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Amigo Holdings PLC Annual report and accounts 2022
Amigo Holdings PLC
Annual report and accounts 2022
Moving forward
responsibly
A lot has changed at Amigo. We, as a Board
andmanagement team, joined Amigo to fix the
issues that had arisen from its historical lending
practices. It’s been a dicult journey and we have
had to make dicult choices, but we are now
inaposition to move forward, and we will do so
responsibly, with a culture that puts customers
firstand is focused on achieving positive
outcomes for all our stakeholders.
The Amigo of the future will get it right.
Gary Jennison
Chief Executive Officer
Approaching
our future
responsibly
1
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Strategic report
1 Purpose and values
2 At a glance
4 Headlines
6 Investment case
8 Chair’s statement
10 Chief Executive Ocer’s review
14 Strategy
16 Market review
18 Business model
20 Stakeholder engagement and section 172
24 Sustainability
36 KPIs
38 Financial review
42 Risk management
43 Our risks
46 Emerging risks
48 Going concern and viability statement
Corporate governance
51 Chair’s introduction
52 Board of Directors and Company Secretary
54 Executive Committee (ExCo) members
56 Corporate governance statement
57 Governance report
63 Audit Committee report
67 Nomination Committee report
69 Risk Committee report
71 Directors’ remuneration report
92 Directors’ report
98 Directors’ responsibilities statement
Financial statements
100 Independent auditor’s report
109 Consolidated statement of
comprehensiveincome
110 Consolidated statement of financial position
111 Consolidated statement of changes in equity
112 Consolidated statement of cash flows
113 Notes to the consolidated financial statements
148 Company statement of financial position
149 Company statement of changes in equity
150 Company statement of cash flows
151 Notes to the financial statements – Company
153 Appendix: alternative performance
measures (unaudited)
159 Glossary
162 Information for shareholders
Our purpose
We’re here to provide those with few
options to borrow the opportunity to
achieve financial mobility.
Our vision
To break down the barriers to financial
inclusion, creating a community where
people are rewarded and empowered
toachieve financial mobility.
Our values
1
We put customers first
We are passionate about making borrowing possible.
Wehelp each other to thrive.
2
We are human
We are welcoming and embrace diversity.
We respect and listen to each other.
3
We act with integrity
We are open and honest. We aim to do
what is right and fair. Always.
4
We own the outcome
We find solutions and deliver excellence.
Wequestionandchallenge the status quo.
2
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Read more on our markets on page 16
We believe in breaking down the barriers to
financial inclusion and creating a community
where people are rewarded and
empowered to achieve financial mobility.
We have spent the past year embedding a new
management team and culture that brings fresh thinking,
processes, skills and values to the business. The new team
has transformed Amigo’s culture and is singularly focused
on delivering the best possible outcomes for both existing
and future customers. The new Amigo is very different to
the Amigo of the past.
We have developed a lending proposition that provides
those with few or no options to borrow access to fairly
priced and well designed products that meet their needs.
This will enable us to serve a large section of society that
is in real need of better access to affordable finance.
Over the course of the last twelve months Amigo has had
extensive interaction with our regulator, the Financial
Conduct Authority (“FCA”) and we are confident that
we explicitly understand its objectives and are well
poised to return to lending as a vital component of the
UKcredit system:
•
We accept responsibility for the failures of the past and
we have learnt from these mistakes.
•
We understand the needs of the c. twelve million people
who are not served by mainstream lenders. We are certain
that our new products will provide real benefit for a
section of this demographic.
•
We believe that our plans will meet customers’ needs
in a market where there is limited inflow of capital and
many firms have left the market.
•
We are launching a new proposition under a new
brand,RewardRate, designed to enable customers
topursue their financial objectives.
At a glance
Our business vision
Rehabilitation
Customers who have credit impairment in their past and
who are re-finding their financial feet.
Life event
Typical reasons include divorce or separation, illness,
timeout of work to care for family, redundancy, or a
significant unexpected shock.
The young
Borrowers under 32 who may have lived at home or been
credit invisible and can’t provide sufficient weight of
evidence for a traditional scorecard to accept them.
Non-UK nationals
On the UK Electoral Roll, but little if any credit bureau data.
The accounts that they have are typically under three
years old and may be limited to telco, utilities and rent.
c.12m
1
adults in the UK who
cannot obtain a loan from
amainstream lender
Our target market
We help customers who would otherwise find it difficult to access financial
services. In all the examples below, evidence of income sufficiency and stability
helps us to lend successfully to customers who other lenders decline.
1 This is a conservative estimate. A recent PWC survey concluded that the number of financially underserved was much higher at 20.2m.
www.pwc.co.uk/industries/financial-services/insights/overlooked-and-financially-underserved.html
3
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Read more on pages 23 and 25
Read more on page 24
Our products
We have historically offered only guarantor loans, where a family member or friend supports the borrower to
achieve their financial goals. Our return to lending is subject to FCA approval (see Focus Area on page 5). We are
preparing to return to lending in the financial year ended March 2023, under our new brand RewardRate, with two
unique products which will include both guarantor and non-guarantor loans. Every aspect of the brand, customer
journey and customer experience of our innovative new products must enable the customer to make this statement:
“MyRewardRate loan worked for me because…”
Opportunity
Customers with few or no options to borrow have access
tofair, affordable and responsible loans that meet their needs.
Financial wellness
Customers are empowered and provided with tools and
education to help improve their financial wellbeing.
Flexibility
Customers are provided with flexibility and enhanced
support that meet their individual needs and accounts
for any potential vulnerability.
Customer experience
Customers are provided with an exceptional customer
experience and are assured their needs are put first.
“The rewarding way to borrow.”
Personal loans and guarantor loans
•
£2,000-£5,000.
•
2-4 year terms.
•
Dynamic APR starting at 49.9%/39.9% with the ability
todrop rate and monthly repayments if payments
aremade on time.
•
Annual, interest-free, payment holiday.
•
Digital application with open banking technology.
Our customer-focused outcomes
Everything we do is designed with customer outcomes in mind.
Strategic report
4
Amigo Holdings PLC
Annual report and accounts 2022
Headlines
Operational headlines
•
Throughout the year, the Board pursued a Scheme of
Arrangement (“Scheme”) to deliver the best possible
outcome to Scheme creditors as it sought to address
Amigo’s historical lending complaints liability. The
Board’s preferred Scheme, the New Business Scheme
(“NBS”), was sanctioned by the High Court in May 2022,
after year end.
•
The “preferred” outcome under the NBS is contingent
on lending restarting within nine months of the Scheme
effective date, 26 May 2022, and Amigo completing a
successful equity raise within twelve months.
•
Subject to FCA consent, Amigo will return to lending
with a new guarantor loan as well as an unsecured
loan product which will both feature dynamic pricing to
encourage and reward on-time payment with lower rates
and penalty-free annual payment holidays. The new
products will be released under the RewardRate brand,
representing a new start for the business.
•
Under the terms of the “preferred” outcome under the
NBS, Amigo will make a cash contribution of at least
£97m from internally generated resources, of which
£60m was paid into the Scheme fund in June 2022 and
£37m is due to be paid by 26February 2023. A further
contribution of at least £15mhas been committed, being
part of the proceeds from a new equity and capital raise.
•
Details of a new capital raise are expected to be
announced in the second half of the current calendar
year. The “preferred” outcome of the NBS requires
Amigo to issue at least 19 new shares for every existing
share in issue, resulting in a significant dilution for
existing shareholders who are unable or do not want to
take up their rights entitlements or sell their entitlements
in the market.
•
Whilst the quantum of the fundraising has not yet been
determined, we are cognisant that minimising the equity
raised by utilising higher gearing will make it more
feasible for existing shareholders to participate in any
rights issue. Amigo will publish equity raise specifics as
well as detail of its future business plan and new lending
performance ahead of a shareholder vote to approve
the raise.
•
The FCA investigations initiated in 2020 and 2021, into
Amigo’s creditworthiness assessment and complaints
handling respectively, are ongoing.
•
Following year end, on 6 June 2022, Danny Malone was
appointed Chief Financial Officer, having performed the
role on an interim basis since February 2022.
Revenue
£89.5m
2021: £170.8m
Net loan book
£138.0m
2021: £340.9m
Profit before tax
£167.9m
2021: (£283.6m) loss
Number of customers
73,000
2021: 136,000
Impairment:revenue ratio
41.3%
2021: 35.5%
Net cash
£83.9m
2021: (£118.6m) net debt
5
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Financial headlines
Despite the sanctioning of the Scheme, the Board has
concluded that a material uncertainty over going concern
remains (see note 1 to the financial statements for further
information). However, the Board considers that it is
appropriate to prepare these financial statements on a
going concern basis, as the sanction of the Scheme and
the potential to successfully meet the conditions of the
“preferred” outcome under the NBS provide a realistic
alternative to a managed wind-down or insolvency.
•
Reported statutory profit before tax for the year ended
31 March 2022 was £167.9m (FY 2021: loss of £283.6m)
driven by a credit of £156.6m from the complaints
provision following Scheme sanction. Adjusted profit
after tax of £13.3m (FY 2021: loss of £279.8m).
•
Complaints provision down 47.8% at £179.8m (FY 2021:
£344.6m). The complaints provision release resulted in a
credit in the income statement of £156.6m (FY2021: debit
of £318.8m).
•
Net loan book reduction of 59.5% to £138.0m (FY 2021:
£340.9m) due to the run-off of the back book and the
continued pause in new lending throughout the period
as well as an increase in impairment coverage to 25.6%
(FY2021: 19.4%).
•
Revenue reduction of 47.6% to £89.5m
(FY2021:£170.8m) due to the ongoing pause in lending
throughout the year.
•
Despite an increasing trend in delinquency, overall
collections, including early repayments and recoveries
from written-off accounts, have remained robust.
•
Continued strong focus on controlling costs.
•
£133.6m of unrestricted cash and cash equivalents as
at 31 March 2022 (FY 2021: £177.9m) reflects continued
strong cash generation. Current unrestricted cash balance
of over £100m, following payment of £60m initial Scheme
contribution to the Scheme fund in June 2022.
•
Net assets of £47.9m as at 31 March 2022 (FY 2021: net
liabilities of £121.4m). Substantially all of the Group’s net
assets, excluding c.£8m of working capital, are committed
to Scheme creditors.
•
In September 2021, Amigo’s securitisation facility was
repaid in full, from internal resources. The facility structure
is now in the process of being closed.
•
In January 2022, Amigo redeemed £184.1m of the
£234.1m outstanding 7.625% senior secured notes due
in 2024. The remaining £50.0m gross principal amount
outstanding is due in January 2024. The resulting interest
saving will form part of the Scheme contribution.
•
Positive net cash/(debt) of £83.9m at 31 March 2022
(FY2021: (£118.6m)) driven by the continued collection
ofthe back book while originations remained suspended.
•
While all Covid-19 payment holidays had concluded by
July 2021, we continue to assist customers experiencing
financial difficulty with alternative payment arrangements.
Read more on our investment case overleaf
Focus area:
Scheme of
Arrangement update
Why is Amigo using a Scheme
ofArrangement (“Scheme”)?
A Scheme of Arrangement (“Scheme”) is a
Court-approved process which allows a company
to enter into a compromise or arrangement with
itscreditors.
Customers have made complaints about Amigo’s
past lending practices, including that we did
not assess affordability for borrowers and/or
guarantors adequately at the time the loan was
taken out or when the guarantee was provided.
By using a Scheme, Amigo believes it will be able
to provide more cash compensation to these
customers for their valid claims than they would get
in an insolvency process, which is the alternative
tothe Scheme.
What is now required for the
NewBusiness Scheme to deliver?
The New Business Scheme was approved by
creditors in a vote on 12 May 2022 and subsequently
sanctioned by the High Court, and became effective,
on 26 May 2022. There are two important conditions
that need to be met for our New Business Scheme
to proceed.
The conditions are as follows:
1. Amigo resumes lending within nine months
ofthe Scheme effective date, subject to FCA
approval; and
2. Amigo completes a 19:1 capital raise within
twelve months of the Scheme effective date.
If these conditions are not met:
In these circumstances, Amigo will revert to a
Wind-Down Scheme, in which the Amigo Loans
Ltd business will be wound down. Cash payments
to creditors will be distributed from the remaining
assets after operating costs and repayment of
existing debt financing arrangements.
Strategic report
6
Amigo Holdings PLC
Annual report and accounts 2022
Strength of
leadershipwith
extensive sector
expertise
The Board and executive team,
experienced in successfully
transforming business performance,
joined Amigo from 2020 to address
the issues which had arisen
under previous management.
New skills, values and knowledge
which span specialist lending,
risk, regulation, compliance and
digital transformation, all with
a central customer focus, have
meshed with existing capabilities
to create an enterprise uniquely
placed to succeed in an
underserved sector.
Enhanced
governance and
culture framework
We have robust new policies and
procedures in place to ensure
the issues of the past do not
reoccur. Integral to our new
lending proposition are enhanced
borrower and guarantor credit
and affordability checks, alongside
a deeper underwriting process
that includes the use of open
banking. Principles and practices
of conduct risk are embedded
in Amigo’s culture framework
and values.
An employee-led Responsible
Business Council has been
formed to advise the Board
as we define and implement
our environmental, social and
governance (“ESG”) strategy.
We are supporting the UN
Sustainable Development Goals
and will be setting targets to
tackle the goals where we can
make the greatest contribution.
Social purpose and
customer-centric
approach
Amigo’s purpose is a social
one – aimed at providing those
with few options to borrow
the opportunity to achieve
financial mobility. Our new and
enhanced products are focused
on delivering positive customer
outcomes and designed to serve
a large section of society that is
in real need of better access to
affordable credit. If it works for
our customers, it works for Amigo.
For example, rewarding better
financial behaviours by dropping
the effective APR customers
pay if payments are consistently
made on time will lead not only
to greater financial resilience
in our customers, but also to
lower credit losses and reduced
account management costs
for Amigo.
1 2 3
Foundations for
futuresuccess
Amigo pioneered the guarantor loan product in the UK
in2005 and built a leading position in our niche segment
of the specialist lending market. We have faced challenges
which the Board moved quickly to address. A Scheme of
Arrangement was sanctioned at the High Court in May 2022
to address complaints associated with lending practices
which took place under previous management. While
material uncertainties remain, as outlined in our Going
Concern Statement on page 48, we are focused on
implementing the Scheme of Arrangement, which is
conditional on a return to lending and a future capital
raise(for more information, please see our Scheme Focus
onpage 5). It is important to note that substantially all net
assets related to the existing loan book are committed
tothe creditors of the Scheme. New investment in
AmigoHoldings PLC will fund future lending as well as a
further minimum £15m Scheme contribution. Our return
tolending in the short term will be funded by Amigo’s
remaining £50m of bonds. Amigo is unrecognisable from
the Amigo of old in terms of culture and process and with
innovative new products, Amigo is well positioned to
meetthe growing demand for specialist credit, to
deliverpositive outcomes for our customers and create
sustainable value for our investors over the long term.
Investment case
Read more on our Board and
leadership on pages 52 to 55
Read more in our risks section on
pages 42 to 46 and in our
sustainability section on pages 24 to 35
Read more on our strategy on
pages14 to 15
7
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
We will grow
responsibly to meet
increasing demand
Amigo has a large, and growing,
addressable market with around
twelve million people unable
to access mainstream credit.
Of these, we estimate that
around five million customers
meet Amigo’s target customer
profile. Building on our previously
established leading position,
with tighter eligibility criteria
and robust affordability and
credit checks, we will prioritise
long-term growth and controlled
scalability over short-term
results as we meet this
increasing demand.
Product innovation
will position Amigo
for the long term
Amigo’s enhanced guarantor loan
and new personal loan products,
incorporating innovative features
unique to the sector, will be
launched under a new brand,
RewardRate, and will position
Amigo well to meet the significant
demand for affordable, mid-cost,
responsible credit focused on
customer needs and outcomes.
Investment in our digital platform
will support growth as we build
a sustainable business for the
long term.
With strong cash
generation and a
lowcapex model
Our business model generates
significant positive cash flow.
Theonline or by-phone customer
journey, coupled with our focus
on driving efficiency throughout
our processes, will help keep cost
ratios at best-in-class levels.
4 5 6
Read more on our markets on
pages16 and 17
Read more in our At a Glance
onpages 2 and 3
Read more on our business model
onpages 18 to 19
8
Amigo Holdings PLC
Annual report and accounts 2022
Chair’s statement
Moving forward
responsibly
Strategic report
Jonathan Roe
Chair
I am pleased to introduce this
year’s financial results at what is an
important juncture in our business’
trajectory. After a significant effort,
for which I would like to thank all
my colleagues, our customers and
our regulator, the Financial Conduct
Authority (“FCA”), our preferred
Scheme of Arrangement, the New
Business Scheme, was sanctioned
by the High Court on 26 May 2022.
The sanctioning of the Scheme will
enable Amigo to redress creditors in
the fullest way possible and paves the
way for Amigo to return to providing
a much-needed service to those
underserved by mainstream lenders.
Culture and conduct
The governance of our business is
fundamentally important, and we are
committed to delivering the highest
standards of corporate oversight with
diligence and integrity. To ensure the
issues of the past are not repeated,
we undertook a thorough root cause
analysis and have used the results
of that analysis to inform initiatives
to transform our culture and the way
that we work.
Our focus has been on creating a culture
of open and constructive feedback,
both downwards and upwards, to
allow for responsible and transparent
decision making. Employees are
encouraged to speak out through
regular surveys and a programme of
engagement implemented this year
from Board level down.
We have developed a new culture
framework to allow Amigo to measure,
monitor and improve its internal
culture. Coupled with this, we have
taken some important steps towards
formulating our environmental,
social and governance (“ESG”)
strategy. In May 2022, we established
our employee-led Responsible
Business Council. This is part of
our ongoing mission to improve
inclusivity and to create a forum that
encourages diversity of thought,
creating a workplace where people
feel empowered to ask questions,
be curious and share their views,
enabling innovation, fresh thinking
and creativity to flourish. The Council
will meet monthly and report quarterly
to the Board, advising on key ESG
matters as we define and execute
Amigo’s ESG strategy. We have also
selected four priority UN Sustainable
Development Goals (“UN SDGs”),
following a materiality assessment and
review by the Responsible Business
Council, which align to our strategic
pillars, our values and our purpose.
Over the coming year, we will be
setting targets and metrics against
each goal and will report on these
in next year’s Annual Report. One of
our priority goals is “Climate Action”
and this year we have reported
against the Task Force on Climate-
related Financial Disclosures (“TCFD”)
recommendations for the first time.
We are early in this journey and as
such, do not yet comply with all the
recommendations but we have set out
a roadmap of the steps we plan to take
to achieve full disclosure.
There are increased and improved
opportunities for employees to learn
the “right way of working”. Initiatives
include Lean Six Sigma training,
apprenticeships, conduct training
for all employees and continual
development of online learning,
including the launch this year of
risk management awareness and
mandatory conduct risk training.
Strategic report
This is a turning
pointfor Amigo
andIam confident
that wecanmove
forwardresponsibly,
creating value for
allour stakeholders.
9
Amigo Holdings PLC
Annual report and accounts 2022
It is critical that, as we prepare to return
to lending, we are confident that our
products and processes will deliver
the best outcomes for our customers.
We are mindful of the adverse impact
of increasing inflation and the cost of
living upon borrowers. This is being
factored into affordability assessments
in both current forbearance and our
future lending approach. We will be
returning to lending with new products,
built to serve the needs of a clearly
defined set of customer profiles for
whom having the loan will allow them
to meet their financial goals. The
ability to be able to afford repayments
and meet other commitments is a key
part of the definition of the target
customer groups. A distribution
strategy using real-time quotations
and soft credit and income verification,
as well as open banking technology
and tighter eligibility criteria, will drive
lending decisions so that our products
are only presented and sold to
customers whose needs they meet.
The FCA’s proposed new Consumer
Duty will underpin our customer
outcomes. New lending products have
been designed, built and are being
tested to ensure customers have the
very best possible likelihood of being
able to attest: “My loan worked for
me because...” The new RewardRate
products will contain in-built payment
holiday features enabling customers
to freeze their loan and interest for
one month each year without question
if they, for instance, experience an
income or expense shock. This is in
addition to a range of more traditional
forbearance options.
Business performance will be
measured against metrics designed
to drive good organisational conduct
and alignment of interests with the
customers who we serve. These will
be embedded from the top down and
include Net Promoter Score (“NPS”)
surveys and reviews and will measure
the difference in the financial health
of customers at the outset and end
oftheir journey with us.
A new Customer Outcome Committee
chaired by the Chief Customer Officer
with representation from across the
business will undertake an ongoing
review of products and markets, and
the management of relationships with
distribution partners to ensure Amigo
products are represented accurately
in away that is clear, fair and not
misleading. It will ensure governance
arrangements are in place to oversee
the design, approval, distribution and
management of products, journeys,
tools and features throughout the
product life cycle and that systems
and controls are in place to ensure
that products are sold responsibly
and deliver appropriate customer and
market outcomes.
This is a turning point for Amigo and
Iam confident that we can move forward
responsibly, creating value for all
ourstakeholders.
Board
I joined Amigo in August 2020 and
have built a strong team who I would
like to thank for their tireless work over
the last year. I am deeply grateful to our
Board who have committed a significant
amount of time to resolving the issues of
the past and who bring a considerable
amount of expertise to the table.
On 24 January, Amigo announced
thatChief Financial Officer (“CFO”),
MikeCorcoran would leave the
business with immediate effect.
Mikeformally stepped down as a
Director on 19 February 2022. The
Board wishes to thank Mike for
hissignificant contribution to
thedevelopment of the Scheme
proposals and for leading the Finance
team through achallenging period.
I am pleased to announce that Danny
Malone, who joined us in February
as Interim CFO, has taken up the role
permanently, subject to approval
under the FCA’s Senior Managers
and Certification Regime. Danny
joined the Board on 6 June 2022.
Danny is a Chartered Accountant
andhasextensive business and
regulatory experience gained
from working predominantly in the
specialist consumer finance sector
and having co-founded Everyday
Loans in 2006.
Maria Darby-Walker, who joined
the Board in October 2020, was
appointed Senior Independent
Director, subject to approval under
the FCA’s Senior Managers and
Certification Regime on 6 June 2022.
Looking ahead
With a challenging economic backdrop
and credit availability tightening as a
result, it is now, more than ever, critical
that companies like Amigo are able to
fulfil an increasing need for mid-cost
financial products for those underserved
by mainstream lenders. With financial
vulnerability increasing, we must move
forward responsibly. Asa Board we
are committed to driving a culture of
strong governance and fair treatment
of customers. We seek to deliver
positive outcomes for all stakeholders
as we pursue our purpose of providing
those with few options to borrow the
opportunity to achieve financial mobility.
Jonathan Roe
Chair
8 July 2022
We’re supporting
theUNSustainable
Development Goals
We will be setting ourselves targets
totacklethe goals where we can
makethe greatest contribution.
10
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Chief Executive Ocer’s review
On 26 May 2022, after the reporting
period end, the High Court
sanctioned our preferred New
Business Scheme of Arrangement
(“NBS”). This is an important step in
addressing the liabilities that arose
from historical lending practices under
previous management and towards
our business surviving. The approval
of the Scheme will deliver the best
possible outcome for creditors and
enable us to continue to play an
important role in the specialist lending
sector, at a time when the UK is
facing an unprecedented rise in the
cost of living and a further tightening
of credit availability. This would not
have been possible without the hard
work of all our people who have
shown remarkable resilience and
commitment to both our business and
our customers. For this I would like
to, wholeheartedly, thank each and
every one of our Amigos. This would
also not have been possible without
the hard work and understanding of
the FCA. I would like to reinforce to
our customers our commitment to
delivering the best possible outcome
to them as we implement the NBS
and to assure all our stakeholders
that the mistakes of the past will not
be repeated as we move forward
responsibly to rebuild abusiness we
can all be proud of.
Performance
The sanctioning of our Scheme
means that £164.8m of the provision
for complaints held on our balance
sheet at 31 December 2021 has been
released. This has resulted in a write
back to the income statement of
£156.6m and a reported profit before
tax for the period ended 31 March
2022 of £167.9m. It is important to
note that, while the release of the
provision has resulted in a significant
profit, this must be viewed alongside
our Shareholder Equity position;
although we have returned to balance
sheet solvency, substantially all of the
Shareholder Equity from the business,
excluding a small working capital
amount of c.£8m, is committed to
Scheme creditors under the agreed
NBS. Statutory profit after tax was
£169.6m owing to a £1.7m tax credit
in the period. This statutory profit
is also put in context when viewed
against last year, when we posted a
loss before tax of £283.6m. Adjusted
profitafter tax for the year was £13.3m
(FY 2021: loss of £279.8m).
Whilst we pursued Scheme sanction,
which continued throughout the
financial year ended 31 March
2022, Amigo’s pause in lending
was maintained. This led to a 46.3%
decline in customer numbers over the
period and a corresponding reduction
in revenue of 47.6%. The net loan
book fell 59.5% to £138.0m reflecting
both the pause in lending and higher
impairment charge and coverage
ratio. Despite an increasing trend in
delinquency, overall collections, which
have included early repayments and
recoveries from written-off accounts,
have remained robust.
Scheme of Arrangement
The sanction of our preferred Scheme
of Arrangement is the culmination of a
huge amount of hard work from all at
Amigo. I would also like to thank both
the FCA, for the considerable amount
of time that was afforded to us as we
worked to present a new and much
improved solution to our customers,
Gary Jennison
Chief Executive Officer
Rebuilding a business
we can all be proud of
11
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
and our customers for their patience
and the trust they have put in us to
complete the Scheme, which will
enable us to return to providing
a much-needed service to those
underserved by mainstream lenders.
Over the last year, we took many
steps to address the concerns
highlighted by the Judge at the first
Scheme sanction hearing, including
forming an Independent Customer
Committee (“ICC”) to provide redress
creditors with the opportunity to help
shape the new Scheme. As a result
of this communication, we were able
to put two Scheme options to the
Court: a New Business Scheme and a
Wind-Down Scheme. The “preferred”
outcome under the NBS is contingent
on new lending restarting and Amigo
completing a successful equity raise.
The Wind-Down Scheme was a
managed wind-down of the Amigo
Loans Ltd business under a Scheme
framework. Both options were
submitted to the Court for sanction.
If the Judge had not sanctioned the
NBS, the Judge would have been
asked to sanction the Wind-Down
Scheme at the same hearing.
The proposed new Schemes, as
recognised by the FCA in its letter
of8April 2022, were significantly
improved compared with the first
Scheme considered by the Court in
May 2021. While the Scheme is not
expected to satisfy the liability owed
to redress creditors with valid claims
in full, the contribution to the new
Scheme has been significantly
increased from that of the original
Scheme. Under the “preferred”
outcome, Amigo will make an initial
cash contribution of £97m to the NBS.
A further contribution of at least £15m
will be made from the proceeds of a
new equity raise. In order to secure
the best result for redress creditors
possible in the circumstances, the
NBS will also include a mechanism for
additional monies to be paid to
redress creditors to be made in the
event that the existing loan book
generates a better return than
currently anticipated. The initial cash
contribution compares to an amount
of up to £35m in the previous Scheme
proposal. A number of factors,
including the greater clarity the
business now has on the impact of
Covid-19, contributed to our ability to
significantly raise the initial cash
contribution. The initial cash contribution
also reflects the lower expected
balance adjustments resulting from
continued collections on the loan
book compared with last year and
interest savings of £28m from the
early redemption, in January 2022,
ofa significant proportion of our
outstanding senior secured notes.
A Scheme creditors meeting was
convened and creditors were asked to
vote on both Scheme options. To
ensure that creditors fully understood
the Schemes presented, we contacted
via SMS and email all past and present
borrowers and guarantors for whom
we had contact details. We created a
dedicated website,
www.amigoscheme.co.uk, for all legal
documents, explainer videos and
FAQ, and we held frequent Q&A
sessions on social media. As a result,
we were able to double the number
ofcreditors that took part in the vote.
Ofthe creditors who chose to vote,
88.8% by number representing 90.0%
by value, voted in favour of the NBS.
Intotal, the Company received 145,532
votes in favour of and 18,401 votes
against the NBS, with values of
£459,526,003 in favour and
£50,894,131 against. And, of the
creditors who chose to vote, 83.1%
bynumber representing 81.7% by
value, voted in favour of the
Wind-Down Scheme.
In total, the Company received
134,677 votes in favour of the
Wind-down Scheme and 27,363 votes
against the Wind-Down Scheme, with
values of £411,849,382 in favour and
£92,231,859 against. Consequently,
both Schemes were presented to
theCourt at the sanction hearing
on23 May 2022. The Court order
sanctioning the NBS became effective
on 26 May 2022 and the judgement,
passed down to Amigo on 30 May
2022, is available on
www.amigoscheme.co.uk.
I am extremely
grateful to all our
people who have
continued to believe in
our purpose and have
supported the Board
and our customers
throughout the year.
Strategic report
12
Amigo Holdings PLC
Annual report and accounts 2022
Chief Executive Ocer’s review continued
Scheme of Arrangement
continued
The “preferred” option under the NBS
is contingent on Amigo returning to
lending, with FCA consent, within nine
months of the Scheme effective date,
26 May 2022. It is also contingent
on Amigo completing an equity raise
within twelve months. If Amigo fails to
meet these conditions, the Scheme
will revert to a wind-down of the
Amigo Loans Ltd business.
Equity raise
Amigo will be proposing an equity
raise to fund both the minimum
£15madditional Scheme contribution
required under the “preferred” option
under the NBS and future lending.
In order to fulfil the expectations
of the Judge who presided over
our first Scheme and who provided
clear direction to the design of our
subsequent Scheme, the “preferred”
outcome under the NBS requires
Amigo to issue at least 19 new shares
for every existing share in issue,
resulting in a significant dilution of
theexisting shares. Market sentiment
has undergone significant change
since we made our announcement
on 6 December 2021 that “the
£15m contribution to the Scheme is
expected to be funded from an equity
raise and new capital commitments
of between £120m and £300m, of
which it is hoped to raise a minimum
of £70m in new equity.” Whilst the
quantum of the fundraising has not yet
been determined, we are cognisant
that minimising the equity raised by
utilising higher gearing will make it
more feasible for existing shareholders
to participate in any rights issue.
There is no doubt that the impact
on our shareholders is significant
for those who are not able or decide
they do not want to participate in
the equity raise associated with the
proposed NBS. Given the legally
binding priority ranking of all creditors
over shareholders, we must deliver as
much value as we can to our creditors
before retaining any equity value.
However, rather than see equity
holders lose all economic interest, the
NBS enables some economic value
to remain with shareholders. It allows
allexisting shareholders to participate,
if they choose and are able to do so,
and leaves them with a maximum
5% equity holding if they do not take
up their rights. While difficult, the
alternative would be no value if Amigo
fails to complete the equity raise
and the NBS reverts to amanaged
wind-down of the business.
The decision in favour of a single equity
raise to fund future lending alongside
the minimum £15m additional Scheme
contribution has been well considered.
One reason for this approach is that
without further funds supporting the
business, we would not be able to
provide evidence of sufficient working
capital as required in an FCA-approved
equity raise prospectus. As all the
back-book run-off cash collected, net
of the collection costs, will be paid to
unsecured Scheme creditors, there
would be no existing resources to
sustain a new lending business in
the longer term. As part of the NBS,
we have agreed a£35m cap on new
business lending before the Scheme
funds are settled, designed to allow
proof of concept of the new business
model and to protect secured and
unsecured creditors in the event that
the required new equity funding cannot
be raised and the fallback element
of the NBS is triggered. The £35m of
planned new lending will be funded
by our existing bonds and does not,
therefore, imply available equity
resources. In addition, the complexity
of completing two raises in short
succession would significantly increase
the cost of the transaction. We have not
yet taken a decision with our advisors
as to the exact amount of capital
required, in a single raise, in order to
maximise the success of both the raise
and the business it will fund. This will
be announced in due course.
Once we have presented our future
business plan and provided details of
the proposed equity raise, shareholders
will be asked to approve the raise. We
also recognise that it will be important
to have a resolution to the ongoing FCA
investigations into complaints handling
and affordabilityprocesses before we
seek shareholder approval for the raise.
The FCA has stated that the levying
of any fine would be considered in the
context of the Scheme and its impact
on creditors.
Strategy
A new brand to better meet
customer needs
When we return to lending, we will
do so with an attractive new product
proposition designed to meet strong
demand in a large and growing
addressable market. Encouraging
better money management and
financial resilience, we want to help
our customers improve their credit
health and support their long-term
financial wellbeing.
We will not return to lending with our
Amigo brand. Instead, our revised
guarantor loan product and new
non-guarantor unsecured loan will
be released under our new brand,
RewardRate. This represents a new
start for our business. Our innovative
new products have been designed
in collaboration with a respected
charitable organisation and feature
dynamic pricing to reward and
encourage good payment behaviour
with penalty-free annual payment
holidays to provide customers with
greater flexibility. We have invested
in soft search application capability
enabling targeted and accurate
quotes to be presented to customers
who match our target customer profile
without impacting their credit file.
Open banking, or an equivalent,
will be used in all affordability
assessments. Our products are
designed to be inclusive, provide
flexibility and help our customers
build a brighter financial future.
We are also ready to respond when
needs change and ensuring borrowers
get the right help and support,
whenthey need it, is a priority.
When we return to
lending, we will do so
with an attractive new
product proposition
designed to meet
strong demand in a
large and growing
addressable market.
13
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Whilstregulatory Covid-19 support
has ended, Amigo continues to offer
a range of forbearance measures to
customers facing financial difficulty.
Investing in our people
I continue to be immensely impressed
with the quality of people that we have
been able to attract and retain during
what has been a significant period
of uncertainty for the business. I am
extremely grateful to all our people
who have continued to believe in our
purpose and have supported the Board
and our customers throughout the year.
To ensure the issues of the past do not
reoccur, we have invested in training
to provide a thorough understanding
of the root causes of past issues. The
Board has collectively and individually
spent a lot of time engaging with
our employees to betransparent on
the challenges wehave faced and
encourage employees to ask questions
and challenge decisions. To understand
better what affects our people and
how we can improve their working life,
we also perform monthly surveys. I am
proud that, despite the difficulties we
have experienced this year, we have
been able to increase our engagement
score, which measures sentiment
based on questions on workplace
andproduct, from 7.3 in March 2021
to8.0 by the end of the financial year.
As we have emerged from the Covid-19
pandemic we have introduced hybrid
working for all employees to provide
the flexibility that best suits each
individual. Employees are encouraged
to attend the office at least twice in a
working week. We have also halved the
median gender pay gap from 10% to 5%
and will continue to focus on creating
a work environment that promotes
diversity, equity andinclusion.
Enhance efficiencies
A continued focus on driving
efficiencies through all areas of the
business is delivering better customer
outcomes and reducing costs. We have
implemented initiatives designed to
identify, quantify and evaluate what
our customers need and want from
us, leading to improvements in the
customer journey and enhancing
product and customer service. Teams
across functions are trained in lean
working practices to drive efficiency
improvements by reducing waste
and variation in processes, optimise
resources and roll out best practice.
Projects over the year have focused
on driving operational efficiencies
in Collections, Complaints, Quality
Assurance and Customer Self-Service
and on increasing awareness
of vulnerability to improve the
supportavailable.
