethical responsibilities in accordance with those requirements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis forour opinion.
Emphasis of matter – financial statements
prepared on a basis other than going concern.
We draw attention to note 1 to the financial statements which
explains that the Directors have taken the decision to wind down
the operations and subsequently liquidate the Group and Parent
Company and therefore do not consider it to be appropriate to
adopt the going concern basis of accounting in preparing the
financial statements. Accordingly, the financial statements have
been prepared on a basis other than going concern as described
in note 1.
Our opinion is not modified in respect of this matter.
Overview of our audit approach
Group
audit scope
Our audit was scoped by obtaining an understanding
of the Group, including the Parent Company, and
its environment, including the Group’s system of
internal control, and assessing the risks of material
misstatement in the financial statements. We also
addressed the risk of management override of
internal controls, including assessing whether there
was evidence of bias by the Directors that may
haverepresented a risk of material misstatement.
We identified significant components based on
their significance to the Group balance sheet and
operations. We performed full scope audit work
onthe Parent Company and significant components.
The components not covered by our audit scope
were subject to analytical procedures to confirm
our conclusion that there were no significant
risks of material misstatement in the aggregated
financialinformation.
First year
transition
This is the first year we have been appointed as
auditors to the Group and the Parent Company.
Weundertook the following transitional procedures:
•
Held meetings with senior management to gain
an understanding of the Group and Company’s
operations and strategic objectives.
•
We held meetings with the predecessor
auditors, including reviewing their audit working
papers for the prior financial period to gain an
understanding of the Group and Company’s
processes, their audit risk assessment, and
the design of their audit approach for the year
ended 31 March 2022.
The results of these procedures were considered
in our audit planning and risk assessment for our
audit for the year ended 31 March 2023.
Materiality Group Parent company
£200,000 £18,000
2.6% of net assets 2% of total assets
Key
audit matters
•
Customer complaints provision.
•
Expected credit losses on customer loans
andreceivables.
82
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Independent auditor’s report to the members of Amigo Holdings PLC continued
Key audit matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Customer complaints provision
Key audit
matterdescription
The Group has been subject to historic complaints relating to unaffordable lending. A provision is carried in the
financial statements in respect of compensation payments related to these complaints. The Group agreed a
court approved Scheme of Arrangement (the “Scheme”), which limits in part the amount the Group would pay
in compensation on these claims. As at the year end the complaints provision held is £195.9m (2021: £179.8m) of which
£97.1m (2021: £97.0m) is accrued for redress due to customers. The cash is held in a restricted bank account.
The provision is made in line with the terms of the Scheme. The element of the provision that is subject to
significant estimation and judgement relates to balance adjustments in respect of upheld complaints where
thecustomer holds a live loan at the Scheme’s effective date. The key areas of estimation and judgement are:
•
Uphold rates.
•
Average balance adjustments.
How the scope of
ouraudit responded
tothe key audit matter
We performed the following procedures:
We obtained and reviewed the calculation of the provision. We challenged management on the various
elements that make up the provision to assess the appropriateness of its inclusion in the provision.
We obtained and reviewed the management judgement paper setting out the key judgements made in
determining the provision.
We reviewed key legal documents relating to the provision, including the court approved Scheme of Arrangement.
We performed loan and complaints data testing to test the validity of data used in calculating the provision.
Uphold rates:
•
Obtained an understanding of the method used to determine uphold rates and sources of data of key inputs.
•
Challenged management on the basis which they determined the uphold rate, including whether management
had considered factors that would either have an increasing or decreasing effect on the uphold rate.
•
Selected a sample of processed claims to validate against supporting documents the claim status as either
rejected or upheld or unprocessed.
•
Benchmarked the uphold rate of complaints, to other market participants who had faced similar conduct issues.
•
Performed sensitivity analysis of the provision to changes in the uphold rate.
Average balance adjustments:
•
Obtained an understanding of the method used to determine average balance adjustment and sources
ofdata of key inputs.
•
On a sample basis tested key data inputs such as arrears status, loan write off and loan balance
tosupporting information.
•
Recalculated the average balance adjustment.
Key observations
communicated to
theAudit Committee
The requirements for IAS 37 for recognition of a provision have been applied appropriately in recognition
ofthe customer complaints provision.
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
83
Key audit matters continued
2. Expected credit losses on customer loans and receivables
Key audit
matterdescription
There is significant management judgement and estimation in determining the key assumptions used the
estimation of expected credit losses (“ECL”) on customer loans and receivables.
The Group had two loan books. The Amigo Legacy loan book and the Amigo Reward Rate loan book.
TheAmigo Reward Rate loan book has been classified as held for sale therefore ECL is not calculated on the
loan book. The ECL model of the Group works on collective assessment level assigning Probability of Default
(“PD”), Loss Given Default (“LGD”) and Exposure at Default (“EAD”) based on key terms of the loan receivables
such as: term of loan, vintage, arrears status, COVID flag, current balance, and forbearance indicator flags.
The key assumptions and judgements include:
•
Staging – Allocation of loan receivables to stage 1, 2, or 3 on a timely basis in accordance with IFRS 9.
•
Model estimations – Accounting interpretations, modelling assumptions and data used to build and run
the Probability of Default (“PD”), Loss Given Default (“LGD”) and Exposure at Default (“EAD”) models that
calculate the ECL.
•
Economic scenarios – Inputs, assumptions and weightings used to estimate the impact of multiple economic
scenarios including any changes to scenarios required.
•
Judgements exercised by management in determining whether a significant increase in credit risk (“SICR”)
should be recognised.
•
Determining the appropriateness of any model overlays is at the discretion of management.
How the scope of
ouraudit responded
tothe key audit matter
We performed the following procedures:
Controls testing – We evaluated the design and implementation of key controls across the processes relevant
to ECL, including the judgments and estimates noted. As there was no material new lending in the period,
wedid not test controls over underwriting of new loans. We tested controls in the areas of:
•
Identification of loan arrears and system flagging of these, and non-performing loans.
•
Allocation of loan repayments to loan accounts.
•
Accuracy of recording of loan data in the loan system.
•
Reconciliation of loan data to the general ledger
•
Governance and approval and key areas of judgments and estimate, including in-model adjustments (“IMA”),
post-model adjustments (“PMA”) and application macro-economic scenarios.
We engaged the support of our credit modelling experts to assess the performance of the ECL models and
theappropriateness of management’s key judgements and assumptions in the context of the current economic
environment and our wider industry experience.
Staging – We evaluated the criteria used to allocate loans to stage 1, 2 or 3 in accordance with IFRS 9.
Forsample exposures, we tested the appropriateness of the staging of the exposure by testing the correct
application of SICR criteria. Our work in this regard included validating the payment history of the exposure
toensure that the exposure has been correctly classified as either stage 1, 2 or 3.
Model estimations – We evaluated and challenged the impairment methodologies for compliance with IFRS
9. Using modelling experts we tested the application of the key assumptions, inputs and formulae used.
This included a combination of assessing model design and formulae, alternative modelling techniques,
recalculating the PD, LGD and EAD, and model implementation.
Economic scenarios – Using a credit and modelling expert, we evaluated and challenged the application
ofthe economic scenarios to the determination of the ECL. This included evaluating probability weights and
considering contrary evidence by comparing these to other scenarios from a variety of external sources and
assessing whether the forecasted macroeconomic variables were complete and appropriate.
We assessed the appropriateness of the SICR criteria determined by management in relation to loans and
advances to customers.
Tested post model adjustments and overlays. This included assessing the completeness and appropriateness
of these adjustments.
Overall assessment – We performed an overall assessment of the ECL provision levels by stage to determine
ifthey were reasonable by considering the overall credit quality of the loan portfolio and the risk profile.
Key observations
communicated to
theAudit Committee
We are satisfied that provision for the impairment of loans and advances to customers were reasonable and
recognised in accordance with IFRS 9 requirements.
84
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Independent auditor’s report to the members of Amigo Holdings PLC continued
Our application of materiality
Our definition of materiality considers the value of error or
omission on the financial statements that, individually or in
aggregate, would change or influence the economic decision of
a reasonably knowledgeable user of those financial statements.
Misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature
of identified misstatements, and the particular circumstances of
their occurrence, when evaluating their effect on the financial
statements as a whole. Materiality is used in planning the scope
ofour work, executing that work and evaluating the results.
Materiality in respect of the Group was set at £200,000 which
was determined on the basis of 2.6% of the Group’s net assets.
Materiality in respect of the Parent Company was set at £18,000,
determined on the basis of 2.0% of the Parent Company’s total
assets. Net assets and total assets were deemed to be the
appropriate benchmark for the calculation of materiality as this
isa key area of the financial statements because this reflects the
net equity interest in the Group and Parent Company respectively.
We considered this to be a key metric in view of the financial
statements being prepared on a basis other than going concern.
Inour opinion this is therefore the benchmark with which the
usersof the financial statements are principally concerned.
Performance materiality is the application of materiality at the
individual account or balance level, set at an amount to reduce,
to an appropriately low level, the probability that the aggregate
ofuncorrected and undetected misstatements exceeds materiality
for the financial statements as a whole.
Performance materiality for the Group was set at £120,000 and
at £30,540 for the Parent Company which represents 60% of the
above materiality levels.
The determination of performance materiality reflects our
assessment of the risk of undetected errors existing, the nature
ofthe systems and controls and the level of misstatements arising
in previous audits.
We agreed to report any corrected or uncorrected adjustments
exceeding £10,000 and £2,500 in respect of the Group and
Parent Company respectively to the Audit Committee as well
as differences below this threshold that in our view warranted
reporting on qualitative grounds.
Overview of the scope of the Group and
ParentCompany audits
Our assessment of audit risk, evaluation of materiality and
our determination of performance materiality sets our audit
scope foreach company within the Group. Taken together, this
enablesus to form an opinion on the consolidated financial
statements. This assessment takes into account the size, risk profile,
organisation/distribution and effectiveness of group-wide controls,
changes in the business environment and other factors such as
recent internal audit results when assessing the level of work to
beperformed at each component.
In assessing the risk of material misstatement to the consolidated
financial statements, and to ensure we had adequate quantitative
and qualitative coverage of significant accounts in the consolidated
financial statements, of the eight reporting components of the
Group, we identified six components which represent the principal
business units within the Group. We performed full scope audits
of these six components. The remain two reporting components
were deemed immaterial to the Group financial statements and
analytical procedures were performed on these components.
Nocomponent auditors were involved in this audit.
The control environment
We evaluated the design and implementation of those internal
controls of the Group, including the Parent Company, which
are relevant to our audit, such as those relating to the financial
reporting cycle.
We deployed our internal IT audit specialists to obtain an
understanding of the general IT environment.
Climate-related risks
In planning our audit and gaining an understanding of the Group
and Parent Company, we considered the potential impact of
climate-related risks on the business and its financial statements.
We obtained management’s climate-related risk assessment, along
with relevant documentation and reports relating to management’s
assessment and held discussions with management to understand
their process for identifying and assessing those risks. We have
agreed with managements’ assessment that climate-related risks
are not material to these financial statements and reviewed the
relevant disclosures as required by the Listing Rules.
Reporting on other information
The other information comprises the information included in
the annual report other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of
the audit:
•
the information given in the strategic report and the Directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
•
the strategic report and the Directors’ report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the course
of the audit, we have not identified material misstatements in the
strategic report or the Directors’ report.
Directors’ remuneration report
Those aspects of the Directors’ remuneration report which are
required to be audited have been prepared in accordance with
applicable legal requirements.
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
85
Corporate governance statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the entity’s compliance with
theprovisions of the UK Corporate Governance Code specified
forour review by the Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
•
Directors’ statement with regards the basis of preparing the
financial statements on a basis other than going concern set
outon page 77;
•
Directors’ explanation as to its assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate set out on page 74;
•
Directors’ statement on whether it has a reasonable expectation
that the Group will be able to continue in operation and meets
its liabilities set out on page 74;
•
Directors’ statement on fair, balanced and understandable set
out on page 79;
•
Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 28;
•
Section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on page 28; and
•
Section describing the work of the audit committee set out
on page 46.