We are also designing, building
and deploying a new technology
environment to support a return to
lending with new products. The new
technologies are cloud-based and
built around market-leading solutions.
Third-party supporting services
are being integrated using open
application programming interfaces
(“API”) technologies which both
speedup and simplify the build.
Operate responsibly
To move forward responsibly, we
need to have understood where we
have gone wrong in the past. We have
therefore performed a thorough root
cause analysis and held mandatory
training for all employees to ensure
past mistakes are not repeated.
Policies, standards and practices have
been rewritten ahead of our return
to lending and a cultural assessment
framework has been established
to challenge and guide the right
behaviours. In the coming year, we will
undergo independent reviews of key
controls to provide further assurance
to ourstakeholders.
Setting our ESG strategy
As a publicly listed company, Amigo
understands its responsibility to drive
forward positive change in society
and has ambitions to go above and
beyond what is expected in terms
of corporate responsibility. The new
Amigo is different from the Amigo of
the past. This does not mean that we
turn our back on everything that came
before. We are hugely proud of charity
initiatives this business has passionately
pursued in the past. Wehave also taken
steps to reduce waste in the office and
minimise our carbon footprint.
The establishment of Amigo’s
Responsible Business Council,
in May2022, provides a real
opportunity for our employees to
shape the business we will be in
the future. It willact as a sounding
board, challenger, innovator and
advisor to the Board and business
leaders responsible for defining,
planning and executing Amigo’s
ESG strategy. Priority areas include
setting Amigo’s ESG vision, goals
and targets, driving diversity, equity
and inclusion, climate-change related
matters and our strategy for charity
and community engagement. With
these foundations in place, we are
now moving towards formulating our
ESG strategy and will be setting goals
and targets aligned to our recently
selected priority UN Sustainable
Development Goals in the current
financial year.
Summary and outlook
In summary, the sanctioning of our
NBS represents aturning point for
Amigo. The Board believes that the
NBS provides the best outcome for
redress creditors and I am pleased that
we can now work towards bringing it
to fruition. The Board is grateful to the
FCA for the time it has afforded the
business, to our customers and to our
people who have all contributed to
getting us to this position.
The current cash position remains
strong at over £100m. Hurdles remain
before we can finally secure the
continuation of the business, including
FCA agreement to restart lending,
reaching a satisfactory resolution of
the FCA investigations and the
completion of a significant capital
raise. We continue to work
constructively to satisfy the FCA that
we meet threshold conditions and are
in a position to return to lending.
Amigo is a very different business
to the business of the past. We will
move forward responsibly, with
a refreshed culture, focused on
delivering positive outcomes for all
stakeholders. The Board is confident
that its future lending proposition
meets a strong demand in the market
for a competitively priced, mid-cost,
specialist credit product and that
Amigo can be a responsible and
valuable contributor to the sector.
Gary Jennison
Chief Executive Officer
8 July 2022
Strategic report
14
Amigo Holdings PLC
Annual report and accounts 2022
Providing access to fair and affordable finance, we put customers
first as we seek to identify what works for them, filling a gap
in the market for mid-cost lending and delivering exceptional
customer experience at every interaction. Encouraging better
money management and financial resilience, we aim to help our
customers improve their credit health and support their long-term
financial mobility. With our customers at the core, our products
are designed to be inclusive, provide flexibility and help them
build a brighter financial future.
Our people make Amigo special. To ensure we attract and retain
the best people, we invest in training to enhance employees’
skills and to help them build long-term career success. We provide
an inclusive and welcoming environment to support our teams’
personal wellbeing, promoting fairness and equity to ensure
everyone has the opportunity to succeed. Having happy, healthy
and engaged employees who feel empowered to reach their
full potential, and who share our values and sense of purpose,
will enable us to deliver on our strategy and move forward in
aresponsible and sustainable way.
A continuous improvement culture where each team is empowered
to constantly raise the bar is improving our customer experience,
delivering better customer outcomes and reducing costs. We
have implemented initiatives designed to identify, quantify and
evaluate what our customers need and want from us, known as
Voice of the Customer (“VOC”), leading to improvements in the
customer journey and enhancing product and customer service.
Teams across functions are trained in lean working practices to
drive efficiency improvements by reducing waste and variation
inprocesses, optimise resources and roll out best practice.
Our conduct is founded upon a clear set of values, expressed
through deliberate behaviours and management, overseen
andchallenged at every level by a robust conduct and risk
framework. We work to understand different stakeholder
perspectives and deliver balanced outcomes by encouraging
two-way communication. Prioritising long-term value growth and
controlled scalability over short-term results, and by seeking
opportunities to make a positive impact on our environment
and the communities in which we operate, we aim to build
asustainable and responsible business for the long term.
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Activity in financial year
•
Innovative new lending proposition developed to be launched
under a new customer-focused brand, RewardRate.
•
Collaboration with respected charitable organisation to
stress-test and develop new proposition.
•
Product features include dynamic pricing to reward and
encourage good payment behaviour, and penalty-free annual
payment holidays to provide customers with greater flexibility.
•
Investment in soft search application capability enabling
targeted and accurate quotes to be presented to customers
who match our target customer without impacting their
credit file.
•
Metrics defined to measure customer conduct and
customer outcomes.
Activity in financial year
•
Transforming our culture with in-house training, coaching and
internal communication ensuring a thorough understanding of
the root causes of past issues and the importance of delivering
good customer outcomes.
•
Focus on employee retention and engagement in the form of
Board member interaction and regular engagement surveys.
Despite the uncertainty around Amigo’s future, the leadership
team has increased the employee engagement score from
7.3last year to 8.0 in March 2022.
•
9,868 hours of training delivered. Apprenticeship levy
funds used to provide apprenticeships and upskill existing
team members.
•
Hybrid working introduced for all employees to provide the
flexibility that best suits each individual.
•
Median gender pay gap halved from 10% to 5%.
Activity in financial year
•
Eight projects focused on operational efficiencies in Collections,
Complaints, Quality Assurance and Customer Self-Service and
one on increasing awareness of vulnerability and improving the
support available.
•
In-house recoveries function established, increasing success
oflong-term payment plans.
•
Outbound contact efficiency led to an increase in customers
helped out of arrears.
•
Efficiency savings from complaints reporting standardisation
and customer self-service initiatives directly translated into
more people available to support customers where needed.
•
Better identification and tracking of vulnerable customers
allow agents to provide bespoke support and aid creation of
Servicing and Collection strategies to better support different
types of customers.
Activity in financial year
•
A thorough root cause analysis of past issues completed.
•
Policy, standards and practices rewritten for a positive return
to lending.
•
A cultural assessment framework established to challenge
andguide desired behaviours.
•
A new ESG framework developed.
•
Conduct and risk awareness training for all employees.
•
A refreshed second line of defence to challenge decision
making at all levels.
Looking forward
•
Focus on delivering the Scheme of Arrangement (sanctioned
inMay 2022) to provide an equitable solution to customers
withredress claims.
•
Open banking, or equivalent process, will be used in all
affordability assessments and confirmation of payee.
•
Customer-listening platform embedded throughout the
full-customer journey to help drive customer satisfaction.
•
Initial return to lending to be funded by existing resources.
Capital raise to facilitate further lending.
Looking forward
•
High performance organisation (“HPO”) approach to be
introduced to drive organisation performance. Employees will
be graded against set objectives and how they demonstrate
Company values.
•
Quarterly talent reviews to ensure a rich talent and
succession pipeline.
•
ESG initiatives to focus on diversity, equity and inclusion.
•
Investment in employee development opportunities including
further Lean Six Sigma and leadership development programmes.
Looking forward
•
Business transformation focused on delivering new lending
proposition to market and deploying iterated improvements
based on user data and customer behaviour and feedback.
•
New technology environment design, build and deployment to
deliver at scale and respond to future changes in customer needs.
•
Lean Six Sigma supported by the implementation of the Scaled
Agile Framework (“SAFE”), utilising concepts of Lean and Agile
to deliver projects at scale.
•
A continued focus on VOC: user testing to ensure all features of the
new products continue to align with customer needs and wants.
Looking forward
•
Establishment of a Responsible Business Committee and
Customer Outcome Committee to guide the firm’s conduct
andapproach to key matters.
•
Measured testing of policies and procedures as we return
to lending.
•
Independent reviews of key controls to provide valuable
assurance to the Board and other stakeholders.
•
Ongoing dialogue with all key stakeholders as we seek
toreconcile needs and expectations.
Link to risks
1
Credit risk
2
Conduct risk
3
Regulatory risk
4
Operational risk
5
Strategic risk
6
Treasury risk
Invest in our people
Strategy
Our strategic pillars
Meet customer needs
15
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Providing access to fair and affordable finance, we put customers
first as we seek to identify what works for them, filling a gap
in the market for mid-cost lending and delivering exceptional
customer experience at every interaction. Encouraging better
money management and financial resilience, we aim to help our
customers improve their credit health and support their long-term
financial mobility. With our customers at the core, our products
are designed to be inclusive, provide flexibility and help them
build a brighter financial future.
Our people make Amigo special. To ensure we attract and retain
the best people, we invest in training to enhance employees’
skills and to help them build long-term career success. We provide
an inclusive and welcoming environment to support our teams’
personal wellbeing, promoting fairness and equity to ensure
everyone has the opportunity to succeed. Having happy, healthy
and engaged employees who feel empowered to reach their
full potential, and who share our values and sense of purpose,
will enable us to deliver on our strategy and move forward in
aresponsible and sustainable way.
A continuous improvement culture where each team is empowered
to constantly raise the bar is improving our customer experience,
delivering better customer outcomes and reducing costs. We
have implemented initiatives designed to identify, quantify and
evaluate what our customers need and want from us, known as
Voice of the Customer (“VOC”), leading to improvements in the
customer journey and enhancing product and customer service.
Teams across functions are trained in lean working practices to
drive efficiency improvements by reducing waste and variation
inprocesses, optimise resources and roll out best practice.
Our conduct is founded upon a clear set of values, expressed
through deliberate behaviours and management, overseen
andchallenged at every level by a robust conduct and risk
framework. We work to understand different stakeholder
perspectives and deliver balanced outcomes by encouraging
two-way communication. Prioritising long-term value growth and
controlled scalability over short-term results, and by seeking
opportunities to make a positive impact on our environment
and the communities in which we operate, we aim to build
asustainable and responsible business for the long term.
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Link to risks
1 2 3 4 5 6
Activity in financial year
•
Innovative new lending proposition developed to be launched
under a new customer-focused brand, RewardRate.
•
Collaboration with respected charitable organisation to
stress-test and develop new proposition.
•
Product features include dynamic pricing to reward and
encourage good payment behaviour, and penalty-free annual
payment holidays to provide customers with greater flexibility.
•
Investment in soft search application capability enabling
targeted and accurate quotes to be presented to customers
who match our target customer without impacting their
credit file.
•
Metrics defined to measure customer conduct and
customer outcomes.
Activity in financial year
•
Transforming our culture with in-house training, coaching and
internal communication ensuring a thorough understanding of
the root causes of past issues and the importance of delivering
good customer outcomes.
•
Focus on employee retention and engagement in the form of
Board member interaction and regular engagement surveys.
Despite the uncertainty around Amigo’s future, the leadership
team has increased the employee engagement score from
7.3last year to 8.0 in March 2022.
•
9,868 hours of training delivered. Apprenticeship levy
funds used to provide apprenticeships and upskill existing
team members.
•
Hybrid working introduced for all employees to provide the
flexibility that best suits each individual.
•
Median gender pay gap halved from 10% to 5%.
Activity in financial year
•
Eight projects focused on operational efficiencies in Collections,
Complaints, Quality Assurance and Customer Self-Service and
one on increasing awareness of vulnerability and improving the
support available.
•
In-house recoveries function established, increasing success
oflong-term payment plans.
•
Outbound contact efficiency led to an increase in customers
helped out of arrears.
•
Efficiency savings from complaints reporting standardisation
and customer self-service initiatives directly translated into
more people available to support customers where needed.
•
Better identification and tracking of vulnerable customers
allow agents to provide bespoke support and aid creation of
Servicing and Collection strategies to better support different
types of customers.
Activity in financial year
•
A thorough root cause analysis of past issues completed.
•
Policy, standards and practices rewritten for a positive return
to lending.
•
A cultural assessment framework established to challenge
andguide desired behaviours.
•
A new ESG framework developed.
•
Conduct and risk awareness training for all employees.
•
A refreshed second line of defence to challenge decision
making at all levels.
Looking forward
•
Focus on delivering the Scheme of Arrangement (sanctioned
inMay 2022) to provide an equitable solution to customers
withredress claims.
•
Open banking, or equivalent process, will be used in all
affordability assessments and confirmation of payee.
•
Customer-listening platform embedded throughout the
full-customer journey to help drive customer satisfaction.
•
Initial return to lending to be funded by existing resources.
Capital raise to facilitate further lending.
Looking forward
•
High performance organisation (“HPO”) approach to be
introduced to drive organisation performance. Employees will
be graded against set objectives and how they demonstrate
Company values.
•
Quarterly talent reviews to ensure a rich talent and
succession pipeline.
•
ESG initiatives to focus on diversity, equity and inclusion.
•
Investment in employee development opportunities including
further Lean Six Sigma and leadership development programmes.
Looking forward
•
Business transformation focused on delivering new lending
proposition to market and deploying iterated improvements
based on user data and customer behaviour and feedback.
•
New technology environment design, build and deployment to
deliver at scale and respond to future changes in customer needs.
•
Lean Six Sigma supported by the implementation of the Scaled
Agile Framework (“SAFE”), utilising concepts of Lean and Agile
to deliver projects at scale.
•
A continued focus on VOC: user testing to ensure all features of the
new products continue to align with customer needs and wants.
Looking forward
•
Establishment of a Responsible Business Committee and
Customer Outcome Committee to guide the firm’s conduct
andapproach to key matters.
•
Measured testing of policies and procedures as we return
to lending.
•
Independent reviews of key controls to provide valuable
assurance to the Board and other stakeholders.
•
Ongoing dialogue with all key stakeholders as we seek
toreconcile needs and expectations.
Opportunity
Financial
wellness
Flexibility
Customer
experience
Enhance efficiencies Operate responsibly
Everything we do is designed to achieve positive customer outcomes
andmakeavalueddifference to all ourstakeholders.
Strategic report
16
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Annual report and accounts 2022
Market review
Helping customers
achieve financial
mobility
Large underserved market
Demand for credit is high in this segment and the market is relatively fluid over time
with around two million consumers moving in and out each year. Of the twelve
million in our addressable market, there are an estimated five million people who
meet our criteria.
Credit impaired
•
CCJs issued over last six years
•
IVAs issued over last six years
•
Bankruptcies in the last six years
•
Debt relief orders since
introduced in 2009
•
Debt management plans
Low credit status or
nocredithistory
•
New migrants over last five years
•
Young borrowers
•
People on incapacity or
unemployment benefits
5m customers who meet thenewAmigo criteria
12m addressable population
4m 8m
Based on data from LEK Consulting and Amigo’s own calculations.
All figures are approximations.
•
Working professional
•
Aged 21–65
•
Sustainable income
•
Thin or light adverse credit history
•
Not bankrupt (or equivalent)
•
Ready to make a difference
totheirfinancial future
Financial inclusion is one of the biggest challenges
facing the UK today. With the exit of many providers in
the specialist lending sector over the past two years, and
the failure of many credit unions, there is a growing need
for lenders which offer fair, affordable and responsible
products. Without a functioning regulated market, there
is a danger that unregulated loan sharks will move in to
exploit the financially vulnerable. As highlighted in a report
published by the Centre for Social Justice in March 2022,
the combination of pressures on household budgets, low
financial resilience and increasingly limited credit options
is liable to create a perfect storm in which people are
driven towards exploitation.
Our response
Amigo is well placed to tackle the issue of financial inclusion.
With extensive knowledge of the specialist lending sector,
gained from over 17 years serving more than one million
customers, we can offer a mid-cost solution to those who
pass our redesigned underwriting and affordability checks.
For those for whom a loan is not the right solution, we will
provide customers with information on debt charities and
details of advisors who can give further guidance. Our
newly developed products are designed to increase the
financial resilience and mobility of people underserved by
mainstream financial services.
FCA data suggests that over a quarter of UK adults have
low financial resilience. With inflation at a 40 year high,
the impact of Covid-19 still materialising and the economic
impact of the war in Ukraine, the UK population is facing
increasing pressure on its finances. All this at a time when
Covid-19 related government support has ended and
interest rates are rising. While unemployment remains
low, inflationary pressures tend to hit the demographic
we serve the hardest as wages fail to rise in line with the
increase in the cost of goods. Higher demand for credit is
expected but there is also likely to be increased pressure
on borrowers’ ability to repay existing debts.
Our response
Amigo has a deep knowledge of our customer base and
our innovative new lending proposition is designed to
meet customers’ needs, introducing a transparent and
easy to comprehend mechanism for reducing monthly
payments and the ability to take an annual, interest-
free, payment holiday. We are also ready to respond
when needs change. Ensuring borrowers get the right
help and support when they need it is a priority. Whilst
regulatory Covid-19 support has ended, Amigo continues
to offer a range of forbearance measures to customers
facing financial difficulty. Specialists have reviewed our
product designs and helped shape how we support our
customers. As a result, we have enhanced training in
place to identify, support and understand the needs of
vulnerablecustomers.
Amigo, as part of the UK finance sector, is regulated by the
Financial Conduct Authority (“FCA”). Key areas of focus
for the FCA include affordability, supporting borrowers in
financial difficulty and improving diversity, inclusion and
operational resilience in regulated firms. New Consumer
Duty guidelines expected in July 2022 will seek to ensure
that firms take account of product suitability and the impact
of their services on customers. The FCA envisages that
its Consumer Duty will result in fewer future rule changes,
lowering costs to regulated firms. Another focus area is
the financial impact of climate change and in January
2022 new rules and guidance came into force for listed
companies to publish climate-related risks and financial
disclosures as set out by the Task Force on Climate-related
Financial Disclosures (“TCFD”).
Our response
Mandatory training for all employees is undertaken
to ensure regulatory compliance at all levels of the
business with new conduct and risk awareness modules
introduced this year. Amigo supports regulation that
protects consumers and maintains a fair and effective
market. We are committed to maintaining a constructive
relationship with our regulator to understand and meet
regulatory requirements as well as promote a good
understanding of our business and the important role
weplay in society. For detail of our response to the TCFD
disclosure requirements, please see the dedicated section
on pages28 to 31.
A need for financial inclusion
Rising pressure on consumers
The regulatory environment
17
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Annual report and accounts 2022
Strategic report
1 https://www.centreforsocialjustice.org.uk/library/swimming-with-sharks
2 https://www.fca.org.uk/news/speeches/critical-issues-financial-regulation-fca-perspective
Strategic report
18
Amigo Holdings PLC
Annual report and accounts 2022
Customer-first approach
Our new lending proposition consists
of new and enhanced guarantor and
unsecured loan products which are
feature rich and designed to meet
specific customer needs by being
adaptive, flexible andrewarding.
The right people in place
Engaged, committed and talented
people at all levels, focused on
delivering the best customer
experience and outcomes,
passionate about our purpose
and values.
Digital platform
We are investing in our digital
platform, decisioning processes and
customer experience, integrating
leading third-party internal operating
systems with open banking.
Significant sector expertise
Depth of knowledge and data
developed over 17 years serving
more than one million customers,
including both borrowers
andguarantors.
Strong partner relationships
Some of the best companies in the
industry will be working alongside
us as we bring our new brand and
innovative new lending proposition
to market.
Robust conduct and
riskframework
Reinforced internal systems
and controls, with strong
product governance, focused
oncustomer outcomes.
Our customers
Leaving customers in a stronger
financial position. Providing a
pathway towards prime lending
as they build or repair their
credit history.
Investors
Building a sustainable business for
the long term, growing responsibly
and ultimately generating a good
return for our investors.
Regulator
Engaging regularly and constructively
to ensure regulatory compliance.
Operating with integrity, treating
customers fairly and supporting a
healthy, sustainable credit market by
providing access to regulated credit to
an underserved segment of society.
Our people
Providing an inclusive environment
where our people are well trained
and motivated to make a positive
difference to our customers and our
community and empowered to excel,
developing rewarding careers that
they can be proud of.
Community
Enabling financial mobility and
supporting our local communities
through charitable donations,
employee volunteer programmes
andcareer opportunities.
Distribution network
By building a sustainable business
for the long term with an ethical
culture and innovative products,
wecan provide trusted partnerships
and reliable business streams to
ourbroking partners.
Business model
To provide those with few options to borrow the opportunity
toachieve financial mobility.
We aim to return to lending in 2022 with a new brand and innovative new lending proposition, significantly improved
processes and a culture of operating responsibly to drive positive outcomes for all our stakeholders. Driven by our
purpose and guided by our values, we will play a valuable role in society by providing accessible and affordable loans
tocustomers who have limited access to mainstream finance. With well-designed products that meet their needs, we will
support our customers to improve their financial mobility by offering a pathway to cheaper credit.
The value we create
Strong foundations
Read more on pages 42 to 47
Read more on page 21
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Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
How we create value
Enabling
financial
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Strategic report
20
Amigo Holdings PLC
Annual report and accounts 2022
Our section 172 statement
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good
faith, would be most likely to promote the success of the company for the benefit of its members as a whole. Indoing
this, section172 requires adirector 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;
(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.
Stakeholder engagement and section 172
Our customers Our people Investors
Why they are important
•
By understanding what’s important
to our customers, their needs
remain at the forefront of all
that we do.
Our priorities
•
To meet customer needs and,
this past year, to ensure that they
fully understand the Scheme of
Arrangement process.
•
To understand how customers’
needs evolve over time.
•
To have the right support in place
throughout the customer journey.
How we engage
•
An Independent Customer
Committee was set up this year to
consult on our Scheme process.
We also held Q&A sessions on
Facebook and provided information
via video, SMS, email and
social media.
•
The relaunch will include offline and
online journeys to serve the widest
possible cross-section of customers
and achieve high conversion.
Why they are important
•
The skill and commitment of
our employees are key to our
success, creating sustainable value
and delivering an outstanding
customerexperience.
Our priorities
•
To engage talented and
passionateemployees.
•
To provide an inclusive and
welcoming environment.
•
To encourage challenge and
diversity of thought.
How we engage
•
Monthly engagement surveys
to gauge sentiment and better
understand our teams.
•
Regular e-training modules.
•
Board members hold informal
meetings with employees from
across business functions.
•
The Board receives regular
employee updates from the
Head of HR.
Why they are important
•
Our investors provide funding
intheform of debt and equity.
•
Attracting new investors will
support our funding requirements
as those needs evolve.
Our priorities
•
To provide clear, timely and
transparent updates on our
business to all investors in line
withregulatory requirements.
•
To manage expectations and
foster a good understanding of our
business, purpose and prospects.
How we engage
•
We have regular dialogue with
investors and provide a dedicated
email for investors’ enquiries.
•
Financial results are reported
quarterly and presentations
webcast to enable access to all.
•
Board members attend periodic
investor meetings and receive
regular updates from our
HeadofInvestor Relations.
•
Customers are empowered to
achieve their financial goals,
and provided with affordable
products that meet their needs
and flexibility when their
circumstances change.
•
We have retained key people
through a period of significant
uncertainty for the business.
•
Our employees are engaged
and empowered to reach their
full potential, and have a solid
understanding of our purpose
and values.
•
Investors are able to make
informed investment decisions.
•
The business has a pool of
investors it can draw on for
future funding.
Outcomes
21
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
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 and the
local communities in which weare located.
The Board recognises that building strong relationships with our stakeholders will help us to deliver our strategy in line
with our long-term values and operate the business in asustainable way.
CommunitiesRegulators Suppliers
Why they are important
•
By playing an active role in our
community, we can 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
•
We have strengthened our
relationship 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.
•
The Amigo Volunteer Scheme
provides employees with paid
leaveto volunteer.
•
Employees have provided food
and sanitary products to local food
banks to help those in need.
Why they are important
•
Regulatory approvals enable us to
provide fair and responsible finance
to the growing population of people
who are unable to access credit
through mainstream lenders.
Our priorities
•
To ensure we meet regulatory
standards at all times.
•
To promote a good understanding
of our purpose and the need in the
market for our services.
•
To maintain a constructive
relationship with the teams in all
areas of the FCA.
How we engage
•
We have maintained an open
and regular dialogue with our
regulator, particularly as we have
progressed through our Scheme
ofArrangement process.
•
We have participated in FCA
consultations to provide our views
on the industry and proposed
regulation change.
Why they are important
•
Our suppliers support our
operation, enabling us to deliver our
service and meet customer needs.
•
A strong relationship with our
distribution network promotes
a robust understanding of, and
efficient route to, our target market.
Our priorities
•
Develop strong partnerships
with the best companies in the
industry to deliver an outstanding
customerexperience.
•
Work collaboratively to foster
mutually beneficial relationships.
How we engage
•
Our Chief Customer Officer
manages the relationship with our
distribution network.
•
The Board receives updates on
any issues or proposals concerning
suppliers, for example where
outsourcing is considered.
•
Through fundraising and
business donations we raised
over £8,300 this year.
•
Amigo’s total emissions
have reduced significantly
over the year.
•
A thorough understanding
ofallregulatory requirements.
•
Recognition of the need
for companies in the
specialist lending sector to
provide financial services
to the millions excluded by
mainstream lenders.
•
Trusted partnerships developed
with leading businesses in
the industry.
•
We aim to provide reliable
business streams to our
introducing partners.
Outcomes
Strategic report
22
Amigo Holdings PLC
Annual report and accounts 2022
Stakeholder engagement and section 172 continued
Decision to continue with the sanctioning of a Scheme of Arrangement after the first Scheme was
not sanctioned
At the time the first Scheme of Arrangement was not sanctioned by the Court in May 2021 the Board had to decide if it
was in the interest of all Amigo stakeholders to continue with the cost and time commitment to develop a second more
robust Scheme of Arrangement or to immediately place the Company into administration.
Stakeholders Considerations
Our
customers
The failure of the original proposed Scheme of Arrangement to be sanctioned by the Court in May 2021 left
ourcustomers who had, or were likely to raise a complaint against Amigo, without a mechanism to settle their
claims equitably.
An orderly Scheme of Arrangement was judged to be the best solution to finding a way to settle equitably all
liabilities for past lending activities by Amigo. It was deemed an orderly Scheme of Arrangement would maximise
the return to claimants and be preferable to customers than administration.
A Scheme of Arrangement would potentially allow Amigo to return to lending.
Investors
Whilst Amigo remained insolvent the Board was required to operate the Amigo business for the benefit of creditors.
Agreement on a Scheme of Arrangement would allow the Board to operate the business for all stakeholders.
Investors would have the opportunity to make a contribution to the future compensation pool from an equity
raise. The purpose of the new Scheme of Arrangement being to facilitate some equity participation by the
existing shareholders in any surviving entity, albeit with significant dilution, to increase available compensation.
Regulators
The FCA wished to ensure that the interests of customers were upheld and that future customer harm, from past
actions of Amigo, could be resolved in the best manner possible for customers.
An orderly Scheme of Arrangement would likely increase the likelihood that the settlement of claims by Amigo
customers would be dealt with in the most equitable fashion.
Our people
In the event that a Scheme of Arrangement could not be arranged Amigo would be insolvent. As such, a failure
to sanction a new Scheme of Arrangement would mean all Amigo employees, contractors and sub-contractors
would be given immediate notice of termination of employment.
Formation of a new Customers’ Committee to help deliver a fairer outcome to creditors
The Committee was established to represent the interests and views of customers through the process of finding a way
forward for Amigo. An independent Chair, Jamie Drummond-Smith was appointed on 3 August 2021. Mr Drummond-Smith
is an experienced financial services sector professional; he had never worked for Amigo and had his own legal advisor.
Toset up the Committee, Amigo emailed customers in July 2021 to ask for self-nominations to be a part of the Committee.
From these self-nominations, Mr Drummond-Smith randomly selected eight past and present borrowers and guarantors,
some of whom, depending on the status of their current balance, would benefit from a balance reduction if they had
a valid claim in either of the New Schemes, and some of whom would not. This provided a cross-section of Amigo’s
customer population from the self-nominations received, each of whom were also required to confirm that they were
notshareholders of Amigo as part of the self-nomination process. See table on the next page.
Principal Board decisions taken during FY22
23
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Stakeholders Considerations
Our
customers
The Committee was offered the opportunity to get independent advice paid for by Amigo, as was suggested by
the Court and the FCA at the Court hearing for the Previous Scheme.
The Committee had the opportunity to consider a wide range of issues that shaped the terms of the New
Schemes. The input of the Committee included: (a) considering new Scheme proposals; (b) giving a preference
on those proposals; (c) putting forward alternative proposals and (d) negotiating the New Schemes terms to
ensure they maximised recoveries for creditors.
Investors
A criticism of the first Scheme of Arrangement was that shareholders had not been asked to contribute to the
redress compensation pool for customers. The Customer Committee considered a number of factors and took
into account that it would be mutually beneficial for shareholders and customers to reach agreement on a
suitable financial contribution from shareholders.
Regulators
The Customer Committee provided the FCA with comfort that customers were receiving independent advice.
Our people
The Customer Committee provided challenge to the business about the propositions to be included in the
Scheme of Arrangement. It provided comfort to the employees that the Scheme of Arrangement being put
forward was realistic and provided a fair equitable offer to customers.
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. Our vision is to break
down the barriers to financial inclusion, creating a community where people are rewarded and empowered to achieve
financial mobility. We are dedicated to constantly innovating and building ways to make sure our customers have access
to fair and affordable finance so they can make their life plans possible. Our new proposition is designed to serve a large
section of society that is in real need of better access to affordable credit. It’s designed to be inclusive, provide flexibility
and help our customers build a brighter financial future. Our mantra is ‘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 from accessing credit. The RewardRate product has been
designed to responsibly meet the requirements of this demographic.
The RewardRate proposition is designed to be flexible and help the financial mobility of the proposed
customer base.
Investors
A condition precedent of the New Business Scheme is 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 is intended to provide a viable, new, product which it is hoped will allow Amigo to raise the necessary
capital to meet the requirement.
RewardRate provides Amigo with the opportunity to start relending, which it is intended will increase the size
ofthe loan book, which in turn will facilitate a return to shareholders.
Regulators
RewardRate is a product that will help fill a gap in the market for customers who are underserved by existing
lending propositions. The issue is made more impactful due to the withdrawal of many of the participants lending
to this customer base.
Our people
RewardRate provides an opportunity for Amigo to return to lending. It will facilitate the continued employment
ofstaff working for the business.
Distribution
network
RewardRate will allow Amigo to restart lending again.
Strategic report
24
Amigo Holdings PLC
Annual report and accounts 2022
Sustainability
Our customers
We put customers first and firmly believe that if it works
for them, it works for us. In the last twelve months we
have worked tirelessly to build a new lending proposition
that allows people to borrow when they need to in a
way that is fair and inclusive and that improves their
financialwellbeing.
Responsible lending
Our purpose is to provide those with few options to
borrowthe opportunity to achieve financial mobility.
Todothis we are focused on building well-designed
products that increase the financial resilience and
wellbeing of our customers. We provide a mid-cost
alternative for the growing number of people who are
unable to access credit through mainstream channels.
We have made changes to our affordability processes
in line with FCA guidance. We will assess the income
and expenditure of all applicants, both borrowers and
guarantors, and have incorporated open banking technology
into the process for all applications to ensure that we only
lend to customers who can comfortably afford to repay the
loan. We are committed to the fair treatment of customers,
to achieving positive outcomes and to empowering our
customers by giving them the financial mobility they need
to achieve their goals.
Enabling financial mobility
Our new proposition, RewardRate, has been designed with
tools, features and dynamic pricing mechanisms aimed
at reversing the debt spiral, rehabilitating customers’
credit reports and helping customers get closer to true
prime rates.
Focused on positive customer outcomes
Financial inclusion doesn’t just mean access to finance, it’s
about providing the right products to the right consumers
at a fair and reasonable price. Our products have been
designed to offer affordable and responsible finance
options to consumers across the alternative lending
landscape. We want all of our customers to be able to say
“my loan worked for me because…” and our newly formed
Customer Outcome Committee has been created to keep
customer experiences and outcomes on track.
Tailored support that meets individual needs
Customers are assured that when life gets bumpy, they have
dedicated support in place to help them. Our skilled teams
will assess each customer’s circumstances individually and
put tailored, sustainable arrangements in place that meet
their needs. We check in on a regular basis to ensure the
support is still viable and that, if their circumstances have
changed, we can help to get them back on track.
Vulnerable customers
It is our intention that every customer who experiences
vulnerability is assured the best support throughout their
journey with Amigo. Our teams are trained to recognise
when a customer might be considered vulnerable, either
through the conversations they have with them or because
of an assessment of the information we attain on them.
It could be for a range of reasons including a sudden
change in circumstances such as recent unemployment
or that they are experiencing mental health issues. The
Covid-19 pandemic highlighted how easily circumstances
can change. It could be that our customers need permanent
help or just a little assistance during a particularly tricky
time. Our dedicated specialist support team is on hand
to provide tailored support and ensure each customer
receives fair and appropriate treatment. Whatever a
customer’s situation, we want to give them the confidence
that we are here to help.
25
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Jake joined Amigo in June 2021 to lead
the marketing, product and distribution
strategies that deliver our goals of widening
financial inclusion and bringing about
positive customer outcomes.
with Jake Ranson, Chief Customer Officer
Q&A
Q
Why is driving financial mobility important
to you?
A
Delivering financial mobility and meeting the
needs of today’s customers go hand in hand. At a
conservative estimate there are twelve million British
adults who cannot obtain a loan from a mainstream
lender. Millions of UK consumers are caught in a
“debt trap” where the products they either hold or
can’t access predetermine their financial outcomes.
In addition, the supply of products has shrunk with
many specialist providers exiting over the last two
years, so the availability of mid-cost options for
non-prime customers is worsening. We believe that
there are millions of target customers for our new
proposition, who can be lent to responsibly and for
whom a RewardRate loan will be the best product
available to improve their financial health. Delivering
our new proposition to market with this purpose offers
the best outcome for customers, redress creditors,
shareholders and employees of Amigo.
Q
How have you tested the new
productrange?
A
I strongly believe that the way to change the financial
services industry is by ensuring that the voices of
people who face the biggest barriers to accessing
finance and credit are heard and listened to as new
products are developed. In designing and testing
RewardRate we worked with communities which have
experienced financial challenges and faced barriers
such as access to credit or high cost products. Our
new products and services have been co-designed
with input from people with lived experience of credit
exclusion and as a result will lead to more positive
outcomes for such customers when using RewardRate
products as intended.
Our return to lending is subject to FCA approval.
Q
What is the role of the new Customer
Outcome Committee you have formed?
A
Treating Customers Fairly (“TCF”) is a regulatory
requirement. It goes hand in hand with protecting
customers from detriment, increasing consumer
trust, gaining brand advocacy and Amigo meeting
its commercial goals. Our new proposition has been
built under the precept that “if it works for you, it
works for us” so the Customer Outcome Committee’s
overarching mission is to ensure that our commitment
to selling loans which work for our customers is
upheld. By performing outcomes testing at each stage
of the customer journey we can evidence the extent
to which drivers such as product features, pricing,
decision making and staff incentive structures are
delivering good outcomes for customers.