Matters on which we are required to report
byexception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report
toyou if, in our opinion:
•
adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received by branches not visited by us; or
•
the parent company financial statements are not in agreement
with the accounting records and returns; or
•
certain disclosures of Directors’ remuneration specified by law
are not made; or
•
the part of the Directors’ remuneration report to be audited is
not in agreement with the accounting records and returns; or
•
we have not received all the information and explanations
werequire for our audit; or
•
a corporate governance statement has not been prepared
bythe Parent Company.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement,
the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the
Group or Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whetherthe financial statements as a whole are free from
materialmisstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detecta material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably
beexpected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the
financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
formspartof our auditor’s report.
86
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Independent auditor’s report to the members of Amigo Holdings PLC continued
Extent to which the audit was considered
capable of detecting irregularities,
includingfraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud.
These audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud
or error. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error and detecting irregularities that result from fraud is
inherentlymore difficult than detecting those that result from
error,as fraud may involve collusion, deliberate concealment,
forgery or intentional misrepresentations. Also, the further
removed non-compliance with laws and regulations is from
eventsand transactions reflected in the financial statements,
theless likely wewould become aware of it.
Identifying and assessing potential risks arising
from irregularities, including fraud
The extent of the procedures undertaken to identify and assess
the risks of material misstatement in respect of irregularities,
including fraud, included the following:
•
We considered the nature of the industry and sector the control
environment, business performance including remuneration
policies and the Group’s, including the Parent Company’s, own
risk assessment that irregularities might occur as a result of fraud
or error. From our sector experience and through discussion
with the Directors, we obtained an understanding of the legal
and regulatory frameworks applicable to the Group focusing
on laws and regulations that could reasonably be expected to
have a direct material effect on the financial statements, such
as provisions of the Companies Act 2006, UK tax legislation
orthose that had a fundamental effect on the operations of the
Group including the regulatory and supervisory requirements
ofthe Financial Conduct Authority (FCA).
•
We enquired of the Directors and management including the
in-house legal counsel, compliance, risk and internal audit, audit
committee concerning the Group’s and the Parent Company’s
policies and procedures relating to:
•
identifying, evaluating and complying with the laws and
regulations and whether they were aware of any instances
ofnon-compliance;
•
detecting and responding to the risks of fraud and whether
they had any knowledge of actual or suspected fraud; and
•
the internal controls established to mitigate risks related
tofraud or non-compliance with laws and regulations.
•
We assessed the susceptibility of the financial statements
to material misstatement, including how fraud might occur
by evaluating management’s incentives and opportunities
for manipulation of the financial statements. This included
utilising the spectrum of inherent risk and an evaluation of
the risk of management override of controls. We determined
that the principal risks were related to posting inappropriate
journal entries to increase revenue or reduce costs, creating
fictitious transactions, and management bias in accounting
estimates particularly in determining expected credit losses
andcustomercomplaints provision.
Audit response to risks identified
In respect of the above procedures:
•
we corroborated the results of our enquiries through our review
of the minutes of the Group’s and the Parent Company’s board
and audit committee meetings, inspection of the complaints
registers, inspection of legal and regulatory correspondence
and correspondences from the FCA;
•
audit procedures performed by the engagement team in
connection with the risks identified included:
•
reviewing financial statement disclosures and testing to
supporting documentation to assess compliance with
applicable laws and regulations expected to have a direct
impact on the financial statements;
•
testing journal entries, including those processed late for
financial statements preparation, those posted by infrequent or
unexpected users, those posted to unusual account combinations;
•
evaluating the business rationale of significant transactions
outside the normal course of business, and reviewing
accounting estimates for bias;
•
enquiry of management around actual and potential litigation
and claims;
•
challenging the assumptions and judgements made by
management in its significant accounting estimates, in
particular those relating to the determination of the expected
credit losses and customer complaints provision as reported
in the key audit matter section of our report; and
•
obtaining confirmations from third parties to confirm existence
of a sample of balances.
•
the Group and the Parent Company operate in a regulated
industry. As such, the Senior Statutory Auditor considered
the experience and expertise of the engagement team to
ensure that the team had the appropriate competence and
capabilities; and
•
we communicated relevant laws and regulations and potential
fraud risks to all engagement team members, including experts
and remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Other requirements
We were appointed by the Directors on 2 September 2022.
Theperiod of total uninterrupted engagement period of the firm
isone year.
We did not provide any non-audit services which are prohibited
bythe FRC’s Ethical Standard to the Group or the Parent Company,
and we remain independent of the Group and the Parent Company
in conducting our audit.

Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
87
Use of our report
This report is made solely to the Parent Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (“FCA”) Disclosure
Guidance and Transparency Rule (“DTR”) 4.1.14R, these financial
statements form part of the European Single Electronic Format
(“ESEF”) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF
Regulatory Technical Standard (“ESEF RTS”). This auditor’s report
provides no assurance over whether the annual financial report
has been prepared using the single electronic format specified
inthe ESEF RTS.
Rakesh Shaunak, FCA
(Senior Statutory Auditor)
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
27 July 2023
MHA is the trading name of MacIntyre Hudson LLP, a limited
liability partnership in England and Wales (registered
number OC312313)
Financial statements
88
Amigo Holdings PLC
Annual report and accounts 2023
Year to Year to
31 Mar 2023 31 Mar 2022
Notes £m £m
Revenue 4 19.3 89.5
Interest payable and funding facility fees 5 (3.6) (16.7)
Interest receivable 1.5 0.1
Impairment of amounts receivable from customers 3.4 (37.0)
Administrative and other operating expenses 7 (36.2) (24.6)
Complaints provision (expense)/release 19 (19.1) 156.6
Total operating (expense)/income (55.3) 132.0
(Loss)/profit before tax (34.7) 167.9
Tax (charge)/credit on (loss)/profit 10 (0.1) 1.7
(Loss)/profit and total comprehensive (loss)/profit attributable to equity
shareholders of the Group
1
(34.8) 169.6
The(loss)/profit is derived from continuing activities.
(Loss)/earnings per share
Basic (loss)/earnings per share (pence) 12 (7.3) 35.7
Diluted (loss)/earnings per share (pence) 12 (7.3) 35.7
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 comprehensive income
for the year ended 31 March 2023
89
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
31 Mar 2023 31 Mar 2022
Notes £m £m
Non-current assets
Customer loans and receivables 13 — 25.4
Property, plant and equipment — 0.5
Right-of-use lease assets 20 — 0.8
— 26.7
Current assets
Customer loans and receivables 13 45.7 114.8
Property, plant and equipment 0.3 —
Right-of-use lease assets 20 0.1 —
Other receivables 16 1.5 1.6
Current tax asset 0.8 0.7
Cash and cash equivalents (restricted)
1
107.2 7.6
Cash and cash equivalents 62.4 133.6
218.0 258.3
Held for sale assets 14 1.1 —
Total assets 219.1 285.0
Current liabilities
Trade and other payables 17 (6.0) (6.7)
Lease liabilities 20 (0.1) (0.3)
Complaints provision 19 (195.9) (82.8)
Restructuring provision 19 (4.5) —
(206.5) (89.8)
Non-current liabilities
Borrowings 18 — (49.7)
Lease liabilities 20 — (0.6)
Complaints provision 19 — (97.0)
— (147.3)
Total liabilities (206.5) (237.1)
Net assets 12.6 47.9
Equity
Share capital 21 1.2 1.2
Share premium 207.9 207.9
Translation reserve — 0.1
Merger reserve (295.2) (295.2)
Retained earnings 98.7 133.9
Shareholder equity 12.6 47.9
The accompanying notes form part of these financial statements.
1 Cash and cash equivalents (restricted) of £ 107.2m (2022: £7.6m) 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
27 July 2023
Company no. 10024479
Consolidated statement of financial position
as at 31 March 2023
Financial statements
90
Amigo Holdings PLC
Annual report and accounts 2023
Share Share Translation Merger Retained Total
capital premium reserve
1
reserve
2
earnings equity
£m £m £m £m £m £m
At 1 April 2021 1.2 207.9 — (295.2) (35.3) (121.4)
Total comprehensive profit — — — — 169.6 169.6
Translation reserve — — 0.1 — — 0.1
Share-based payments — — — — (0.4) (0.4)
At 31 March 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
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 changes in equity
for the year ended 31 March 2023
91
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
(Loss)/profit for the period (34.8) 169.6
Adjustments for:
Impairment movement (3.4) 37.0
Complaints provision 28.8 (156.6)
Restructuring provision 4.5 —
Tax charge/(credit) 0.1 (1.7)
Interest expense 3.6 16.7
Interest receivable (1.5) (0.1)
Interest recognised on loan book (30.8) (97.0)
Share-based payment (0.4) (0.4)
Depreciation of property, plant and equipment 0.5 0.5
Operating cash flows before movements in working capital (33.4) (32.0)
Decrease in receivables — 0.1
Increase/(decrease) in payables 0.6 (6.3)
Complaints cash expense (12.7) (8.1)
Tax (paid)/refunds (0.2) 0.2
Interest paid (3.4) (18.5)
Net cash (used in) operating activities before loans issued and collections on loans (49.1) (64.6)
Loans issued (2.5) —
Collections 130.6 263.0
Other loan book movements (2.1) (0.4)
Decrease in deferred brokers’ costs 1.9 7.5
Net cash from operating activities 78.8 205.5
Investing activities
Proceeds from sale of property, plant and equipment — 0.3
Net cash from investing activities — 0.3
Financing activities
Lease principal payments (0.3) (0.3)
Repayment of external funding (50.0) (248.5)
Net cash (used in) financing activities (50.3) (248.8)
Net increase/(decrease) in cash and cash equivalents 28.5 (43.0)
Effects of movement in foreign exchange (0.1) —
Cash and cash equivalents at beginning of period 141.2 184.2
Cash and cash equivalents at end of period
1
169.6 141.2
The accompanying notes form part of these financial statements.
1 Total cash is inclusive of cash and cash equivalents (restricted) of £107.2m (2022: £7.6m). This restricted cash materially relates to cash held for the
benefit of customers in relation to payments arising out of the Scheme of Arrangement.
Consolidated statement of cash flows
for the year ended 31 March 2023
Financial statements
92
Amigo Holdings PLC
Annual report and accounts 2023
1. 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
(LS E:A E: A MGO). 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. 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 which featured dynamic pricing to reward on-time payment with lower rates and penalty-free annual payment holidays. The new
products were released under the RewardRate brand. With the Fallback Solution being implemented, leading to a cessation of trade and
implementation of a wind down plan, new lending has been stopped in the current year.
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 amortised cost or 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
Gro upa up a nd 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.
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. 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 2023.
In undertaking a going concern review, the Directors considered the Group’s decision to switch the Scheme from the Preferred to the
Fallback Solution, announced on 23 March 2023.
The switch to the Fallback Solution required that the trading subsidiary, Amigo Loans Ltd (“ALL”), stopped lending with immediate effect
and be placed into an orderly wind down, with the result that all surplus assets after the wind down will be transferred to the Scheme
creditors. A further requirement of the Fallback Solution is that ALL be placed into liquidation within two months of payment of the final
Scheme dividend. No value will be attributed to the ordinary shares of the Company in this scenario.
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 Amigo Loans Ltd (the Group’s sole cash-generating unit), the Board
have determined that the Annual Report and financial statements for FY23 will be prepared on a basis other than going concern.
The Board has prepared a set of financial projections for the solvent wind down following the cessation of new lending in March.
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 that are considered severe but plausible. Stresses have been applied to:
•
the collect out of the legacy Amigo loan book;
•
removal of any prospective debt sales;
•
increased Scheme liabilities; and
•
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 can
bec be c onsidered 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 subsidiary undertakings inclusive of structured entities (“SEs”); see note 28 for a full list of subsidiaries and
SEs. 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
th atco at co ntrol ceases.
The vehicle ALL Scheme Ltd was incorporated on 6 January 2021 and is a wholly owned and controlled subsidiary of the Group included
in the consolidated financial statements for the years ended 31 March 2023 and 31 March 2022. The Group reviews complaint claims
through this vehicle and, where appropriate, will pay cash redress to customers that have been affected by historical issues in the UK
business. There was no activity through this vehicle in the prior financial year.
Notes to the consolidated financial statements
for the year ended 31 March 2023
93
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
1. Accounting policies continued
1.1 Basis of preparation of financial statements continued
Basis of consolidation continued
The Group’s securitisation facility was established in November 2018. The Company fully repaid the facility in September 2021, and
the securitisation structure was subsequently closed in November 2022 (see note 18 for further details). The structured entity AMGO
Funding (No. 1) Ltd was set up in this process. The Group had both power and control over that structured entity, as well as exposure
to variable returns from the special purpose vehicle (“SPV”); hence, this is included in the consolidated financial statements. SEs are
fully consolidated based on the power of the Group to direct relevant activities, and its exposure to the variable returns of the SE.
Inassessing whether the Group In assessing whether the Group controls an SE, judgement is exercised to determine the following: whether the activities of the SE are
being conducted on behalf of the Group to obtain benefits from the SE’s operation; whether the Group has the decision-making powers
to control or to obtain control of the SE or its assets; whether the Group is exposed to the variable returns from the SE’s activities; and
whether the Group is able to use its power to affect the amount of returns. The Group’s involvement with SEs is detailed in note 25.
All intercompany balances and transactions are eliminated fully on consolidation. The financial statements of the Group’s subsidiaries
(including SEs that the Group consolidates) 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at F as at F VTPL):
•
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.
Business model assessment
In the assessment of the objective of a business model, the information considered includes:
•
the stated policies and objectives for the loan book and the operation of those policies in practice, in particular whether management’s
strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the
financial assets to the duration of the liabilities that are funding those assets or realising cash flows through the sale of the assets;
•
how the performance of the loan book is evaluated and reported to the Group’s management;
•
the risks that affect the performance of the business model (and the financial assets held within that business model) and its strategy
for how those risks are managed;
•
how managers of the business are compensated (e.g. whether compensation is based on the fair value of the assets managed or the
contractual cash flows collected); and
•
the frequency, volume and timing of debt sales in prior periods, the reasons for such sales and the Group’s expectations about future
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of how the
Group’s stated objective for managing the financial assets is achieved and how cash flows are realised.
The Group’s business comprises primarily loans to customers that are held for collecting contractual cash flows. Debt sales of charged
off assets are not indicative of the overall business model of the Group. The business model’s main objective is to hold assets to collect
contractual cash flows.
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, noting also that any reclassification of financial assets identified as requiring reclassification is the
first day of the next accounting period. The assessment was no longer considered appropriate for the RewardRate portfolio for which
a decision has been made to sell as a result of the wind down strategy and has been classified as Held for Sale as at 31 March 2023
(see note 14). The RewardRate portfolio has been reclassified under fair value through other comprehensive income with effect from
1Ap 1 Ap ril 2023.
Assessment of whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition. “Interest” is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular
period of time, as well as profit margin.
In assessing whether the contractual cash flows are SPPI, the Group considers the contractual terms of the instrument. This includes
assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such
that it would not meet this condition. The Group has deemed that the contractual cash flows are SPPI and hence, loans to customers are
measured at amortised cost under IFRS 9.
Financial statements
94
Amigo Holdings PLC
Annual report and accounts 2023
1. Accounting policies continued
1.2 Amounts receivable from customers continued
ii) Impairment
IFRS 9 includes a forward-looking expected credit loss (“ECL”) model with regards to impairment. IFRS 9 requires an impairment provision
to be recognised on origination of a financial asset. Under IFRS 9, a provision is made against all stage 1 (defined below) financial assets
to reflect the expected credit losses from default events within the next twelve months. The application of lifetime expected credit losses
to assets which have experienced a significant increase in credit risk results in an uplift to the impairment provision.
iii) Measurement of ECLs
Under IFRS 9 financial assets fall into one of three categories:
Stage 1 – financial assets which have not experienced a “significant” increase in credit risk since initial recognition;
Stage 2 – financial assets that are considered to have experienced a “significant” increase in credit risk since initial recognition; and
Stage 3 – financial assets which are in default or otherwise credit impaired.
Loss allowances for stage 1 financial assets are based on twelve month ECLs; that is the portion of ECLs that result from default events
that are estimated within twelve months of the reporting date and are recognised from the date of asset origination. Loss allowances
fors for s tage 2 and 3 financial assets are based on lifetime ECLs, which are the ECLs that result from all default events over the expected
li feof af fe of a f inancial instrument.
At the reporting date, the Group held both guarantor and personal loans on balance sheet. In relation to the guarantor loans, in substance
the borrower and the guarantor of each financial asset have equivalent responsibilities. Hence, for each loan there are two obligors to
which the entity has equal recourse. This dual borrower nature of the product is a key consideration in determining the staging and the
recoverability of an asset. The new guarantor and unsecured loan products under the RewardRate brand have been disclosed as held
fors for s ale assets at 31 March 2023 and therefore does not attract ECL impairment.
The Group has assessed that ECLs on customer loans and receivables is a key sensitivity, refer to note 2.1.1 for further detail of the
judgements and estimates used in the measurement of ECLs and note 2.1.3 for detail on impact of forward-looking information on the
measurement of ECLs.
iv) Assessment of significant increase in credit risk (“SICR”)
In determining whether the credit risk (i.e. risk of default) of a financial instrument has increased significantly since initial recognition,
the Group considers reasonable and supportable information that is relevant and available without undue cost or effort, including both
quantitative and qualitative information and analysis. The qualitative customer data used in this assessment is payment status flags,
which occur in specific circumstances such as a short-term payment plan, breathing space or other indicators of a change in a customer’s
circumstances. See note 2.1.2 for details of how payment status flags are linked to staging, and judgements on what signifies a significant
increase in credit risk.
v) Derecognition
Receivable from customers are derecognised when the entity’s contractual rights to the financial asset’s cash flows have expired.
vi) Definition of default
The Group considers an account to be in default if it is more than three contractual payments past due, i.e. greater than 61 days, which is
a more prudent approach than the rebuttable presumption in IFRS 9 of 90 days and has been adopted to align with internal operational
procedures. The Group reassesses the status of loans at each month end on a collective basis. When the arrears status of an asset
improves so that it no longer meets the default criteria for that portfolio, it is immediately cured and transitions back from stage 3 within
the Group’s impairment model.
vii) Forbearance
Where the borrower indicates to the Group that they are unable to bring the account up to date, informal, temporary forbearance
measures may be offered. There are no changes to the customer’s contract at any stage. Depending on the forbearance measure
offered, an operational flag will be added to the customer’s account, which may indicate significant increase in credit risk and trigger
movement of this balance from stage 1 to stage 2 in impairment calculation. See note 2.1.2 for further details.
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 1.12.1.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of the financial instrument (or a shorter period where appropriate) to the net carrying value of the financial asset or financial liability.
Thecalculation tak The calculation tak es 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.
1.4 Operating expenses
Operating expenses include all direct and indirect costs. Where loan origination and acquisition costs can be referenced directly back
to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.
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
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Financial statements
1. Accounting policies continued
1.5 Interest payable and funding facilities
Interest expense and income, excluding bond premium, 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. Issue costs are initially recognised
as a reduction in the proceeds of the associated capital instruments and recognised over the behavioural life of the liability. The bond
premium is amortised over the life of the bond. Amortised facility fees are charged to the consolidated statement of comprehensive
income over the term of the facility using the effective interest rate method. Non-utilisation fees are charged to the consolidated
statement of comprehensive income as incurred.
Where an existing debt instrument is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability. All capitalised fees relating to the prior debt instrument are written off to the consolidated statement
ofcom of com prehensive income at the date of derecognition.
Senior secured note premiums and discounts are part of the instrument’s carrying amount and therefore are amortised over the expected
life of the notes. Where senior secured notes are repurchased in the open market resulting in debt extinguishment, the difference
between the carrying amount of the liability extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in the consolidated statement of comprehensive income.
1.6 Dividends
Equity dividends payable are recognised when they become legally payable. Interim equity dividends are recognised when paid.
Fi nale nal e quity 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 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of financial position date.
1.9 Intangible assets
Intangible assets are recognised at historical cost less accumulated amortisation and accumulated impairment losses. Intangible assets
are amortised from the date they are available for use. Amortisation is charged to the consolidated statement of comprehensive income.
Acquired software costs incurred are capitalised and amortised on a straight-line basis over the anticipated useful life, which is normally
four years.
Amortisation methods, useful lives and residual values are reviewed at each consolidated statement of financial position date.
Financial statements
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Notes to the consolidated financial statements continued
for the year ended 31 March 2023
1. Accounting policies continued
1.10 Held for sale assets
A non-current asset or disposal group is classified as held-for-sale when its carrying amount will be recovered principally through a sale
transaction. This is the case when the asset is available for immediate sale in its present condition subject only to terms that are usual and
customary for sales of such asset and its sale is highly probable. On initial classification as held-for-sale non-current assets are measured
at the lower of their carrying amount and the fair value less costs to sell.
1.11 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group 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 19.
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 19 for further details.
1.12 Financial instruments
The Group primarily enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities,
th emo e mo st significant being amounts receivable from customers and senior secured notes in the form of high yield bonds. During the year
the Group utilised a securitisation facility which has been fully repaid at the balance sheet date.
1.12.1 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 and interest on such balances is accrued on an arm’s length basis. 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immat is immat erial.
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 1.12.1.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 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.
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Financial statements
1. Accounting policies continued
1.12 Financial instruments continued
1.12.2 Financial liabilities
Debt instruments (other than those wholly repayable or receivable within one year), i.e. borrowings, are initially measured at fair value
less transaction costs and subsequently at amortised cost using the effective interest method.
Debt instruments that are payable within one year, typically trade payables, are measured, initially and subsequently, at the undiscounted
amount of the cash or other consideration expected to be paid or received. These include liabilities recognised for the expected cost of
repurchasing customer loans and receivables previously sold to third parties, where a lending decision complaint has since been upheld
in the customer’s favour. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment
of at of a t rade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright
short-term loan not at market rate, the financial liability is measured, initially, at the present value of the future cash flow discounted at
amark a mark et rate of interest for a similar debt instrument and subsequently at amortised cost.
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. See note 1.5 for details of treatment
ofof premiums/discounts on borrowings .
Short-term payables are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair
value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or has expired. Where an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a
new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in the
consolidated statement of comprehensive income.
1.13 Securitisation
The Group securitised certain financial assets via the sale of these assets to a special purpose entity, which in turn issued securities to investors.
All financial assets continue to be held on the Group’s consolidated statement of financial position, together with debt securities in issue
recognised for the funding. Securitised loans are not derecognised for the purposes of IFRS 9 on the basis that the Group retains substantially
all the risks and rewards of ownership. The securitisation structure was closed in November 2022. See note 25 for further details.
1.14 Merger reserve
The merger reserve was created as a result of a Group reorganisation in 2017 to create an appropriate holding company structure.
Wit hh the merger accounting method, the carrying values of the assets and liabilities of the parties to the combination are not required
tobe a to be a djusted 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.
1.15 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. The lease liability is remeasured whenever:
•
the lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate;
•
the lease payments change due to changes in an index or rate, in which case the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate; and
•
the lease contract is modified and the modification is not accounted for as a separate lease, in which case the lease liability
isr is r emeasured by discounting the revised lease payments using a revised discount rate.
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 The Group’s right-of-use assets relate to two property leases for offices in Bournemouth.
Financial statements
98
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
1. Accounting policies continued
1.16 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 and Republic
of Ireland. 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 at an average exchange rate for the month.
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.
1.17 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.
1.18 Share-based payments
The Company grants options under employee savings-related share option schemes (typically referred to as Save As You Earn schemes
(“SAYE”)) and makes awards under the Share Incentive Plans (“SIP”) and the Long Term Incentive Plans (“LTIP”). All of these plans are
equity settled.
The fair value of the share plans is recognised as an expense over the expected vesting period with a corresponding entry to retained
earnings, net of deferred tax. The fair value of the share plans is determined at the date of grant. The fair value of the awards granted
is measured based on Company-specific observable market data, taking into account the terms and conditions upon which the awards
were granted.