Q
What is different about RewardRate?
A
The RewardRate product suite has been designed to
fill a gap in the market for a mid-cost proposition that
can underwrite customers in the non-prime sector and
through incentive, flexibility and adaptation become
avital contributor to the customer’s financial progress.
Every product feature and journey has been designed
to enable a customer to attest: “My RewardRate
loan worked for me because…” RewardRate is a
customer-focused brand that proved popular in our
consumer testing. It will in due course provide an
expanded range of lending products and tools that
can help customers boost their financial health and
understanding. At the heart of the proposition are
twopowerful USPs that testing has proven have
strong appeal to customers.
The first is a completely transparent price reduction
mechanism which rewards customers with decreasing
monthly repayments simply for staying up to date.
The second is a “freeze my loan” feature. This gives
customers an optional payment and interest holiday
once a year should they need it. We are incredibly
proud of the new proposition and cannot wait to put it in
the hands of customers once we receive FCA approval.
Strategic report
26
Amigo Holdings PLC
Annual report and accounts 2022
Amigo has always nurtured a culture that does its best
to look after the planet, as well as one another. We want
to support our people in making decisions that minimise
their impact on the environment with the aim of doing
what we do in the most sustainable and environmentally
friendly way possible. Data provided on these pages
summarises the energy usage, associated emissions,
energy efficiency actions and energy performance
of our two offices, both based in the UK, in line with
government guidelines for Streamlined Energy and
CarbonReporting (“SECR”).
Energy efficiency
To help our employees as they return to the office
following the Covid-19 pandemic and the associated
national lockdowns, we have introduced a hybrid way of
working. We will therefore be educating and supporting
our employees to make environmentally friendly decisions
both in the office and at home. As a result of the hybrid
working policy, we have seen a reduction in employees
coming into the office, which has, in turn, resulted in
a reduction in our energy consumption. We have also
removed many desktop computers to allow for hot-desking
and have more employees using laptops whichare more
energy efficient.
Other energy efficiency measures we have taken include
replacing the many light bulbs in our main office with a
more energy efficient LED alternative and, at the end of
last year, we switched our energy provider which resulted
in an increase in the amount of renewable energy within
our supply.
Over the past year, we have looked at how our on-site
café operates, reducing food waste and encouraging
our employees to think about the products they use
and recycle.
Greenhouse gas emissions
This is the third year Amigo has reported on emissions
in compliance with the Streamlined Energy and Carbon
Reporting (“SECR”) requirement. For the year ended
31March 2022 our total emissions for scope 1 and 2 have
accounted for 65.45 tonnes of CO
2
e.
The total quantity of energy used during the year ended
31March 2022 resulting from the purchase of electricity
and fuels from company-owned vehicles was 308,185 kWh.
All figures relate to emissions in the UK only; we do not
have the data available for Amigo Ireland. Energy from our
second office in our Bournemouth location was provided
to us under a service charge, as this is a leased office
space. Below you will find a year-on-year comparison of
both carbon and energy data from the last three years:
Indicator Metric / / /
Scope  Tonnes CO
e . . .
Scope  Tonnes CO
e . .
.
Total CO
e emissions
Tonnes CO
e . .
.
Carbon emissions intensity Tonnes CO
e/per FTE . . .
Total energy consumption
kWh , , ,
In addition to our SECR data, we have voluntarily chosen to report on our scope 3 – business travel as we start to expand
our efforts to gauge our wider carbon footprint. This data was readily available with a comparison with previous years.
See below:
Scope  Metric / / /
Business travel Tonnes CO
e . . .
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 2021 to 31 March 2022, using an operational
control boundary.
UK CO
2
e emissions were calculated using DEFRA (2021) 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.
1 Total CO
2
e emissions: this represents the total carbon dioxide equivalent of greenhouse gases associated with Amigo’s scope 1 and 2 emissions.
2 Total energy consumption: consists of energy (kWh) associated with electricity, gas and company-owned vehicles.
Environment
Sustainability continued
27
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Annual report and accounts 2022
Strategic report
Summary of changes
In summary, our emissions total and our energy consumption have reduced significantly year-on-year. The reduction in
our scope 1 emissions reflects the absence of air conditioning unit refrigerant replacement in the reporting period. We
have also seen a marked reduction in our scope 2 emissions with our electricity usage at both sites being significantly
lower. This is a result of a number of energy efficiency measures taken in the year. Lastly, our scope 3 emissions have
increased as we have expanded the level of data within our business travel emissions. This year we have introduced
carbon data for flights, taxis and train journeys.
1 2 3
0.02
tonnes of CO
2
e
(52.44 in 2021)
65.43
tonnes of CO
2
e
(89.96 in 2021)
16.76
tonnes of CO
2
e
(5.78 in 2021)
Company facilities
82.21
total emissions
tonnes of CO
2
e
(148.19 in 2021)
Company-owned vehicles Purchased electricity Business travel
Scope 1
(Direct CO
2
e emissions)
Scope 2
(Indirect CO
2
e emissions)
Scope 3
(Associated scope 3 emissions)
0.27 (0.37 in 2021)
tonnes of CO
2
e per employee (average number
of UK employees: 248 as at 31 March 2022)
Environment intensity indicators
Strategic report
28
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Annual report and accounts 2022
Sustainability continued
Task Force on Climate-related Financial Disclosures (“TCFD”)
This year we are reporting against TCFD recommendations for the first time. While we are early in this journey, the
Board recognises the value of TCFD beyond disclosure and is committed to assessing and responding to the risks and
opportunities that climate change might present in order to increase operational resilience and sustainability. We are
not yet fully compliant with all guidance (see page 56). However, the following report details the current actions we have
taken towards integrating TCFD recommendations into Amigo’s strategy and includes a roadmap of the steps we plan to
take to achieve full disclosure. We also report on scope 1, scope 2 and relevant aspects of scope 3 carbon emissions on
pages 26 and 27.
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.
Amigo has put in place a governance structure aimed at ensuring environmental,
social and governance (“ESG”) issues, including climate-related risks, will be
considered by the Board and management in all business strategy decisions.
The Board has overall responsibility for Amigo’s ESG strategy, in which
climate-related matters are included and championed by Non-Executive
Director Maria Darby-Walker. Maria, who also sits on the Audit and Risk
Committees, will oversee compliance with, and progress on, climate change
reporting. The Board meets at least monthly, and ESG matters will form part
of every scheduled meeting’s agenda. Maria will be informed specifically of
climate-related risks and opportunities at least quarterly, principally by our
ChiefRisk Officer and the Chair of our Responsible Business Council.
The Responsible Business Council is a recently formed advisory body, 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 consists
of eight elected employees and one secretary and will meet monthly, with its
Chair reporting quarterly into the Board. The Responsible Business Council is
employee led, with members and Chair voted into position. As well as providing
guidance and recommendations to the Board, the Responsible Business Council
will be instrumental in embedding Amigo’s ESG strategy and climate-related
initiatives throughout the business.
Representatives from the Responsible Business Council, Risk, Finance and
Investor Relations make up Amigo’s Climate Task Force. The Climate Task
Force will review climate-related risks and opportunities and devise and
implement mitigation strategies and will also meet monthly. It will be guided by
the Responsible Business Council and report into both the Chief Risk Officer
and Chief Financial Officer who will ultimately be responsible for establishing
aprocess for a more comprehensive assessment and integration of climate-related
risks into the Company’s current risk management register and strategy, formulating
and monitoring the progress of action plans and environmental targets as
Amigo develops and implements its roadmap to full TCFD adoption.
Board
Maria Darby-Walker
Climate Champion
Responsible Business
Council
Chief Risk Officer
Climate Task Force
Chief Financial Officer
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Annual report and accounts 2022
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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 operates with a defined risk management framework that takes into
account both likelihood and severity. To date climate-related issues have
been monitored through risk reporting as an emerging risk. An emerging
risk is an identified, new or evolving risk which could be a trend, innovation
or development that has the potential to adversely impact the delivery of
ourstrategy. This activity is overseen by Amigo’s Chief Risk Officer. As
awareness and education builds through planned ESG work, our intention
is to develop this alongside the Responsible Business Council and Climate
Task Force. The Climate Task Force will work closely with the Responsible
Business Council and report into the Chief Risk Officer and Chief Financial
Officer to develop achievable targets and compliant TCFD disclosures.
Specific climate-related issues would be logged and recorded in line with
our risk management process.
•
Crystallised risks and incidents where events are identified are logged
and escalated to management. All of our identified incidents and
risks arerecorded and tracked with automated regular reporting to
accountable individuals. Material matters are shared and escalated
through various riskcommittees up to Board level on an ongoing basis.
•
All risks are tracked through ongoing risk assessment and reporting.
Material risks and issues are considered in business planning. This process
is also used to identify the need for any additional contingency measures
which could include insurance or additional control.
Risks are prioritised based upon their materiality, likelihood and impact.
Thedetermination of materiality follows a standard approach to ensure
that all risks are assessed and prioritised in a proportionate and
consistent manner.
To further integrate climate-related risks into Amigo’s risk management
process, Amigo will carry out a comprehensive climate risk assessment
to identify any acute and chronic physical risks and transitional risks and
opportunities related to potential policy, legal, technology and market
changes. We recently undertook an exercise to determine the sustainability
priorities of our business, out of which UN Sustainable Development Goal
13 “Climate Action” emerged as a priority goal. Climate change is a global
threat and will impact us all in some way. Stakeholders are increasingly
looking at the companies they work with or for and demanding that they
take climate action seriously. As UN SDG 13 “Climate Action” has been
identified as a priority goal, the risk and opportunities assessment that is
to be carried out will also inform the Company’s climate strategy and target
setting process. Moreover, as the Chief Risk Officer holds responsibility for
overseeing the risk and opportunity identification, reporting to the Board on
a quarterly basis, climate-related considerations will be integrated into our
business strategy.
Key
Compliant Currently non-compliant but scheduled for compliance in coming 12 months
Currently non-compliant and compliance forecast in 24–36 months
Key showing compliance/non-compliance In line with listing rule 9.8.6R (8). Where disclosures are currently non-compliant this follows
from the prioritisation of activities as set out in the roadmap on page 31.
Strategic report
30
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Annual report and accounts 2022
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>or
<2°C scenario.
Climate change is currently classified and monitored as an emerging
risk, the potential for risks stemming from an increased exposure to and
changing patterns of extreme weather events such as floods, storms and
rising sea levels impacting customers and supply chains. This includes
issuance of more specific requirements to analyse and disclose the climate
impacts of lending activities. The potential for Amigo to inadvertently create
environmental damage through its business model and behaviours is also
assessed and monitored.
As a small business in financial services, with two offices in one city
location, climate-related risks and opportunities have not, to date, been
considered to have a material financial impact on our business, and as
such have not had a significant impact on Amigo’s strategic and financial
planning. However, “Climate Action” (UN SDG 13) has recently been
identified as a priority goal and it will therefore be established as one of the
pillars of our sustainability strategy.
As part of our approach to TCFD reporting we will be undertaking a more
detailed materiality assessment of risks and opportunities presented by
climate change, focused not just on the impact we have as a business, but
on what impact actual and potential risks of changes in climate might have
on our business strategy and financial planning and that of our suppliers
and our customers. Amigo will be identifying both physical climate-related
risks as well as transitional risks and opportunities related to the transition
to a low-carbon economy over the short (up to twelve months), medium (one
to three years) and long term (over three years), and developing adaptation
and mitigation strategies.
A scenario analysis to assess the impact of 2°C warming, and the resilience of our
strategy in different climate-related scenarios, will be undertaken in the coming
year. We also intend to consider a target for when Amigo could achieve net zero.
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.
Our emissions are reported in accordance with the Greenhouse Gas
(“GHG”) Protocol. We use an operational control approach to account for our
emissions using the UK Government DEFRA emissions factors. Each year,
we disclose our emissions data in compliance with the Streamlined Energy
and Carbon Reporting (“SECR”) guidelines through our Annual Report.
The environment intensity indicator we use is kg of CO
2
e per employee
and we measure tonnes CO
2
e for scope 1, scope 2 and selected scope
3 categories. In the coming year, we are planning to extend our carbon
accounting to measure scope 3 emissions more fully.
As we continue to improve our climate risk and opportunity assessment
process, the results will inform our climate strategy and enable us to define
additional targets and metrics. For example, we intend to develop an
emissions reduction plan and undertake an analysis to define a suitable
net-zero target, which would be aligned to the Paris Agreement’s ambition
of limiting global warming to 1.5°C. We expect to undertake the process of
target setting in the financial year ended March 2024, once our risk and
opportunities assessment is completed.
Sustainability continued
Task Force on Climate-related Financial Disclosures (“TCFD”) continued
31
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Our climate strategy roadmap
Phase  FY 
•
We have integrated climate risk and opportunities
oversight into the Board governance structure.
•
Established the Climate Task Force, which focuses on
climate-related risk and opportunities management
across the organisation.
•
Established the Responsible Business Council with the
aim of cascading responsibility for climate-related risk
and opportunity management, alongside other ESG
issues, down from the Board and senior management,
across the organisation.
•
Defined sustainability strategy priorities around the
UNSDGs with “Climate Action” being one of them.
•
We will define responsibilities and mandates related to
monitoring and achieving the targets.
•
Carry out an assessment to identify key physical and
transitional climate-related risks and opportunities over
the short, medium and long term.
•
Develop strategic plans for mitigating identified risks and
adapting the business model to address key opportunities
and impacts.
•
Determine the financial impact of the identified risks
and opportunities as well as the financial impact of any
mitigation and contingency plans.
•
Carry out a scenario analysis to determine business model
resilience against different climate-related scenarios.
•
Perform analysis in order to assess a credible Science
Based Targets initiative (“SBTi’’) aligned net-zero target.
•
Train employees on sustainability, climate-related risks
and opportunities.
Phase  FY 
•
Integrate the detailed climate-related risks and
opportunities assessment process into the Company’s
risk management system and establish a process
for prioritising climate-related risks in the overall
riskregister.
•
Measure progress and evaluate the effectiveness of
the Company’s climate-related governance structure to
ensure that the results from the risk and opportunities
assessment and scenario analysis are considered by the
Board in all strategic business decisions.
•
Define targets based on the identified climate-related
risks over the short, medium and long term with
accompanying key risk indicators (“KRIs”) and key
performance indicators (“KPIs”) for measuring progress.
•
Align the Company’s climate strategy to the Science
Based Targets initiative (“SBTi”) and establish a net-
zero target.
•
Annual review of targets, risks and opportunities and
scenario analysis.
Phase  FY 
•
Annual review of targets, risks and opportunities
andscenario analysis.
•
Consider establishing third-party verification for
GHGemissions data.
Key
Compliant Currently non-compliant but scheduled for compliance in coming 12 months
Currently non-compliant and compliance forecast in 24–36 months
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Sustainability continued
Our people
At Amigo we recognise that it is our people that make the
difference. From attracting the right people, to investing
in their development and supporting them throughout
their career with us, we are focused on creating an
environment where our people are happy, healthy and
working together as a team to deliver the best possible
outcomes for our customers.
The past year has been challenging as the business has
faced significant uncertainty regarding its future. As a
Company we have had to look deeply into the root cause
of past problems and learn from our mistakes, enabling
us to move forward together with a renewed sense of
purpose and shared values. We have continued to support
our employees’ health and wellbeing as we have emerged
from the Covid-19 pandemic providing flexibility, support
and development opportunities to our teams.
Transforming our culture
Significant time has been spent with our employees in
exploring and understanding the root causes of the issues
that arose from past lending. We have presented the
learnings from our analysis to all employees over multiple
platforms with presenters from across the business to
ensure each and every one of our employees understands
where we went wrong in the past and, more importantly,
how we must conduct ourselves going forward. In-house
training, coaching and internal communications have
focused on ensuring all employees understand the
importance of delivering good customer outcomes.
Continued investment in training
The training and development of our teams is essential to
ensure we deliver the right customer outcomes, comply
and remain up to date with regulatory requirements and
support our people to fulfil their potential.
Our in-house training team has delivered 9,868 hours
of training over the year (FY 2021: 37,000) including 56
e-learning courses, of which 26 are new courses introduced
this year. All new starters attend a dedicated induction
known as the Amigo Academy, with specific Academies
for each of our key business areas. These are designed to
enable our employees to have the right skills and capability
to deliver the right outcomes to our customers. The lower
total hours of training compared to the prior year reflects
this year’s significantly lower headcount, which has halved
since March 2021, as well as a drive for more efficient
e-learning modules. This year, we also introduced an
apprenticeship programme providing new apprentice roles
in Marketing and IT. As well as bringing new members on
board, the programme has enabled us to further support
the development of our existing teams with the funding
oftraining across two business areas.
This coming financial year, we will be introducing
ahigh-performance organisation (“HPO”) approach.
Employees’ performance will be assessed both against set
objectives as well as on how they have demonstrated our
Company values. We plan to invest further in employee
development opportunities, including a further cohort of
Lean Six Sigma Yellow Belts and a leadership development
programme in which high potential employees will be
provided with tailored learning development plans and
ongoing coaching.
Increased focus on employee engagement
andretention
To better understand what affects our people and
how we can improve their working life, we perform
regular surveys using an online platform called Peakon.
Thisyear, we increased the frequency of our employee
engagement surveys from quarterly to monthly and
performed exit interviews for leavers. This has allowed us
to understand employee sentiment and create action plans
for improvement in real time. Despite the uncertainty around
Amigo’sfuture, we are proud to have been able to increase
the employee engagement score from 7.3 last year to 8.0 in
March2022. Employees have been provided with frequent
opportunities to meet with the leadership team and Board
members in an informal setting with an open agenda.
Our people are encouraged to provide feedback, ask
questions and challenge decisions.
In addition, our Chief Executive Officer holds regular
all-employee meetings and publishes fortnightly blogs, aiming
to always be transparent with our people about the challenges
we face and the opportunities available to us as a business.
33
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Strategic report
Our new employee-led council
The newly formed, formally constituted
Responsible Business Council is part of our
ongoing mission to improve inclusivity and to
create a forum that encourages diversity of
thought, creating a workplace where people feel
empowered to ask questions, be curious and share
their views and enabling innovation, fresh thinking
and creativity to flourish. Council members will be
elected annually and will meet monthly, reporting
to the Board quarterly. The Council will provide a
real opportunity for our employees to shape the
business we will be in the future.
A meaningful voice on a variety
ofimportant issues
The Responsible Business Council will act as a
sounding board, challenger, innovator and advisor
to the Board and business leaders responsible
for defining, planning and executing Amigo’s
ESGstrategy.
Priority areas:
1. Amigo’s ESG vision, goals and targets
2. Diversity, equity and inclusion
3. Climate change related matters
4. Charity and community engagement strategy
Education level
Despite the uncertainty
around Amigo’s future,
weare proud to have
beenable to increase the
employee engagement
scorefrom 7.3 last year
to8.0 in March 2022.
We have continued to work with an outsourced human
resources (“HR”) function, strengthening our partnership
with The Curve Group consultancy over the year. Having
experienced specialists supporting our managers on
recruitment, employee relations and administration has
proven to be an efficient way of operating. We have also
continued to work with our dedicated HR system, the
Hub, which provides a single comprehensive, robust
and strategic people management solution to streamline
processes and reduce manual administrative burden
across the Group. This is a self-serve system where
employees and their managers can maintain their own
personal data.
Health and wellbeing
It has always been very important to us that we support
our people in all aspects of their health and wellbeing and
this year, we are delighted to have been able to welcome
back our Health and Wellbeing Manager, who has driven
health and wellbeing initiatives throughout the year, focusing
on getting our teams active and eating healthily, managing
their mental health and combating loneliness ata time
when many of our teams remain remote working.
As one of the leading causes of illness, mental health is
an important focus for our business. We have a robust
programme of support in this area for our employees,
whether the issue is work related or not. We have trained
mental health first aider employees and all employees take
part in a specific mental health training module at least
annually. We provide an Employee Assistance Programme
which provides free, confidential, 24/7 support for all
employees both online and over the phone, as well as
providing face-to-face therapy sessions if required.
Number
ofmembers i
9
LGBTQ+
representation
22%
Combined length
ofservice
>46 years
Nationalities
represented
Focus area:
Responsible
BusinessCouncil
Level 2 11%
Level 3 22%
Level 6 45%
Level 7 22%
Eight elected members and one council secretary.
Education level based on Gov.uk nine qualification levels in
England, Wales and Northern Ireland – https://www.gov.uk/what-
different-qualification-levels-mean/list-of-qualification-levels.
Strategic report
34
Amigo Holdings PLC
Annual report and accounts 2022
Sustainability continued
Our people continued
Health and wellbeing continued
We have introduced the option of hybrid working for
all employees. This has provided employees with the
flexibility many of them told us they wanted. As a result,
we have happy and engaged employees who have
shown remarkable loyalty to our business during a
yearofimmense uncertainty.
Diversity
To help deliver equity we are committed to supporting
diversity and creating an inclusive workplace where all
our people feel valued and able to fulfil their potential,
regardless of their race, gender, age, religion or disabilities.
We aim to be inclusive in our recruitment, selection,
promotion and development processes, ensuring
full and fair consideration is given to all applications
foremployment.
The importance of diversity, equity and inclusion (“DEI”) is
highlighted in our equity and diversity policy and we are
proud that this is demonstrated through our culture, where
decisions are based on individual ability and potential in
relation to the needs of the business.
We have the following controls in place to deliver an
inclusive culture and diverse workforce:
•
an equity and diversity policy which applies to all
employees in Amigo;
•
all our employees are required to complete a mandatory
equity and diversity e-learning module annually; and
•
we seek a good balance of male and female employees
through our recruitment and selection processes.
This year, we will be establishing our environmental,
social and governance (“ESG”) strategy. Driven from the
top with the Board taking ultimate responsibility, it will be
embedded throughout the business by the introduction
of a new employee-led Responsible Business Council.
TheResponsible Business Council’s composition
isintended to generate rich and diverse perspectives
on a wide range of topics that fit under the umbrella
and will include a focus on DEI. We will look at how we
can continue to promote DEI and how we can measure
ourperformance.
The table below shows our employee base at year
end, split bygender, using the definition used in the
Hampton-Alexander Review (namely the most senior
levelof management (“ExCo”) plus those of its direct
reportsthat are senior managers).
Role Male Female Total
ExCo
Senior managers  
Other employees   

1 Hampton-Alexander Review – Improving gender balance in FTSE
leadership, November 2019.
Our Gender Pay Gap Report, which shows gender pay for
a snapshot date of April 2021, is available on our website.
It shows a halving of Amigo’s median gender pay gap
when comparing to April 2020, from 10% to 5%. Tackling
gender inequality is high on our DEI agenda and is being
championed by Board members Michael Bartholomeusz
and Maria Darby-Walker.
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.
We delivered
1,278
hours of e-learning in the year
and released 56 e-learning
courses across the business
FY21: hours of e-learning:
4,300; e-learningcourses
delivered: 32
We delivered
9,868
total hours of training
FY21: 37,000
Hours of upskill training:
3,639
FY21: 6,000
We delivered
2,826
hours of training to
newemployeesthrough
the Academy
FY21: 26,000
Training stats over the year
35
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Our community
As a key player in the UK specialist lending sector,
and as a public listed company, Amigo understands
its responsibility to drive positive change in society.
Being a force for good in our local and wider community
is therefore important to us. As a business we have
chosen charitable causes that matter to our employees,
impact the community in which we operate, and have
relevance for our customers and significance within the
finance industry. We also want to minimise the impact
we have as a business on our environment, and we are
committed to ensuring we operate in a sustainable and
environmentally friendly way. See our Environment report
for details on how we are doing.
Amigo give something back
We play an important role in the lives of our customers and
our approach to charity has been built around this. Whilst
the Covid-19 pandemic has made it harder for us to carry
out our usual fundraising activities, it has highlighted the
importance of supporting the most vulnerable in our society.
As a business we organised a variety of fundraising events
over the year, operating within Covid-19 guidelines, to help
support our local community. We have a close relationship
with a local children’s hospice called Julia’s House.
This year we have continued to support Julia’s House
throughout our fundraising and to contribute to charities
that help the homeless and the financially vulnerable
within our local community.
The following is just some of our activity in the year:
•
The business ran an in-house sports day which raised
£3,090 for Julia’s House. The funds raised helped pay
for 66 hours of care in the community, providing support
devised specifically to meet the individual needs of a
child and their family, from sensory play and interaction
to relaxing complementary therapy.
•
In March 2021, four Amigo employees volunteered
with Julia’s House, helping the hospice to reopen in
aCovid-safe way.
•
We sponsored Bournemouth Electric under 9s children’s
football team providing a new kit and partnering with
Julia’s House to put its logo on the front, with the words
“We are supporting Julia’s House”.
•
Eight employees took part in a charity golf day, raising
£500 for charity.
•
The business and employees donated food to two
local charities which focus on the needs of vulnerable
communities, helping to support lower income families.
•
Bournemouth’s Food Bank was looking for food
donations to help local families in crisis. Our employees
came together to donate 1,544 items which weighed
832kg equalling 2,377 meals.
•
Hope for Food is a local charity based in Bournemouth
set up and run entirely by volunteers. The organisation
was founded in 2012 with the aim of providing
life’s essentials on a day-to-day basis to people in
need ofhelp. Our Amigos supported the charity by
bringingin 637 items of requested toiletries.
•
In September 2021 Amigo took part in our own “Amigo
Beach Clean Up” on Bournemouth Beach. The council
enabled us to spread our “Clean Up” further by working
our way through the surrounding areas and gardens.
•
We also took part in the Macmillan Coffee Morning.
However, rather than the traditional coffee morning, we
ran the event all day. Employees brought in their home
baked cakes, alongside our own kitchen staff’s bakes.
From this we were able to raise £522.
•
The business donated £630 to a charitable institution
that works to address the causes and impacts of poverty.
•
The business donated £500 in sponsorship to one of our
own employees running a marathon in aid of East Anglia’s
Children’s Hospices (“EACH”). EACH offers care and
support for children and young people with life threatening
conditions and supports families all over East Anglia.
•
Towards the end of the financial year, we donated a total
of £2,030 between both the business and employees
to a charity in Poland called Siepomaga to support
Ukrainian refugees who had been welcomed by Poland
following Russia’s invasion of Ukraine.
•
We organised a clothing donation and were able to
provide 20 large bags of new and used clothes to a
Polish community in Bournemouth which delivered the
bags to Poland to help support Ukrainian refugees.
•
Our employees donated to charities of their choice
through payroll giving, including Dorset Cancer Care,
Julia’s House, Dorset Mind and Sleep Safe.
During the coming financial year, we plan to continue our
fundraising activities within the local community, whilst also
developing new partnerships with local and national charities
as we develop our ESG strategy and align our activities
with our elected UN Sustainable Development Goals.
Strategic report
36
Amigo Holdings PLC
Annual report and accounts 2022
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 46.3% to
73,000 (2021: 136,000), driven by two factors.
Firstly the pause in lending, with no new lending
in the year to 31 March 2022 Secondly continued
collections on the back-book.
732022
2021
2020
136
222
Description
Revenue comprises interest income onamounts
receivable from customers. It isprimarily derived
from a single segment in theUK, with a small
proportion being from the Group’s Irish entity,
Amigo Loans Ireland Ltd.
Performance
As a result of decreased customer numbers
revenue has declined by 47.6% to £89.5m
from£170.8m.
Revenue
(£m)
89.52022
2021
2020
170.8
294.2
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
Year-on-year there has been an increase in the
impairment:revenue ratio from 35.5% to 41.3%.
This is driven by a reforecast of expected credit
losses to reflect an increasing trend in the level of
arrears in the year, predominantly from customers
exiting Covid-19 payment holidays.
41.32022
2021
2020
35.5
38.5
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 59.5% to £138.0m
(2021: £340.9m); the decline is due to the pause
in lending, recognition of modification losses
and balance adjustments for upheld customer
complaints. Impairment provision coverage
increased year-on-year to 25.6% (2021: 19.4%)
driven by reforecast expected credit losses,
reflecting an increased trend in the level
of arrears.
Net loan book
(£m)
138.02022
2021
2020
340.9
643.1
Operating cost:income ratio
(excluding complaints) (%)
Description
The Group defines operating cost:income ratio
as operating expenses excluding complaints
and items deemed by the Group to be exceptional
(such as strategic review, formal sale process
costs and related financing costs), divided
byrevenue.
Performance
Operating cost:income ratio (exclusive of
complaints) increased to 27.5% (2021: 26.1%),
driven by the reduction in revenue from £170.8m
to £89.5m inthe year. The Group has a continued
strong focus on controlling costs.
27.52022
2021
2020
26.1
20.2
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 are closely monitored
internally. The KPI’s 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 38 to 40 for further
detail on the Group’s financial performance throughout
theyear. Fordetailed definitions and calculations of all
alternative performance measures (“APMs”) mentioned,
please see the APMs section on pages 153 to 158.
37
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Statutory profit/(loss)
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 profit before tax was £167.9m for the
period (2021: loss of £283.6m); this is primarily
driven bya decrease in the complaints expense
from an increase of £318.8m in 2021 to a
credit of £156.6m in 2022, with the provision
calculated on a Scheme basis in 2022, following
the successful High Court sanction hearing.
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 profit after tax was £169.6m (2021:loss
of £289.1m). Due to losses bought forward there
is no tax charge on profits for the year. A small
tax credit is shown in the year following release
of a prior year tax provision.
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 profit after tax was £13.3m (2021:loss
of £279.8m); In the current financial year,
itadjusts for tax provision release and
securitisation fees. See the Alternative
Performance Measures (“APMs”) section on
pages 153 to 158 forthe full reconciliation.
Net (cash)/debt over
grossloanbook
(%)
Description
Net (cash)/debt is defined as borrowings
lesscash at bank and in hand. Net (cash)/debt
over gross loan book shows if the movement
in(cash)/debt is in line with loan book growth.
Performance
Net (cash)/debt over gross loan book has
reduced from 28.0% to negative 45.3% at
31March 2022. Cash collections on the legacy
loan book have driven debt reduction and
cash increase. Borrowings reduced due to both
the repayment of the securitisation facility and
£184.1m of the senior secured notes in the
period, resulting in a positive net cash position
at the end of the period.
(45.3)%2022
2021
2020
28.0%
52.8%
2022
2021
2020
167.9
(283.6)
(37.9)
Statutory profit/(loss)
aftertax
(£m)
Adjusted profit/(loss)
aftertax
(£m)
Basic earnings/(loss)
pershare
(pence)
Description
This measure calculates earnings/loss (profit/
loss) after tax per share (weighted average
number of shares).
Performance
Basic earnings per share was 35.7p compared
toprior years loss per share of 60.8p, driven by the
increase in statutory profit after tax year-on-year.
Adjusted basic earnings/
(loss) 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 earnings per share was 2.8p compared
to a loss of 58.9p in the prior year. This is due
to the adjusted profit after tax increase year-
on-year driven by the release of complaints
provision inthe period.
2022
2021
2020
169.6
(289.1)
(27.2)
2022
2021
2020
(279.8)
(26.9)
13.3
2.8
2022
2021
2020
35.7
(60.8)
(5.7)
2022
2021
2020
(58.9)
(5.7)
38
Amigo Holdings PLC
Annual report and accounts 2022
Financial review
I am pleased to present my first
full year Financial Review as Chief
Financial Officer (“CFO”). I joined
Amigo as Interim CFO in February 2022
and I am delighted to have taken up
the role permanently from 6 June 2022,
subject to FCA authorisation.
The twelve month period ended
31 March 2022 was a challenging
year with the Group committed to
addressing liabilities from historical
lending practices. With the Scheme
now sanctioned, the Board is
confident we can move forward with
new systems, policies and procedures
in place and innovative new products
that meet customer needs and a
strong demand in the market.
Amigo’s key performance indicators,
shown in this report, have been
considered when reviewing business
performance within the financial
year. For detailed definitions
and calculations of all alternative
performance measures (“APMs”)
mentioned, please see the APMs
section at the back of this report.
Overall financial performance
At year end, the Board believed there
to be sufficient certainty to account
for claims redress on a Scheme basis.
This has been confirmed following the
High Court decision to sanction the
New Business Scheme. This has led
to a credit of £156.6m in relation to the
claims provision in the consolidated
statement of comprehensive income.
This is the main driver behind the
Group showing a return to profitability
in the year.
With the pause in lending continuing,
revenues have decreased from
£170.8m in the prior year to £89.5m.
However, management has retained
a tight control on costs and, excluding
the release of part of the complaints
provision and other non-business
as usual items in the year, the Group
made an adjusted profit after tax
of £13.3m.
The continued strong collection of
the back book has allowed the partial
repayment of the senior secured
notes in January 2022, and has led to
a positive net cash balance of £83.9m
at 31 March 2022, compared to a
net debt position of £118.6m in the
prior year.
Although the results show a healthy
Shareholder Equity position at 31
March 2022, in reality the value of
the business is being delivered to the
creditors by way of the Scheme. Once
the costs of administering the Scheme
and collecting out the remaining
portfolio are paid then substantially all
of the value will have been delivered
to creditors. The remaining working
capital will not be sufficient to support
future lending which will be funded,
in part, by way of an expected equity
raise during the twelve months
following the Scheme effective date.
Danny Malone
Chief Financial Officer
Cautious optimism
forthe future
Strategic report
39
Amigo Holdings PLC
Annual report and accounts 2022
Strategic report
Revenue
The ongoing pause in lending
throughout the year was the primary
driver of the 47.6% decline in revenue
year-on-year to £89.5m (FY 2021:
£170.8m). This decline was mirrored in
the customer numbers which fell by
46.3% to 73,000 (FY 2021: 136,000).
The pause in lending drove a 56.2%
reduction in the gross loan book
year-on-year to £185.4m (FY 2021:
£422.9m). The net loan book reduced
by 59.5% year-on-year to £138.0m
(FY 2021: £340.9m). This reduction
is reflective of both the decline in
the gross loan book and impairment
coverage which increased to 25.6%
(FY 2021: 19.4%) at the year end.
Revenue yield in the year was
similarto the prior year at 29.4%
(FY2021: 29.1%). The Group defines
revenue yield as annualised revenue
over the average of the opening and
closing gross loan book for the period.
Impairment
The impairment charge for the year
was £37.0m (FY 2021: £60.7m),
with the impairment:revenue ratio
increasing to 41.3%. At 31 March
2022 the impairment provision
stood at £47.4m (FY 2021: £82.0m)
representing 25.6% of the gross loan
book (FY 2021: 19.4%).
Both the impairment charge and
year-end provision are driven by two
competing dynamics. The ongoing
pause in originations and consequent
reduction in the size of the loan
book drove a lower impairment
charge, partly owing to the upfront
expected credit loss methodology of
IFRS 9. Counteracting this, reforecast
expected credit losses, to reflect the
increasing trend in the level of arrears
which has persisted through the
period, resulted in increased levels of
impairment held against the existing
loan book.
Whilst unemployment trends are
favourable, the cost of living crisis is
expected to have an impact on our
customer base. Significant uncertainty
remains in respect of future customer
behaviour and collections as the
cost of living increases and the loan
bookdiminishes. Further details on
the key judgements and estimates in
the IFRS9 impairment model are set out
in note 2 to the financial statements.