Non-market-based vesting conditions (i.e. earnings per share and absolute total shareholder return targets) are taken into account in
estimating the number of awards likely to vest, which is reviewed at each accounting date up to the vesting date, at which point the
estimate is adjusted to reflect the actual awards issued.
The grant by the Company of options and awards over its equity instruments to the employees of subsidiary undertakings is treated
asan as aninvest invest ment in the Company’s financial statements.
1.19 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.
1.20 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:
•
IFRS 9: measurement of ECLs:
•
Assessing whether the credit risk of an instrument has increased significantly since initial recognition (note 2.1.2).
•
Definition of default is considered by the Group to be when an account is three contractual payments past due (note 1.2.vi).
•
Multiple economic scenarios – the probability weighting of base, downside and severe downside scenarios to the ECL
calculati on(no on (no te 2.1.3).
•
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.
•
Accounts receivable from customers:
•
Judgement is applied in assessing whether the contractual cash flows are SPPI, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount
of contractual cash flows such that it would not meet this condition.
•
Held for sale assets:
•
Assessing probability and timing of an asset’s prospective sale (note 14).
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Financial statements
2. Critical accounting assumptions and key sources of estimation uncertainty continued
Estimates
Areas which include a degree of estimation uncertainty are:
•
IFRS 9: measurement of ECLs:
•
Adopting a collective basis for measurement in calculation of ECLs in IFRS 9 calculations (note 2.1.1).
•
Probability of default (“PD”), exposure at default (“EAD”) and loss given default (“LGD”) (note 2.1.1).
•
Forward-looking information incorporated into the measurement of ECLs (note 2.1.3).
•
Incorporating a probability weighted estimate of external macroeconomic factors into the measurement of ECLs (note 2.1.3).
•
Complaints provisions:
•
Calculation of the uphold rate for customers on the gross loan book and/or customers that have made payments post the Scheme
Effective Date. These calculations evaluate current and historical data, and assumptions and expectations of future outcomes (note 2.2.1).
•
Estimation of the cash liability is based on assumptions around net future collections which uses assumptions around credit losses,
valuation of impaired debt and 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.
•
Held for sale asset:
•
Estimate of expected fair value less costs to sell, valued via a market approach (note 14).
2.1 Credit impairment
2.1.1 Measurement of ECLs
The Group has adopted a collective basis of measurement for calculating ECLs. The loan book is bifurcated into those customers who
have had a Covid-19 forbearance plan and those who have not. The allowance for ECLs is calculated using three components: PD, LGD
and EAD. The ECL is calculated by multiplying the PD (twelve month or lifetime depending on the staging of the loan), LGD and EAD and
the result is discounted to the reporting date at the original EIR.
The twelve month and lifetime PDs represent the probability of a default occurring over the next twelve months or the lifetime of the
financial instruments, respectively, based on historical data and assumptions and expectations of future economic conditions.
EAD represents the expected balance at default, considering the repayment of principal and interest from the balance sheet date to
the default date. LGD is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference
between the contractual cash flows due and those that the Group expects to receive.
2.1.2 Assessment of significant increase in credit risk (“SICR”)
To determine whether there has been a SICR the following two-step approach has been taken:
1) The primary indicator of whether a significant increase in credit risk has occurred for an asset is determined by considering the
presence of certain payment status flags on a customer’s account. This is the Group’s primary qualitative criteria considered in the
assessment of whether there has been a significant increase in credit risk. If a relevant operational flag is deemed a trigger indicating
the remaining lifetime probability of default has increased significantly, the Group considers the credit risk of an asset to have increased
significantly since initial recognition. Examples of this include operational flags for specific circumstances such as short-term payment
plans and breathing spaces granted to customers.
2) As a backstop, the Group considers that a significant increase in credit risk occurs no later than when an asset is two contractual
payments past due (one payment past due is equivalent to 30 days past due), which is aligned to the IFRS 9 rebuttable presumption
ofmo of mo re than 30 days past due. This is the primary quantitative information considered by the Group in significant increase in credit
ri skas sk as sessments.
The Group reassesses the flag status of all loans at each month end and remeasures the proportion of the book which has demonstrated
a significant increase in credit risk based on the latest payment flag data. An account transitions from stage 2 to stage 1 immediately when
a payment flag is removed from the account.
2.1.3 Forward-looking information
The Group assesses the impact of forward-looking information on its measurement of ECLs. While the Group has historically analysed effects
of a range of macro-economic variables it believes the most significant factors likely to impact future credit losses will be unemployment and
inflation. These factors are considered on a qualitative basis in estimating PDs and weighting scenarios and ultimately reflect The Group’s
expectations of future credit losses.
Financial statements
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Notes to the consolidated financial statements continued
for the year ended 31 March 2023
2. Critical accounting assumptions and key sources of estimation uncertainty continued
2.1 Credit impairment continued
2.1.3 Forward-looking information continued
The Group has modelled and weighted three different ECL scenarios – a base, a downside and a severe downside scenario:
•
The base scenario broadly represents probability of defaults whereby historic performance is extrapolated with an expectation for
future deterioration applied on a judgemental qualitative basis relating to expectations on the aforementioned macroeconomic factors.
A weighting of 25% has been applied to reflect the Group’s assumption that whilst the current macroeconomic environment has the
potential to improve based on recent Office for Budgetary Reporting (“OBR”) forecasts, the rate of inflation is likely to remain high
throughout the remaining life of the loan book and therefore likely to impact customers in an adverse manner. Further consideration
has been given to the rise in interest rates, which are expected to remain materially above recent prior year averages.
•
The downside scenario uplifts the base scenario probability of default by an average of 17%. Incremental to the base scenario
assumptions, further consideration has been given to the uncertainty surrounding macroeconomic forecasts and the potential for a
range of outcomes. In the downside scenario, the uplift to PDs is modelled based on a further potential deterioration in the economy
and the macroeconomic factors that may impact the Group’s customer base, for example inflation and unemployment spike, which
would result in an income shock and rise in defaults. A weighting of 50% has been applied to this scenario to reflect a prudent
judgement on future credit losses given the high level of uncertainty in economic forecasts.
•
The severe downside applies a further uplift of 25% to the downside scenario, weighted at 25%. This scenario captures the income
shock outlined in the downside scenario along with incremental credit losses the Group may reasonably expect to experience in the
managed wind down of the business.
The following table details the absolute impact on the current ECL provision of £18.0m if each of the three scenarios are given a probability
weighting of 100%.
Impact
Base -0.9m
Downside +0.2m
Severe downside +0.5m
The scenarios above demonstrate a range of ECL provisions from £17.1m to £18.5m.
As with any economic forecasts, the projections and likelihoods of occurrence are subject to a high degree of inherent uncertainty and
therefore the actual outcomes may be significantly different to those projected.
2.2 Complaints provisions
2.2.1 Complaints provision – estimation uncertainty
Provisions included in the statement of financial position refers to a provision recognised for customer complaints. 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 whether complaints provisions should be recognised, revising previous judgements and
estimates as appropriate; however, there is a wide range of possible outcomes.
These calculations involve significant, complex management judgement and estimation. The key assumption with the most potential for
variability is the uphold rate (%) – the expected average uphold rate applied to future undecisioned Scheme claimants.
The calculation of the complaints provision as at 31 March 2023 is based on Amigo’s best estimate of the future obligation. The Scheme
cash redress provision is £97.1m, which 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 2023, the Group has recognised a complaints provision totalling £195.9m in respect of customer complaints redress and
associated costs. Utilisation in the period totalled £3.0m. primarily relating to the cost incurred in processing decisioning on Scheme
claims. The liability has increased by £16.1m compared to prior year. The closing provision is comprised of balance adjustments which
have decreased with the passage of time,due to the collection of customer balances, 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.
On an underlying basis the liability for customer redress has increased approximately £27m, which is reflective of both increased volume
of claims, now known, and the estimated rate of the claims that are upheld. The uphold rate in prior year was estimated at 65% based
primarily on empirical evidence from comparable schemes, this has been revised to 81% as at 31 March 2023 based on actual decisioning
data f rom ama rom a ma terial portion of the claimant population.
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Financial statements
2. Critical accounting assumptions and key sources of estimation uncertainty continued
2.2 Complaints provisions continued
2.2.1 Complaints provision – estimation uncertainty continued
The following table details the effect on the complaints provision considering incremental changes on the key assumption, should current
estimates prove too high or too low.
Assumption Assumption used Sensitivity applied Sensitivity (£m)
Average uphold rate per customer
1
81% +/-5ppts +5.0 -5.0
Cash redress provision
2
£97.1m +/-5ppts +4.9 -4.9
1 Uphold rate. Sensitivity analysis shows the impact of a 5 percentage point change in the applied uphold rate on both the current and forward-looking
elements of the provision.
2 Cash redress. Sensitivity analysis shows the impact of a 5 percentage point change in the amount of the cash redress provision
The table above shows the increase or decrease in total provision charge resulting from reasonably possible changes in the key uphold
rate assumption. The Board considers that this sensitivity analysis covers the full range of likely outcomes based on the fact that a
significant portion of claims has been decisioned already.
It is possible that the eventual outcome may differ materially from the current estimate and could materially impact the financial
statements as a whole. This is due to the risks and inherent uncertainties surrounding the assumptions used in the provision calculation.
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.
Amigo Loans Ireland Limited, registered in Ireland, is not a reportable operating segment, as it is not separately included in the reports
provided to the strategic steering committee. The results of these operations are included in the “other segments” column. Amigo Loans
Ireland Limited was, in prior years, reported as a separate segment but it no longer meets the criteria for separate segment reporting.
Amigo Loans Ireland Limited was sold by the Group to the CEO of the business in a management buy-out on 28 February 2023.
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 ended 31 March 2023
Year to Year to Year to
31 Mar 2023 31 Mar 2023 31 Mar 2023
£m £m £m
UK Other Total
Revenue 19.2 0.1 19.3
Interest payable and funding facility fees (3.6) — (3.6)
Interest receivable 1.5 — 1.5
Impairment of amounts receivable from customers 3.4 — 3.4
Administrative and other operating expenses (37.5) 1.3 (36.2)
Complaints provision expense (19.1) — (19.1)
Total operating (expense)/income (56.6) 1.3 (55.3)
(Loss)/profit before tax (36.1) 1.4 (34.7)
Tax charge on loss (0.1) — (0.1)
(Loss)/profit and total comprehensive income attributable to equity shareholders
oftheGroup of the Group
(36.2) 1.4 (34.8)
31 Mar 2023 31 Mar 2023 31 Mar 2023
£m £m £m
UK Ireland Total
Gross loan book
1
63.4 — 63.4
Less impairment provision (18.0) — (18.0)
Net loan book
2
45.4 — 45.4
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.
Financial statements
102
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
3. Segment reporting continued
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.
Year ended 31 March 2022
Year to Year to Year to
31 Mar 2022 31 Mar 2022 31 Mar 2022
£m £m £m
UK Other Total
Revenue 88.6 0.9 89.5
Interest payable and funding facility fees (16.6) (0.1) (16.7)
Interest receivable 0.1 — 0.1
Impairment of amounts receivable from customers (37.4) 0.4 (37.0)
Administrative and other operating expenses (23.9) (0.7) (24.6)
Complaints provision release 156.6 — 156.6
Total operating income/(expense) 132.7 (0.7) 132.0
Profit before tax 167.4 0.5 167.9
Tax credit on profit
1
1.7 — 1.7
Profit and total comprehensive income attributable to equity shareholders of the Group 169.1 0.5 169.6
31 Mar 2022 31 Mar 2022 31 Mar 2022
£m £m £m
UK Other Total
Gross loan book
2
184.2 1.2 185.4
Less impairment provision (47.1) (0.3) (47.4)
Net loan book
3
137.1 0.9 138.0
1 The tax credit for the UK reflects an adjustment for prior years and a tax refund received during the year.
2 Gross loan book represents total outstanding loans and excludes deferred broker costs.
3 Net loan book represents gross loan book less provision for impairment.
4. Revenue
Revenue consists of interest income and is derived primarily from a single segment in the UK, but also from Irish entity Amigo Loans
Ireland Limited (see note 3 for further details).
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
Interest under amortised cost method 19.0 88.2
Modification of financial assets (note 6) 0.3 1.2
Other income — 0.1
19.3 89.5
5. Interest payable and funding facility fees
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
Senior secured notes interest payable 3.7 14.9
Funding facility fees (0.1) 1.0
Securitisation interest payable — 0.2
Other finance costs — 0.6
3.6 16.7
No interest was capitalised by the Group during the period. Funding facility fees include non-utilisation fees and amortisation of initial
costs of the Group’s senior secured notes.
Other finance costs in the prior year largely represent non-utilisation fees of £0.5m relating to the securitisation facility.
103
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Financial statements
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 £0.6m (2022: £5.9m).
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
Modification release recognised in revenue — 1.2
Modification release recognised in impairment 0.1 4.1
Total modification release 0.1 5.3
7. Operating expenses
The main categories of expenditure included in administrative and other operating expenses are employee costs £17.3m (2022: £13.6m),
legal, professional and consultancy fees £10.9m (2022: £5.1m) and licence fees £2.5m (2022: £1.9m).
Year to Year to
31 Mar 2023 31 Mar 2022
Other operating expenses include: £m £m
Fees payable to the Company’s auditor and its associates for:
– audit of these financial statements 0.2 0.3
– audit of financial statements of subsidiaries 0.4 0.9
– audit-related assurance services
1
0.1 0.4
Depreciation of property, plant and equipment 0.5
0.5
Depreciation and interest expense on leased assets 0.3 0.3
Defined contribution pension cost 0.4 0.4
1 Other assurance services include reviews of interim financial statements and other assurance services. In 2023, audit fees were paid to MHA, and in
2022 they were paid to KPMG.
8. Employees
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
Employee costs
Wages and salaries 10.9 11.1
Social security costs 1.4 1.4
Cost of defined contribution pension scheme (note 23) 0.4 0.4
Share-based payments (note 22) (0.2) (0.4)
Restructuring provision
1
(note 19) 4.2 -
Other (termination payments) 0.6 1.1
17.3 13.6
1 Restructuring provision relates to the cost of redundancies (see note 19 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 Year to Year to
31 Mar 2023 31 Mar 2023 31 Mar 2023 31 Mar 2022 31 Mar 2022 31 Mar 2022
UK Other Total UK Other Total
Employee numbers
Operations 101 7 108 151 7 158
Support 101 3 104 97 5 102
202 10 212 248 12 260
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 48 in the current year as compared to prior year, reflecting the reduction in size of the book
over the year.
Financial statements
104
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
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 2023 31 Mar 2023
£m £m
Key management emoluments including employers’ National Insurance costs 1.8 1.6
Termination payments 0.6 —
2.4 1.6
During the year retirement benefits were accruing for one Director (2022: one) in respect of defined contribution pension schemes.
There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 £1,417,007 inclusive of employers’ National Insurance payments,
ofw of w hich £630,000 related to loss of office payments (2022: £745,005 inclusive of employers’ National Insurance payments).
The value of the Group’s contributions paid to a defined contribution pension scheme in respect of the highest-paid Director amounted
to£to £nil due to an election being made for payment in lieu of pension (2022: £nil).
10. Taxation
The applicable corporation tax rate for the period to 31 March 2023 was 19.0% (2022: 19.0%) and the effective tax rate is negative 0.3%
(2022: negative 1.0%).
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
Corporation tax
Current tax on (loss)/profit for the year 0.1 (0.3)
Adjustments in respect of previous periods — (1.4)
Total current tax charge/(credit) 0.1 (1.7)
Taxation charge/(credit) on (loss)/profit
0.1
(1.7)
A reconciliation of the actual tax charge/(credit), shown above, and the (loss)/profit before tax multiplied by the standard rate of tax,
isas f is as f ollows:
Year to Year to
31 Mar 2023 31 Mar 2022
£m £m
(Loss)/profit before tax (34.7) 167.9
(Loss)/profit before tax multiplied by the standard rate of corporation tax in the UK of 19% (2022: 19%) (6.6) 31.9
Effects of:
Expenses not deductible for tax purposes 0.8 0.7
Non-taxable income — (0.6)
Adjustments to tax charge in respect of prior periods — (1.4)
Other (0.1) —
Current-year (losses)/profits for which no deferred tax asset is recognised 6.0 (32.3)
Total tax charge/(credit) for the year 0.1 (1.7)
Effective tax rate (0.3)% (1.0)%
The Finance Act 2021 increased the UK corporation tax rate from 19% to 25% with effect from 1 April 2023. While this change does not affect
the current tax position for the year, it will affect future periods.
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 £41.8m at the substantively enacted rate of 25% (FY22: £35.3m 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 £36.3m (FY22: £28.5m)
in relation to £145m (FY22: £114m) of unutilised tax losses and £5.6m (FY22: £6.8m) in relation to other timing differences of £22.3m
(FY22: £27m).
The UK statutory rate for FY23 is 19% (FY22: 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.
105
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
12. (Loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the (loss)/profit for the period attributable to equity shareholders by the weighted
average number of ordinary shares outstanding during the period.
Diluted (loss)/earnings per share calculates the effect on (loss)/earnings per share assuming conversion of all dilutive potential ordinary
shares. In the current year, following the closure of the performance-related share incentive plans and non-performance-related
schemes, there are no dilutive potential ordinary shares. Dilutive potential ordinary shares in the prior year were calculated as follows:
i) For share awards outstanding under performance-related share incentive plans, such as the Share Incentive Plan (“SIP)” and the
LongTerm In Long Term In centive Plans (“LTIPs”), the number of dilutive potential ordinary shares is calculated based on the number of shares
which would be issuable if the end of the reporting period is assumed to be the end of each scheme’s performance period.
Anassessment over An assessment over financial and non-financial performance targets as at the end of the reporting period has therefore been
performed to aid calculation of the number of dilutive potential ordinary shares.
ii) For share options outstanding under non-performance-related schemes such as the two Save As You Earn schemes (“SAYE”), a
calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average
annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding
share options. The number of shares calculated is compared with the number of share options outstanding, with the difference being
the dilutive potential ordinary shares.
Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per
share or increase loss per share.
31 Mar 2023 31 Mar 2022
Pence Pence
Basic (loss)/earnings per share (7.3) 35.7
Diluted (loss)/earnings per share
1
(7.3) 35.7
Adjusted (loss)/earnings per share (basic and diluted)
2
(2.0) 2.8
1 The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted loss per share.
2 Adjusted basic (loss)/earnings per share and earnings for adjusted basic earnings(loss) per share are non-GAAP measures.
The Directors are of the opinion that the publication of the adjusted (loss)/earnings per share is useful as it gives a better indication
ofof ongoing business performance. Reconciliations of the loss used in the calculations are set out below.
31 Mar 2023 31 Mar 2022
£m £m
(Loss)/profit for basic EPS (34.8) 169.6
Complaints provision expense/(release) 19.1 (156.6)
Restructuring expense 4.5 —
Onerous contract expense 1.9 —
Senior secured notes redemption — 0.7
Write-off of unamortised securitisation fees — 0.5
Tax provision release — (0.8)
Less tax impact — (0.1)
(Loss)/profit for adjusted basic EPS
1
(9.3) 13.3
Basic weighted average number of shares (m) 475.3 475.3
Dilutive potential ordinary shares (m)
2
— —
Diluted weighted average number of shares (m) 475.3 475.3
1 Adjusted basic (loss)/profit per share and earnings for adjusted basic (loss) per share are non-GAAP measures.
2 Although the Group issued further options’ under the employee share schemes in the prior year, upon assessment of the dilutive nature of the options,
some options are not considered dilutive as they would not meet the performance conditions. Those dilutive shares included are in relation to the
employee October 2020 SAYE scheme and time apportioned for the year. Please see note 22 for further details.
Financial statements
106
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
13. Customer loans and receivables
The table shows the gross loan book and deferred broker costs by stage, within the scope of the IFRS 9 ECL framework.
31 Mar 2023 31 Mar 2022
£m £m
Stage 1 42.2 128.8
Stage 2 11.0 32.4
Stage 3 10.2 24.2
Gross loan book 63.4 185.4
Deferred broker costs
1
– stage 1 0.2 1.5
Deferred broker costs
1
– stage 2 0.1 0.4
Deferred broker costs
1
– stage 3 — 0.3
Loan book inclusive of deferred broker costs 63.7 187.6
Provision (18.0) (47.4)
Customer loans and receivables 45.7 140.2
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.
Ageing of gross loan book (excluding deferred brokers’ fees and provision) by days overdue:
31 Mar 2023 31 Mar 2022
£m £m
Current 43.7 132.1
1–30 days 6.7 21.1
31–60 days 2.7 8.0
>60 days 10.3 24.2
Gross loan book 63.4 185.4
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.
Year ended 31 March 2023
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Gross carrying amount at 1 April 2022 128.8 32.4 24.2 185.4
Deferred broker fees 1.5 0.4 0.3 2.2
Loan book inclusive of deferred broker costs at 1 April 2022 130.3 32.8 24.5 187.6
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 time
1
(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 (1.3) (0.3) (0.3) (1.9)
Loan book inclusive of deferred broker costs as at 31 March 2023 42.4 11.1 10.2 63.7
107
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
13. Customer loans and receivables continued
Year ended 31 March 2022
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Gross carrying amount at 1 April 2021 311.5 61.4 50.0 422.9
Deferred broker fees 7.2 1.4 1.1 9.7
Loan book inclusive of deferred broker costs at 1 April 2021 318.7 62.8 51.1 432.6
Changes in gross carrying amount attributable to:
Transfer of loans receivable to stage 1 16.3 (15.8) (0.5) —
Transfer of loans receivable to stage 2 (50.4) 51.4 (1.0) —
Transfer of loans receivable to stage 3 (15.6) (9.6) 25.2 —
Passage of time
1
(63.4) (13.1) (3.2) (79.7)
Customer settlements (60.3) (10.4) (1.9) (72.6)
Loans charged off (18.3) (31.4) (43.8) (93.5)
Modification loss relating to Covid-19 payment holidays (note 6) 9.0 (0.1) (0.6) 8.3
Net movement in deferred broker fees (5.7) (1.0) (0.8) (7.5)
Loan book inclusive of deferred broker costs as at 31 March 2022 130.3 32.8 24.5 187.6
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.
As shown in the table above, the loan book inclusive of deferred broker cost decreased from £187.6m to £63.7m at 31 March 2023.
Thiswas This was primarily driven by the effect of passage of time (loan balances amortising throughout the period), customer settlements
andn and n oor o or iginations on these loans in the year. The originations in the year related to the RewardRate brand. These are shown as
hel dfors d for s al eas e as sets (note 14).
The following tables explain the changes in the loan loss provision between the beginning and the end of the period:
Year ended 31 March 2023
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
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 time
1
(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 6.1 3.3 8.6 18.0
Year ended 31 March 2022
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Loan loss provision as at 1 April 2021 21.0 14.1 46.9 82.0
Changes in loan loss provision attributable to:
Transfer of loans receivable to stage 1 1.2 (1.4) (0.4) (0.6)
Transfer of loans receivable to stage 2 (3.5) 8.4 (0.8) 4.1
Transfer of loans receivable to stage 3 (1.1) (1.5) 20.9 18.3
Passage of time
1
(4.4) (2.1) (2.6) (9.1)
Customer settlements (4.2) (1.2) (1.6) (7.0)
Loans charged off (1.2) (8.5) (36.3) (46.0)
Management overlay 0.1 0.1 0.5 0.7
Modification loss relating to Covid-19 payment holidays (note 6) 0.6 — (0.1) 0.5
Remeasurement of ECLs 9.6 1.0 (6.1) 4.5
Loan loss provision as at 31 March 2022 18.1 8.9 20.4 47.4
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.
As shown in the above tables, the allowance for ECL decreased from £47.4m at 31 March 2022 to £18.0m at 31 March 2023. The overall
provision has reduced as the book amortises and ages in the absence of new originations on these loans.
Financial statements
108
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
13. Customer loans and receivables continued
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
£m £m £m £m
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
>60 days — — 10.2 10.2
42.2 11.0 10.2 63.4
The following table splits the gross loan book by arrears status, and then by stage respectively for the year ended 31 March 2022.