Complaints provision
At year end, the Board believed there
to be sufficient certainty to account
for claims redress on a Scheme basis.
This has been confirmed following the
High Court decision to sanction the
New Business Scheme. This has led
to a credit of £156.6m in relation to the
claims provision in the consolidated
statement of comprehensive income.
This has resulted in a complaints
provision of £179.8m as at 31 March
2022 (FY 2021: £344.6m), after net
utilisation of £8.2m in the year.
Sensitivity analysis of the key
assumptions, including the volume
ofclaims, is set out in note 2.2 to
these financial statements.
Cost management
Administrative and other operating
costs decreased by £19.9m (44.7%)
year-on-year; however, with revenue
declining by 47.6% over the same
period the operating cost:income ratio
(exclusive of complaints) increased
to 27.5% (FY 2021: 26.1%). The
composition of the cost remained
similar to the prior year. With the
pause in lending, savings were
made in discretionary advertising
and marketing costs. There was also
The need for financial
inclusion is greater
than ever and the
dearth of mid-cost
lenders in Amigo’s
core customer market
presents a significant
opportunity for the
launch of Amigo’s new
lending proposition,
RewardRate.
a reduction in other variable costs
including communications, print, post
and stationery, and bank charges
through a combination of targeted
efficiency initiatives and declining
volumes aligned to the reducing
customer base. Employee costs fell
significantly following the difficult but
necessary decision to restructure the
staff cost base through two formal
redundancy programmes, announced
in the prior year. In the prior year a
restructuring provision of £1.0m was
included in the financial results in
respect of the redundancies, and this
was fully utilised in the current year.
Strategic report
40
Amigo Holdings PLC
Annual report and accounts 2022
Financial review continued
Cost management continued
Year-on-year legal and professional
fees have reduced primarily
due to classification of advisory
services related to the Scheme of
Arrangement, now being capitalised
within the complaints provision
figure, whereas in prior year advisory
costs were primarily disclosed in
operating expenses.
There had also been an absolute
reduction in the cost of contractors
handling complaints due to the pause
in case review whilst the business
pursued a Scheme of Arrangement.
Year to Year to
 Mar   Mar 
£m £m
Advertising and
marketing — .
Communication
costs . .
Credit scoring
costs . .
Employee costs . .
Legal and
professional fees . .
Print, post and
stationery . .
Bank charges . .
Other . .
. .
Tax
Whilst the twelve months ended
31 March 2022 were profitable, no
tax charge has been recognised on
profits as the Group has sufficient
losses brought forward. A tax credit
of £1.7m was applied in the period
reflecting the release of a historical
tax liability and tax refund.
Profit
Profit before tax was £167.9m for the
year (FY 2021: loss of £283.6m) with
profit after tax of £169.6m (FY 2021:
loss of £289.1m) driven primarily by
the complaints provision release and
related credit of £156.6m. Adjusting
for non-recurring items defined in
note 8 of the notes to the summary
financial table, adjusted profit
after tax was £13.3m (FY 2021: loss
of £279.8m).
Our adjusted basic earnings/(loss)
per share for the year was earnings
of 2.8p (FY 2021: loss of 58.9p), and
basic earnings/(loss) per share for the
year was earnings of 35.7p (FY 2021:
loss of 60.8p).
Funding and liquidity
Funding facilities as
atyear end (£m)  Mar   Mar 
Senior secured
notes () . .
Securitisation — .
. .
The securitisation facility in place
during the year was fully repaid on
24September 2021. The Board intends
to wind down the securitisation
structure as it does not believe that
it will be appropriate for the future
needs of the business.
The senior secured notes are
presented in the financial statements
net of unamortised fees. As at 31
March 2022, the gross principal
amount outstanding was £50.0m.
During the current year, on 4 January
2022, Amigo served notice of the
early redemption, at par, of £184.1m
of the £234.1m outstanding 7.625%
senior secured notes due in 2024
with a redemption date of 15 January
2022. The remaining £50.0m gross
principal amount outstanding is due
inJanuary 2024.
The Group’s average cost of funds,
calculated as interest payable as
a percentage of average gross
loan book, has increased to 5.5%
compared to 4.3% at the same time
last year due to the reducing gross
loan book, partially offset by a
reduction in finance costs.
Net cash/(debt) (£m)  Mar   Mar 
Senior secured
notes
(.) (.)
Securitisation — (.)
Cash and cash
equivalents . .
Net cash/(debt) . (.)
1 Figures presented above are net
ofunamortised fees.
Net cash was £83.9m as at 31 March
2022 (FY 2021: net debt of £118.6m) as
the back book continued to be collected
while originations remained suspended.
Unrestricted cash and cash equivalents
as at 31 March 2022 decreased to
£133.6m (FY 2021: £177.9m) following
the early redemption of £184.1m of the
senior secured notes due in 2024.
Summary
After a challenging year for Amigo
and its stakeholders, following the
sanctioning of the New Business
Scheme by the High Court and
subject to agreement from the FCA,
the Board expects to recommence
lending in the second half of this
calendar year. The outcome of the
FCA investigations is pending and a
significantly dilutive equity issue is
needed to fund the Scheme. This will
also be used to part recapitalise the
ongoing business.
The Board believes that the approval
of the Scheme delivers the best
outcome for creditors, and Amigo’s
return to lending will allow the Group
to play an important role in the
specialist lending sector, at a time
ofunprecedented rising living costs.
The need for financial inclusion is
greater than ever and the dearth
of mid-cost lenders in Amigo’s
core customer market presents a
significant opportunity for the launch
of Amigo’s new lending proposition,
RewardRate. It is on this basis
that we look to the future with the
cautious optimism that Amigo can
soon return to its core purpose of
providing those with few options to
borrow the opportunity to achieve
financial mobility.
Danny Malone
Chief Financial Officer
8 July 2022
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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
Good risk management is at the core of what we do. Faced with
a complex operating environment and significant uncertainty, we
have focused upon building a stronger and more adaptable risk
management capability. This enables us to better navigate our way
forward, making timely decisions that achieve the right outcomes in
a controlled and effective way. Our approach is founded upon a risk
management framework, articulated risk appetites and supporting
policies and procedures that help us manage risks in a resilient manner.
Training and awareness is 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 together with senior management to promote a responsible
culture of risk management by emphasising the importance of
balancing risk with profitability and growth in decision making, whilst
also ensuring compliance with regulatory requirements and internal
policies. At Amigo, every employee is empowered to make risk-aware,
purposeful decisions.
This has been a difficult year for Amigo in facing up to existential
risks. With the Scheme of Arrangement sanctioned in May 2022, the
survival of our business is now dependent upon the restart of lending,
the resolution of the outstanding FCA enforcement action and the
completion of a successful capital raise.
Paul Dyer
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.
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Our principal risks
Principal risks are those that can seriously affect performance, future prospects or reputation of the Company. Our risk
profile is reviewed regularly at all levels in the organisation to keep us risk aware and 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 over this period has remained relatively static with conduct and balancing stakeholder expectations
remaining a core focus as we resolve our legacy issues and work to meet regulatory commitments ahead of new lending.
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,
either due to poor
decisions or a failure to
adapt to changes in the
competitiveenvironment.
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 could lead to the
Company requiring more
expensive funding, reducing
profitability or even
being unable to meet its
obligations as they fall due.
Regulatory
If the regulatory
environment changes
or we don’t meet the
requirements, it could
detrimentally impact our
business or ability to lend.
Credit
Counterparties may fail to
meet their debt obligations
in full or on time. There
may also be exposure to
concentrations in credit.
Strategic report
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Our risks continued
Our principal risks continued
Conduct
Risk appetite
Amigo has a low appetite for
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 lending decisions
and 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
increasing inflation and the cost of
living on borrowers which will put
additional strain on customer finances
and affordability.
While there were concerns around the
effect of Covid-19 on customers and
their financial circumstances, impact
was minimised through Amigo’s
support of government initiatives.
Key mitigating actions
Amigo continues to put effort
into improving its conduct risk
management approach in parallel
with resolving its legacy lending
issues. A new culture framework
has been developed and will further
drive our customer-oriented mindset.
We continue to prepare for the new
Consumer Duty requirements.
Any new lending will have 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.
Read more on pages 8-9 and page 20
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,
refining our operations in a
continually changing environment.
Amigo aims to have the quantity and
quality of people necessary to meet
its objectives at all times and to
maintain its performance in case of
unexpected loss of keypersonnel.
Risk drivers and threats
Operational resilience has been
stable over the last twelve months
with no significant disruptions to
operations. While approval of the
Scheme has increased the certainty
of Amigo’s future, the people risk
and potential for attrition will remain
until lending resumes. Third-party
risk remains as we have reliance
on some key suppliers. 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. We continue to
build trusted relationships with our
suppliers and ensure our resilience
capabilities extend across our
third-party managed services. We
are also engaging with a number of
independent specialists to support
identification of areas of weakness.
Read more on page 21
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 has maintained a constructive
and open relationship with the
Financial Conduct Authority and other
regulators and agencies. During this
period, the FCA did not object to the
Scheme of Arrangement and has
agreed that Amigo could return to
lending subject to certain conditions
being met. The FCA’s enforcement
investigations remains open.
Key mitigating actions
Amigo continues to work closely
with all regulatory stakeholders to
effectively execute the Scheme of
Arrangement and restart lending in
aresponsible fashion.
Read more on page 21
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Strategic
Risk appetite
Amigo maintains a simple
strategy, focusing on maintaining
its position and leading execution
in the guarantor loans space while
exploring adjacent niches which can
be developed using our specialised
capabilities ifthey prove promising.
Risk drivers and threats
A number of competitor firms
which provide mid-cost finance to
retail customers have gone into
administration in the past year. This
has created a gap in the market that
Amigo intends to fill with its new
proposition. The introduction of a
Consumer Duty for firms by the FCA
is a further opportunity for Amigo
todifferentiate itself.
Key mitigating actions
A return to lending with a
continuous focus on conduct and
regulatorycompliance.
Read more on pages 14-15
Treasury
Risk appetite
Amigo operates its treasury function
to support the growth of its lending
business. Treasury is not a profit
centre and avoids or hedges any
material risk.
Risk drivers and threats
Amigo has paid off a substantial
proportion of its outstanding senior
secured notes inthis period.
Key mitigating actions
Maintaining a liquidity buffer
remains a priority as we seek
torestart lending.
Read more on page 40
Credit
Risk appetite
Amigo is a mid-cost lender, and
we take a degree of credit risk that
is consistent with our pricing. Our
lending is to customer segments we
understand well. We also engage on
a controlled basis in pilot lending,
testing new segments that we think
are appropriate for our product.
Amigo does not have an appetite
for material wholesale credit risk
or other credit risk outside its
lending business.
Risk drivers and threats
The existing loan book continues
toperform in line with expectations.
Key mitigating actions
Ongoing monitoring of credit risk
andpreparation for relending.
Read more on page 39
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Annual report and accounts 2022
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
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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.
Future of data
regulation
The organisation operates in a highly regulated market which continues to see a high level of
regulatorychange.
Adoption of
openbanking
Open banking is central to a shift to more digital services which better connect financial companies,
customers, regulators and technology services. With open banking comes additional risks including
integration challenges, privacy concerns and lack of knowledge from consumers.
Business disruption The pandemic has been a major driver of awareness around the risks associated with business interruption,
including supply chain disruption.
Fintech consolidation Public pressure to address income inequality may be met by use of alternative data sources for evaluating
creditworthiness and otherwise assessing eligibility.
Environmental
Emerging trend Description
Pandemics With Amigo’s hybrid working policy, the impact of Covid and increased remote working has not had a
material impact on the organisations 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 is being
placed on environmental, social and governance (“ESG”), including climate-related issues. Amigo is
developing its ESG strategy.
Economic
Emerging trend Description
Increasing inflation risk Increased rate of inflation and cost of living will likely impact loan affordability and increase the proportion
ofvulnerable customers.
Economic recovery
post-pandemic
There will still be unanticipated impacts to customers and staff as a result of pandemic recovery including
tightening of credit options.
Geopolitical/legal/regulatory
Emerging trend Description
Speed of
regulatorychange
2022 continues to bring high levels of regulatory supervision and enforcement. 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
Increasing potential for financially vulnerable to become further indebted.
Growing levels of
economic abuse
Potential for increasing and undetected prevalence of economic abuse within households.
Strategic report
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Annual report and accounts 2022
Going concern and viability statement
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 these
financial statements. This has taken
into account the Group’s business
plan and the principal risks and
uncertainties facing the Group,
including the success of the Scheme
of Arrangement (“the Scheme”).
The financial statements have been
prepared on a going concern basis
which the directors believe to be
appropriate for the following reasons.
Following the sanctioning by the
High Court on 26 May of the Scheme
of Arrangement (“the Scheme”)
the Group now has a clear path to
returning to lending over the next
twelve months. Failure to meet the
conditions of the Scheme however
remains a key risk faced by the Group.
The relevant conditions are:
•
approval before 26 February 2023
by the Financial Conduct Authority
for Amigo to resume lending; and
•
issuance and sale of at least 19
shares for every 1 share in issue
before 26 May 2023.
Should either of these conditions
remain unsatisfied within the required
timeframes, under the terms of the
Scheme the business will revert to
a managed wind-down and neither
the Group nor Company will be a
going concern. Projections show the
business has sufficient resources for a
solvent wind-down in this context.
However, the Directors have a
reasonable expectation that these
conditions can be met and, therefore,
have modelled a ‘Base scenario’
and ‘Severe but plausible downside
Scheme scenario’ which the Directors
believe are realistic alternatives to the
managed wind-down scenario.
Base scenario – business plan
assumptions
The Base scenario assumes that:
•
the conditions of the Scheme
(explained above) are met in the
required timescales, with FCA
approval to commence re-lending
being received in Summer 2022;
•
balance adjustments resulting
from complaints in the Scheme are
consistent with the assumptions
that underpin the complaints
provision reported as at 31 March
2022 (see note 2.2.2);
•
at least the minimum committed
amount of £112m is paid out as cash
redress in the Scheme, being £97m
from existing resources and future
collections plus an additional £15m
following the equity raise;
•
new lending originations
commence as soon as possible in
summer 2022; and
•
collections on the existing
loanbook continue in line with
recent experience.
This scenario indicates that the Group
will have sufficient funds to enable it
to operate within its available facilities
and settle its liabilities as they fall due
for at least the next twelve months.
Severe but plausible downside
Scheme scenario
The Directors have prepared a severe
but plausible downside scenario.
This assumes the conditions of the
Scheme are met and also that the
Group is able to successfully obtain
new debt financing to enable it to
repay its non-current borrowings as
they fall due in January 2024, but
considers the potential impact of:
•
an increased number of upheld
complaints. Whilst this sensitivity
does not increase the cash liability,
which is capped under the Scheme,
the number of customers receiving
balance write downs will increase,
thus reducing future collections and
adversely impacting the Group’s
liquidity position;
•
increased credit losses as a result
of the cost of living crisis and the
inability of an increased number of
the Group’s customers to continue
to make payments;
•
halving of forecast origination
volumes, whether arising due to
delays in new product launch or
market conditions; and
•
halving of new equity funding raised
(whilst still meeting the dilution
conditions of the Scheme).
This severe but plausible downside
Scheme scenario indicates that the
Group’s available liquidity headroom
would reduce but would be sufficient
to enable the Group to continue to
settle its liabilities as they fall due for
at least the next twelve months.
FCA investigation
The Group is currently under
investigation by the FCA in relation
to historical lending and complaints
management processes. We are
hopeful that the outcome of these
investigations will be known within
the next twelve months. If the
enforcement process is not completed
within twelve months, then Amigo
could fail to comply with one of the
Scheme conditions and is likely to
revert to the fallback solution or some
form of insolvency.
There are a number of avenues of
sanction open to the FCA should
it deem it appropriate and so the
potential impact of the investigation
on the business is extremely difficult
to predict and quantify, so has not
been provided for in the financial
statements, and is not modelled in
the business plan or stress scenario.
In mitigation, the FCA has stated
that the levying of any fine would
be considered in the context of the
Scheme and its impact on creditors.
However, if the FCA were to impose
a significant fine it would significantly
reduce the Group’s available liquidity
headroom and the Group may
potentially need to source additional
financing to maintain adequate
liquidity and to continue to operate.
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Conclusion
Approval by the High Court of the
Scheme provides the Group with a
clear path to return to lending under
a business plan which has been
the subject of extensive external
scrutiny as a result of the Court
process. Based on the severe but
plausible scenario the Directors have
a reasonable expectation that the
Group and Company have adequate
resources to continue in operation
for at least the next twelve months.
Accounting standards require an
entity to prepare financial statements
on a going concern basis unless the
Board either intends to liquidate
the entity or to cease trading or has
no realistic alternative but to do so.
Accordingly, the Board believes that
it remains appropriate to prepare
the financial statements on a going
concern basis.
However, the Board also recognises
that at the date of approval of these
financial statements significant
uncertainty remains. The Scheme
requires the meeting of conditions,
being approval for a return to
lending before 26 February 2023
and issuance and sale of at least
19 shares for every 1 share in issue
before 26 May 2023. Additionally,
the successful delivery of the
Group’s business plan depends on
raising sufficient equity and/or debt
funding and the final outcome of the
FCA investigations remains highly
uncertain. These conditions are
outside of the control of the Group.
These matters indicate the existence
of a material uncertainty related to
events or conditions that may cast
significant doubt over the Group and
Company’s ability to continue as a
going concern and, therefore, that the
Group and Company may be unable
to realise their assets and discharge
their liabilities in the normal course
of business. The financial statements
do not include any adjustments
that would result from the basis of
preparation being inappropriate.
Viability statement
In accordance with Provision 31of the
UK Corporate Governance Code, the
Board has assessed the viability of the
Group over the three years to March
2025. The Directors’ assessment
has been made with reference to the
Group’s current position and strategy,
as laid out in the Strategic Report
(see pages 1 to 49), and the Group’s
principal risks and uncertainties and
how these are managed (see pages
42 to 47).
The Directors’ assessment covers
a period of three years to March
2025, which the Board believes is
the most appropriate period for the
assessment of long-term viability as
it is aligned to the Group’s three-year
strategic planning scenario analysis.
The financial projections are built
on a bottom-up, granular basis and
make specific assumptions in respect
of future credit losses, customer
complaints redress, funding and
capital structure. These assumptions
are reviewed for reasonableness with
key internal and external stakeholders
and benchmarked to consensus
economic forecasts. The Board obtains
independent assurance from the
Risk function over the alignment of
the strategic plan with the Board’s
risk appetite.
In making the assessment of viability,
the Board took account of scenarios
that show the effects of severe but
plausible stresses to key assumptions
in the plan. Details of the scenarios
are provided in note 1.1 to the
financialstatements.
Funding
In the context of the prolonged
lending pause and the necessity
to preserve cash for the benefit of
creditors whilst the Scheme options
were under consideration, funding
lines which have historically been
available to the Group have either
been withdrawn or mostly repaid.
TheGroup’s return to lending as set
out in the base case plan is predicated
on raising sufficient debt and equity
funding to sustain the business at
scale. Such future activity inherently
entails a high degree of uncertainty
where success is based at least partly
on external market factors.
Directors’ assessment
However, the Directors have a
reasonable expectation that the
Group will be able to continue in
operation and meet its liabilities
as they fall due over the period
to 31 March 2025, subject to the
assumptions that:
1. the conditions of the Scheme are
met in a timely manner;
2. the FCA investigation does not
result in a material financial or
other penalty;
3. sufficient funding is achieved,
and originations reach a level,
tosupport a business at scale; and
4. collections on the legacy book
remain materially within the
levelsforecast.
The assessment concluded that
were sufficient realistic management
actions which could be taken
to mitigate material credit and
liquidity risks.
Corporate governance
51 Chair’s introduction
52 Board of Directors and Company Secretary
54 Executive Committee (ExCo) members
56 Corporate governance statement
57 Governance report
63 Audit Committee report
67 Nomination Committee report
69 Risk Committee report
71 Directors’ remuneration report
92 Directors’ report
98 Directors’ responsibilities statement
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Amigo Holdings PLC
Annual report and accounts 2022
51
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Jonathan Roe
Chair
I am pleased to introduce this report
on 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 2021/22 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.
At Board level we continued to
strive for a well-balanced and
effective Board, strong oversight
of risk management and sound
stakeholderrelationships.
Earlier in the year, the Board has made
strenuous efforts to develop and
expand Board membership, so it had
the necessary skills composition to
deal with the serious and challenging
issues facing the Company. These
efforts were hampered in the early
part of the reporting period by the
rejection of the original Scheme of
Arrangement proposal, by the High
Court, and the continued uncertainty
of the wider business. Some suitable
candidates identified in the period
had to be stood down on the
grounds of incurring costs following
that decision.
In January 2022 we took on
DannyMalone to act as interim
CFO, to replace Mike Corcoran. The
Board are very pleased when Danny
agreed to become a Director and
permanent CFO. The recruitment
of two additional Non-Executive
Directors will be a significant challenge
for the Board in the remaining part of
the 2022, now that the High Court has
approved the New Business Scheme
of Arrangement.
Overall, I remain delighted with
thequality of the Directors. Every
member of the Board continues to
have a common belief in the societal
purpose that Amigo has and the role
it can play in providing finance and
hope to its customers.
By any measures this has been a
busyyear for the Board as evidenced
by the number of meetings for the
Board and Committee (see page 57).
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
8 July 2022
A committed Board
Chair’s introduction
Corporate governance
52
Amigo Holdings PLC
Annual report and accounts 2022
Board of Directors and Company Secretary
A N R Ri
Age: 66 Tenure: 2 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 recently Non-Executive
Chairman of Vanquis Bank for three and
ahalf years, 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 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: 65 Tenure: 2 years
Profile
Gary joined the Board as a Non-Executive
Director on 17 August 2020 but then took
up the role of CEO on 23 September 2020.
Background and external appointments
Gary has over 40 years of experience
within the financial services sector, of
which approximately 20 years have
been at CEO or board level. These
appointments covered a wide spectrum
of the credit industry with positions at
The Warranty Group, Secure Trust Bank,
Barclays Bank, Lex Vehicle Leasing, GE
Capital, Hitachi Credit, Lloyds Bowmaker,
PayZone UK and Together Money. Since
2017, Gary has been Chairman of Orchard
Funding Group, Lantern Debt Recovery
Services, the Fry Group and the advisory
board of Positive Momentum Partners.
He was also aNon-Executive Director
ofAdmiral FinancialServices Limited.
Brings to the Board
Gary is a proven executive with a history
of having worked in regulated financial
services businesses and leading them
through times of change. He has the
necessary commitment, skills and
experience to lead Amigo forward in
thenext chapter of itsdevelopment.
Age: 58 Tenure: Less than 1 year
Profile
Danny joined the Board on 6 June 2022 as
Chief Financial Officer (“CFO”), subject to
FCA approval under the Senior Managers’
Regime, and following joining Amigo as
Interim CFO on 7February 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 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.
Jonathan Roe
Chair of the Board
Non-ExecutiveDirector
Gary Jennison
Chief Executive Officer
Danny Malone
Chief Financial Officer
53
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Committee key:
A
Audit
N
Nomination
R
Remuneration
Ri
Risk Committee chair
A N R Ri A N R Ri
Other Directors holding office in the year
Michael Corcoran was a Director of the Company during the year until he resigned on 19 February 2022.
Age: 57 Tenure: 1 year
Profile
Maria joined the Board as a Non-Executive
Director on 12 October 2020 and became
Chair of the Remuneration Committee
on 20January 2021 and appointed SID,
subject to FCA approval.
Background and external appointments
Maria has over 30 years of experience
advising the boards of leading brands
on marketing, brand and corporate
reputation, including within the financial
services sector. Experienced at developing
strategy, managing risk and organisational
change, she helps businesses to create
their narrative and proactively engage with
their stakeholders; she has a strong focus
on driving good culture, leadership and
purposeful behaviour. Her client list has
included: the FCA, Iglo/Birds Eye, Cadbury
and Rio Tinto amongst other leading
brands. Maria is also a Non-Executive
Director of Personal Group Holdings
plc, where she chairs the Remuneration
Committee and is Senior Independent
Director of Redwood Bank Limited.
Maria is an Ambassador for Women on
Boards, a member of Deloitte’s Women
on Boards Academy, and was voted one
of Cranfield University’s “100 Women
toWatch” for FTSE board positions.
Maria is due to be appointed a Visiting
Fellow to the University of Oxford from
1September 2022.
Brings to the Board
Maria has financial and regulatory
experienceand prior experience as Senior
Independent Director and Chair of a
Remuneration Committee, combined with
a commitment to open and transparent
engagement with all stakeholders.
Age: 64 Tenure: 1 year
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
Interim 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, following approval
by the Financial Conduct Authority on
19 July 2021. Michael is a Fellow of the
Association of Corporate Treasurers
and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: 59 Tenure: 3 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.
Maria Darby-Walker
Senior Independent Director
Non-ExecutiveDirector
Michael Bartholomeusz
Independent
Non-ExecutiveDirector
Roger Bennett
Company Secretary
Corporate governance
54
Amigo Holdings PLC
Annual report and accounts 2022
Executive Committee (ExCo) members
In addition to Gary Jennison and Danny Malone, whose biographies are shown on page 52, the following senior
managers sit on the ExecutiveCommittee:
Other senior managers in the year
Steve King, who was Chief Customer Officer and a member of the
Executive Committee, left the business on 30June 2021.
Naynesh Patel, who was Chief Analytics Officer and a member
ofthe Executive Committee, left the business on 31July 2021.
Shaminder Rai, who was Chief Transformation Officer and
a member of the Executive Committee, left the business on
12November 2021.
Candice Openshaw, who was Head of Human Resources and
a member of the Executive Committee at the year end, left the
business on 26 June 2022.
Profile
Paul Dyer joined Amigo as Chief Risk Officer in November 2020.
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 Masters degree with distinction in Innovation,
Creativity, Leadership from CASS university.
Paul Dyer
Chief Risk 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.
Profile
Jake joined Amigo in June 2021. As Chief Customer Officer
he leads the marketing and distribution strategies that deliver
Amigo’s brand goal of widening mainstream financial inclusion
and bringing about positive customer outcomes. Jake spent
over a decade at Equifax where, as European Chief Marketing
Officer, he led strategy, product, pricing and marketing and
played a key role in delivering its transformation and reputation
rebuild programmes. Jake also brings industry experience
from ClearScore and most recently Freedom Finance where his
product team won numerous awards for its work on widening
access to affordable credit using Open Banking technology.
Jake has a BA in history and postgraduate qualifications from
theLSEand Ashridge.
Nicholas Beal
Chief Restructuring Officer
Jake Ranson
Chief Customer Officer
55
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Profile
Andy Smith joined Amigo in September 2021 as Interim CTO.
Andy has held a number of CIO, COO and Transformation Lead
positions in financial services organisations, both public and private
equity-owned, including GE Capital, CIT Bank, First Data Corp, The
Warranty Group and Assurant. Leading large pan-European teams,
he has worked with C-Suite and Board colleagues, successfully
driving business and technology transformation programmes,
implemented technology solutions to drive efficiencies and improve
the customer experience, led customer service improvement
programmes which delivered significant business growth, and
helped companies embrace and adapt to change as a result
of M&A activity. Andy has a BA in Pure Mathematics, Statistics
andEconomics from The University ofSheffield.
Profile
James Tattersall joined Amigo as Head of Customer Care in
June2021, before taking up the position of Head of Operations.
James has over 25 years of experience leading the delivery
of customer service outcomes within Financial Services
organisations, covering Life & Pensions, General Insurance,
Banking and now Consumer Credit. James joined from Domestic
& General, where he was Group Head of Customers Care, a
role that covered it’s UK and European businesses. Prior to
that, James worked for Hastings Direct as its Head of Customer
Relations, leading a multi-disciplined operational transformation
programme. James has also run his own successful consultancy
business, specialising in MI, System Transformation, Root Cause
and Remediation across the UK.
Andy Smith
Chief Technology Officer (Interim)
James Tattersall
Operations Director
Corporate governance
Corporate governance statement
56
Amigo Holdings PLC
Annual report and accounts 2022
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 2022, the Company has
complied with the provisions set out in the UK Corporate
Governance Code, except for the following matters:
Per provision 5, for engagement with the workforce, one
or a combination of the following methods should be used
by the Company: a director appointed from the workforce;
a formal workforce advisory panel; or a designated
non-executive director. Due to the difficult position faced
by the Company the Board and senior management has
actively engaged at all levels of the business and that
engagement was judged to be sufficient with a workforce
reduced to c.210 people for much of the year. Subsequent
to the year end the Company formed the Responsible
Business Council (“RBC”), which included within its varied
role, active engagement with the wider workforce. Currently
approximately 50% of the membership of the Committee
is elected directly from applicants drawn from across the
entire workforce. Two NEDs are invited to attend the RBC
to facilitate greater interaction between the Board and the
wider workforce.
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 did not have
an appointed senior independent director in the year.
Subsequent to the year end, Maria Darby-Walker was
appointed to the role of Senior Independent Director,
subject to the approval of the FCA.
Per provision 21, the Board should carry out a formal
and rigorous annual evaluation of the performance of the
Board, its committees, the chair and individual directors.
The chair should consider having a regular externally
facilitated Board evaluation. In FTSE 350 companies this
should happen at least every three years. The Board is
aware that it is now over three years since the Company
floated with a premium listing on the London Stock
Exchange and no external evaluation of the Board has
been undertaken. Given the then insolvent balance sheet
and the complete rotation of the Board in the previous
year, the Board took the decision that it would not be
appropriate to incur the costs of an external third party
company to facilitate a Board evaluation, until the New
Business Scheme was sanctioned by the Court.
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 should,
when we should
Leadership and effectiveness
Governance structure
Following the sanction of the New Business Scheme in May
2022, the Company engaged The Corporate Governance
Institute of UK and Ireland to carry out the evaluation.
Thework is expected to start in September 2022.
Per provision 24, the Audit Committee is required to
have three Independent Non-Executive Directors and the
Chair of the Board should not be a member. Throughout
the year, the Audit Committee had three Non-Executive
Directors, one of whom, Jonathan Roe, was also the Chair
of the Board. The Committee is chaired on an interim basis
by Michael Bartholomeusz. A process is underway to bring
the composition of the Committee back into compliance
with the UK Corporate Governance Code including the
appointment of a new Chair of the Committee.
Statement of Compliance with TCFD, pages 28 to 31
report on the Company’s response to compliance with the
requirements of Listing Rule 9.8.6R. The requirements are
derived from the adoption by the UK, in December 2021, of
the recommendations emanating from the Task Force for
Climate-related Financial Disclosure (“TCFD”). As has been
documented elsewhere in the Annual Report, until the
sanctioning of the New Business Scheme by the Court, the
Company operated with an insolvent balance sheet. As a
consequence of the insolvent balance sheet the Board was
required to operate the Company on behalf of creditors
and was tightly constrained financially. As a consequence
of the financial constraints the Company remains early
on its journey to deliver against all the recommendations
of the TCFD. Notwithstanding the constraints during the
reporting period, the Board is satisfied the Company has
taken substantive steps to address the issues raised and
believes it is on track to fully meet the obligations arising
from TCFD as outlined in the Climate Strategy Roadmap
(see p.31).
57
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
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 61 and 62. 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 quarters
ending in June and December, the half year ending in
September and the full year ending in March, and would,
if appropriate, also meet to approve the interim and final
dividends in January and July.
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. As well as meeting the ongoing solvency and
conduct issues, the Board reviewed the current position
of the market offering and considered options for
meeting future customer demand. When considering the
business of the Group, the Board is aware of the need to
have regard to the matters set out in section 172 of the
Companies Act 2006 (see pages 20 to 23) as well as the
significance of environmental, social and governance
(“ESG”) matters.
Governance report
Role of the Board
Meeting type
Total meetings
in year
Jonathan
Roe
Maria
Darby-Walker
Michael
Bartholomeusz
Gary
Jennison
Mike
Corcoran
Board – scheduled
Board – ad hoc      
Audit n/a n/a
Risk n/a n/a
Remuneration     n/a n/a
Nomination n/a n/a
1 Jonathan Roe was appointed as a Director on 1 August 2020.
2 Maria Darby-Walker was appointed as a Director on 21 October 2020.
3 Michael Bartholomeusz was appointed as a Director on
19November 2020.
4 Gary Jennison was appointed as a Director on 17 August 2020.
5 Mike Corcoran stood down as CFO on 24 January 2022 and as a
Director on 19 February 2022.
Corporate governance
Governance report continued
58
Amigo Holdings PLC
Annual report and accounts 2022
Leadership and effectiveness continued
Operation of the Board continued
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 management of the business whilst
operating with an insolvent balance sheet; meeting the
challenges of the ongoing regulatory scrutiny; 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 with the restrictions imposed due to the Covid-19
pandemic many of the meetings in the year have been
held virtually. For those Directors who are unable to attend
meetings in person, 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 review
process undertaken by the Board requires members to
rate their own performance and the performance of the
Board through completion of a questionnaire. The review
process for the year was disrupted due to the uncertainty
over the future of the business. The Board did not carry out
a formal Board evaluation in the period on the grounds that
the costs and time commitment to carry out an effective
evaluation was not consistent with the obligations placed
on Directors to manage the business on behalf of creditors
given the solvency position. The Board has engaged the
services of The Chartered Governance Institute of UK and
Ireland, an independent specialist agency, to carry out a
formal Board evaluation in September 2022. The Board
will look to implement the recommendations and actions
arising from the review.
Areas covered by the review will include 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 to be considered annually by the Remuneration
Committee in conjunction with their annual pay review and
the payment of bonuses.
Training and support
The training needs of the Board and its Committees are
regularly 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 (subject to Covid-19 restrictions) 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. Directors also have access to the
services of the Company Secretary. The Group was able
to obtain Directors’ and Officers’ liability insurance from
1 December 2021. At the year end the Group did hold
Directors’ and Officers’ liability insurance.
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,
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 and its implications;
and insolvency matters, including the orderly treatment
of creditors provided by the Company’s legal and
financialadvisors.
59
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
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
to all contributors to the Annual Report and a detailed review
by senior management of the overall content.
Board composition, structure and diversity
As at the year end the Board comprised the Independent
Non-Executive Chair, one Executive Director and two
Independent Non-Executive Directors. The Chair was
Jonathan Roe and the CEO was Gary Jennison. The
Directors’ biographies are on pages 52 and 53. During
the year, Executive Director and CFO, Mike Corcoran,
stepped down as CFO on 24 January 2022 and resigned
as a Director on 19 February 2022. Danny Malone was
appointed as Interim CFO. Subsequent to the year end,
on 6 June 2022, Danny Malone was appointed as an
Executive Director and CFO, subject to approval of the
FCA. The dates of the changes in directorships are listed
inthe table on page 93.
The Board has started the search to recruit a new
Chair for the Audit Committee as well as an additional
Non-Executive Director.
Amigo’s policy and approach to diversity at Board level is
described in the Nomination Committee Report on page
68, while Amigo’s commitment to diversity and inclusion
within the workforce, and how it has been implemented,
can be found on page 34.
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. The Company appointed Maria Darby-Walker
asSenior Independent Director after the year end, subject
to the approval of the FCA. 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.
Board independence and Committee membership – Directors as at 31 March 2022
Name Independent
Audit
Committee
Nomination
Committee
Remuneration
Committee
Risk
Committee
Jonathan Roe Yes
Maria Darby-Walker Ye s
Michael Bartholomeusz Ye s

Gary Jennison No
1 Interim Chair pending appointment of new Chair of the Audit Committee.
Key: Member Chair
Corporate governance
Governance report continued
60
Amigo Holdings PLC
Annual report and accounts 2022
Independence continued
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. 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.
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 team which 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 institutional
shareholders 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 that the
Company’s shares are substantially 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.
Annual General Meeting (AGM)
Amigo will hold its fourth AGM in 2022 on 28 September
2022. The notice of the AGM will be sent to shareholders
at least 20 working 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.
61
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Future General Meeting
One of the conditions precedent for the completion of the New Business Scheme requires the Company to carry
out a substantive capital raising exercise, most likely effected via a mixture of equity and debt. The composition of the
capital raise has not been finalised at the date of the publication of this Annual Report but it is expected that equity
raise element will be by way of a Rights Issue. The Company has previously announced that the Rights Issue would
result in a substantial dilution to any existing shareholders who elected not to take up all their rights’ entitlement. It
is anticipated that shareholders will need to approve elements of the capital raise via a General Meeting at some, yet
to be organised, future date. The Board is aware of the need for extensive engagement with shareholders and other
stakeholders in the lead up to the anticipated General Meeting, which it is hoped will be held before the end of Q1 2023.
Thedeadline for completion of the initial capital raising exercise is 25 May, 2023, the anniversary of the approval of New
Business Scheme.
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. The Investor Relations
team is happy to answer questions by email at 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.
Corporate governance
Governance report continued
62
Amigo Holdings PLC
Annual report and accounts 2022
Board Committees continued
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said 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
disclosive matters, may at times not include all Directors. The Disclosure Committee meets on an ad hoc basis and
considers matters when appropriate during the year. During the year to 31 March 2022 the Disclosure Committee held
eight 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.
63
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
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 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
Interim Chair of the Audit Committee
8 July 2022
Committee members
Member Meetings Attendance
Michael Bartholomeusz
Maria Darby-Walker
Jonathan Roe
1 Michael Bartholomeusz was appointed on 19 November 2020.
2 Maria Darby-Walker was appointed on 21 October 2020.
3 Jonathan Roe was appointed on 1 August 2020.
Focus areas for 2023
•
Considering the impact of the ongoing
arrangements for the New Business Scheme
•
Considering the impact of the worsening economic
environment on the loan book
•
Development of assurance reporting
•
Implications of the return to lending
•
Appointing a new external auditor
•
Ensuring the internal whistleblowing safeguards
are visibly aligned with both the return to
lending and the activity of the Responsible
Business Council
Audit Committee report
Michael Bartholomeusz
Interim Chair of the AuditCommittee
Corporate governance
Audit Committee report continued
64
Amigo Holdings PLC
Annual report and accounts 2022
Committee composition
There were no changes to the Committee membership
over the year. The members of the Committee during
the year were Michael Bartholomeusz, who acted as
Interim Chair, Jonathan Roe and Maria Darby-Walker. The
Board is actively seeking to recruit a replacement Chair
ofthe Committee. 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 viability statement included in the Annual
Report and the adoption of the going concern basis
as the appropriate basis on which to prepare Amigo’s
financial statements.
•
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 New
Business Scheme in May 2022.
•
Review of reporting on ESG and 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.
•
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 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 5 meetings during the year. Attendance
at these meetings by the Committee members is shown in
the table on page 63. On each occasion the CFO or Interim
CFO, Company Secretary and other senior members of the
executive team attended, including the Chief Risk Officer.
The external auditors attended meetings when matters
relating to the financial reporting cycle were discussed.
Attendance by representatives of the Internal Auditors
occurred on an ad hoc basis when Internal Audit output
was reviewed.
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 Chairs 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
development of the Internal Audit programme and the firms
own assurance reporting structure, especially in relation to
affordability and conduct risk and the implications for the
return to lending; oversight of the impact of the worsening
economic environment on the loan book; and ensuring the
internal whistleblowing safeguards are visibly aligned with
both the return to lending and the activity of the Responsible
Business Council. Given the recent changes to the size and
nature of the Group’s business, since the original tender
and appointment, it is appropriate for both KPMG and
the Company to reconsider the audit of the Amigo group
of companies. KPMG will not be offering themselves for
re-election at the AGM due to be held on 28 September
2022. The Directors have commenced the tender process
for the selection of the replacement auditor. Given the
aforementioned financial issues, the Committee will continue
to monitor whether thegoing concern basis remains the
correct basis on which toprepare the financial statements.
65
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Key activities of the Audit Committee
in2021/22
The Committee met 5 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 2021 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 2021;
•
reviewed and considered significant issues relevant
to the unaudited Interim Report and Accounts to
30September 2021;
•
reviewed and considered significant issues relevant
to the unaudited Quarterly Report and Accounts to
31December 2021;
•
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;
•
reviewed and assessed the methodology used for
carrying the provisions to cover the cost of complaints
given the proposed Scheme of Arrangement and,
following rejection of the first Scheme by the Court in
May 2021, the change in approach to the calculation of
the provision forcomplaints at the year end;
•
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 Covid-19 forbearance
provisioning undertaken;
•
reviewed, considered and agreed the need for an
impairment in the carrying value of subsidiaries within
the Group;
•
reviewed and considered accounting for Covid-19
forbearance measures, including the need for modification
loss accounting and changes to incomerecognition;
•
reviewed the external auditor’s audit planning report
for the year ended 31 March 2022 and findings from
the 2021/22 interim audit work completed in the period.
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
auditors 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, given the implications
of the increased provisioning to cover the costs of
complaints raised by customers and the failure of the
first Scheme of Arrangement to obtain the approval in
May 2021. 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 the impact on the provision for complaints
given the sanction of the New business Scheme
in May 2022;
•
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, especially given the
approval of the New Business Scheme in May 2022;
•
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:
–
management information assessment;
–
affordability;
–
business continuity;
–
collections, forbearance and arrears management;
–
complaints handling;
–
cyber security;
–
data management and data protection;
–
fraud control;
–
payroll;
–
cyber and business continuity; and
–
vulnerability and vulnerable customers.
Corporate governance
Audit Committee report continued
66
Amigo Holdings PLC
Annual report and accounts 2022
Auditor effectiveness and independence
The Committee considered KPMG’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. KPMG’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 100 to 108.
The Committee has also considered the objectivity and independence of the external audit, noting both the statement
of independence provided by KPMG and the absence of any known conflict of interest between Amigo and KPMG. The
Committee’s policy is that KPMG 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 last financial year KPMG did not provide any non-audit
work. Details of audit fees paid to KPMG are provided in note 7 to the consolidated financial statements.
There was a tender of audit services in February 2017 when KPMG was appointed as auditor to the Group. Given the
changes to the business, since the original tender and appointment, it is appropriate for both KPMG and the Company to
reconsider the audit of the Amigo group of companies. KPMG will not be offering themselves for re-election at the AGM
due to be held on 28 September 2022.
Financial reporting
The Committee reviewed and provided input into the audit scope and audit plan provided by KPMG. In evaluating key
issues and areas of judgement relevant to the consolidated financial statements, the Committee reviewed KPMG’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 rational provided by management.
•
Monitoring of the relevance of the Covid-19 to the economic overlay during the early part
of the year.
•
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 agreed subsequent to the year end.
•
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 short, medium and long-term funding requirements considering complaints
andimpact of the deteriorating economic situation on impairment levels.
•
Consideration of whether the failure of the first Scheme of Arrangement to deal with the costs of
dealing with customer complaints would impact the future survival of the business and whether
asa result going concern was the correct basis on which to prepare the financial report throughout
the period before the New Business Scheme was sanctioned by the High Court in May 2022.
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.
Nomination Committee report
67
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Overview
I am pleased to introduce our Nomination Committee
Report for 2021/22, 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. There were no
changes in the Committee during the review period and
throughout this time it strove to ensure that the Company
met the provisions of the UK Corporate Governance Code,
although this was not always possible.
Committee composition
I have been Chair of the Nomination Committee
throughout the review period. Maria Darby-Walker and
Michael Bartholomeusz are also both current members
ofthe Committee. 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.
Key activities of the Nomination Committee
inthe year
The Committee held 3 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. The replacement of the CFO, Mike Corcoran,
mid year proving particularly challenging given the
difficulties caused by the financial situation facing
the Company.
Committee members
Member Meetings Attendance
Jonathan Roe
Maria Darby-Walker
Michael Bartholomeusz
1 Jonathan Roe was appointed on 1 August 2020.
2 Maria Darby-Walker was appointed on 12 October 2020.
3 Michael Bartholomeusz was appointed on 19 November 2020.
Focus areas for 2023
•
Recruitment of two additional Non-Executive
Directors, including a Chair of the Audit committee
•
Board evaluation exercise and implementation
ofthe findings
Jonathan Roe
Chair of the Nomination Committee
Corporate governance
Nomination Committee report continued
68
Amigo Holdings PLC
Annual report and accounts 2022
Key activities of the Nomination Committee
inthe year continued
Other key activities during the year included:
•
reviewing the composition of the various
BoardCommittees;
•
supporting the appointment of Danny Malone as interim
CFO, and subsequent to the year end, as CFO, subject to
FCA approval; 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 introduction 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 now that the determination
on the Schemes of Arrangement has been made by
the Court.
The Committee has been actively seeking to build the
Board and identify skills shortages. The Board is actively
seeking to recruit two additional Non-Executive Directors,
including an individual who can perform the role of Chair
of the Audit Committee. 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.
The Committee has not undertaken an external evaluation
of the Board this year, as the process was disrupted by
the ongoing workflow to seek approval for the Scheme of
Arrangement. The Committee has engaged The Corporate
Governance Institute of UK and Ireland to undertake
a thorough review in Autumn 2022 now that the New
Business Scheme has been sanctioned by the High Court.
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. With the sanctioning of
the New Business Scheme the Board can actively recruit
new Board members, with a key view to increase diversity
(including gender and ethnicity) on the Board.
The Board currently consists of five people (but four at
the year end), which will expand with the appointment
of a new Chair of the Audit Committee and an additional
Non-Executive Director. The Board believes that Amigo
would be best served by creating a diverse Board with a
suitable range of skills, experience and knowledge across
all the Board members.
The Hampton-Alexander Report and the Parker Review
diversity recommendations will be a key consideration
aswe look to build the best Board for the future of Amigo.
The Committee recognises that it has much work to do
tomeet these voluntary targets.
Jonathan Roe
Chair of the Nomination Committee
8 July 2022
69
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Risk Committee report
dealing with the consequences of historic complaints
activity against Amigo, including the possible impact and
subsequent fallout from the failure of the first proposed
Scheme of Arrangement to receive Court sanction,
together with theongoing investigations by the FCA.
A key part of the Committee’s work was to oversee the:
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. Specifically,
as a Committee we have taken a closer look at areas
such as responsible lending (including affordability) and
the treatment of vulnerable individuals. We also had to
consider the changing landscape in relation to complaints
and the changing position of the FOS. In relation to lending
to customers, despite there being no new lending in the
review period, we have taken into account the regulatory
landscape when developing a strategy for the responsible
return to lending.
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 cash of £83.9m.
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. This deterioration has had
a significant adverse effect on many of our stakeholders,
especially our customers and employees. Helping these
customers and managing the default risk of these customers
going forward will be critical to the business. In this regard,
we have considered the appropriate scenarios and stress
tests that should be applied and the potential impact
on the business. Anecdotal evidence suggests some
customers benefited from furlough scheme payments
earlier in the review period but the furlough scheme
has now ceased so the pressures may be enhanced
going forward.
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 failure of the first proposed
Scheme of Arrangement to be approved by the Court.
This presented real challenges for the Committee and
the Board to consider, with the implications on solvency,
viability and going concern.
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 customers, managing the impact of
a deteriorating economic backdrop, residual Covid-19
issues and Covid-19 forbearance on the business, and
Committee members
Member Meetings Attendance
Jonathan Roe
Maria Darby-Walker
Michael Bartholomeusz
1 Jonathan Roe was appointed on 1 August 2020.
2 Maria Darby-Walker was appointed on 12 October 2020.
3 Michael Bartholomeusz was appointed on 19 November 2020
and approved as Chair on 19 July 2021.
Focus areas for 2023
•
Review of emerging risks
•
Enhancement of the policies and standard framework
•
Introduction of climate related risks
•
Continued automation of risk management and
reporting through the CAMMS system
•
That risks associated with the return to 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
Michael Bartholomeusz
Chair of the RiskCommittee
Corporate governance
Risk Committee report continued
70
Amigo Holdings PLC
Annual report and accounts 2022
Overview continued
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. 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.
Membership and attendance
The Committee consists of 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 69.
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 2021/22
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 43 to 45.
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 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 2022/23
The Committee intends to continue to improve the Company’s
risk management framework during 2022/23. Key tasks
include: a review of emerging risks; the enhancement of the
policies and standard framework; the introduction of climate
related risks into the suite of KRI; the continued automation of
risk management and reporting through the CAMMS system;
that risks associated with the return to lending are properly
considered and overseen; and that appropriate actions are
taken to mitigate risks to customers and the firm arising from a
worsening economic environment.
Michael Bartholomeusz
Chair of the Risk Committee
8 July 2022
71
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Directors’ remuneration report
and Non-Executive Directors in respect of 2021/22 and
summarises how we intend to implement the Remuneration
Policy in 2022/23.
Section 2 – Remuneration Policy: at our 2022 AGM we are
required under the UK Companies Act to seek re-approval
of our Directors’ Remuneration Policy every three years.
Our current Directors’ Remuneration Policy was approved
by shareholders at the Company’s AGM in 2019. The
changes are not substantive but are detailed on pages 85
to 91 below.
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 100 to 108, as specified by the UK Listing
Authority and the Regulations.
Business context for 2021/22
The fourth year of Amigo as a public company has
continued to be a period of significant change and
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 38 to 40, the
sanctioning of the Scheme facilitated the write-back of a
considerable element of the complaints provision, which
masks the true position of the business. The ongoing
business of managing our customers’ loans has been
somewhat overshadowed in the period by the work
needed to achieve: a viable Scheme of Arrangement;
resolution of historic legacy issues, including the ongoing
enforcement actions; and the preparations for a return
to lending.
The Profit before tax was £167.9m, compared to a loss
before tax of £(283.6)m in FY2021. This was driven
primarily by the release of the £156.6m from the complaints
provision. The net cash position of the Group also
improved substantially to a surplus of £83.9m at the year
end, from a deficit of £118.6m at the previous year end.
In the period, the net loan book decreased by 59.5% to
£138.0m, a reflection ofthe continuing collections activity
of the business, and the continuing cessation of new
lending activity during the year.
Director changes in the period
Mike Corcoran stepped down as the CFO of the Company
on 24 January 2022 and resigned as a Director on 19
February 2022. As announced on 6 June 2022, Danny
Malone has now been appointed as a Director and CFO,
subject toFCA approval.
Details regarding the terms of Mike Corcoran’s departure
and the new remuneration terms for Danny Malone are
set out in this report. All of these terms were agreed
within the scope of the Company’s current Directors’
Remuneration Policy.
Committee members
Member Meetings Attendance
Maria Darby-Walker
 
Michael Bartholomeusz
 
Jonathan Roe
 
1 Maria Darby-Walker was appointed on 12 October 2020.
2 Michael Bartholomeusz was appointed 19 November 2020.
3 Jonathan Roe was appointed on 1 August 2020.
Focus areas for 2023
•
Benchmarking exercise for Directors and
senior managers
•
Revision of Directors’ Remuneration Policy for
approval at the next AGM
•
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 2022. 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
Maria Darby-Walker
Chair of the Remuneration Committee
Corporate governance
Directors’ remuneration report continued
72
Amigo Holdings PLC
Annual report and accounts 2022
Remuneration decisions and outcomes
for2021/22
The Committee’s activities focused on the application of
the Policy in the year including adjustments to base pay
with effect from 1 April 2021 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 CFO required the
Committee to consider the appropriateness of the existing
remuneration arrangements for the departing CFO, the
terms offered as part of the departure process, and
the terms for Danny Malone, originally as interim, but
subsequent to the year end, as a permanent Executive
Director appointment.
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.
In response to this the Committee agreed a 5% cost of
living rise to all staff below the Executive Director and
ExCo level.
The awards of LTIP during the year were made under the
same performance conditions as was agreed in the previous
year. No awards of LTIP were made to Executive Directors
in the year. In response to comments made during the
first failed application for a Scheme of Arrangement,
Gary Jennison, voluntarily forfeited his LTIP award over
9,500,000 shares in the Company for nil compensation.
Under the current Policy, the CEO and CFO are eligible
for consideration of a bonus award up to 150% and 100%
of base salary, with all of any bonus earned being subject
to deferral into shares for three years, unless a minimum
shareholding requirement is met. There was no annual
bonus declared for the Executive Directors in the year,
asset outon pages 75 and 76.
As has been documented elsewhere in this report the
Company did not achieve the core threshold performance
criteria for the award of bonus entitlement under the
arrangements laid out for 2021/22. Given the ongoing
challenges facing the business, as well as the requirement
of the Voluntary Requirement agreed with the FCA during
the year, the Committee has not proposed to pay a bonus
to either of the Executive Directors during the year.
Renewal of the Remuneration Policy at
the2022 AGM
At the 2022 AGM, shareholders will be asked to approve
two resolutions related to Directors’ remuneration matters.
These resolutions are:
•
to approve the Directors’ Remuneration Report; and
•
to approve a new Directors’ Remuneration Policy.
The vote to approve the Directors’ Remuneration
Report is the normal annual advisory vote on such
matters. If approved by our shareholders, the Directors’
Remuneration Policy will apply for a maximum of
three years from the 2022 AGM and will replace the
Directors’ Remuneration Policy previously approved
atthe 2019 AGM.
With regards to the resolution to approve the Directors’
Remuneration Policy, given the Company’s position
we have consciously sought to position this item as a
straight-forward renewal of our existing policy to the
extent that it is appropriate to do so. It is mandatory under
the UK Companies Act for a company listed on the Main
Market
of the London Stock Exchange to have its Directors’
Remuneration Policy re-approved by shareholders every
three years.
The 2022 Directors’ Remuneration Policy contains no
proposed changes to the base salary of the Executive
Directors, although it does propose changes which will
allow the Remuneration Committee discretion when
determining the amount of any bonus which needs to be
deferred. Given the Company’s position, we are very likely
to review continuing appropriateness and effectiveness
of the policy during the course of 2022/23 and if the
outcome from that review requires any changes to the
Policy, these matters will be brought to the AGM in 2023
for shareholders’ approval.
For transparency, we have made a limited number
of changes to the policy which we feel reflect either
market best practice or the removal of features which
were“bespoke” and reflected the “Founder Status” of
theCompany’s then CEO at IPO in June 2018. Changes,
ifany, to the prior Policy are detailed for eachremuneration
section on pages 85 and 91.
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.
Maria Darby-Walker
Chair of the Remuneration Committee
8 July 2022
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Annual report and accounts 2022
Corporate governance
Section 1 – Annual Report on Remuneration
1.1 Committee composition during the year
During the year, the Committee comprised:
•
Maria Darby-Walker, Jonathan Roe and
MichaelBartholomeusz.
There were 10 Committee meetings held during the
year; details of attendance are shown in the table on
page71. All members 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 year
ended 31 March 2022;
•
discussed and approved both financial and strategic
targets for and made LTIP awards to key personnel;
•
discussed and approved remuneration for Gary Jennison
as CEO and Mike Corcoran as CFO;
•
considered the exit terms for Mike Corcoran as CFO; and
•
approved terms of appointment for senior management
joining the business (such as the Chief Risk Officer,
ChiefCommercial Officer, Chief Operations Officer,
Interim Complaints Director, Interim Chief Technology
Officer and Interim CFO).
1.3 Advisors and other attendees
During the year, the Committee has been supported by
the Head of HR 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 did not
use the services of an external remuneration consultant.
Since the year end the Committee has engaged FIT
Remuneration Consultants LLP to provide advice to the
Remuneration Committee about the proposed Director’s
Remuneration Policy, detailed on pages 85 to 91, and to
carry out an independent remuneration benchmarking
exercise for directors and senior executives.
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. Our goal is 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.
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:
•
Attract and retain – enable Amigo to attract and
retain management of a high calibre with the necessary
customer service focus, and financial and regulatory
credentials required to deliver a sustainable business
model and drive shareholder returns. 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 relative to the
companies of a similar size and in similar sectors,
without seeking to “match the median”, to identify
and mitigate the risk of losing strong performers.
•
Link variable pay to performance and the delivery
of the agreed strategy – provide management with
the opportunity to earn competitive remuneration
through annual and long-term variable pay
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.
Different elements of executive pay are delivered
over the short and longer term and are designed
to ensure that a substantial proportion of the
executives’ remuneration is variable, performance
related and shareholding based.
•
Align executives with shareholders – ensure
management’s interests are aligned with those of
shareholders by incentivising management to deliver
the Group’s long-term strategy of a sustainable,
growing business and thus enhance shareholder
value. A significant portion of reward is delivered
inshares to create alignment of interests.
•
Drive sustainable ethical performance –
remuneration arrangements are designed to support
the sustainable delivery of ethical performance and
to prevent excessive risk taking.
Remuneration at a glance
Corporate governance
Directors’ remuneration report continued
74
Amigo Holdings PLC
Annual report and accounts 2022
Section 1 – Annual Report on Remuneration continued
1.3 Advisors and other attendees continued
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.
Implementation of the Remuneration Policy in 2021/22
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 2021/22 with
prior year comparatives.
Gary Jennison
Mike Corcoran
Nayan Kisnadwala
Hamish Paton Glen Crawford
/ / / / / / / /
Base salary
, , , , — , , ,
Bonus — — — — — — — —
Benefits
, , . , — , , —
Pension
— — , , — —  ,
Total , , , , — , , ,
Total fixed
remuneration , , , , _ , , ,
Total variable
remuneration _ _ _ _ _ _ _ _
1 This represents cash paid or receivable in respect of the period. Included within this figure for 2020/21 are payments in lieu of notice for Nayan
Kisnadwala (£319,350) andHamish Paton (£110,769).
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 (£30,000; 2021 was£15,692). NayanKisnadwala
(£6,652), Hamish Paton (£7,833), and Glen Crawford (£5,000).
4 Gary Jennison was appointed as an Independent Non-Executive Director of the Company on 17 August 2020. He transitioned to the role of CEO
andExecutive Director on 23 September 2020, at which point his salary was £600,000 p.a.
5 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 (see note 1.13) of which £38,370 was paid in the period to 31 March 2022.
6 Nayan Kisnadwala was appointed as a Director of the Company on 31 January 2019. He ceased to be a Director of the Company on 11November 2020.
7 Hamish Paton was appointed as a Director of the Company on 29 July 2019. He ceased to be a Director of the Company on 31 July 2020.
8 Glen Crawford was acting as CEO designate from 1 August 2020 to 22 September 2020 with a salary of £600,000 p.a.; during this time he was not
officially appointed as a Director of the Company. In the prior year he was a Director of the Company until his resignation on 14 June 2019.
1.5 Changes to Executive Directors
Mike Corcoran resigned as CFO on 24 January 2022 and stepped down as a Director on 19 February 2022. 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 18 August 2022. His outstanding incentive
awards under the Amigo Holdings PLC 2019 Long Term Incentive Plan are treated in accordance with the Remuneration
Policy. Mike Corcoran was treated as a good leaver in respect of his outstanding awards so he shall continue to hold
them until the normal vesting date. The outstanding awards shall be pro-rated as to time and performance over the
period he was in office. As at the year end, given the share price and profit performance of the Company against the
performance conditions of the LTIP award, no entitlement to the Total Shareholder Return and EPS elements of the LTIP
is expected at vesting of the LTIP. The Committee will review the remaining Good Conduct element of the LTIP award at
the normal vesting point.
75
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Subsequent to the year end, Danny Malone was appointed as CFO, subject to FCA approval, 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 maximum annual bonus opportunity is 60% of salary in accordance with
the Policy. Danny will also be eligible for reimbursement of costs incurred by him for a period of two years or until
herelocates to Bournemouth.
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.
1.8 Bonus (audited)
No bonus was considered for Gary Jennison or Mike Corcoran for the period of their employment. Further details of the
bonus scheme are set out on page 84.
Bonus – strategic scorecard
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 ended 2022 were withdrawn given the changes in personnel and the
cessation of lending activity over the review period. The Board believes that the LTIP provides adequate incentive to
Directors and Senior Managers in relation to matching stakeholder interests with the long term interests of the Company.
The Company operates 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 inhouse
environmentally sensitive approach. The Committee therefore does not believe it is beneficial to include a benchmark for
environmental impact as a remuneration metric, other than within the LTIP.
Corporate governance
Directors’ remuneration report continued
76
Amigo Holdings PLC
Annual report and accounts 2022
Section 1 – Annual Report on Remuneration continued
1.8 Bonus (audited) continued
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
%
Gary Jennison % % — %
Mike Corcoran % % — %
1.9 Long-term incentives
The Committee are of the view that awards of shares under the Company’s approved Long Term Incentive Plan provide
appropriate incentive to Executive Directors and better match the aspirations of shareholders to those of the Directors.
Inaddition, the Committee carefully reviewed and modified the performance conditions used to evaluate future vesting of
any awards made under the Long Term Incentive Plan, to ensure all stakeholders’ interests were promoted appropriately.
Awards made in 2021/22 (audited)
No awards of LTIP were made in the year to Executive Directors. On 3 March 2022 the Company agreed to the request
from Gary Jennison, the CEO, that the Company cancel his LTIP Awards over 9,500,000 ordinary shares of 0.25 pence
each in the Company, made on 1 December 2020. No compensation will be payable to Mr Jennison for the cancellation
of the Award. The Company agreed to the cancellation request made by Mr Jennison because it helped to address the
criticism, raised during the Court Sanction hearing held in May 2021, that the Directors could benefit financially through
the exercise of LTIP Awards, in the event the Court approved the proposed Scheme of Arrangement.
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Corporate governance
1.10 Other share awards (audited)
Save As You Earn (“SAYE”)
Gary Jennison and Mike Corcoran did not participate in the SAYE during the year.
Share Incentive Plan (“SIP”)
Gary Jennison and Mike Corcoran did not participate in the 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.
The Executive Director, detailed in the table below, purchased shares since he joined the Company. Bonuses are not
payable in cash until the relevant Director’s shareholding guideline has been met.
Gary Jennison
Shareholding guideline %
Shareholding as at  March  ,,
Current value (based on share price on  March 
) £,
Current % of salary .%
1 This being the last trading day of the financial year. Mid-price £0.0544 per ordinary share of 0.25p in Amigo Holdings PLC.
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.
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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. During the year no Executive Director held any
external Non-Executive Director roles.
1.12 Payments to former Directors
Michael Corcoran resigned as CFO on 24 January 2022 and stepped down as a Director on 19 February 2022. As at the
balance sheet date he was 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 18 August 2022. During the
period from 19 February 2022 to 31 March 2022 he was paid £38,370.
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
Mike Corcoran resigned as CFO on 24 January 2022 and stepped down as a Director on 19 February 2022. Under the
terms of his service contract his salary, pension and benefits for the period to 18 August 2022, amounting to salary of
£159,032 plus £7,952 pension contribution and £934 in benefits will be paid in full and treated as compensation for loss
of office. Of these amounts: £36,339 was accrued as salary; £1,817 accrued as pension contributions; and £214 accrued
as benefits and paid for the period since he stepped down as a Director to 31 Match 2022. The remainder of the balance
will be paid after the year end, when due. His outstanding incentive awards under the Long Term Incentive Plan have
been treated in accordance with the Remuneration Policy. Mike has been treated as a good leaver in respect of his
outstanding awards, the awards have been pro-rated as to time and performance and a portion of the awards have been
forfeited but he will continue to hold the remainder until the normal vesting date.
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 then twelve months.
The service contract for Gary Jennison, CEO, provides for a notice period of twelve months, by the Company or
theindividual.
The service contract for Mike Corcoran, CFO, provided 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.
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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.
1.16 Unexpired term of service contract for Directors at AGM re-election
Director Term of service
Jonathan Roe  months
Maria Darby-Walker  months
Michael Bartholomeusz  months
Gary Jennison  months
Danny Malone  months
The unexpired term of service contracts is based on all Director contracts being on a rolling basis unless notice has been
given. As at the date of this report, no notice has been given in relation to Directors terminating their service contracts.
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. The Group is
actively working towards a unified bonus plan for all employees.
The LTIP has been extended to some members of the senior management team below the Board.
1.18 Statement of consideration of shareholder views
In the prior year, the Committee consulted with its largest shareholders prior to publication of the Remuneration
Policy. 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.
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1.19 Single total figure of remuneration for Non-Executive Directors
Non-Executive Director single figure comparison (audited)
/
Jonathan
Roe
Maria
Darby-Walker
Michael
Bartholomeusz
Fees
, , ,
Bonus — — —
Benefits , , ,
Pension — — —
Total , , ,
Total fixed remuneration , , ,
Total variable remuneration _ _ _
/
Jonathan
Roe
Maria
Darby-Walker
Michael
Bartholomeusz
Gary
Jennison
Stephan
Wilcke
Roger
Lovering
Richard
Price
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.
3 Jonathan Roe was appointed as Director of the Company on 1 August 2020.
4 Maria Darby-Walker was appointed as Director of the Company on 12 October 2020.
5 Michael Bartholomeusz was appointed as Director of the Company on 19 November 2020.
6 Gary Jennison was appointed as an Independent Non-Executive Director of the Company on 17 August 2020. He transitioned to the role of interim
CEO and Executive Director on 23 September 2020.
7 Stephan Wilcke resigned as a Director of the Company on 18 June 2020. He waived his Non-Executive Director fee, which instead was paid to
charities supported by the Company.
8 Roger Lovering took up the position of Acting Chair on 18 June 2020. He resigned as a Director of the Company on 31 October 2020.
9 Richard Price resigned as a Director of the Company on 16 December 2020.
1.20 Waiver of emoluments
No director waived their emoluments in the review period.
1.21 Non-Executive Director shareholding as at 31 March 2022
Class of share  
Jonathan Roe Ordinary shares of .p each , ,
Maria Darby-Walker 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 2022 and 7July 2022.
Non-Executive Directors do not have a shareholding guideline but they are encouraged to buy shares in the Company.
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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 2022. TSR has been measured against the FTSE 250 excluding Investment Trusts and the
FTSE 350 excluding Investment Trusts.
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
/ Hamish Paton , % n/a
/ Glen Crawford , % n/a
/ Gary Jennison , % n/a
/ Gary Jennison , % n/a
1.24 Change in CEO remuneration compared to employees (audited)
The table overleaf 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 2021/22 CEO remuneration
for GaryJennison to the CEO remuneration for Hamish Paton (for the period 1 April to 31 July 2020), Glen Crawford (for the
period 1 August to 22 September 2020) and, subsequently, Gary Jennison (from 23 September 2020 to 31 March 2021). Due
to the changes of CEO, the Committee considers the percentage change figures in the table below are not representative
of the year-on-year change in remuneration that the Committee would expect to set for a single individual. There was no
change in the annualised basic salary for Gary Jennison as CEO from 2020/21 to 2021/22. The decrease in benefits in the
period is due to cost savings made by the Company in the way accommodation is paid for.
Annual percentage change from /
Salary Bonus Taxable benefits
CEO -% % -%
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.
3 Calculated based on average taxable benefits expense per employee for the period.
No figures are included for other Executive Directors’ as they left the Board in the year and therefore there is no
comparator figure.
FTSE 350 ex invest trustFTSE 250 ex invest trustAmigo 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 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Dec 2021 Mar 2022
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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 2021/22 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 2021/22 includes the pay for Gary Jennison in the year (the figure for 2020/21 includes the pro-rate
pay for Gary Jennison, Hamish Paton and Glen Crawford in the year).
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) : : :
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 2022.
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 2020/21 and 2021/22 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
Profit/ (Loss) before tax £.m £(.)m
Average headcount  
Average profit (loss) profit before tax per employee £, £(,)
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1.27 Application of the Remuneration Policy in 2021/22
Throughout the year, Amigo has been faced with considerable challenges which has made the task of the Committee
more difficult than it should have been when the current Directors’ Remuneration Policy was approved in 2019.
Notwithstanding these headwinds, the Committee has sought to apply a consistent approach when addressing
remuneration matters. Generally, the Committee believes that there is greater transparency on remuneration matters,
including the need to deliver performance responsibly.
The Committee considered the need to balance retention, performance and risk when making awards under the LTIP
to other senior managers during the year. The awards were made with the objective of further aligning the attitudes
and culture of the awardees with those of shareholders, customers and other stakeholders by the application of two
clear performance targets: growth in EPS, and absolute total shareholder return, and the introduction of non-financial
measures to ensure the right attitudes and culture permeate across the wider business. The Committee believes that the
use of non-financial performance measures has helped to deliver a more rounded performance target which matches
incentives to deliver performance to the risks of delivering that performance. The targets are intended to provide an
interlinking matrix to drive responsible performance and manage risk across the business. The Committee also operates
a mechanism to ensure that any vesting of awards would be subject to scrutiny by the Committee before vesting and that
all awards are made subject to malus and clawback provisions for poor behaviours.
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. Other factors taken into account to measure
the success of the changes made to remuneration include the improvement in the staff retention rate over the year and
the driving of appropriate business behaviours across the various departments.
The Committee decided against carrying out a formal review of its Executive and Non-Executive Director remuneration
arrangements during the year, choosing to wait until the New Business Scheme was sanctioned in May 2022 before
engaging FIT Remuneration Consultants LLP to help with this exercise. The Remuneration Committee is satisfied that
the Remuneration Policy has performed in line with expectations to date and accordingly there has been no substantive
engagement or consultation with shareholders or the wider workforce about executive remuneration.
The Remuneration Committee is able to consider corporate performance on environmental, social and governance
(“ESG”) issues when setting Executive Directors’ remuneration. The Remuneration Committee has ensured that the
incentive structure for senior management does not raise ESG risks by inadvertently motivating irresponsible behaviour.
Please see pages 24 to 35 for further information on the Group’s environmental and social issues.
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 2019 policy in
the proposals for the 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.
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1.28 Statement of implementation of Remuneration Policy in 2022/23
The table below sets out the detail of how we propose to implement the Executive Directors’ Remuneration Policy
in 2022/23.
Unless otherwise stated, the implementation of each element will be in line with the Policy.
Element Summary of Policy implementation in /
Base salary CEO: £600,000
CFO: £355,000
Annual bonus Maximum:
•
CEO: 60% of salary
•
CFO: 60% of salary
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):
Performance measures and weightings are as set out on page 143. The Committee has yet to determine
the targets for 2022/23 due to uncertainty in the underlying economic environment.
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 CEO received temporary accommodation costs of £42,500. The CFO received temporary
accommodation costs of £22,430.
Other key Policy features: shareholding guidelines and post-exit shareholding requirements will operate in 2022/23
asper the Remuneration Policy.