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Up to date 120.5 11.6 — 132.1
1–30 days 8.3 12.8 — 21.1
31–60 days — 8.0 — 8.0
>60 days — — 24.2 24.2
128.8 32.4 24.2 185.4
The following table further explains changes in the net carrying amount of loans receivable from customers to explain their significance
toto the changes in the loss allowance for the same portfolios.
31 Mar 2023 31 Mar 2022
Customer loans and receivables £m £m
Due within one year 45.4 113.0
Due in more than one year — 25.0
Net loan book 45.4 138.0
Deferred broker costs
1
Due within one year 0.3 1.8
Due in more than one year — 0.4
Customer loans and receivables 45.7 140.2
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. Held for sale assets
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 which feature dynamic pricing to reward on-time payment with lower rates and penalty-free annual payment
holidays. The new products were released under the RewardRate brand. Following the implementation of the wind down plan on
23Ma 23 Ma rch 2023, new lending immediately ceased. It is considered that, under IFRS 5, the RewardRate loan book meets the criteria
asahe as a he ld for sale asset. This conclusion has been reached in the assessment of the following criteria outlined in IFRS 5:
•
Carrying amount to be recovered principally through the sale - given the loan book will run for approximately five years based
on loan term, this far exceeds the current wind down plan timeline and any period that would be economical to collect. The only
reasonable solution to maximise creditor returns is to sell the RewardRate loan book rather than collect it to term.
•
Asset is available for immediate sale – The loan book is considered to be available for sale reasonably imminently.
•
Sale is highly probable It is considered given the nascency of the book and the robustness of creditworthiness, alongside initial
indications of interest, a sale is more likely than not.
Given the Group expects to sell the loan book at a discount (i.e. below carrying value) it will be measured at the fair value less
costs to sell.
It is not expected to incur costs to sell the asset and therefore can recognise the asset at fair value – i.e. the price it expects to receive
from a third party purchasing the asset.
109
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
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).
31 Mar 2023 31 Mar 2022
Carrying Fair Carrying Fair
Fair value amount value amount value
hierarchy £m £m £m £m
Financial assets not measured at fair value
1
Amounts receivable from customers
2
Level 3 45.7 17.2 140.2 125.0
Held for sale assets Level 3 1.1 1.1 — —
Other receivables Level 3 1.5 1.5 1.6 1.6
Cash and cash equivalents (restricted) Level 1 107.2 107.2 7.6 7.6
Cash and cash equivalents Level 1 62.4 62.4 133.6 133.6
217.9 189.4 283.0 267.8
Financial liabilities not measured at fair value
1
Other liabilities Level 3 (6.0) (6.0) (6.7) (6.7)
Senior secured notes
3
Level 1 — — (49.7) (48.7)
(6.0) (6.0) (56.4) (55.4)
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c it c onsiders this as 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t in t he calculation, this results in a fair value lower than the carrying amount.
3 Senior secured notes are presented in the financial statements net of unamortised fees. As at 31 March 2023, the gross principal amount outstanding
was £0m (2022: £50.0m). The fair value reflects the market price of the notes at the financial year end.
Financial instruments not measured at fair value
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t is t herefore determined through future cash flows, they are classed as Level 3 under IFRS 13: Fair Value Measurement.
The fair value of senior secured notes has been taken at the Bloomberg Valuation Service (“BVAL”) market price.
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 treasury 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
Whilst Amigo currently has only a single product in a single market for the legacy lending, and two products for the pilot lending (solo and
guarantor), there is a limited concentration of risk to individual customers with an average customer balance outstanding on the legacy
lending of £2,181 (2022: £2,540), and for the pilot lending £5,238 (2022:£nil). The carrying amount of the loans represents the Group’s
maximum exposure to credit risk.
The Group carried out an affordability assessment on the customer before a loan could be paid out. As a separate exercise, each
potential loan undergoes a creditworthiness assessment based on the customer’s credit history.
The Group managed credit risk at origination by actively managing the blend of risk in its portfolio to achieve the desired impairment
rates in the long term. This objective was achieved by managing application scorecards and the maximum exposure to individual
customers depending on their circumstance and credit history. Credit risk exposure at origination has been minimal inthe y in the y ear due
toth to th elo e lo w value of lending during the pilot RewardRate product.
Financial statements
110
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
15. Financial instruments continued
Credit risk continued
a) Amounts receivable from customers continued
Credit risk continues to be managed post-origination via ongoing monitoring and collection activities. When payments are missed,
regular communication with customers commences. We will contact the borrower and, where applicable, the guarantor from day one
to advise them of the missed payment and seek to agree a resolution with the borrower. For loans supported by a guarantor, if we are
unable to resolve with the borrower, then we will turn to the guarantor for payment after fourteen days. Throughout this whole process,
operational flags will be added to the account to allow monitoring of the status of the account. Operational flags are used within the
Group’s impairment model in the assessment of whether there has been a significant increase in credit risk on an account (see note 2.1.2
for further details).
Risk segmentation – Previously the IFRS 9 provision was segmented into Amigo’s risk segments. It is apparent that due to the impact of
Covid-19 these segments no longer have discernible credit risk profiles. Instead, and with a view for simplicity, the book is bifurcated into
customers who have had a Covid-19 forbearance plan and those that have not, along with the lending pilot.
b) Bank counterparties
This credit risk is managed by the Group’s key management personnel. This risk is deemed to be low; derivative financial instruments
held are immaterial to the Group, and cash deposits are only placed with high quality counterparties such as tier 1 bank institutions.
Treasury 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
seeks to limit the net exposure to changes in interest rates. Interest rate risk has diminished in the period as debt with a variable interest
rate has been paid off.
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.
The reisn re is n o significant foreign exchange risk to the Group. The Group does incur some operating costs in US Dollar and Euro, which it
does not hedge as there would be minimal impact on reported profits and equity. Amigo Luxembourg S.A. is a GBP functional currency
entity and gives no foreign exchange exposure upon consolidation. During the year the Group was exposed to foreign exchange
ri skt sk t hrough its Amigo Ireland operation, but this was considered immaterial; as at 31 March 2022 the Irish net loan book represented
0.7% of the Group’s consolidated net loan book. During the year the Group disposed of its Irish operation. Hence, foreign exchange
ri skis d sk is d eeme dimm d imm aterial.
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 2023 was £62.4m.
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
Since entering into the Fallback Solution the Board is no longer actively seeking new capital to sustain the business.
31 Mar 2023 31 Mar 2022
Maturity analysis of financial liabilities £m £m
Analysed as:
Due within one year
Other liabilities (6.0) (6.7)
Due in one to two years
Senior secured notes — (49.7)
(6.0) (56.4)
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Annual report and accounts 2023
Financial statements
15. Financial instruments continued
Liquidity risk continued
Capital management continued
Maturity analysis of contractual cash flows of financial liabilities
Carrying
0-1 year 1-2 years Total amount
As at 31 March 2023 £m £m £m £m
Other liabilities 6.0 — 6.0 6.0
Carrying
0-1 year 2-5 years Total amount
As at 31 March 2022 £m £m £m £m
Other liabilities 6.7 — 6.7 6.7
Senior secured notes 3.8 53.8 57.6 49.7
10.5 53.8 64.3 56.4
16. Other receivables
31 Mar 2023 31 Mar 2022
£m £m
Current
Other receivables 0.2 0.6
Prepayments and accrued income 1.3 1.0
1.5 1.6
17. Trade and other payables
31 Mar 2023 31 Mar 2022
£m £m
Current
Accrued senior secured note interest — 0.8
Trade payables 0.9 0.4
Taxation and social security 0.3 0.4
Other creditors
1
1.9 1.1
Accruals 2.9 4.0
6.0 6.7
1 Other creditors include an onerous contract provision of £1.3m in relation to the Reward Rate (RR) product. The product has a number of associated
supplier contracts that cannot either be terminated, or a termination fee has been negotiated to end the contract early. These unavoidable costs are
expected to be £1.8m which is greater than the economic benefits (actual achieved and forecast) of the potential RR loan book sale (expected to be
£1.5m). At 31 March 2023 £0.5m has already been paid and £1.3m remains payable. Revenue generated from RR is separately distinguishable. Contracts
associated with the pay-out process for the RR product are considered as onerous from March 2023 following the announcement that the business
would stop new lending. Contracts associated with the independent RR loan book platform are considered onerous from the expected date of the
de bts bt s ale.
Financial statements
112
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
18. Bank and other borrowings
31 Mar 2023 31 Mar 2022
£m £m
Current and non-current liabilities
Amounts falling due in one to two years
Senior secured notes — 49.7
— 49.7
Below is a reconciliation of the Group’s borrowing liabilities:
31 Mar 2023 31 Mar 2022
£m £m
Opening Group borrowings 49.7 296.5
Repayment of external funding (50.0) (248.5)
Interest expense relating to Group borrowings 4.8 19.6
Interest paid relating to Group borrowings (4.5) (17.9)
Closing Group borrowings — 49.7
The Group’s Senior secured notes in the form of £49.7m high yield bonds with a coupon rate of 7.625% which were due to expire in
January 2024, were redeemed early in March 2023.
19. 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.
2023 2022
Complaints Restructuring Total Complaints Restructuring Total
£m £m £m £m £m £m
Opening provision 179.8 — 179.8 344.6 1.0 345.6
Provisions (released)/made during year 19.1 4.5 23.6 (156.6) — (156.6)
Net utilisation of the provision (3.0) — (3.0) (8.2) (1.0) (9.2)
Closing provision 195.9 4.5 200.4 179.8 — 179.8
Non-current — — — 97.0 — 97.0
Current 195.9 4.5 200.4 82.8 — 82.8
195.9 4.5 200.4 179.8 — 179.8
Customer complaints redress
As at 31 March 2023, the Group has recognised a complaints provision totalling £195.9m in respect of customer complaints redress
and associated costs. Utilisation in the period totalled £3.0m. The liability has increased by £16.1m compared to prior year. The closing
provision is comprised of an estimate of cash liability, balance adjustments which have decreased with the passage of time, due to the
collection of customer balances, and an estimate of refunds to upheld Scheme claimants for collections made since Scheme effective
date, which will be redressed in ful lan l an d attract compensatory interest.
On an underlying basis the liability for customer redress has increased approximately £27m, which is reflective of both increased volume
of claims, now known, and the estimated rate of the claims that are upheld. The uphold rate in prior year was estimated at 65% based
primarily on empirical evidence from comparable schemes, this has been revised to 81% as at 31 March 2023 based on actual decisioning
data from material portion of the claimant population.
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 twelve 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 2023, the Group recognised a restructuring provision totalling £4.5m in respect of the expected cost of staff redundancies
and liquidator costs due to the wind down of the business.
113
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Annual report and accounts 2023
Financial statements
20. 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.
2023 2022
Right-of-use assets £m £m
Cost
At 1 April 2022/1 April 2021 1.4 1.4
Restatement of lease term (0.5) —
At 31 March 2023/31 March 2022 0.9 1.4
Accumulated depreciation and impairment
As at 1 April 2022/1 April 2021 (0.6) (0.4)
Charged to consolidated statement of other comprehensive income (0.2) (0.2)
At 31 March 2023/31 March 2022 (0.8) (0.6)
Net book value at 31 March 2023/31 March 2022 0.1 0.8
Lease liabilities
2023 2022
£m £m
Current 0.1 0.3
Non-current — 0.6
Total 0.1 0.9
A maturity analysis of the lease liabilities is shown below:
2023 2022
£m £m
Due within one year 0.1 0.3
Due between one and five years — 0.5
Due in more than five years — 0.2
Total 0.1 1.0
Unearned finance cost — (0.1)
Total lease liabilities 0.1 0.9
In the year £0.3m (£0.2m in relation to depreciation and impairment and £0.1m in relation to interest expense) was charged to the consolidated
statement of comprehensive income in relation to leases (2022: £0.3m). Lease liabilities relate 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 have been
remeasured to reflect a reduction in useful life in accordance with IFRS 16.
Financial statements
114
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
21. 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 475m ordinary shares and increasing
neta net a ssets by £207.2m. No additional shares were issued subsequent to conversion of the shareholder loan notes.
Allotted and called up shares at par value
31 Mar 2023
£’000
Total
41,000 deferred ordinary shares of £0.24 each 10
475,333,760 ordinary shares of 0.25p each 1,188
1,198
31 Mar 2022
£’000
Total
41,000 deferred ordinary shares of £0.24 each 10
475,333,760 ordinary shares of 0.25p each 1,188
1,198
Ordinary A Ordinary B Ordinary C Ordinary D Ordinary Total
Number Number Number Number Number Number
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 — — — — 75,333,760 75,333,760
At 31 March 2019 — — — — 475,333,760 475,333,760
At 31 March 2020 — — — — 475,333,760 475,333,760
At 31 March 2021 — — — — 475,333,760 475,333,760
At 31 March 2022 — — — — 475,333,760 475,333,760
At 31 March 2023 — — — — 475,333,760 475,333,760
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gen a gen eral 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 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 2023 (2022: £nil).
115
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
22. Share-based payment
The Group issues share options and awards to employees as part of its employee remuneration packages. The Group operated three
types of equity settled share scheme: Long Term Incentive Plan (“LTIP”), employee savings-related share option schemes referred to
asS as S ave 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 increase 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, taking into account
the terms and conditions upon which the awards were granted.
When an equity settled share option or award is granted, a fair value is calculated based on: the share price at grant date, the probability
of the option/award vesting, the Group’s recent share price volatility, and the risk associated with the option/award. A fair value is
calculated based on the value of awards granted and adjusted at each balance sheet date for the probability of vesting against
performance conditions. The fair value of all options/awards is charged to the consolidated statement of comprehensive income
onas on a s traight-line basis over the vesting period of the underlying option/award.
The credit to the consolidated statement of comprehensive income for the year to 31 March 2023 was £0.4m (2022: credit of £0.4m)
fort for t he Group and Company.
A summary of the awards under each scheme is set out below:
31 March 2023 31 March 2022
August
2021
February/
March 2021
December
2020
September
2019 August 2021
February/
March 2021
December
2020
September
2019
LTIPs LTIPs LTIP LTIP LTIPs LTIPs LTIP LTIP
Performance condition
Ye s Ye s
Ye s
Ye s
Ye s
Ye s Ye s
Ye s
Method of settlement accounting Equity Equity Equity Equity Equity Equity Equity Equity
Number of instruments — — — — 3,700,000 2,500,000 4,750,000 688,347
Vesting period N/A N/A N/A N/A 3 years 3 years 3 years 3 years
Exercise price
— —
— —
— —
— —
31 March 2023 31 March 2022
October 2020 September 2019 October 2020 September 2019
SAYE SAYE SAYE SAYE
Performance condition No No No No
Method of settlement accounting Equity Equity Equity Equity
Number of instruments — — 2,747,494 37,781
Vesting period N/A N/A 3.3 years 3.3 years
Exercise price — — 0.097 0.6368
31 March 2023 31 March 2022
2019 SIP 2019 SIP
Performance condition No No
Method of settlement accounting Equity Equity
Number of instruments — 2,552,822
1
Vesting period N/A 3 years rolling
Exercise price — —
1 This figure includes both matching and partnership shares.
Long Term Incentive Plans (“LTIPs”)
With effect from 31 March 2023, all outstanding awards in favour of Directors, Persons Discharging Management Responsibilities (“PDMR”)
and employees made under the Amigo Holdings PLC Long Term Incentive Plan were cancelled for nil consideration.
At the time of the cancellation, there were outstanding LTIP awards over 8,047,349 ordinary shares of 0.25 pence each in the Company
(“Ordinary Shares”). Over the course of the period since the introduction of the LTIP, no LTIP awards over Ordinary Shares have vested.
Details of the cancelled LTIP held by PDMR, totalling awards over 3,500,000 Ordinary Shares are set out in the table below.
PDMR shares cancelled:
Name Position No. of ordinary shares
Nicholas Beal Chief Restructuring Officer 1,000,000
Paul Dyer Chief Operating Officer 1,500,000
Jacob Ranson Chief Customer Officer 1,000,000
Financial statements
116
Amigo Holdings PLC
Annual report and accounts 2023
Notes to the consolidated financial statements continued
for the year ended 31 March 2023
22. Share-based payment continued
Share Incentive Plan (“SIP”)
The Company gives participating employees one matching share for each partnership share acquired on behalf of the employee
using deductions from participating employees’ gross salaries. The shares vest at the end of three years on a rolling basis as they are
purchased, with employees required to stay in employment for the vesting period to receive the matching shares. Following the move
into wind down all remaining matching shares held in the SIP were released from the vesting period requirement.
Save As You Earn option plan (“SAYE”)
Options under the 2020 scheme were granted on 9 October 2020 (2019 scheme: 23 September 2019).
The Company offers a savings contract that gives participating employees an opportunity to save a set amount using the participating
employees’ net salaries. The shares vest at the end of three years where the employee has the opportunity to purchase the shares at the
fixed option price, take the funds saved or buy a portion of shares and take the remaining funds, with the employees required to stay in
employment for the vesting period to receive the shares; however, the funds can be withdrawn at any point.
The SAYE awards are treated as vesting after three and a quarter years; the participants will have a window of six months in which
to exercise their options. Due to the short nature of the exercise window it is reasonable to assume the participants will exercise, on
average, at the mid-point of the exercise window. The SAYE awards are not subject to the achievement of any performance conditions.
Following the announcement on 23 March 2023 that the Fallback Solution under the Scheme of Arrangement was being implemented
and the business was entering an orderly wind down all SAYE plans have been cancelled, no SAYE options were ever exercised.
23. 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 £0.4m (2022: £0.4m).
24. Related party transactions
The Group had no related party transactions during the twelve month period to 31 March 2023 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
0.30% of the voting shares of the Company as at 31 March 2023 (2022: 0.58%). The remuneration of key management is disclosed
in note 9.
25. Structured entities
AMGO Funding (No. 1) Ltd is a special purpose vehicle (“SPV”) formed as part of a securitisation facility to fund the Group. The consolidated
subsidiary and structured entities table in note 28 has further details of the structured entities consolidated into the Group’s financial
statements for the year ended 31 March 2023. This is determined on the basis that the Group has the power to direct relevant activities,
is exposed to variable returns of the entities and is able to use its power to affect those returns. The results of the securitisation vehicle
are consolidated by the Group at year end per the Group accounting policy (see note 1.1). The securitisation structure was closed in
November 2022.
26. 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no in no te 1.1. There has been no significant impact to the Group as a result of their issue.
•
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
•
Annual Improvements to IFRS Standards 2018-2020
•
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
•
Reference to the Conceptual Framework (Amendments to IFRS 3)
Other standards
The IASB has also issued the following standards, amendments to standards and interpretations that will be effective from 1 January 2023,
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.
IFRS 17: Insurance Contracts amendments
•
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)
117
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
27. Immediate and ultimate parent undertaking
The immediate and ultimate parent undertaking as at 31 March 2023 is Amigo Holdings PLC, a company incorporated in England
and Wales.
28. Investment in subsidiaries and structured entities
Amigo Loans Group Ltd (“ALGL”) is a wholly owned subsidiary of the Company and a reconciliation to its consolidated results was
included in the presentation pack on the Company’s website as part of ALGL’s senior secured note reporting requirements. Following
repayment of the senior secured notes in March 2023 this is no longer necessary.
The following are subsidiary undertakings of the Company at 31 March 2023 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.
The Irish entity, Amigo Loans International Limited, together with its subsidiary, Amigo Loans Ireland Limited, was sold by the Group to
the CEO of the business in a management buy-out on 28 February 2023. Following write off of the intercompany balances there were
net liabilities in the Irish entities of less than £0.1m. Consideration for the disposal was £1. Prior to disposal, Amigo Loans Ireland Limited
contributed revenue of £0.1m and a loss of £0.6m to the Group’s results in the year ending 31 March 2023.
Class of Ownership Ownership
Name Country of incorporation shares held 2023 2022 Principal activity
Direct holding
Amigo Loans Group Ltd
1
United Kingdom Ordinary 100% 100% Holding company
ALL Scheme Ltd
1
United Kingdom Ordinary 100% 100% Special purpose vehicle
Indirect holdings
Amigo Loans Holdings Ltd
1
United Kingdom Ordinary 100% 100% Holding company
Amigo Loans Ltd
1
United Kingdom Ordinary 100% 100% Trading company
Amigo Management Services Ltd
1
United Kingdom Ordinary 100% 100% Trading company
Amigo Luxembourg S.A.
2
Luxembourg Ordinary 100% 100% Financing company
AMGO Funding (No.1) Ltd
3
United Kingdom n/a — SE Special purpose vehicle
Amigo Car Loans Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Vanir Financial Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Vanir Business Financial Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Amigo Store Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Amigo Group Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Amigo Finance Limited
1*
United Kingdom Ordinary 100% 100% Dormant company
Amigo Loans International Limited Ireland Ordinary — 100% Holding company
Amigo Loans Ireland Limited Ireland Ordinary — 100% Trading company
1 Registered at Unit 11a, The Avenue Centre, Bournemouth, Dorset, BH2 5LT, England.
2 Registered at 9, Rue de Bitbourg, L-1273 Luxembourg.
3 Registered at Level 37, 25 Canada Square, London E14 5LQ.
* Currently under liquidation .
29. Post balance sheet events
In April 2023 £50.7m of Scheme restricted cash was transferred to unrestricted cash as permitted under the Fallback Solution to support
the orderly wind down of the business.
On 15 May 2023 Danny Malone resigned from his role as CEO and Director, subject to serving out his six month notice period to ensure
the continuation of the solvent and orderly wind down of the business.
On 9 June 2023 the Board announced that the Company had been approached by Michael Fleming, a financier and shareholder, to
request an exclusivity arrangement in relation to the business, which Amigo agreed to. This is to allow Mr Fleming to explore finding and
completing an investment in the Company or its subsidiaries. The period of exclusivity expires on 6 September 2023. The Agreement will
not stop the Company or its subsidiaries progressing with the disposal of assets under its wind down plan or acting on any transaction
governed by the Takeover Code. There remain significant impediments to any new capital being made available to the business.
Inaddition, establishing a new business In addition, establishing a new business and potentially creating value for shareholders in the longer term, has significant execution
risk sand w s and w ill require regulatory approval.
Financial statements
118
Amigo Holdings PLC
Annual report and accounts 2023
31 Mar 2023 31 Mar 2022
Notes £m £m
Non-current assets
Investments 2a — 26.1
Current assets
Investments 2a 0.9 —
Total assets 0.9 26.1
Current liabilities
Other payables 3a (70.6) (69.8)
Total liabilities (70.6) (69.8)
Net assets/(liabilities) (69.7) (43.7)
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 £25.6m (2022: loss of £47.4m) (283.5) (257.5)
Shareholder equity (69.7) (43.7)
The parent company financial statements were approved and authorised for issue by the Board and were signed on its behalf by:
Kerry Penfold
Director
27 July 2023
Company no. 10024479
The accompanying notes form part of these financial statements.
Company statement of financial position
as at 31 March 2023
119
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Share Share Merger Retained Total
capital premium reserve
1
earnings equity
£m £m £m £m £m
At 31 March 2021 1.2 207.9 4.7 (209.7) 4.1
Total comprehensive (loss) — — — (47.4) (47.4)
Share-based payments — — — (0.4) (0.4)
At 31 March 2022 1.2 207.9 4.7 (257.5) (43.7)
Total comprehensive income — — — (25.6) (25.6)
Share-based payments — — — (0.4) (0.4)
At 31 March 2023 1.2 207.9 4.7 (283.5) (69.7)
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 changes in equity
for the year ended 31 March 2023
Financial statements
120
Amigo Holdings PLC
Annual report and accounts 2023
Year to Year to
31 Mar 23 31 Mar 22
£m £m
Loss for the period (25.6) (47.4)
Adjustments for:
Impairment of investment in subsidiaries 25.2 48.0
Income tax credit (0.2) (1.1)
Share-based payment (0.4) (0.4)
Operating cash flows before movements in working capital (1.0) (0.9)
(Decrease)/increase in payables (0.1) 0.2
Net cash (used in) operating activities (1.1) (0.7)
Financing activities
Proceeds from intercompany funding 1.1 0.7
Net cash from financing activities 1.1 0.7
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.