The table below sets out the detail of how we propose to remunerate the Non-Executive Directors in 2022/23:
NED fees Non-Executive Chair: £175,000
Other Non-Executive Director basic fee: £70,000
Senior Independent Director fee: £5,000
Audit Committee Chair: £12,500 (N. B. Interim Chair paid £1,000 per month)
Remuneration Committee Chair: £12,500
Risk Committee Chair: £12,500
1.29 Statement of voting at the 2021 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 ,, .% , .% ,, ,
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Section 2 – Remuneration Policy
The following table summarises Amigo Holdings PLC’s policies in respect of the key elements of our Directors’
remuneration. Any material changes from the previous policy approved by shareholders at our 2019 AGM are highlighted
below. The revised Policy will be put to shareholders at the AGM due to be 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.
A1.4: Changes from previous Policy
A1.4.1: There are no material changes from the previous Policy.
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.
•
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.
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.
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Element Summary of remuneration policy
Section A Executive Director remuneration
A2.4: Changes from previous Policy
The previous maximum bonus level for the CEO was 200% of base salary. This is removed in the new
policy to align all Executive Directors at 150% of base salary bonus maximum.
The new policy introduces flexibility for the Remuneration Committee to consider each year the
appropriate level of bonus deferral. In the previous policy, 100% of bonus outcomes was deferred into
shares each year unless an individual held shares worth 200% of base salary, and after that threshold
was attained, bonuses could be paid 50% in cash and 50% in shares if the Remuneration Committee
determined it appropriate to do so. The shareholding requirement reflected the large shareholding of
the CEO at IPO (where he held 6.2% of issued share capital). In order to be able to operate the bonus
plan appropriately in the current circumstances, it is proposed that the Remuneration Committee should
have flexibility to determine appropriate deferral requirements for any year.
This new policy will apply to all bonuses paid after the date of the 2022 AGM (including any bonuses for
2021/22 for which payments are presently delayed pending assessments on affordability).
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.
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.
A3.4: Changes from previous Policy
A3.4.1: There are no material changes from the previous Policy.
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.
A4.2: Changes from previous Policy
A4.2.1: There are no material changes from the previous Policy.
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.
Section 2 – Remuneration Policy continued
2.1 Policy table for Executive Directors continued
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Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Element Summary of remuneration policy
Section A Executive Director remuneration
A5.3: Changes from previous Policy
A5.3.1: There are no material changes from the previous Policy.
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.
A6.3: Changes from previous Policy
A6.3.1: There are no material changes from the previous Policy other than relocation payments to be
limited to two years.
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.
A7.2: Changes from previous Policy
A7.2.1: There are no material changes from the previous Policy.
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.
A8.2: Changes from previous Policy
A8.2.1: Post-cessation guideline to apply for two year, post cessation.
Corporate governance
Directors’ remuneration report continued
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Element Summary of remuneration policy
Section A Executive Director remuneration
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
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Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Element Summary of remuneration policy
Section A Executive Director remuneration
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 will be effective from the date of the AGM, if the policy is approved.
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.
Corporate governance
Directors’ remuneration report continued
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Amigo Holdings PLC
Annual report and accounts 2022
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
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Annual report and accounts 2022
Corporate governance
Element Summary of remuneration policy
Section D 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 £1 million
per annum in aggregate).
D3: Performance assessment
D3.1: N/A
Section E E: Illustration of application of the Remuneration Policy
E1.1 Fixed pay E1: Chief Executive Officer
Salary: £600,000
Benefits: 4 x Life cover, Private Medical
Pension: 5% of salary
E1.2: Annual
bonus
Minimum: N/A
Target: 50% of maximum
Maximum: 150% of salary
E1.3: Long-term
incentive
Minimum: N/A
Target: 20% of maximum
Maximum: 200% of salary
4th scenario: Maximum plus 50% share price growth
E2.1 Fixed pay E1: Chief Financial Officer
Salary: £355,000
Benefits: 4 x Life cover, Private Medical
Pension: 5% of salary
E2.2: Annual
bonus
Minimum: N/A
Target: 50% of maximum
Maximum: 150% of salary
E2.3: Long-term
incentive
Minimum: N/A
Target: 20% of maximum
Maximum: 100% of salary
4th scenario: Maximum plus 50% share price growth
Corporate governance
92
Amigo Holdings PLC
Annual report and accounts 2022
The Directors present their report and audited accounts forthe year ended 31 March 2022.
Additional disclosures
The Strategic Report is a requirement of the UK Companies Act 2006 and can be found on pages 1 to 49 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 
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
Going concern and viability statement –
Governance –
Credit, market and liquidity risks –
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 other than operated by a subsidiary based in Dublin, Amigo Loans
Ireland Ltd.
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.
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 pages
48 and 49.
Directors’ report
93
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Results and dividends
The results for the year are set out in the financial statements on pages 109 to 158.
The Company did not pay a half year dividend in the period (2021: nil). In light of the continued solvency issues facing
the Company given the costs of resolving the complaints issues over the full year results to 31 March 2022, the Board
decided that it is prudent to conserve capital in the business and did not recommend 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 scale of the costs and contribution incurred to resolve the complaints situation, the Directors are of the view that no
dividend can be paid in the short to medium term.
Events since the balance sheet date
As reported on page 5 of this Annual Report, the High Court approved the New Business Scheme, the preferred Scheme
of Arrangement, as a result of the hearing held on 23 May 2022. Following the issue of the outcome of the hearing on
26May 2022, the Company has been working with the FCA and other stakeholders to fulfil the required conditions of the
High Court approving the Scheme ofArrangement.
Directors
The names and biographical details of the current Directors and the Board Committees of which they are members are set
out on pages 52 to 55.
In respect of the period between 31 March 2021 and 8 July 2022, the following persons were Directors of the Company:
Current Directors
Name Role Appointment date
Jonathan Roe
Independent Non-Executive Chair  August 
Gary Jennison
CEO  August 
Maria Darby-Walker Independent Non-Executive Director  October 
Michael Bartholomeusz Independent Non-Executive Director  November 
Danny Malone CFO  June 
Directors resigned in the year
Mike Corcoran
CFO  November 
1 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 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 Was appointed as a Director on 6 June 2022.
4 Resigned as a Director on 19 February 2022.
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.
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.
Corporate governance
Directors’ report continued
94
Amigo Holdings PLC
Annual report and accounts 2022
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.
At the AGM held on 29 September 2021, the Company shareholders approved to increase the borrowing limit to a level
appropriate for the current and future needs of the business. The shareholders also agreed to ratify any prior technical
breach of the Articles of Association.
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 51 to 98.
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 2022 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. Subsequent to the year end, on 6 June 2022, he was appointed CFO, subject to approval by the FCA.
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2022, 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 2022, 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.
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Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
Substantial shareholders
As at 31 March 2022, 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 ,, .%
AJ Bell Securities 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 2022, that any one
individual or organisation holding shares through them, has a reportable shareholding in excess of 3% of the Company’s
issued share capital. During the period between 31 March 2022 and 7 July 2022 (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. Voting at the meeting took place by way of proxy due
tothe restrictions on shareholder attendance put in place to safeguard against Covid-19.
Corporate governance
Directors’ report continued
96
Amigo Holdings PLC
Annual report and accounts 2022
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 29 September 2021, 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 2022 AGM. The Company did not
repurchase any of its shares during the financial year 2021/22.
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 29 September 2021, 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 2022 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71 to 91.
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.
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.
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 71 to 91.
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 48, the Directors have reviewed the projected cash flows and other relevant information
and have a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the
consolidated financial statements. The going concern assumption is adopted on the basis that the High Court sanctioned
the New Business Scheme on 26 May 2022. There remain a number of conditions precedent that need to be resolved.
This represents a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going
concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of business.
97
Amigo Holdings PLC
Annual report and accounts 2022
Corporate governance
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 is 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.
As at the signing date, the largest notified shareholding position, was 3.31% of the issued share capital of the Company.
The Company did not regard an insolvent balance sheet as a default event under the terms of the Senior Secured Notes.
There are no agreements between the Company and its Directors or employees providing for compensation for loss
ofoffice or employment loss of office or employment, other than LTIP awards following a takeover.
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 2022.
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.
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.
Given the recent changes to the size and nature of the Group’s business, since the original tender and appointment, it is
appropriate for both KPMG and the Company to reconsider the audit of the Amigo group of companies. KPMG will not be
offering themselves for re-election at the AGM due to be held on 28 September 2022. The Directors have commenced
the tender process for the selection of the replacement auditor.
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 8 July 2022.
By Order of the Board
Roger Bennett
Company Secretary
Amigo Holdings PLC
Corporate governance
98
Amigo Holdings PLC
Annual report and accounts 2022
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;
•
state whether they have been prepared in accordance
with international accounting standards;
•
assess the Group and parent company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
•
use the going concern basis of accounting unless
they either intend to liquidate the Group or the parent
company or to cease operations, or have no realistic
alternative but to do so.
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
8 July 2022
Financial statements
100 Independent auditor’s report
109 Consolidated statement of
comprehensiveincome
110 Consolidated statement of financial position
111 Consolidated statement of changes in equity
112 Consolidated statement of cash flows
113 Notes to the consolidated financial statements
148 Company statement of financial position
149 Company statement of changes in equity
150 Company statement of cash flows
151 Notes to the financial statements – Company
153 Appendix: alternative performance
measures(unaudited)
159 Glossary
162 Information for shareholders
99
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
1. Our opinion is unmodified
We have audited the financial statements of Amigo
Holdings plc (the “Company”) for the year ended 31
March 2022 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated and
Company Statement of Financial Position, the
Consolidated and Company Statement of Changes in
Equity, the Consolidated and Company Statement of Cash
Flows, and the related notes, including the accounting
policies in note 1.
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 2022 and of the Group’s profit
for the year then ended;
—
the Group financial statements have been properly
prepared in accordance UK-adopted international
accounting standards;
—
the parent Company financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards and as applied in
accordance with the provisions of the Companies Act
2006; and
—
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the Audit Committee.
We were first appointed as auditor by the Directors on 27
February 2017. The period of total uninterrupted
engagement is for the six financial years ended 31 March
2022. We have fulfilled our ethical responsibilities under,
and we remain independent of the Group in accordance
with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No
non-audit services prohibited by that standard were
provided.
Independent auditor’s report
to the members of Amigo Holdings plc
Overview
Materiality:
Group financial
statements as a
whole
£630k (2021: £1.2m)
0.7% (2021: 0.7%) of Group total
revenue
Coverage 100% (2021: 100%) of Group profit
(2021: loss) before tax
Key audit matters vs 2021
Recurring risks Going concern
Customer complaints
provision
Expected credit losses on
customer loans and
receivables
The impact of IT access
controls and change
management on the
effectiveness of the control
environment
Recoverability of parent
Company’s investment in
Subsidiary
100
Amigo Holdings PLC
Annual report and accounts 2022
2. Material uncertainty related to going concern
Key audit matter The risk Our response
Going concern
Refer to page 63 (Audit
Committee Report) and page 113
(basis of preparation of financial
statements)
We draw attention to note 1 to
the financial statements which
indicates that the ability of the
Group and Company to continue
as a going concern is dependent
on the FCA granting the Group
permission to commence
relending before 26 February
2023, the Company completing a
successful 19:1 share issue before
26 May 2023, the Group raising
sufficient equity and/or debt
funding in order to successfully
deliver its business plan, and the
severity of any sanction arising
from the ongoing FCA
investigation.
These events and conditions
along with the other matters
explained in note 1, constitute a
material uncertainty that may
cast a significant doubt on the
Group’s and the parent
Company’s ability to continue as a
going concern.
Our opinion is not modified in
respect of this matter.
Disclosure quality
The financial statements explain how
the Board has formed a judgement that
it is appropriate to adopt the going
concern basis of preparation for the
Group and Company.
That judgement is based on an
evaluation of the inherent risks to the
Group’s and Company’s business model
and how those risks might affect the
Group’s and Company’s financial
resources or ability to continue
operations over a period of at least a
year from the date of approval of the
financial statements.
There is little judgement involved in the
Directors’ conclusion that risks and
circumstances described in note 1 to
the financial statements represent a
material uncertainty over the ability of
the Group and Company to continue as
a going concern for a period of at least
a year from the date of approval of the
financial statements.
However, clear and full disclosure of
the facts and the Directors’ rationale
for the use of the going concern basis
of preparation, including that there is a
related material uncertainty, is a key
financial statement disclosure and so
was the focus of our audit in this area.
Auditing standards require that to be
reported as a key audit matter.
Our procedures included:
— Assessing transparency: We considered whether the going
concern disclosure in note 1 to the financial statements gives a
full and accurate description of the Directors’ assessment of going
concern, including the identified risks, dependencies, and related
sensitivities.
Our assessment of the Director’s going concern assessment also
included:
— Evaluating Directors’ assessment: We read and evaluated the
plans that the Board reviewed in forming its assessment of going
concern. These plans take into account the decision of the High
Court on sanctioning the Scheme of Arrangement the terms of
the New Business Scheme, the preferred and fall back solution.
The plans include assumptions across various scenarios including
Base and Downside scenario as well as alternatives including a
wind-down scheme;
— Enquiry of regulator: We made enquiries with the regulator with
particular focus on the sanctioned Scheme of Arrangement, the
level of customer complaints and the status of the ongoing
Financial Conduct Authority investigation. In addition we
attended the Scheme creditors meeting and the High Court
sessions held in May 2022;
— Funding assessment: We evaluated the Group and Company’s
financing, including the available terms and covenants associated
with the bonds;
— Data and assumptions: We assessed and challenged the
relevance and reliability of the underlying data and the
assumptions on which the assessment is based –including
consistency with each other and related assumptions used in
other areas;
— Historical comparisons: We compared the Group’s historical
forecasts against actual cash flows achieved in previous years to
ascertain their historical accuracy;
— Our sector experience: We challenged the key assumptions used
in the Director’s forecasts such as future complaint redress and
collections to ensure they were realistic, plausible and consistent
with our other audit work; and
— Sensitivity analysis: We challenged the Group’s sensitivities over
the level of available financial resources indicated by the financial
forecasts taking account of reasonably possible adverse effects
that could arise from these risks individually and collectively; in
particular we assessed key assumptions such as the plans for new
originations and level of collections; and
— Disclosures: We evaluated the Group’s disclosures in respect of
going concern and viability.
Our results
We found the going concern disclosure in note 1 with a material
uncertainty to be acceptable (2021 result: acceptable).
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
101
Key audit
matter
The risk Our response
Complaints
provision
(£179.8
million; 2021:
£344.6
million)
Refer to page
63 (Audit
Committee
Report), page
118
(accounting
policy) and
page 139
(financial
disclosures).
Complaints provision
In considering the level of complaints provision the
Directors have considered the following key
judgements and estimates:
— In advance of the formal sanctioning of the
Scheme of Arrangement (“the Scheme”) in May 2022
the Directors made the decision in March 2022 that
the provision should be accounted for on the basis
that a Scheme was more likely than not to be
sanctioned, based on their assessment of the
development of the Scheme, their discussions with
and feedback from regulators and the initial Court
hearing in March 2022.
— Within the provision the Directors have provided
for the Scheme cash redress liability of £97m in
accordance with the terms of the New Business
Scheme. They have not provided for possible
incremental amounts that might be paid into the
Scheme based on future events, such as the
additional minimum £15m as part of the proposed
capital raise which is a condition of the New Business
Scheme, as they do not consider it more likely than
not at this stage that they will be able to raise this
capital.
— As a result of accounting for the provision on a
Scheme basis the overall level of estimation
uncertainty is reduced as the previously unlimited
cash liability is replaced by a fixed amount of cash
redress of £97m in line with the Scheme
requirements. The main element of the provision
where there remains significant estimation
uncertainty relates to balance adjustments in respect
of upheld complaints where the customer holds a live
loan at the Scheme effective date, as these are not
limited. When calculating the potential adjustment
to live loans the Directors have exercised significant
judgment; in particular, there is subjectivity in the
following key assumptions and estimates to calculate
this element of the provision:
- volume of expected future complaints;
- uphold rates;
- customer mix; and
- average balance adjustment amount.
As set out above the overall estimation uncertainty
over the customer complaints provision has reduced
compared to prior year. However, the effect of the
matters noted above in particular the balance
adjustment element; is that, as part of our risk
assessment, we determined that the customer
complaints provision has a high degree of estimation
uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the
financial statements as a whole and possibly many
times that amount.
Our procedures included:
— Control design: We evaluated the processes and controls over the data
integrity of the inputs into the complaints provision model, the approval
of complaint outcomes and the assessment of the reasonableness of
key assumptions.
— Our testing identified weaknesses in the design of these controls. As a
result we expanded the extent of our detailed procedures as set out below.
— Our sector experience: We critically assessed the methodology and
assumptions used by the Group to calculate the customer complaints
provision by comparing the assumptions to our knowledge of the Group’s
recent conduct experience. In doing so we considered the rationale for the
accounting in line with the sanctioned Scheme terms to challenge the basis
of the estimate. We inspected publicly available documents, the approved
judgement, board minutes and held discussions with senior management
and Directors.
— Accounting judgement: We considered the Director’s judgement under
relevant accounting standards that the complaints provision should
calculated on the Scheme basis as at the year end. We additionally assessed
the judgement that the additional capital raise was not more likely than not
to occur.
— Challenge of key assumptions:
— We benchmarked the level of potential complaints to other
market participants who have faced similar conduct issues
and we have re-run data extraction scripts to validate the
population of potential claimants.
— Our own market conduct specialists looked at a sample of
reject/uphold decisions made by the Group in the previous
years. We used their results, and other available data, to
challenge the uphold rates used by the Group in their
calculation.
— For average balance adjustment amounts we have tested a
sample of previous years’ balance adjustments to
settlement letters and bank statements or customer loan
statements to validate the basis of the assumption.
— Inspection of regulatory and legal matters: We inspected
correspondence with the Financial Conduct Authority and external legal
advisors to identify any regulatory observations or legal matters which
impact the customer complaints provision;
— Independent re-performance: We recalculated the provision based on
the key assumptions (volume of expected future complaints, uphold
rates and average balance adjustment amount per claim) and other
input data including such as scheme costs;
— Tracing adjustments: We traced adjustments made to the estimated
future volume of as a consequence of the Group’s re-assessment of the
future volumes based on the vote volume from the Scheme creditor’s
vote through to final reported numbers; and
3. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statement
and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those 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. Going
concern is a significant key audit matter and is described in section 3 of our report. We summarise below the other key audit matters (unchanged
from 2021), in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those
matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion
thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
102
Amigo Holdings PLC
Annual report and accounts 2022
Key audit
matter
The risk Our response
Complaints
provision
(£179.8
million; 2021:
£344.6
million)
Refer to page
63 (Audit
Committee
Report), page
118
(accounting
policy) and
page 139
(financial
disclosures).
Disclosure quality:
The financial statements (note 2.3) discloses
sensitivity analysis illustrating the impact of the
reasonably possible alternative assumptions.
The Directors’ assessment of the extent of the
disclosure is based on an evaluation of the inherent
risks in estimating the provision.
The risk for our audit is whether or not those
disclosures adequately address the uncertainties
within the estimate, and if so, whether those
uncertainties are fundamental to the users’
understanding of the financial statements.
— Assessing transparency: We considered the adequacy of the Group’s
disclosures in respect of the estimation uncertainty associated with the
customer complaints provision, including and ensuring the sensitivity
disclosures in Note 2.3.2 appropriately reflect uncertainty inherent in
the assessment of the provision, as well as reasonably plausible changes
in key assumptions. This included assessing whether reasonable
possible outcomes that could have resulted in a higher provision were
made clear.
Our results
We found the Group’s customer complaints provision to be acceptable, and
the disclosure of the associated estimation uncertainty to be acceptable
(2021 result: acceptable).
3. Key audit matters: our assessment of risks of material misstatement (cont.)
Expected credit losses
on customer loans
and receivables
(£47.4 million; 2021:
£81.0 million)
Refer to page 63
(Audit Committee
Report), page 115
(accounting policy)
and page 131
(financial disclosures).
Subjective estimate:
The estimation of expected credit losses (ECL) on
customer loans and receivables involves significant
judgement and estimates.
The key areas where we identified significant
management judgement include:
— Probability of default (PD): The calculation of PDs
relies primarily on historic data and as such, there is
subjectivity as to whether greater forward-looking
data should be incorporated. Also, customer
behaviour can change and there is inherent
uncertainty relating to the current economic
environment;
— Significant increase in credit risk (SICR): The
identification of the criteria identifying SICR are
inherently subjective;
— Determining the appropriate macroeconomic
variables for inclusion in the macroeconomic overlay
and each scenarios. There is inherent judgement in
the selection of economic variables relevant to the
entity given limited correlation with economic
variables in the past;
— Determining the appropriateness of any model
overlays is at the discretion of management
The Group has changed the approach to economic
overlays in the current year to 3 probability weighted
scenarios from the historic nine macroeconomic
scenarios, taking into account the increase in inflation
through the weightings incorporated.
The effect of these matters is that, as part of our risk
assessment, we determined that the impairment of loans
and advances to customers has a high degree of
estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality for the
financial statements as a whole, and possibly many times
that amount. The financial statements (note 2.1) disclose
the sensitivity estimated by the Group.
Our procedures included:
We performed the detailed tests below rather than seeking to
rely on any of the Group’s controls because our knowledge of the
IT related controls indicated that we would no be able to obtain
the required evidence to support the reliance on controls.
— Test of details: We performed the following procedures:
— We tested the key inputs and assumptions impacting the
Group’s overall ECL calculation to assess their
reasonableness. This included performing an analysis to
assess the significance of the probability of default
assumption and the SICR criteria
— We performed recalculations of the ECL measured across
the whole loan book population.
— Our economic expertise: We consulted our own economic
specialists to assist us in assessing the Group’s rationale for
identifying and incorporating macroeconomic variables
such as unemployment rates and CPIs indirectly through the
scenario weightings. The specialist also assessed the
appropriateness of the scenario weightings attached to the
base, downside and severe downside scenario.
— Application of methodology: We performed the following
procedures:
— We inspected the Group’s papers on technical decisions,
including the appropriateness of SICR thresholds;
— We inspected and challenged the Group’s assessment of
SICR criteria and working definition of default,
— We challenged the ECL model in the light of current
inflation crisis and performed a recalculation; and
— We challenged the appropriateness of the Group’s
qualitative staging criteria using industry norms and our
knowledge of the entity and the industry in which it
operates.
— Our credit risk expertise: We involved our own credit risk
specialists in evaluating the ECL model and underlying PD,
LGD and EAD models, as well as management overlays. We
used our knowledge of the Group and our experience of the
industry that the Group operates in to independently assess
the appropriateness of the Group’s IFRS 9 models and key
components.
— Assessing transparency: We evaluated whether the
disclosures (including sensitivities) are appropriate, and
adequately reflect and address the uncertainty which exists
when determining the Group’s overall ECL.
Our results
We found the Group’s assessment of the expected credit losses
on customer loans and receivables to be acceptable. (2021:
acceptable)
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
103
Key audit matter The risk Our response
The impact of IT access
controls and change
management on the
effectiveness of the
control environment
Refer to page 63 (Audit
Committee Report).
Data capture:
As with many financial service companies, the
Group is highly dependent on IT systems for
the processing and recording of significant
volumes of transactions.
We regard this area as a key audit matter
owing to the high level of IT dependency
within the Group as well as the associated
complexity and the risk that automated
controls are not designed and operating
effectively.
There is a risk that if the general IT controls
(“GITCs”) are not sufficient then inappropriate
access could be gained to IT applications and
inappropriate changes made to the application
itself or to the integrity of related automated
controls. In addition, GITCs which are not
sufficient could also affect the integrity of data
stored on the IT systems and the effectiveness
of automated and manual controls which use
this data.
In the prior year, we noted password
management/monitoring, change
management, and the associated user access
controls were not effective in ensuring that
only approved changes to applications and
underlying data are authorised and made
appropriately. These issues have
remained throughout the current year.
Our procedures included:
— Risk assessment: We performed a risk assessment of the GITC
environment to assess whether it was sufficient to support an approach
whereby we could test and place reliance on certain automated controls.
As a consequence, and based on this risk assessment procedure, we have
not relied on GITCs or application controls. Instead, we focused on testing
the relevant data elements as detailed below.
— Control operation: With the assistance of our IT specialists, we evaluated
actions taken by management to address prior year deficiencies in
selected controls over the integrity of the IT systems that are relevant to
financial reporting, including general IT controls over change
management, associated user and privileged access control. We tested
the design and implementation of key IT application controls to inform
our risk assessment, where those application controls were associated
with a significant audit risk, as well as new controls implemented during
the period to respond to this key audit matter; and
— Test of detail: We used sample testing to agree relevant data elements
used in the financial reporting process (including customer and
transactional data) to appropriate supporting evidence. As we did not
place reliance on the GITC environment we increased our sample sizes for
this testing; and where we performed substantive testing over areas such
as certain data feeds and data calculations, we increased our sample sizes
because we did not place reliance on relevant GITCs.
Our results: Our testing identified weaknesses in the design, implementation
and operation of password management/monitoring, change management
and associated user access controls. As a result we expanded the extent of
our detailed testing, as set out above, in line with last years approach. This
work was completed satisfactorily. (2021: In 2021 we have identified the
same deficiencies in the IT environment and the work completed was
satisfactory).
Recoverability of parent
Company’s investment
in Subsidiary
(£26.1 million; 2021:
£72.0 million)
Refer to page 63 (Audit
Committee Report),
page 113 (accounting
policy and financial
disclosures).
Market based valuation
The carrying amount of the Parent Company’s
investments in subsidiaries (in the Parent only
balance sheet) are significant and at risk of
recoverability, due to the continued level of
claims, regulatory action and uncertainty
about the Group’s future. These are internal
trigger events that require consideration to be
given to impairment.
Accounting Standards require the carrying
value of the investment to be written down to
the higher of Value in Use (VIU) and fair value
less cost of disposal.
The Director’s calculation of VIU show it to be
below fair value. The share price at 31 March
2022 was £5.4p and was readily available. This
gives a market capitalisation of £25.7m. The
Group has adjusted this value down by 5% to
allow for cost of disposal. This led to a year
end valuation of £24.4m.
We determined that the recoverable amount
of the cost of investment in subsidiaries had a
high degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole, and possibly many
times that amount. The financial statements
(note 2a) disclose the sensitivity estimated by
the Company.
We performed the tests above rather than seeking to rely on any of the
parent company's controls because the nature of the balance is such that we
would expect to obtain audit evidence primarily through the detailed
substantive procedures described.
Our procedures included:
— Valuation: We agreed the year end market price to external sources. We
considered the appropriateness of the adjustment for cost of disposal by
comparison to deals where companies are taken into private ownership;
— VIU calculation: We assessed the VIU computations to assess whether
they valued the subsidiaries at a lower value than market price. We
consulted our own valuations specialist in assessing the discount rate
used in the VIU computation;
— Comparing valuations: We compared the value in use and the fair value
to the carrying value of the investment to assess the level of impairment
required;
— Historical comparisons: we assessed the reasonableness of the budgets
by considering the historical accuracy of the previous forecasts;
— Sensitivity analysis: We evaluated the sensitivity of the model to changes
in judgemental assumptions, to critically assess the impact of alternative
assumptions and identify those assumptions most significant to the
estimate; and
— Assessing transparency: We have challenged the adequacy of the
disclosures about the degree of estimation sensitivity and the variability in
the share price.
Our results:
We found the balance of the Company’s investments in subsidiaries and the
related impairment charge and the disclosure of sensitivities to be
acceptable. (2021: acceptable).
3. Key audit matters: our assessment of risks of material misstatement (cont.)
104
Amigo Holdings PLC
Annual report and accounts 2022
4. Our application of materiality and an overview of the
scope of our audit
Materiality for the Group financial statements as a whole
was set at £0.63m (2021: £1.2 million), determined with
reference to a benchmark of total revenue (of which it
represents 0.7% (2021: 0.7%)).
We consider that revenue is the most appropriate
benchmark, because profit before tax no longer measures
the size of the business.
Materiality for the parent company financial statements as a
whole was set a £0.19m (2021: £0.4 million) based on total
assets.
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to
reduce to an acceptable level the risk that individually
immaterial misstatements in individual account balances add
up to a material amount across the financial statements as a
whole.
Performance materiality was set at 65% (2021: 65%) of
materiality for the financial statements as a whole, which
equates to £0.41m (2021: £0.8m) for the Group and £0.12m
(2021: £0.3m) for the parent Company. We applied this
percentage in our determination of performance materiality
because we did not identify any factors indicating an
elevated level of risk.
In addition, we applied materiality of £1 (2021: £1) to
Directors’ remuneration for which we believe misstatements
of lesser amounts than materiality for the financial
statements as a whole could be reasonably expected to
influence the Company's members' assessment of the
financial performance of the Group.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £0.03m
(2021: £0.06 million), in addition to other identified
misstatements that warranted reporting on qualitative
grounds.
The scope of the audit work performed was predominately
substantive as we did not rely upon the Group's internal
control over financial reporting.
Of the Group’s nine (2021: nine) reporting components, we
subjected five (2021: six) to full scope audits for group
purposes and none (2021: none) to specified risk-focused
audit procedures.
The components within the scope of our work accounted for
100% (2021: 100%) of Group revenue, Group profit (2021:
loss) before tax and Group total assets.
The Group team performed the audit of the Group as if it
was a single aggregated set of financial information. The
audit was performed using the materiality and performance
materiality levels set out above .
The Group team established the component materialities,
which ranged from £0.06 to £0.63 million (2021: £0.1 million
to £1.1 million), having regard to the mix of size and risk
profile of the Group across the components.
The work on all of the components (2021: all), including the
audit of the parent company, was performed by the Group
team.
Group total revenue
£89.5m (2021: £170.8m)
Group materiality
£0.63m (2021: £1.2m)
Group total revenue
Group materiality
£
0.63m
Whole financial
statements
materiality (2021:
£1.2m)
£0.41m
Whole financial
statements performance
materiality (2021: £0.8m)
Range of materiality at six
components £0.06
- £0.62m
(2021: £0.1m to £1.1m)
£0.03m
Misstatements
reported to the
audit committee (2021: £0.06m)
100
100
Group revenue
100
100
Group profit/(2021: loss) before
tax
100
100
Group total assets
Key:
Full scope for group audit purposes 2022
Specified risk-focused audit procedures 2022
Full scope for group audit purposes 2021
Specified risk-focused audit procedures 2021
Residual components
100%
100%
(2021: 100%)
100%
(2021: 100%)
(2021: 100%)
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
105
5. Going concern basis of preparation
The Directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group’s and the Company’s financial position means that
this is realistic for at least a year from the date of approval of the
financial statements (“the going concern period”). As stated in
section 2 of our report, they have also concluded that there is a
material uncertainty related to going concern.
An explanation of how we evaluated management’s assessment of
going concern is set out section 2 of our report.
Our conclusions based on this work:
—
we consider that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements is
appropriate;
—
we have nothing material to add or draw attention to in
relation to the Directors’ statement in note 1 to the financial
statements on the use of the going concern basis of accounting
and their identification therein of a material uncertainty over
the Group and Company’s use of that basis for the going
concern period; and
—
the related statement under the Listing Rules set out on page
92 is materially consistent with the financial statements and our
audit knowledge.
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to
fraud
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
—
enquiring of directors, the audit committee, reviewing internal
audit reporting and inspection of policy documentation as to
the Group’s high-level policies and procedures to prevent and
detect fraud, including the internal audit function, and the
Group’s channel for “whistleblowing”, as well as whether they
have knowledge of any actual, suspected or alleged fraud.
—
reading Board and other executive committee minutes.
—
considering remuneration incentive schemes and performance
targets for management and Directors including share-based
payments for management remuneration.
—
using analytical procedures to identify any unusual or
unexpected relationships.
—
using our own forensic specialists to assist us in identifying
fraud risks based on discussions of the circumstances of the
Group.
—
Inspecting correspondence with regulators to identify instances
or suspected instances of fraud.
—
Reviewing the audit misstatements from prior period to
identify fraud risk factors.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the
audit.
As required by auditing standards, and taking into account possible
pressures to meet profit targets and our overall knowledge of the
control environment, we perform procedures to address the risk of
management override of controls, in particular the risk that Group
management may be in a position to make inappropriate
accounting entries and the risk of bias in accounting estimates and
judgements such as those described in this report: namely
expected credit loss and customer complaints.
On this audit we do not believe there is a fraud risk related to
revenue recognition because of the nature of the Group’s revenue
streams the Groups revenue transactions are non-complex in
nature involving minimal management judgement.
We identified a fraud risk related to:
—
the expected credit losses on customer loans and receivables
due to the significant judgement in this estimate.
—
the complaints provision due to the high degree of estimation

management over uncertain future outcomes of this provision.
In order to address the risk of fraud on the above we challenged
management in relation to the selection of assumptions to assess if
there are indications of management basis. Further detail is set out
in the key audit matter disclosures in section 3 of this report.
We also performed procedures including:
—
identifying journal entries to test for all full scope components
based on risk criteria and comparing the identified entries to
supporting documentation. These included assessing the
appropriateness of journal users, searching for high risk
descriptions or lack there of, those linked to specific accounts
and duplicate entries; and
—
assessing significant accounting estimates for bias, including
the complaint provision, the expected credit loss and
investment in subsidiary that require judgement bias.
Further detail in respect of the customer complaints provision and
expected credit losses on customer loans and receivables is set out
in the key audit matter disclosures in section 3 of this report.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements
from our general commercial and sector experience, through
discussion with the Directors and other management (as required
by auditing standards), and from inspection of the Group’s
regulatory correspondence and discussed with the Directors and
other management the policies and procedures regarding
compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation), distributable
profits legislation, and taxation legislation and we assessed the
extent of compliance with these laws and regulations as part of our
procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or the loss of
the Group’s license to operate. We identified the following areas as
those most likely to have such an effect: conduct and regulatory
risk, anti-bribery, anti-money laundering and certain aspects of
Company legislation recognising the financial and regulated nature
of the Group’s activities.
106
Amigo Holdings PLC
Annual report and accounts 2022
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of the
directors and other management and inspection of regulatory and
legal correspondence, if any. Therefore if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach
The ongoing FCA investigations and customer complaints provision
is set out in the other key audit matter disclosures in section 3 of
this report.
For the ongoing FCA investigation matters discussed in note 1 we
assessed disclosures against our understanding from regulatory
correspondence and discussions with the Board and management.
Context of the ability of the audit to detect fraud or breaches of
law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards
would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing non-
compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
7. We have nothing to report on the other information in the
Annual Report
The Directors are responsible for the other information presented
in the Annual Report together with the financial statements. Our
opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
— we have not identified material misstatements in the strategic
report and the Directors’ report;
— in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
— in our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there
is a material inconsistency between the Directors’ disclosures in
respect of emerging and principal risks and the viability statement,
and the financial statements and our audit knowledge.
Based on those procedures, other than the material uncertainty
related to going concern referred to above, we have nothing
further material to add or draw attention to in relation to:
— the Directors’ confirmation within the long-term viability
statement (page 49) that they have carried out a robust
assessment of the emerging and principal risks facing the
Group, including those that would threaten its business model,
future performance, solvency and liquidity;
— the Principal Risks disclosures describing these risks and how
emerging risks are identified, and explaining how they are
being managed and mitigated; and
— the Directors’ explanation in the long-term viability
statement of how they have assessed the prospects of the
Group, over what period they have done so and why they
considered that period to be appropriate, and their
statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet
its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions
We are also required to review the long- term viability
statement, set out on page 49 under the Listing Rules. Based on
the above procedures, we have concluded that the above
disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were
made, the absence of anything to report on these statements is
not a guarantee as to the Group’s and Company’s longer-term
viability.
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the Directors’
corporate governance disclosures and the financial statements
and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements
and our audit knowledge:
— the Directors’ statement that they consider that the annual
report and financial statements 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;
— the section of the annual report describing the work of the
Audit Committee, including the significant issues that the
audit committee considered in relation to the financial
statements, and how these issues were addressed; and
— the section of the annual report that describes the review of
the effectiveness of the Group’s risk management and
internal control systems.
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
107
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the Listing Rules for
our review, and to report to you if a corporate governance statement
has not been prepared by the company. We have nothing to report
in these respects.
Based solely on our work on the other information described above:
— with respect to the Corporate Governance Statement
disclosures about internal control and risk management systems
in relation to financial reporting processes and about share
capital structures:
we have not identified material misstatements therein; and
the information therein is consistent with the financial
statements; and
— in our opinion, the Corporate Governance Statement has been
prepared in accordance with relevant rules of the Disclosure
Guidance and Transparency Rules of the Financial Conduct
Authority.
8. We have nothing to report on the other matters on which we are
required to report by exception
Under the Companies Act 2006, we are required 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 from branches not visited by us; or
— the parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
— certain disclosures of Directors’ remuneration specified by law
are not made; or
— we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 98, the
Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; 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; assessing the Group
and 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 they either intend to
liquidate the Group or the parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities
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 our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not
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 the
financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at
www.frc.org.uk/auditorsresponsibilities
The Company is required to include these financial statements in an
annual financial report prepared using the single electronic reporting
format specified in the TD ESEF Regulation. This auditor’s report
provides no assurance over whether the annual financial report has
been prepared in accordance with that format.
10. The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the 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
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 Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.
Nicholas Edmonds (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square,
Canary Wharf,
London,
E14 5GL
8 July 2022
108
Amigo Holdings PLC
Annual report and accounts 2022
109
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
Year to Year to
31 Mar 22 31 Mar 21
Notes £m £m
Revenue 4 89.5 170.8
Interest payable and funding facility fees 5 (16.7) (27.5)
Interest receivable 0.1 0.1
Impairment of amounts receivable from customers
(37.0) (60.7)
Administrative and other operating expenses 7 (24.6) (44.5)
Complaints provision release/(expense) 19 156.6 (318.8)
Total operating income/(expense) 132.0 (363.3)
Strategic review, formal sale process and related financing costs 8 — (3.0)
Profit/(loss) before tax 167.9 (283.6)
Tax credit/(charge) on profit/(loss) 11 1.7 (5.5)
Profit/(loss) and total comprehensive profit/(loss) attributable to equity shareholders
oftheGroup
1
169.6 (289.1)
The profit/(loss) is derived from continuing activities.
Earnings/(loss) per share
Basic earnings/(loss) per share (pence) 13 35.7 (60.8)
Diluted earnings/(loss) per share (pence) 13
35.7 (60.8)
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 2022
Financial statements
110
Amigo Holdings PLC
Annual report and accounts 2022
31 Mar 22 31 Mar 21
Notes £m £m
Non-current assets
Customer loans and receivables 14 25.4 125.5
Property, plant and equipment
0.5 1.1
Right-of-use lease assets 20 0.8 1.0
26.7 127.6
Current assets
Customer loans and receivables 14 114.8 225.1
Other receivables 16 1.6 1.6
Current tax asset 0.7 —
Derivative asset — 0.1
Cash and cash equivalents (restricted)
1
7.6 6.3
Cash and cash equivalents 133.6 177.9
258.3 411.0
Total assets 285.0 538.6
Current liabilities
Trade and other payables 17 (6.7) (15.9)
Borrowings 18 — (64.4)
Lease liabilities 20
(0.3) (0.3)
Complaints provision 19 (82.8) (344.6)
Restructuring provision 19 — (1.0)
Current tax liabilities — (0.8)
(89.8) (427.0)
Non-current liabilities
Borrowings 18 (49.7) (232.1)
Lease liabilities 20 (0.6) (0.9)
Complaints provision 19
(97.0) —
(147.3) (233.0)
Total liabilities (237.1) (660.0)
Net assets/(liabilities) 47.9 (121.4)
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 133.9 (35.3)
Shareholder equity 47.9 (121.4)
The accompanying notes form part of these financial statements.
1 Cash and cash equivalents (restricted) of £7 .6m (2021: £6. 3m) materially relates to restricted cash held in a Trust Account for the benefit of those customers
with an open complaint, who may later have their complaints upheld in the Scheme, who continued to make payments on their loan from 1 December 2021 to
the Scheme effective date In the prior year, restricted cash and cash equivalents represented restricted cash held in the structured entity AMGO Funding
(No. 1) Ltd bank account due to contractual obligations at that time.
The financial statements of Amigo Holdings PLC were approved and authorised for issue by the Board and were signed on its behalf by:
Danny Malone
Director
8 July 2022
Company no. 10024479
Consolidated statement of financial position
as at 31 March 2022
111
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
Share Share Translation Merger Retained Total
capital premium reserve 1 reserve 2 earnings equity
£m £m £m £m £m £m
At 1 April 2020 1.2 207.9 — (295.2) 253.5 167.4
Total comprehensive loss ————(289.1) (289.1)
Share-based payments ————0.30.3
At 31 March 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
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 2022
Financial statements
112
Amigo Holdings PLC
Annual report and accounts 2022
Year to Year to
31 Mar 22 31 Mar 21
£m £m
Profit/(loss) for the period 169.6 (289.1)
Adjustments for:
Impairment expense
37.0 60.7
Complaints provision (156.6) 318.8
Restructuring provision — 1.0
Tax (credit)/charge
(1.7) 5.5
Interest expense 16.7 27.5
Interest receivable (0.1) (0.1)
Interest recognised on loan book
(97.0) (185.3)
Share-based payment
(0.4) 0.3
Depreciation of property, plant and equipment
0.5 1.1
Operating cash flows before movements in working capital (32.0) (59.6)
Decrease/(increase) in receivables 0.1 (0.9)
(Decrease) in payables (6.3) (0.3)
Complaints cash expense
(8.1) (64.6)
Tax refunds 0.2 23.6
Interest paid
(18.5) (22.8)
Net cash (used in) operating activities before loans issued and collections on loans (64.6) (124.6)
Loans issued
— (0.4)
Collections 263.0 402.5
Other loan book movements (0.4) (0.6)
Decrease in deferred brokers’ costs 7.5 10.8
Net cash from operating activities 205.5 287.7
Investing activities
Proceeds from sale of property, plant and equipment 0.3 —
Purchases of property, plant and equipment
— (0.5)
Net cash from/ (used in) investing activities 0.3 (0.5)
Financing activities
Lease principal payments (0.3) (0.2)
Repayment of external funding
(248.5) (167.2)
Net cash (used in) financing activities (248.8) (167.4)
Net (decrease)/increase in cash and cash equivalents (43.0) 119.8
Effects of movement in foreign exchange — 0.1
Cash and cash equivalents at beginning of period 184.2 64.3
Cash and cash equivalents at end of period
1
141.2 184.2
The accompanying notes form part of these financial statements.
1 Total cash is inclusive of cash and cash equivalents (restricted) of £7 .6m (2021: £6 . 3m). This materially relates to restricted cash held in a Trust Account for
the benefit of those customers with an open complaint, who may later have their complaints upheld in the Scheme, who continued to make payments on
their loan from 1 December 2021 to the Scheme effective date In the prior year, restricted cash and cash equivalents represented restricted cash held in
the structured entity AMGO Funding (No. 1) Ltd bank account due to contractual obligations at that time.
Consolidated statement of cash flows
for the year ended 31 March 2022
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Financial statements
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 (LSE:AMGO).
The Company is incorporated and domiciled in England and Wales and its registered office is Nova Building, 118–128C–128 Commercial Road,
Bournemouth, United Kingdom BH2 5LT.
The principal activity of the Company is to act as a holding company for the Amigo Loans Group of companies. The principal activity
oftof the Amigo Loans Group is to provide individuals with guarantor loans from £2,000 to £10,000 over one to five years.
These consolidated Group and Company financial statements have been prepared on a going concern basis and approved by the
Directors in accordance with UK-adopted International Financial Reporting Standards (“IFRS”). 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.
The consolidated Group and Company financial statements for the year ended 31 March 2022 were approved by the Board of Directors
on 8 July 2022.
The Group’s principal accounting policies used in accordance with international accounting standards in conformity with the requirements
of the Companies Act 2006, which have been consistently applied to all years presented unless otherwise stated, are set out below.
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 these financial
statements. This has taken into account the Group’s business plan and the principal risks and uncertainties facing the Group, including
the success of the Scheme of Arrangement (“the Scheme”). The financial statements have been prepared on a going concern basis
which the directors believe to be appropriate for the following reasons.
Following the sanctioning by the High Court on 26 May of the Scheme of Arrangement (“the Scheme”) the Group now has a clear path to
returning to lending over the next twelve months. Failure to meet the conditions of the Scheme however remains a key risk faced by the
Group. The relevant conditions are:
•
approval before 26 February 2023 by the Financial Conduct Authority for Amigo to resume lending;
•
issuance and sale of at least 19 shares for every 1 share in issue before 26 May 2023
Should either of these conditions remain unsatisfied within the required timeframes, under the terms of the Scheme the business will
revert to a managed wind-down and neither the Group nor Company will be a going concern. Projections show the business has
sufficient resources for a solvent wind-down in this context.
However, the Directors have a reasonable expectation that these conditions can be met and, therefore, have modelled a ‘Base scenario’
and ‘Severe but plausible downside Scheme scenario’ which the Directors believe are realistic alternatives to the managed wind-down
scenario.
Base scenario - business plan assumptions
The Base scenario assumes that:
•
the conditions of the Scheme (explained above) are met in the required timescales, with FCA approval to commence re-lending being
received in Summer 2022
•
balance adjustments resulting from complaints in the Scheme are consistent with the assumptions that underpin the complaints
provision reported as at 31 March 2022 (see note 2.2.2)
•
at least the minimum committed amount of £112m is paid out as cash redress in the Scheme, being £97m from existing resources and
future collections plus an additional £15m following the equity raise
•
new lending originations commence as soon as possible in summer 2022
•
collections on the existing loan book continue in line with recent experience
This scenario indicates that the Group will have sufficient funds to enable it to operate within its available facilities and settle its liabilities
as they fall due for at least the next twelve months.
Notes to the consolidated financial statements
for the year ended 31 March 2022
Financial statements
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
1. Accounting policies continued
1.1 Basis of preparation of financial statements continued
Severe but plausible downside Scheme scenario
The Directors have prepared a severe but plausible downside scenario. This assumes the conditions of the Scheme are met and also
that the Group is able to successfully obtain new debt financing to enable it to repay its non-current borrowings as they fall due in
January 2024, but considers the potential impact of:
•
an increased number of upheld complaints. Whilst this sensitivity does not increase the cash liability, which is capped under the
Scheme, the number of customers receiving balance write downs will increase, thus reducing future collections and adversely
impacting the Group’s liquidity position.
•
increased credit losses as a result of the cost of living crisis and the inability of an increased number of the Group’s customers to
continue to make payments.
•
halving of forecast origination volumes, whether arising due to delays in new product launch or market conditions.
•
halving of new equity funding raised (whilst still meeting the dilution conditions of the Scheme)
This severe but plausible downside Scheme scenario indicates that the Group’s available liquidity headroom would reduce but would be
sufficient to enable the Group to continue to settle its liabilities as they fall due for at least the next twelve months.
FCA investigation
The Group is currently under investigation by the FCA in relation to historical lending and complaints management processes. We
are hopeful that the outcome of these investigations will be known within the next twelve months. If the enforcement process is not
completed within twelve months, then Amigo could fail to comply with one of the Scheme conditions and is likely to revert to the fallback
solution or some form of insolvency.
There are a number of avenues of sanction open to the FCA should it deem it appropriate and so the potential impact of the investigation
on the business is extremely difficult to predict and quantify, so has not been provided for in the financial statements, and is not modelled
in the business plan or stress scenario. In mitigation, the FCA has stated that the levying of any fine would be considered in the context
of the Scheme and its impact on creditors. However, if the FCA were to impose a significant fine it would significantly reduce the Group’s
available liquidity headroom and the Group may potentially need to source additional financing to maintain adequate liquidity and to
continue to operate.
Conclusion
Approval by the High Court of the Scheme provides the Group with a clear path to return to lending under a business plan which has
been the subject of extensive external scrutiny as a result of the Court process. Based on the severe but plausible scenario the Directors
have a reasonable expectation that the Group and Company have adequate resources to continue in operation for at least the next
twelve months. Accounting standards require an entity to prepare financial statements on a going concern basis unless the Board
either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so. Accordingly, the Board believes that it
remains appropriate to prepare the financial statements on a going concern basis.
However, the Board also recognises that at the date of approval of these financial statements significant uncertainty remains. The
Scheme requires the meeting of conditions, being approval for a return to lending before 26 February 2023 and issuance and sale
of at least 19 shares for every 1 share in issue before 26 May 2023. Additionally, the successful delivery of the Group’s business plan
depends on raising sufficient equity and/or debt funding and the final outcome of the FCA investigations remains highly uncertain. These
conditions are outside of the control of the Group. These matters indicate the existence of a material uncertainty related to events or
conditions that may cast significant doubt over the Group and Company’s ability to continue as a going concern and, therefore, that the
Group and Company may be unable to realise their assets and discharge their liabilities in the normal course of business. The financial
statements do not include any adjustments that would result from the basis of preparation being inappropriate.
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Financial statements
1. Accounting policies continued
1.1 Basis of preparation of financial statements continued
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 that
control 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 2022 and 31 March 2021. There has been no activity through this
vehicle in either financial year. The Group intends to review complaint claims through this vehicle and, where appropriate, to pay cash
redress to customers that have been affected by historical issues in the UK business.
The Group’s securitisation facility was established in November 2018. During the year ended 31 March 2022 the Company fully repaid the
facility, although at the year end the structure remained in place (see note 18 for further details). The structured entity AMGO Funding (No.
1) Ltd was set up in this process. The Group has 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 controls a 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 FVTPL):
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the
principal amount outstanding.
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.
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
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
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
stage 2 and 3 financial assets are based on lifetime ECLs, which are the ECLs that result from all default events over the expected life
ofafinancial instrument.
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 Group performs separate credit and affordability assessments on both the borrower and guarantor. After having passed an initial
credit assessment, most borrowers and all guarantors are contacted by phone and each is assessed for their creditworthiness and ability
to afford the loan. In addition, the guarantor’s roles and responsibilities are clearly explained and recorded. This is to ensure that while
the borrower is primarily responsible for making the repayments, both the borrower and the guarantor are clear about their obligations
and are also capable of repaying the loan.
When a borrower misses a payment, both parties are kept informed regarding the remediation of the arrears. If a missed payment
is not remediated within a certain time frame, collection efforts are switched to the guarantor and if arrears are cleared the loan is
consideredperforming.
The Group assessed that its key sensitivity was in relation to expected credit losses on customer loans and receivables. The matrix of
nine scenarios used in the prior year for calculating the ECL provision has been simplified into base, downside and severe downside
scenarios. In prior years nine macroeconomic scenarios were applied and weighted. However, given the impact of the Covid-19 pandemic
is better known and already to an extent has been realised, this methodology was reviewed and simplified down to three scenarios
–abase, downside and severe downside scenario, to determine the ECL provision (see note 2.1.3).
Previously the IFRS 9 provision was segmented into the Group’s seven legacy risk segments. Due to the impact of Covid-19 these
segments no longer have discernible credit risk profiles. Instead, and in line with information used by management in internal decision
making and review, the book is bifurcated into customers who have had a Covid-19 forbearance plan and those who have not. 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 plans, 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.
The Group has offered payment holidays to customers in response to Covid-19. These measures were introduced on 31 March 2020
and last granted by 31 March 2021, although some customers continued in their existing payment holidays into the 2022 financial year.
The granting of a payment holiday, or the extension of a payment holiday at the customer’s request, does not automatically trigger a
significant increase in credit risk. Customers granted payment holidays are assessed for other indicators of SICR and are classified as stage
2 if other indicators of a SICR are present. This is in line with guidance issued by the International Accounting Standards Board (“IASB”)
and Prudential Regulation Authority (“PRA”) which noted that the extension of government-endorsed payment holidays to all borrowers,
in particular classes of financial instruments, should not automatically result in all those instruments being considered to have suffered
asignificant increase in credit risk. See note 2.1.2 for further detail on SICR considerations for Covid-19 payment holidays.
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Financial statements
1. Accounting policies continued
1.2 Amounts receivable from customers continued
v) Derecognition
Historically, the Group offered, to certain borrowers, the option to top up existing loans subject to internal eligibility criteria and customer
affordability. The Group pays out the difference between the customer’s remaining outstanding balance and the new loan amount at the
date of top up. The Group considers a top up to be a derecognition event for the purposes of IFRS 9 on the basis that a new contractual
agreement is entered into by the customer replacing the legacy agreement. The borrower and guarantor are both fully underwritten
atthe point of top up and the borrower may use a different guarantor from the original agreement when topping up.
vi) Modification
Aside from top ups and Covid-19 payment holidays, no formal modifications are offered to customers. In some instances, forbearance
measures are offered to customers. These are not permanent measures; there are no changes to the customer’s contract and the measures
do not meet derecognition or modification requirements. See policy 1.11 for more details on the Group’s accounting policies for
modification of financial assets.
vii) 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.
viii) 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 (see note 2.2 for further details). 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1.11.1.e for further details).
The effective interest rate (“EIR”) is the rate that discounts estimated future cash payments or receipts through the expected life of
the financial instrument (or a shorter period where appropriate) to the net carrying value of the financial asset or financial liability.
Thecalculation takes into account all contractual terms of the financial instrument and includes any incremental costs that are directly
attributable to the instrument, but not future credit losses.
1.4 Operating expenses
Operating expenses include all direct and indirect costs. Where loan origination and acquisition costs can be referenced directly back
toindividual transactions (e.g. broker costs), they are included in the effective interest rate in revenue and amortised over the behavioural
life of the loan rather than recognised in full at the time of acquisition.
1.5 Interest payable 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
comprehensive 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.
Financial statements
118
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Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
1. Accounting policies continued
1.6 Dividends
Equity dividends payable are recognised when they become legally payable. Interim equity dividends are recognised when paid.
Finalequity dividends are recognised on the earlier of their approval or payment date.
1.7 Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive
income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
1.7.1 Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively
enacted at the consolidated statement of financial position date, and any adjustment to tax payable in respect of previous years. Taxable
profit/loss differs from profit/loss before taxation as reported in the income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
1.7.2 Deferred tax
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that future taxable profits
will be available against which the temporary differences can be utilised. Should circumstances arise where the Group concludes it is no
longer considered probable that future taxable profits will be available against which temporary differences can be utilised, deferred tax
assets will be written off and charged to the consolidated statement of comprehensive income.
The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities
that affect neither accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries
to the extent that they are unlikely to reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the
consolidated statement of financial position date.
1.8 Property, plant and equipment (“PPE”)
PPE is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by
management. Where parts of an item of PPE have different useful lives, they are accounted for as separate items of property, plant and
equipment. Repairs and maintenance are charged to the consolidated statement of comprehensive income during the period in which
they are incurred.
Depreciation is charged to the consolidated statement of comprehensive income on a straight-line basis over the estimated useful lives
of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
•
Leasehold improvements 10% straight line
•
Fixtures and fittings 25% straight line
•
Computer equipment 50% straight line
•
Office equipment 50% straight line
•
Motor vehicles 25% straight line
Depreciation methods, useful lives and residual values are reviewed, and adjusted if appropriate, at each consolidated statement
offinancial position date.
1.9 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.
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Financial statements
1. Accounting policies continued
1.10 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.
1.11 Financial instruments
The Group primarily enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities,
themost significant being amounts receivable from customers 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.
1.11.1 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 immaterial.
c) Cash and cash equivalents (restricted)
Cash and cash equivalents (restricted) materially relates to restricted cash held in a Trust Account for the benefit of those customers
with an open complaint, who may later have their complaints upheld in the Scheme, who continued to make payments on their loan
from 1December 2021 to the Scheme effective date. In the prior year, restricted cash and cash equivalents represented restricted cash
held in the structured entity AMGO Funding (No. 1) Ltd bank account due to contractual obligations at that time. During the year the size
of the securitisation facility decreased from £250m to £100m in June 2021 before being fully repaid on 24 September 2021. Although
the structure exists at the period end all rights, obligations and liabilities of the Noteholders and Lead Arranger have been novated to
ALLScheme Limited and there is consequently no comparable cash restriction.
d) Derivative assets
Derivative assets held for risk management purposes are recognised on a fair value through profit and loss (FVTPL) basis, with movement
in fair value being included under interest expenses in the consolidated statement of comprehensive income.
e) 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 1.11.1.f) 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.
Financial statements
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
1. Accounting policies continued
1.11 Financial instruments continued
1.11.1 Financial assets continued
f) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
•
the rights to receive cash flows from the asset have expired; or
•
the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows
infull without material delay to a third party under a “pass-through” arrangement and either:
•
the Group has transferred substantially all the risks and rewards of the asset; or
•
the Group has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control
oftheasset.
g) Write off
Customer loans and receivables are written off the consolidated statement of financial position when an account is six contractual
payments past due, as at this point it is deemed that there is no reasonable expectation of recovery. When there is recovery on written-off
debts or when cash is received from the third-party purchaser on the legal purchase date of the assets, recoveries are recognised
intheconsolidated statement of comprehensive income within the impairment charge.
1.11.2 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
trade 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 market
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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.
1.12 Securitisation
The Group securitises certain financial assets via the sale of these assets to a special purpose entity, which in turn issues 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. Since the novation of the securitisation structure to Amigo
in September 2021, and the elimination of Noteholders, no additional risks are considered to arise from the remaining structure.
Seenote25 for further details.
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Financial statements
1. Accounting policies continued
1.13 Merger reserve
The merger reserve was created as a result of a Group reorganisation in 2017 to create an appropriate holding company structure.
Withthe merger accounting method, the carrying values of the assets and liabilities of the parties to the combination are not required
tobe adjusted to fair value, although appropriate adjustments shall be made through equity to achieve uniformity of accounting policies
in the combining entities. The restructure was within a wholly owned group, constituting a common control transaction.
1.14 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
remeasured 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’s right-of-use assets relate to two property leases for offices in Bournemouth.
The Group and Company did not make any material adjustments during the year.
1.15 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 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.
1.16 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.
Financial statements
122
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
1. Accounting policies continued
1.17 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. 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investment in the Company’s financial statements.
1.18 Items presented separately within the consolidated statement of comprehensive income
Complaints expense and strategic review, formal sale process and related financing costs are presented separately on the face of the
consolidated statement of comprehensive income. These items are deemed exceptional because of their size, nature or incidence and
which the Directors consider should be disclosed separately to enable a full understanding of the Group’s results.
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.vii).
•
Multiple economic scenarios – the probability weighting of base, downside and severe downside scenarios to the ECL calculation
(note 2.1.3). These scenarios replaced the nine different economic scenarios used in the prior year.
•
Application of a management overlay. A judgemental overlay has been applied to the impairment provision to approximate the
potential short-term impact on the ageing of the loan book (note 2.1.4).
•
Complaints provisions:
•
Judgement is involved in calculating the balance adjustments and in estimating the probability, timing andamount of any outflows
(note 2.2.2).
•
Going concern:
•
Judgement is applied in determining if there is a reasonable expectation that the Group adopts the going concern basis in preparing
these financial statements (note 1.1).
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).
•
Calculation of the management overlay which has been applied to the impairment provision (note 2.1.4).
•
Complaints provisions:
•
Calculation of balance adjustments involve management’s best estimate of Scheme uptake, uphold rate and average redress.
Thecalculation of these evaluates current and historical data, and assumptions and expectations of future outcomes (note 2.2.2).
•
Valuation of the investment in subsidiaries held by parent company Amigo Holdings PLC (note 2a of Company financial statements).
•
Carrying amount of current and deferred taxation assets and liabilities:
•
The current uncertainty over the Group’s future profitability means that it is no longer considered probable that future taxable profits
will be available against which to recognise deferred tax assets.
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Financial statements
2. Critical accounting assumptions and key sources of estimation uncertainty continued
2.1 Credit impairment
2.1.1 Measurement of ECLs
The Group has adopted a collective basis of measurement for calculating ECLs. In the current year the loan book is bifurcated into those
customers who have had a Covid-19 forbearance plan and those who have not. In the prior year, the loan book was divided into portfolios
of assets with shared risk characteristics including whether the loan was new business, repeat lending or part of a lending pilot as well
as considering if the customer was a homeowner or not. These portfolios of assets were further divided by contractual term and monthly
origination vintages. These portfolios are no longer considered to have discernible credit risk profiles due to the impact of Covid-19.
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.
The Group assesses the impact of forward-looking information on its measurement of ECLs. The Group has analysed the effect of a
range of economic factors and identified the most significant macroeconomic factors that are likely to impact credit losses as the rate
ofunemployment and the rate of inflation.
In prior years nine macroeconomic scenarios were applied and weighted. However, given the impact of the Covid-19 pandemic is better
known and already to an extent has been realised, this methodology was reviewed and simplified down to three scenarios – a base,
downside and severe downside scenario, to determine the ECL provision (see note 2.1.3).
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 space 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 (equivalent to 30 days), which is aligned to the rebuttable presumption of more than 30 days past due. This is the
primary quantitative information considered by the Group in a significant increase in credit risk assessments.
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. Each quarter a flag governance meeting is held, to review operational changes which may
impact the use of operational flags in the assessment of a significant increase in credit risk.
Financial statements
124
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
2. Critical accounting assumptions and key sources of estimation uncertainty continued
2.1 Credit impairment continued
2.1.3 Forward-looking information
The Group assesses the impact of forward-looking information on its measurement of ECLs. The Group has analysed the effect of
arange of economic factors and identified the most significant macroeconomic factors that are likely to impact credit losses as the rate
ofunemployment and the rate of inflation.
The Group has modelled and weighted three different macroeconomic scenarios – a base, a downside and a severe downside scenario:
•
The base scenario broadly represents probability of defaults whereby there is no significant deviation of delinquency beyond the
current run-rate. The base scenario captures an element of stress to reflect current inflationary pressures. A weighting of 25% has
been applied to reflect the Group’s assumption that the current macroeconomic environment is more likely than not due to worsen,
given the inflationary pressures facing the Group’s customer base. Historical trends of prior inflationary increases showed no statistical
relationship to the Group’s customers propensity to make payments, so the base scenario appears reasonable.
•
The downside scenario uplifts the base scenario probability of default by approximately 50%. Based on recent Office for Budgetary
Reporting (“OBR”) forecasts, inflation rates, which are already at 40-year highs, are expected to rise further in the short-term.
Although there are no historical indications of a statistical relationship between inflationary rises and customers’ propensity to make
payments, a weighting of 50% has been applied to reflect a prudent approach and expectation that customers will be, in some form,
adversely impacted.
•
The severe downside applies a further uplift of 25% to the probability of default in the downside scenario, reflecting a significant
impact from macroeconomic factors. Whilst the economic outlook is not set to return to more normal levels in the near term, the
Group’s loan book does not have significant time left to run off. Judgement has been made to weight this scenario at 25%. Given the
lack of statistical relationship and level of uncertainty around the impact on customers’ payment behaviour, the Group believes this
weighting is fair and reasonable, but will evolve over time as the cost of living crisis plays out.
The following table details the absolute impact on the current ECL provision of £47.4m if each of the three scenarios are given a
probability weighting of 100%.
Impact
Base -.m
Downside +.m
Severe downside +.m
The scenarios above demonstrate a range of ECL provisions from £44.7m to £48.9m.
In prior years nine macroeconomic scenarios were applied and weighted. However, given the impact of the Covid-19 pandemic is better
known and already to an extent has been realised, this methodology was reviewed and simplified down to three scenarios – a base,
downside and severe downside scenario, to determine the ECL provision.
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.
2.1.4 Application of a management overlay to the impairment provision calculation
In the prior year management overlay was used to enhance the modelled outcome to take account of increasing credit risk indicators that
were potentially masked by payment holidays granted due to Covid-19. This is no longer relevant as all impacted accounts have reverted
to a tailored collections approach captured by status flag.
As noted in 2.1.3, the Board notes that forward looking information carries a degree of uncertainty, particularly in relation to the impact
of the forecast cost of living crisis. However, in the view of the Board, the use of a sufficiently severe downside scenario in the modelled
approach negates the requirement for further management overlay in the impairment estimation.
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Financial statements
2. Critical accounting assumptions and key sources of estimation uncertainty continued
2.2 Complaints provisions
2.2.1 Key judgements – Scheme of Arrangement
On 21 December 2020, the Group announced its intention to agree a Scheme of Arrangement to address customer redress claims with
the aim that all customers are treated equitably. The vehicle ALL Scheme Ltd (“SchemeCo”) was incorporated on 6 January 2021 and is
awholly owned subsidiary through which the Group intends to review claims and, where appropriate, pay redress to customers that have
been affected as a result of historical issues in the UK business.
IAS 37: Provisions, Contingent Liabilities and Contingent Assets requires that the measurement of provisions is not adjusted for future events,
such as the approval of an alternative Scheme of Arrangement, unless there is sufficient objective evidence that the future event will occur.
Following the sanctioning by the High Court of the New Business Scheme and considering that the subsequent conditions precedent for
return to lending and capital raise will be satisfied, Amigo believes that the IAS 37 conditions for recognising a provision will be met. As
a result the complaints provision has been calculated on a Scheme basis. This means that the provision has been reduced to the level of
estimated balance adjustments plus the cash redress promised in the Scheme.
2.2.2 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.
The key assumptions in these calculations which involve significant, complex management judgement and estimation relate primarily to
the projected costs of potential future complaints, where it is considered more likely than not that customer redress will be appropriate.
These key assumptions are:
•
future estimated volumes – estimates of future volumes of complaints;
•
uphold rate (%) – the expected average uphold rate applied to future estimated volumes where it is considered more likely than not
that customer redress will be appropriate; and
•
average balance adjustments (£) – the estimated balance adjustments for future upheld complaints included in the provision.
•
portion of complaints on gross loan book (%) - whether there are customers on the existing loan book remediated via balance
adjustment or whether redress is achieved via the Scheme cash pot.
The calculation of the complaints provision as at 31 March 2022 is based on Amigo’s best estimate of the future obligation at the Scheme
effective date. The revised complaints cash redress provision will be £97m post-Scheme. There is an additional £15m payable resulting
from the contingent equity raise, plus a top up if net collections exceed those forecast in the Scheme scenarios.
The capital raise is a critical component of the preferred solution under the New Business Scheme succeeding, and while the provision
is being accounted for on the basis that the Scheme is successful, it is currently determined that the equity raise contribution component
cannot be accrued as itcannot be justified as more likely than not to occur at today’s date.
As at 31 March 2022, the Group has recognised a complaints provision totalling £179.8m in respect of customer complaints redress and
associated costs. Utilisation in the period totalled £8.2m. The liability has decreased by £164.8m compared to prior year. £126.5m of the
decrease is due to the cash redress liability being reduced to the £97.0m contribution as per the Scheme. The other main component of
the reduction is a decrease in the balance adjustments on the loan book of £47.3m. The level of balance adjustments has declined due
tocustomers paying down their loan and customers charging off the loan book. This has been partly offset by an increase in the assumed
volume of customers coming forward in the Scheme.
The following table details the effect on the complaints provision considering incremental changes on key assumptions, should current
estimates prove too high or too low. Sensitivities are modelled individually and not in combination.
Assumption Assumption used Sensitivity applied Sensitivity (£m)
Future complaint volumes
, +/- % +.m -.m
Average uphold rate per customer
% +/-  ppts +.m -.m
Average balance adjustment per valid complaint
£, +/- £ +.m -.m
Portion of complaints on gross loan book
% +/- ppts +. -.
1 Future estimated volumes. Sensitivity analysis shows the impact of a 5% change in the number of complaints estimated in the provision.
2 Uphold rate. Sensitivity analysis shows the impact of a 20 percentage point change in the applied uphold rate on both the current and forward-looking
elements of the provision.
3 Average balance adjustment. Sensitivity analysis shows the impact of a £500 change in average balance adjustment on the provision. In prior years,
average redress was used as a key assumption, but average balance adjustment is now considered more appropriate with the provision being
calculated on a Scheme basis.
4 Portion of complaints on gross loan book. Sensitivity analysis shows the impact of a 10 percentage point change in the portion of total current and future
upheld complaints on the gross loan book.
The table above shows the increase or decrease in total provision charge resulting from reasonably possible changes in each of the key
underlying assumptions. The Board considers that this sensitivity analysis covers the full range of reasonably possible alternativeassumptions.
It is possible that the eventual outcome may differ materially from the current estimate and could materially impact the financial
statements as a whole, given the Group’s only activity is guarantor-backed consumer credit. This is due to the risks and inherent
uncertainties surrounding the assumptions used in the provision calculation.
Financial statements
126
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Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
3. Segment reporting
The Group has two operating segments based on the geographical location of its operations, being the UK and Ireland. 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. The Group’s segments
comprise Ireland (Amigo Loans Ireland Limited and Amigo Loans International Limited) and UK businesses (the rest of the Group). The
table below illustrates the segments reported in the Group’s management accounts used by the ExCo as the primary means for analysing
trading performance. The table below presents the Group’s performance on a segmental basis for the year to 31 March 2022 in line with
reporting to the chief operating decision maker:
Year ended  March 
Year to Year to Year to
 Mar   Mar   Mar 
£m £m £m
UK Ireland Total
Revenue . . .
Interest payable and funding facility fees (.) (.) (.)
Interest receivable . — .
Impairment of amounts receivable from customers (.) . (.)
Administrative and other operating expenses (.) (.) (.)
Complaints provision release . — .
Total operating income/(expense) . (.) .
Profit before tax . . .
Tax credit on profit
. — .
Profit and total comprehensive income attributable to equity shareholders
oftheGroup . . .
 Mar   Mar   Mar 
£m £m £m
UK Ireland Total
Gross loan book
. . .
Less impairment provision (.) (.) (.)
Net loan book
. . .
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.
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Financial statements
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; hence, the split between the UK and Ireland has not been presented. The results of each segment have
been prepared using accounting policies consistent with those of the Group as a whole.
Year ended  March 
Year to Year to Year to
 Mar   Mar   Mar 
£m £m £m
UK Ireland Total
Revenue . . .
Interest payable and funding facility fees (.) — (.)
Interest receivable . — .
Impairment of amounts receivable from customers (.) (.) (.)
Administrative and other operating expenses (.) (.) (.)
Complaints expense (.) — (.)
Total operating expenses (.) (.) (.)
Strategic review, formal sale process and related financing costs (.) — (.)
(Loss)/profit before tax (.) . (.)
Tax (charge) on (loss)/profit
(.) (.) (.)
(Loss)/profit and total comprehensive (loss)/income attributable to equity shareholders
of the Group (.) . (.)