Company statement of cash flows
for the year ended 31 March 2023
121
Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Notes to the financial statements – Company
for the year ended 31 March 2023
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 this lending 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 which featured dynamic pricing to reward on-time payment with lower rates and penalty-free
annual payment holidays. The new products were released under the RewardRate brand. With the Fallback Solution being implemented,
leading to a cessation of trade and implementation of a wind down plan, new lending has been stopped in the current year.
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.
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. 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 2023.
In undertaking a going concern review, the Directors considered the Group’s decision to switch the Scheme from the Preferred to the
Fallback Solution, announced on 23 March 2023.
The switch to the Fallback Solution required that the trading subsidiary, Amigo Loans Ltd (“ALL”), stopped lending with immediate effect
and be placed into an orderly wind down, with the result that all surplus assets after the wind down will be transferred to the Scheme
creditors. A further requirement of the Fallback Solution is that ALL be placed into liquidation within two months of payment of the final
Scheme dividend. No value will be attributed to the ordinary shares of the Company in this scenario.
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 Amigo Loans Ltd (the Group’s sole cash-generating unit), the Board
have determined that the Annual Report and financial statements for FY23 will be prepared on a basis other than going concern.
The Board has prepared a set of financial projections for the solvent wind down following the cessation of new lending in March.
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 that are considered severe but plausible. Stresses have been applied to:
•
the collect out of the legacy Amigo loan book;
•
removal of any prospective debt sales;
•
increased Scheme liabilities; and
•
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 can be
considered 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 1.12.
Financial statements
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Annual report and accounts 2023
2a. Investments
31 Mar 2023 31 Mar 2022
£m £m
At 1 April 2022/1 April 2021 26.1 74.1
Impairment of investment (24.8) (47.6)
Movement in share-based payment (0.4) (0.4)
At 31 March 2023/31 March 2022 0.9 26.1
31 Mar 2023 31 Mar 2022
£m £m
Non-current — 26.1
Current 0.9 —
0.9 26.1
At 31 March 2023 the share price of Amigo Holdings PLC implied a fair value lower than the carrying value of net assets on the Group
balance sheet. This was considered an indicator of impairment and hence an impairment review to calculate the recoverable amount
ofthe investment in subsidiaries held by the Company was performed.
The share price at the measurement date 31 March 2023 is a readily available indication of the price for an orderly transaction between
market participants. In the current year the share price has fallen from 5.4p to 0.2p. This resulted in the investment being impaired to
arecoverable amount of £0.9m (2022: £26.1m).
The table below demonstrates the sensitivity of the valuation of the investment in subsidiary to a change in the share price at 31March 2023.
Sensitivity
Assumption £m
+20%
1
+0.2
-20%
2
-0.2
1 Sensitivity analysis shows the impact of a 20% increase in Amigo Holdings PLC share price.
2 Sensitivity analysis shows the impact of a 20% decrease in Amigo Holdings PLC share price.
For details of investments in Group companies, refer to the list of subsidiary companies within note 28 to the consolidated financial
statements. The share-based payment investment relates to share schemes introduced in the year, investing in our employees and
thusincreasing the value of investment in subsidiaries. For more details of schemes introduced, see note 22.
3a. Other payables
31 Mar 2023 31 Mar 2022
£m £m
Amounts owed to Group undertakings 70.4 69.5
Accruals and deferred income 0.2 0.3
70.6 69.8
4a. Share capital
For details of share capital, see note 21 to the consolidated financial statements. £nil dividends were paid in the year (2022: £nil).
5a. Share-based payment
For details of share-based payments in the year, see note 21 to the consolidated financial statements.
6a. Capital commitments
The Company had no capital commitments as at 31 March 2023 (2022: £nil).
7a. Related party transactions
The Company had no transactions with or amounts due to or from subsidiary undertakings that are not 100% owned either by the
Company or by its subsidiaries. For details of transactions the Group’s subsidiaries, see note 24 to the consolidated financial statements.
There were no related party transactions in the year.
For details of key management compensation, see note 9 to the consolidated financial statements.
8a. Post balance sheet events
See note 29 to the Group financial statements for further details.
Notes to the financial statements – Company continued
for the year ended 31 March 2023
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Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
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.
Appendix: alternative performance measures (unaudited)
Glossary
The following definitions apply throughout this Annual Report unless the context requires otherwise:
Adjusted (loss)/profit after
tax
(loss)/profit after tax plus movement in complaints expense, add back of restructuring and
onerous contract provisions, securitisation fees, strategic review costs and written down tax
asset less tax provision write off and incremental tax expense
AGM the Annual General Meeting of the Company
ALL Scheme Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 13116075. The Group intends to review complaint
claimsthrough this vehicle as part of an approved Scheme of Arrangement (“SoA”) and, where
appropriate, to pay cash redress to customers that have been affected by historical issues
inthe UK business
AMGO Funding (No.1) Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 11605869. AMGO Funding (No.1) Ltd is a special purpose
vehicle formed as part of a securitisation to fund the Group
Amigo Loans Ireland Ltd the Group’s subsidiary in Ireland, registered in Ireland under company number 609066.
Thisisthe Group’s Irish trading entity, and was disposed of in the year to 31 March 2023
Amigo Loans Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 04841153. This is the Group’s primary UK trading entity
Amigo Loans Group Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 10624393. This is a holding company within the Group
Amigo Loans Holdings Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 10624542. This is a holding company within the Group
Amigo Luxembourg S.A. a wholly owned subsidiary of Amigo Loans Holdings, incorporated as a public limited liability
company (société anonyme) under the laws of the Grand Duchy of Luxembourg, registered
under company number B210134
Amigo Management
Services Ltd
a private company limited by shares incorporated under the laws of England and Wales,
registered under company number 05391984. This is the servicing entity for the Group
APR annual percentage rate of charge
Articles of Association the Articles of Association of the Company
Asset VReq Amigo entered into an Asset Voluntary Requirement with the FCA, this does not impact the
day-to-day running of the Group but the Group needs prior approval from the FCA to transfer
any assets outside of the Group in circumstances such as: discretionary cash payments to
Directors of the Company and dividends to shareholders
Board the Board of Directors of the Company
Breathing space the period of time offered to customers during which payments, arrears, contact and interest
are paused
Charged off loans loans for which the customers are at least six contractual payments past due that have been
fully charged off of the Group’s statement of financial position
Company Amigo Holdings PLC, a public company limited by shares incorporated under the laws
ofEngland and Wales with company number 10024479
Financial statements
124
Amigo Holdings PLC
Annual report and accounts 2023
Directors the Executive Directors and the Non-Executive Directors or the Company
Disclosure Guidance
andTransparency Rules
the Disclosure Guidance and Transparency Rules produced by the FCA and forming part of the
FCA’s handbook of rules and guidance as amended from time to time
ECL expected credit losses. This is the expected loss recognised, on origination of loan assets,
asan impairment provision. Loss allowances for stage 1 financial assets are based on twelve
month ECLs; that is the portion of ECLs that result from default events that are estimated within
twelve months of the reporting date and are recognised from the date of asset origination. Loss
allowances for stage 2 and 3 financial assets are based on lifetime ECLs, which are the ECLs
that result from all estimated default events over the expected life of a financial instrument
Executive Directors the Executive Directors of the Company
FCA the UK Financial Conduct Authority, a regulatory body that regulates financial services in the
United Kingdom
FOS the UK Financial Ombudsman Service, a statutory dispute resolution scheme, set up under
FSMA, to adjudicate complaints about financial services
FSMA the UK Financial Services and Markets Act 2000 (as amended) and related secondary legislation
Group Amigo Holdings PLC and each of its consolidated subsidiaries and subsidiary undertakings from
time to time
HMRC HM Revenue and Customs
IFRS International Financial Reporting Standards, as adopted by the UK
Independent
Non-ExecutiveDirectors
Non-Executive Directors determined by the Board to be independent in character and
judgement and free from relationships or circumstances which may affect, or could appear
toaffect, the Directors’ judgement, and each an “Independent Non-Executive Director”
IT information technology
KPIs key performance indicators
Loan book total outstanding loans in the Company’s statement of financial position
Loans issued total originations for the period
London Stock Exchange London Stock Exchange plc
Long-term payment plan a revised payment schedule drawn up for customers in financial difficulty. Offered where the
customer is considered able to meet the minimum acceptable payment, but with the account
left in arrears until such time as the loan balance has been paid in full. Routine communications
and guarantor collections are paused whilst the plan is in place
Net loan book loan book less provision for impairment
Non-Executive Directors the Non-Executive Directors of the Company
Operating cost:
incomeratio
operating expenses excluding complaints, divided by revenue
Glossary continued
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Amigo Holdings PLC
Annual report and accounts 2023
Financial statements
Scheme of Arrangement a Scheme of Arrangement is an arrangement under part 26 of the Companies Act 2006, and is
a Court-approved agreement between a company and its creditors; for Amigo these creditors
are the FOS and Amigo’s eligible redress customers
Scheme Co the entity ALL Scheme Ltd
Senior secured notes Amigo Luxembourg’s 7.625% seniorsecured notes due 2024. The initial bond had an
aggregate value of £400,000,000, including £275,000,000 issued on 20 January 2017,
£50,000,000 issued as additional notes on 10May2017 and £75,000,000 issued as additional
notes on 18 September 2017 pursuant to the indenture. £350,000,000 worth of bonds were
opportunistically bought back in prior financial years, and in the current financial year the
remaining £50,00,000 worth of bonds were redeemed at par on 17 March 2023
Shareholders the holders of shares in the capital of the Company
Shares the ordinary shares of the Company, having the rights set out in the Articles of Association
Short-term payment plan a revised payment schedule drawn up for customers in financial difficulty as a result of a “one-off”
event. Offered where it is considered that for the customer to restore their account to the position
expected immediately prior to the plan being put in place, they would require no more than 40days
(if already in arrears) or 60 days (when not in arrears). Routine communications and guarantor
collections are paused for so long as the plan is in place, unless otherwise agreed under the
terms of the plan
SMCR the FCA’s Senior Managers and Certification Regime which applied to the Company from
9December 2019
UK Corporate
GovernanceCode
the 2018 UK Corporate Governance Code issued by the Financial Reporting Council
VReq on 27 May 2020 Amigo entered into a Voluntary Requirement with the FCA regarding
complaints to clear the backlog of approximately 9,000 complaints. Due to substantial increase
in the rate of complaints Amigo entered into an amended VReq with the FCA to extend the
deadline from the 26 June 2020 to 30 October 2020; Amigo reviewed and decided on all
outstanding complaints within the VReq by 30 October 2020
Financial statements
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Amigo Holdings PLC
Annual report and accounts 2023
Information for shareholders
Financial calendar
The Company’s Annual General Meeting is expected to be held
on27 September 2023 – please see our website for further details
in due course.
Share price
The shares are listed on the London Stock Exchange under
sharecode “AMGO”.
Registrars
The Company’s registrars are:
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Telephone: 0371 664 0300
(Calls cost 12p per minute, plus your phone company’s access charge.)
Email: enquiries@linkgroup.co.uk
Company details
Registered office and contact details:
Amigo Holdings PLC
Unit 11A
The Avenue Centre
Bournemouth, Dorset
BH2 5RP
investors@amigo.me
companysecretary@amigo.me
Website: www.amigoplc.com
Company number: 10024479
Independent auditor
MHA
6th Floor
2 London Wall Place
London
EC2Y 5AU
CBP019959
Amigo Holdings PLC’s commitment to environmental issues is reflected in this Annual Report, which
has been printed on Arena Extra White Smooth, an FSC® certified material. This document was printed
by Pureprint Group using its environmental print technology, with 99% of dry waste diverted from
landfill, minimising the impact of printing on the environment. The printer is a CarbonNeutral® company.
Boththeprinter and the paper mill are registered to ISO 14001.
Amigo Holdings PLC
Unit 11a
The Avenue Centre
Bournemouth, Dorset
BH2 5RP
www.amigoplc.com
Amigo Holdings PLC Annual report and accounts 2023