 Mar   Mar   Mar 
£m £m £m
UK Ireland Total
Gross loan book
. . .
Less impairment provision (.) (.) (.)
Net loan book
. . .
1 The tax charge for Ireland.is primarily reflective of the write-off of a corporation tax asset in the period. The tax charge for the UK primarily relates to the
write-off of tax assets net with impact of the release of a tax provision no longer required.
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
 Mar   Mar 
£m £m
Interest under amortised cost method . .
Modification of financial assets (note ) . (.)
Other income . .
. .
Financial statements
128
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
5. Interest payable and funding facility fees
Year to Year to
 Mar   Mar 
£m £m
Senior secured notes interest payable . .
Funding facility fees . .
Securitisation interest payable . .
Complaints provision discount unwind (note ) — .
Other finance costs . .
. .
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 largely represent non-utilisation fees of £0.5m (2021:£0.9m) relating to the securitisation facility.
In the prior year, other finance costs also included written-off fees totalling £3.6m following cancellation of the Group’s revolving credit
facility and substantial modification of the securitisation facility.
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 Group stopped granting Covid-19 payment holidays in March 2021; hence, no additional modification losses have been recognised
inthe year. All payment holidays ended by 31 July 2021.
The carrying value of historical modification losses at the year end was £5.9m (2021: £13.9m).
Year to Year to
 Mar   Mar 
£m £m
Modification release/(loss) recognised in revenue . (.)
Modification release/(loss) recognised in impairment . (.)
Total modification release/(loss) . (.)
7. Operating expenses
Year to Year to
 Mar   Mar 
£m £m
Advertising and marketing — .
Communication costs . .
Credit scoring costs . .
Employee costs (note ) . .
Legal and professional fees . .
Print, post and stationery . .
Non-interest related bank charges . .
Other . .
. .
Year to Year to
 Mar   Mar 
Other operating expenses include: £m £m
Fees payable to the Company’s auditor and its associates for:
– audit of these financial statements . .
– audit of financial statements of subsidiaries . .
– audit-related assurance services
. .
Depreciation of property, plant and equipment . .
Depreciation and interest expense on leased assets . .
Defined contribution pension cost . .
1 Other assurance services include reviews of interim financial statements.
129
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
8. Strategic review, formal sale process and related financing costs
Strategic review, formal sale process and related financing costs are disclosed separately in the financial statements because the
Directors consider it necessary to do so to provide further understanding of the financial performance of the Group. There has been
no strategic review, formal sales process and related finance costs in the year to 31 March 2022. Prior period costs are material items
ofexpense that have been shown separately due to the significance of their nature and amount.
Year to Year to
 Mar   Mar 
£m £m
Strategic review and formal sale process costs — .
The costs above relate to advisor and legal fees in respect of the strategic review and formal sale process announced on 27 January 2020
and its termination was announced on 8 June 2020.
9. Employees
Year to Year to
 Mar   Mar 
£m £m
Employee costs
Wages and salaries . .
Social security costs . .
Cost of defined contribution pension scheme (note ) . .
Share-based payments (note ) (.) .
Restructuring provision
(note ) — .
Other (termination payments) . .
. .
1 In the prior year the restructuring provision related to the costs of staff 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
 Mar   Mar   Mar   Mar   Mar   Mar 
UK Ireland Total UK Ireland Total
Employee numbers
Operations     
Support    
     
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 167 in the current year as compared to prior year, reflecting the execution of the restructuring process
during the year, which was announced in the prior year, on 25 February 2021 and 31 March 2021.
10. 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
 Mar   Mar 
£m £m
Key management emoluments including social security costs . .
Termination payments — .
. .
During the year retirement benefits were accruing for one Director (2021: three) in respect of defined contribution pension schemes.
The highest paid Director in the current year received remuneration of £745,005 inclusive of employer’s National Insurance payments
(2021: £766,691 inclusive of employer’s National Insurance payments, of which £319,350 related to loss of office payments).
The value of the Group’s contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted
to£nil due to an election being made for payment in lieu of pension (2021: £nil).
Financial statements
130
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
11. Taxation
The applicable corporation tax rate for the period to 31 March 2022 was 19.0% (2021: 19.0%) and the effective tax rate is negative1.0%
(2021: negative 1.9%).
Year to Year to
 Mar   Mar 
£m £m
Corporation tax
Current tax on profit for the year (.) —
Adjustments in respect of previous periods (.) (.)
Total current tax (credit) (.) (.)
Deferred tax
Origination and reversal of temporary differences — (.)
Adjustments in respect of prior periods — .
Taxation (credit)/charge on profit/(loss) (.) .
A reconciliation of the actual tax (credit)/charge, shown above, and the profit/(loss) before tax multiplied by the standard rate of tax, is
as follows:
Year to Year to
 Mar   Mar 
£m £m
Profit/(loss) before tax . (.)
Profit/(loss) before tax multiplied by the standard rate of corporation tax in the UK of %
(:%) . (.)
Effects of:
Expenses not deductible for tax purposes . .
Non-taxable income (.) —
Transfer pricing adjustments — .
Adjustments to tax charge in respect of prior periods (.) .
Current-year profits/(losses) for which no deferred tax asset is recognised (.) .
Total tax (credit)/charge for the year (.) .
Effective tax charge (.)% (.)%
The Finance Act 2021 increased the UK corporation tax rate from 19.0% to 25.0% with effect from 1April2023. While this change does not
affect the current tax position for the year, it will affect future periods.
12. 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.
 Mar   Mar 
£m £m
At  April / April  — .
(Charge) to the consolidated statement of comprehensive income — (.)
At  March / March  — —
A deferred tax asset has not been recognised in relation to unutilised tax losses of £114.0m and other timing differences of £27.0m on the
basis of recent historic losses and being unable to reliably forecast sufficient, suitable taxable profits in the foreseeable future.
The UK statutory rate for FY22 is 19% (FY21: 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.
131
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
13. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) for the period attributable to equity shareholders by the weighted
average number of ordinary shares outstanding during the period.
Diluted earnings/(loss) per share calculates the effect on earnings/(loss) per share assuming conversion of all dilutive potential ordinary
shares. Dilutive potential ordinary shares are 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 Incentive 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 the schemes’ performance period. 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.
 Mar   Mar 
Pence Pence
Basic earnings/(loss) per share . (.)
Diluted earnings/(loss) per share
. (.)
Adjusted earnings/(loss) per share (basic and diluted)
. (.)
1 The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted loss per share.
2 Adjusted basic earnings/(loss) 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 earnings/(loss) per share is useful as it gives a better indication
ofongoing business performance. Reconciliations of the loss used in the calculations are set out below.
 Mar   Mar 
£m £m
Profit/(loss) for basic EPS . (.)
Release of complaints provision (.) —
Senior secured notes redemption . —
Strategic review, formal sale process and related financing costs — .
Write off of revolving credit facility (RCF) fees — .
Write off of unamortised securitisation fees . .
Tax provision release (.) (.)
Tax asset write off — .
Less tax impact (.) (.)
Profit/(loss) for adjusted basic EPS
. (.)
Basic weighted average number of shares (m) . .
Dilutive potential ordinary shares (m)
— .
Diluted weighted average number of shares (m) . .
1 Adjusted basic profit/(loss) per share and earnings for adjusted basic (loss) per share are non-GAAP measures.
2 Although the Group has issued further options’ under the employee share schemes, upon assessment of the dilutive nature of the options, some
options are not considered dilutive as at 31 March 2022 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
132
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
14. 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.
 Mar   Mar 
£m £m
Stage  . .
Stage  . .
Stage  . .
Gross loan book . .
Deferred broker costs
– stage  . .
Deferred broker costs
– stage  . .
Deferred broker costs
– stage  . .
Loan book inclusive of deferred broker costs . .
Provision (.) (.)
Customer loans and receivables . .
1 Deferred broker costs are recognised within customer loans and receivables and are amortised over the expected life of those assets using the
effective interest rate (“EIR”) method.
As at 31 March 2022, £86.8m of loans to customers had their beneficial interest assigned to the Group’s special purpose vehicle (“SPV”)
entity, namely AMGO Funding (No. 1) Ltd, as collateral for securitisation transactions (2021: £180.3m). See note 25 for further details of this
structured entity.
Ageing of gross loan book (excluding deferred brokers’ fees and provision) by days overdue:
 Mar   Mar 
£m £m
Current . .
– days . .
– days . .
> days . .
Gross loan book . .
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  March 
Stage  Stage  Stage  Total
£m £m £m £m
Gross carrying amount at  April  . . . .
Deferred broker fees . . . .
Loan book inclusive of deferred broker costs at  April  . . . .
Changes in gross carrying amount attributable to:
Transfer of loans receivable to stage  . (.) (.) —
Transfer of loans receivable to stage  (.) . (.) —
Transfer of loans receivable to stage  (.) (.) . —
Passage of time
(.) (.) (.) (.)
Customer settlements (.) (.) (.) (.)
Loans charged off (.) (.) (.) (.)
Modification loss relating to Covid- payment holidays (note ) . (.) (.) .
Net movement in deferred broker fees (.) (.) (.) (.)
Loan book inclusive of deferred broker costs as at  March  . . . .
133
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Financial statements
14. Customer loans and receivables continued
Year ended  March 
Stage  Stage  Stage  Total
£m £m £m £m
Gross carrying amount at  April  . . . .
Deferred broker fees . . . .
Loan book inclusive of deferred broker costs at  April  . . . .
Changes in gross carrying amount attributable to:
Transfer of loans receivable to stage  . (.) (.) —
Transfer of loans receivable to stage  (.) . (.) —
Transfer of loans receivable to stage  (.) (.) . —
Passage of time
(.) (.) . (.)
Customer settlements (.) (.) (.) (.)
Loans charged off (.) (.) (.) (.)
Modification loss relating to Covid- payment holidays (note ) (.) (.) (.) (.)
Net new receivables originated . — — .
Net movement in deferred broker fees (.) (.) — (.)
Loan book inclusive of deferred broker costs as at  March  . . . .
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 £432.6m to £187.1m at 31 March 2022.
Thiswas primarily driven by the effect of passage of time (loan balances amortising throughout the period), customer settlements
andminimal originations in the year.
The following tables explain the changes in the loan loss provision between the beginning and the end of the period:
Year ended  March 
Stage  Stage  Stage  Total
£m £m £m £m
Loan loss provision as at  March  . . . .
Changes in loan loss provision attributable to:
Transfer of loans receivable to stage  . (.) (.) (.)
Transfer of loans receivable to stage  (.) . (.) .
Transfer of loans receivable to stage  (.) (.) . .
Passage of time
(.) (.) (.) (.)
Customer settlements (.) (.) (.) (.)
Loans charged off (.) (.) (.) (.)
Management overlay (note ..) . . . .
Modification loss relating to Covid- payment holidays (note ) . — (.) .
Remeasurement of ECLs . . (.) .
Loan loss provision as at  March  . . . .
Year ended  March 
Stage  Stage  Stage  Total
£m £m £m £m
Loan loss provision as at  March  . . . .
Changes in loan loss provision attributable to:
Transfer of loans receivable to stage  . (.) (.) (.)
Transfer of loans receivable to stage  (.) . (.) .
Transfer of loans receivable to stage  (.) (.) . .
Passage of time
(.) (.) . (.)
Customer settlements (.) (.) (.) (.)
Loans charged off (.) (.) (.) (.)
Management overlay (note ..) (.) . . .
Modification loss relating to Covid- payment holidays (note ) (.) (.) (.) (.)
Remeasurement of ECLs (.) (.) . (.)
Loan loss provision as at  March  . . . .
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 £82.0m at 31 March 2021 to £47.4m at 31 March 2022. The overall
provision has reduced as the book amortises and ages in the absence of new originations.
Financial statements
134
Amigo Holdings PLC
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Notes to the consolidated financial statements continued
for the year ended 31 March 2022
14. 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 2022.
Stage  Stage  Stage  Total
£m £m £m £m
Up to date . . — .
– days . . — .
– days — . — .
> days — — . .
. . . .
The Group stopped granting payment holidays in March 2021; hence, no additional modification losses have been recognised in the
period. All payment holidays ended by 31 July 2021. £5.2m of modification losses were released in respect of loan agreements that
settled or charged off in the period to 31 March 2022. The carrying value of historical modification losses at the period end was £5.9m.
£3.3m of this relates to up to date accounts, £1.2m to 1-30 days, £0.4m to 31-60 days and £1.0m to >60 days.
The following table splits the gross loan book by arrears status, and then by stage respectively for the year ended 31 March 2021.
Stage  Stage  Stage  Total
£m £m £m £m
Up to date . . — .
– days . . — .
– days — . — .
> days — — . .
. . . .
The following table further explains changes in the net carrying amount of loans receivable from customers to explain their significance
tothe changes in the loss allowance for the same portfolios.
 Mar   Mar 
Customer loans and receivables £m £m
Due within one year . .
Due in more than one year . .
Net loan book . .
Deferred broker costs
Due within one year . .
Due in more than one year . .
Customer loans and receivables . .
1 Deferred broker costs are recognised within customer loans and receivables and are amortised over the expected life of those assets using the
effective interest rate (“EIR”) method.
135
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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).
 Mar   Mar 
Carrying Fair Carrying Fair
Fair value amount value amount value
hierarchy £m £m £m £m
Financial assets not measured at fair value
Amounts receivable from customers
Level  . . . .
Other receivables Level  . . . .
Cash and cash equivalents (restricted) Level  . . . .
Cash and cash equivalents Level  . . . .
. . . .
Financial assets measured at fair value
Derivative asset Level  — — . .
— — . .
Financial liabilities not measured at fair value
Other liabilities Level  (.) (.) (.) (.)
Senior secured notes
Level  (.) (.) (.) (.)
Securitisation facility Level  — — (.) (.)
(.) (.) (.) (.)
1 The Group has disclosed the fair values of financial instruments such as short-term trade receivables and payables at their carrying value because
itconsiders this as a reasonable approximation of fair value.
2 The unobservable inputs in the fair value calculation of amounts receivable from customers are expected credit losses, forecast cash flows and discount
rates. As lifetime expected credit losses are embedded in the 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 2022, the gross principal amount outstanding
was £50.0m (2021:£ 234.1m). 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therefore 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, with the exception of the derivative asset which was held at fair value through profit
orloss (“FVTPL”) in the prior year. There are no derivative assets in the current year.
The fair value of the securitisation facility was estimated in the prior year using a net present value calculation using discount rates
derived from contractual interest rates, with cash flows assuming weekly principal repayments in line with the terms of the waiver on the
facility, until the date the facility was forecasted to be repaid in full. During the year ended 31 March 2022 the Company fully repaid the
facility, although at the year end the structure remained in place.
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.
Financial statements
136
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
15. Financial instruments continued
Credit risk continued
a) Amounts receivable from customers
Whilst Amigo currently has only a single product in a single market, there is a limited concentration of risk to individual customers with
an average customer balance outstanding of £2,540 (2021: £3,110). The carrying amount of the loans represents the Group’s maximum
exposure to credit risk.
The Group carries out an affordability assessment on both borrower and guarantor before a loan can be paid out. As a separate exercise
using the knowledge and data from its 17 year presence in the guarantor loan sector, each potential loan undergoes a creditworthiness
assessment based on the applicant’s and guarantor’s credit history. No formal applicant for a collateral or guarantees are held against
loans on the basis that the borrower and guarantor are technically and in substance joint borrowers.
Historically, the Group managed credit risk 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 amount individual
borrowers are able to borrow depending on their circumstance and credit history. Credit risk exposure at origination has been minimal
inthe year due to a pause on new lending.
Credit risk exposure at origination has been minimal in the year due to a pause on new lending.
Credit risk continues to be managed post-origination via ongoing monitoring and collection activities. When payments are missed,
regular communication with both the borrower and guarantor commences. We will contact the borrower and guarantor from day one to
advise them of the missed payment and seek to agree a resolution with the borrower. If we are unable to resolve with the borrower, then
we will turn to the guarantor for payment after 14 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 legacy seven 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 customer’s who have had a Covid-19 forbearance plan and those that have not.
b) Bank counterparties
Counterparty credit risk arises as a result of cash deposits placed with banks and the use of derivative financial instruments with banks
and other financial institutions which are used to hedge against interest rate risk.
This 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.
Securitisation vehicles
The Group securitises certain financial assets via the sale of these assets to a special purpose entity, which in turn issues 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 Group benefits to the extent that the surplus income generated
by the transferred assets exceeds the administration costs of the special purpose vehicle (SPV), the cost of funding the assets and the
cost of any losses associated with the assets and the administration costs of servicing the assets. Risks retained include credit risk,
repayment risk and late payment risk. Since the novation of the securitisation structure to Amigo in September 2021, and the elimination
of Noteholders, no additional risks are considered to arise from the remaining structure. See note 25 for further details.
The following table shows the carrying value and fair value of the assets transferred to securitisation vehicles and the related carrying
value and fair value of the associated liability as at 31 March 2021. The difference between the value of assets and associated liabilities
isprimarily due to subordinated funding provided to the SPV. The collateral is not able to be sold or repurposed by the SPV; it can only
be utilised to offset losses. As at 31 March 2022 the fair value has not been disclosed because the Group has a fully offsetting asset
andliability to a captive entity, and the assets are already fair valued in the customer receivables section.
Carrying Fair
value of Carrying value of Fair
transferred value of transferred value of
assets not associated assets not associated Net fair
derecognised liabilities derecognised liabilities value
AMGO Funding (No. ) Ltd £m £m £m £m £m
As at  March  . . . . .
c) 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.
The outstanding senior secured loan note liability is set at a fixed interest rate of 7.625%.
Amounts receivable from customers are charged at 49.9% APR over a period of one to five years.
137
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Annual report and accounts 2022
Financial statements
15. Financial instruments continued
Credit risk continued
c) Treasury risk continued
Foreign exchange risk
Foreign exchange rate risk is the risk of a change in foreign currency exchange rates leading to a reduction in profits or equity. There isno
significant foreign exchange risk to the Group. 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. Amigo Ireland first lent to customers in February 2019; whilst its functional currency
is Euro, operations are not material to the Group. At 31 March 2022, the Irish net loan book represents 0.7% of the Group’s consolidated
net loan book (2021: 0.8%). A 5% movement in the Sterling to Euro exchange rate would have led to a +/-£0.1m movement in customer
receivables (2021: +/- £0.2m). Hence, foreign exchange risk is deemed immaterial.
Liquidity risk
Liquidity risk is the risk that the Group will have insufficient liquid resources to fulfil its operational plans and/or meet its financial
obligations as they fall due. Liquidity risk is managed by the Group’s central finance department through daily monitoring of expected
cash flows and ensuring sufficient funds are available to meet obligations as they fall due. The unrestricted cash and cash equivalents
balance at 31 March 2022 was £133.6m. This figure will decrease substantially following Scheme redress payments but the Group is still
forecast to have a positive cash balance indicating low liquidity risk in the short to medium term.
The Group’s forecasts and projections, which cover a period of more than twelve months from the approval of these financial statements,
take into account expected originations, collections and payments and allow the Group to plan for future liquidity needs.
Capital management
The Board seeks to maintain a strong capital base in order to maintain investor, customer and creditor confidence and to sustain future
development of the business. Following the Court sanction of the Scheme, the Company is obliged in the next 12 months to enter into
anequity raise for the purposes of recapitalising the business for future lending.
 Mar   Mar 
£m £m
Maturity analysis of financial liabilities
Analysed as:
Due within one year
Other liabilities (.) (.)
Securitisation facility — (.)
Due in one to two years
Senior secured notes (.) —
Due in two to three years
Senior secured notes — (.)
(.) (.)
Maturity analysis of contractual cash flows of financial liabilities
Carrying
– year - years Total amount
As at  March  £m £m £m £m
Other liabilities . — . .
Senior secured notes . . . .
Securitisation facility — — — —
. . . .
Carrying
– year – years Total amount
As at  March  £m £m £m £m
Other liabilities . — . .
Senior secured notes . . . .
Securitisation facility . — . .
. . . .
16. Other receivables
 Mar   Mar 
£m £m
Current
Other receivables . .
Prepayments and accrued income . .
. .
Financial statements
138
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
17. Trade and other payables
 Mar   Mar 
£m £m
Current
Accrued senior secured note interest . .
Trade payables . .
Taxation and social security . .
Other creditors . .
Accruals and deferred income . .
. .
18. Bank and other borrowings
 Mar   Mar 
£m £m
Current and non-current liabilities
Amounts falling due in less than  years
Securitisation facility — .
Senior secured notes . —
Amounts falling due in – years
Senior secured notes — .
. .
Below is a reconciliation of the Group’s borrowing liabilities from 31 March 2022:
£m £m
As at  March / March  . .
Repayment of external funding (.) (.)
Interest expense relating to Group borrowings . .
Interest paid relating to Group borrowings (.) (.)
As at  March / March  . .
The Group’s facilities are:
•
Senior secured notes in the form of £49.7m high yield bonds with a coupon rate of 7.625% which expires in January 2024 (2021: £231.3m).
The senior secured notes are presented in the financial statements net of unamortised fees. As at 31 March 2022, the gross principal
amount outstanding was £50m. On 20 January 2017, £275m of notes were issued at an interest rate of 7.625%. The high yield
bond was tapped for £50m in May 2017 and again for £75m in September 2017 at a premium of 3.8%. £165.9m of notes have been
repurchased in the open market in prior financial years (2020: £85.9m; 2019: £80.0m). During the current year, on 4 January 2022,
Amigo served notice of the early redemption, at par, of £184.1m of the £234.1m outstanding 7.625% senior secured notes due in
2024 with a redemption date of 15 January 2022. The remaining £50.0m gross principal amount outstanding is due in January 2024.
Derecognition of the bonds is in line with the accounting policy set out in note 1.11.2.
•
During the year ended 31 March 2022 the Company fully repaid the securitisation facility, although at the year end the structure
remained in place. With effect from 24 September 2021, all rights, obligations and Securitisation liabilities of the Lead Arranger, Facility
Agent and Senior Noteholder, as defined in the securitisation facility documents were taken over and assumed by Amigo.
139
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Annual report and accounts 2022
Financial statements
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.
 
Complaints Restructuring Total Complaints Restructuring Total
£m £m £m £m £m £m
Balance as at  March / March  . . . . — .
Provisions (released)/made during year (.) — (.) . . .
Discount unwind (note ) — — — . — .
Utilised during the year (.) (.) (.) (.) — (.)
Closing provision . — . . . .
Non-current . — . — — —
Current . — . . . .
. — . . . .
Customer complaints redress
As at 31 March 2022, the Group has recognised a complaints provision totalling £179.8m in respect of customer complaints redress and
associated costs. Utilisation in the period totalled £8.2m. The liability has decreased by £164.8m compared to prior year. £126.5m of the
decrease is due to the cash redress liability being reduced to the £97.0m contribution as per the Scheme. The other main component of
the reduction is a decrease in the balance adjustments on the loan book of £47.3m. The level of balance adjustments has declined due
tocustomers paying down their loan and customers charging off the loan book. This has been partly offset by an increase in the assumed
volume of customers coming forward in the Scheme.
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.
Restructuring provision
As at 31 March 2021, the Group recognised a restructuring provision totalling £1.0m in respect of the expected cost of staff redundancies.
This provision was fully utilised by 30 June 2021 and the outstanding balance at 31 March 2022 is £nil.
Contingent liability
FCA investigation
On 29 May 2020 the FCA commenced an investigation into whether or not the Group’s creditworthiness assessment process, and the
governance and oversight of this, was compliant with regulatory requirements. The FCA investigation will cover lending for the period
from 1 November 2018 to date. There is significant uncertainty around the impact of this on the business, the assumptions underlying the
complaints provision and any future regulatory intervention.
The Group was informed on 15 March 2021 that the FCA has decided to extend the scope of its current investigation so that it can investigate
whether the Group appropriately handled complaints after 20 May 2020 and whether the Group deployed sufficient resource to address
complaints in accordance with the Voluntary Requirement (“VReq”) announced on 27 May 2020 and the subsequent variation announced
on 3 July 2020.
The FCA investigation will consider whether those complaints have been handled appropriately and whether customers have been
treated fairly in accordance with Principle 6 of the FCA’s Principles for Business. The Group will continue to co-operate fully with the FCA.
It is likely but not certain that the outcome of these investigations will be known within the next twelve months. There are a number of
avenues of sanction open to the FCA should it deem it appropriate and so the potential impact of the investigation on the business is
extremely difficult to predict and quantify, so has not been provided,in the financial statements, and is not modelled in the business plan
or stress scenario. In mitigation, the FCA has stated that the levying of any fine would be considered in the context of the Scheme and its
impact on creditors.
Following the Court sanction of the Scheme the Company is obliged in the next twelve months to enter into an equity raise for the
purposes of recapitalising the business for future lending. If this equity raise is successful a further £15.0m cash contribution must be
made to the Scheme. The successful raising of sufficient equity relies on a number of uncertain events, not least market appetite which
may be influenced by a number of external factors beyond the Company’s control.
Financial statements
140
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
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.
 
Right-of-use assets £m £m
Cost
At  April / April  . .
Additions — —
At  March / March  . .
Accumulated depreciation and impairment
As at  April / April  (.) (.)
Charged to consolidated statement of other comprehensive income (.) (.)
At  March / March  (.) (.)
Net book value at  March / March  . .
Lease liabilities
 
£m £m
Current . .
Non-current . .
Total . .
A maturity analysis of the lease liabilities is shown below:
 
£m £m
Due within one year . .
Due between one and five years . .
Due in more than five years . .
Total . .
Unearned finance cost (.) (.)
Total lease liabilities . .
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 (2021: £0.3m). Lease liabilities relate to Amigo’s offices inBournemouth.
141
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
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 475 million ordinary shares and
increasing net assets by £207.2m. No additional shares were issued subsequent to conversion of the shareholder loan notes.
Allotted and called up shares at par value
 Mar 
£’
Total
, deferred ordinary shares of £. each 
,, ordinary shares of .p each ,
,
 Mar 
£’
Total
, deferred ordinary shares of £. each 
,, ordinary shares of .p each ,
,
Ordinary A Ordinary B Ordinary C Ordinary D Ordinary Total
Number Number Number Number Number Number
At  March  , , , , — ,,
Subdivision (,) (,) (,) (,) ,, ,,
Shareholder loan note conversion — — — — ,, ,,
At  March  — — — — ,, ,,
At  March  — — — — ,, ,,
At  March  — — — — ,, ,,
At  March  — — — — ,, ,,
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
atgeneral meetings of the Company. Each ordinary share in the capital of the Company ranks equally in all respects and no shareholder
holds shares carrying special rights relating to the control of the Company. The nominal value of shares in issue is shown in share capital,
with any additional consideration for those shares shown in share premium.
Deferred shares
At the time of the IPO and subdivision the 41,000 ordinary B shares were split into 16,400,000 ordinary shares of 0.25p and 41,000 deferred
shares of £0.24. The deferred shares do not carry any rights to receive any profits of the Company or any rights to vote at a general meeting.
Prior to the subdivision the ordinary B shares had 1.24 votes per share; all other shares had one vote per share. The Group plans to cancel
these deferred shares in due course.
Dividends
Dividends are recognised through equity, on the earlier of their approval by the Company’s shareholders or their payment.
The Board continues to be focused on addressing Amigo’s legacy issues, restoring confidence in its corporate governance and building
a sustainable business for the long term. The Board has decided that it will not propose a final dividend payment for the year ended
31March 2022 (2021: £nil).
Financial statements
142
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
22. Share-based payment
The Group issues share options and awards to employees as part of its employee remuneration packages. The Group operates three
types of equity settled share scheme: Long Term Incentive Plan (“LTIP”), employee savings-related share option schemes referred to
asSave As You Earn (“SAYE”) and the Share Incentive Plan (“SIP”).
Share-based payment transactions in which the Group receives goods or services as consideration for its own equity instruments are
accounted for as equity settled share-based payments. At the grant date, the fair value of the share-based payment is recognised by the
Group as an expense, with a corresponding 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 straight-line basis over the
vesting period of the underlying option/award.
During the year a third SAYE scheme was launched and an additional twelve individuals received LTIP awards on 27 August 2021.
ThreeLTIPs were awarded in the prior year.
The credit to the consolidated statement of comprehensive income for the year to 31 March 2022 was £0.4m (2021: charge of £0.3m)
forthe Group and Company.
A summary of the awards under each scheme is set out below:
 March   March 
August 
February/
March  December  September 
February/
March  December  September 
LTIPs LTIPs LTIP LTIP LTIPs LTIP LTIP
Performance condition Y Y Y Y Y Y Y
Method of settlement
accounting Equity Equity Equity Equity Equity Equity Equity
Number of
instruments ,,
,,
,,
,
,, ,, ,,
Vesting period  years  years  years  years  years  years  years
Exercise price — — — — — — —
 March   March 
October  September  October  September 
SAYE SAYE SAYE SAYE
Performance condition N N N N
Method of settlement accounting Equity Equity Equity Equity
Number of instruments ,, , ,, ,
Vesting period . years . years . years . years
Exercise price . . . .
 March   March 
 SIP  SIP
Performance condition N N
Method of settlement accounting Equity Equity
Number of instruments ,,
,,
Vesting period  years rolling  years rolling
Exercise price — —
1 Number of instruments has reduced since the prior year as a result of share scheme forfeiture in respect of leavers.
2 Number of instruments has reduced since the prior year as a result of cancellation of CEO awards at his request.
3 Number of instruments has reduced since the interim results as a result of share scheme forfeiture in respect of leavers.
4 As at the reporting date, adjusted for known leavers.
5 This figure includes both matching and partnership shares.
143
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
22. Share-based payment continued
Long Term Incentive Plans (“LTIPs”)
The LTIPs awards were made on 27 August 2021, 1 March 2021, 26 February 2021, 1 December 2020, 11 September 2019 and 26 July2019.
The LTIP awards were granted to eligible employees in the form of nil-cost share options and are subject to performance conditions
and continuity of employment. These options are nil-cost to the employee only. The fair value of the share plans is recognised by the
Group as an expense over the expected vesting period with a corresponding entry to retained earnings, net of deferred tax. No value is
recognised against the 2019 LTIP as the conditions for vesting are no longer considered likely to be met. The participants are required to
hold any shares arising at vesting, for a period of two years following the end of the performance period. The FY21 and FY22 LTIP criteria
are set out below:
Performance Performance target over the Weighting Vesting schedule
condition Applicable terms applicable performance period (% of award) (% vesting, threshold – max)
EPS growth Statutory EPS adjusted, at the
discretion of the Remuneration
Committee, to remove the impact
ofprovisions for complaints that
arenot fulfilled over theperiod of
measurement and for anyother
non-standard distortions.
Growth of % over the EPS
hurdle over the performance period.
EPS hurdle is p. Target for full
vesting is p.
% %–% straight
line above hurdle.
Absolute total
shareholder
return (“ATSR”)
Measures the growth in the
potentialvalue of an Amigo share
overthe performance period – that is,
the amount the share price has
appreciated plus the dividends paid.
Growth of ATSR over the ATSR
hurdle over the performance period.
ATSR hurdles are p, p and p
for awards on  December , 
February and  March
respectively. Target for full vesting
for all is p.
% %–%
straight line
above ATSR
hurdle.
Non-financial
measures
Measures the effectiveness of
thesteps taken by the awardees
toensure Amigo adheres to the
standards expected by
allstakeholders.
Test against internal targets for
corporate culture, conduct risk
matters, diversity and inclusiveness
and other ESG measures.
Benchmarked against external
expectations over period.
% %–%.
Financial statements
144
Amigo Holdings PLC
Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
22. Share-based payment continued
Long Term Incentive Plans (“LTIPs”) continued
The FY20 LTIP criteria are set out below:
Relative TSR growth compared to the comparator group Proportion of awards subject to TSR condition that vest
Below median %
Median %
Upper quartile %
Absolute TSR growth Proportion of awards subject to absolute TSR condition that vest
Below % p.a. %
% p.a. %
% p.a. %
EPS growth Proportion of awards subject to EPS condition that vest
Below % p.a. %
% p.a. %
% p.a. %
 August  March  February  December  September
    
Valuation method Monte Carlo
model
Monte Carlo
model
Monte Carlo
model
Monte Carlo
model
Monte Carlo
model
Share price at grant date (£) . . . . .
Exercise price (£) nil nil nil nil nil
Shares awarded/under option ,, ,, ,, ,, ,
Expected volatility
(%) . . . . .
Vesting period (years)
Weighted average remaining contractual life (years) . . . . .
Expected dividend yield (%) nil nil nil nil nil
Risk-free rate
(%) . . . . .
Fair value per award/option (£) . . . . .
1 The expected volatility is normally based on historical share price volatility; however, as the Company has only been listed since June 2018,
thehistorical volatility has been calculated for the longest period for which trading activity is available.
2 The risk-free rate of return is based on the implied yield available on zero-coupon government issues at the grant date.
3 Prior year numbers have been restated. Fair value per award/option for 11 September 2019 has been restated from 1.187 to 0.4453.
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.
Share awards outstanding under the SIP schemes at 31 March 2022 had an exercise price of £nil (2021: £nil) and a total vesting period
of3.0 years (2021: 3.0 years). The following information is relevant in the determination of the fair value.
 August 
Share price at grant date (£) .
Shares awarded (number)
,,
Vesting period (years)  years rolling
Fair value per award/option (£) .
1 This figure includes both matching and partnership shares.
2 Based on weighted average share price at grant date, for all grants since SIP inception; shares are granted once a month following deduction from
participating employees’ gross salaries.
145
Amigo Holdings PLC
Annual report and accounts 2022
Financial statements
22. Share-based payment continued
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.
Share options outstanding under the SAYE schemes at 31 March 2022 had exercise prices of £0.0970 per share and £0.6368 per share
forthe 2020 and 2019 schemes respectively. The schemes have a remaining contractual life of 1.8 years and 0.8 years (2020: 2.8 years
and 1.8 years). The following information is relevant in the determination of the fair value.
 October   September 
Valuation method Black Scholes model Black Scholes model
Share price at grant date (£) . .
Exercise price (£) . .
Shares awarded/under option (number)
,, ,
Expected volatility¹ (%) . .
Vesting period (years) . .
Expected dividend yield (%) nil .
Risk-free rate² (%) . .
Fair value per award/option (£) . .
1 The expected volatility is normally based on historical share price volatility; however, as the Company has only been listed since June 2018,
thehistorical volatility has been calculated for the longest period for which trading activity is available.
2 The risk-free rate of return is based on the implied yield available on zero-coupon government issues at the grant date.
3 As at the reporting date, adjusted for known leavers.
Information for the period
The fair value of the equity settled share-based payments has been estimated as at the date of grant using both the Black Scholes
andMonte Carlo models.
A reconciliation of weighted average exercise prices per share (“WAEP”) and award/share option movements during the year is
shown below:
July –August  October  September  
LTIPs SAYE SAYE SIP
Number WAEP Number WAEP Number WAEP Number WAEP
Outstanding at
April ,, — — — ,, . , —
Awarded/granted ,, ,, . — — ,,
Forfeited (,,) — (,) — (,) — — —
Outstanding at
March ,, — ,, . , . ,, —
Awarded/granted ,, — — — — — , —
Forfeited (,,) (,,) — (,) — —
Cancelled (,,) — — — — — — —
Outstanding at
March ,, — ,, . , . ,, —
Exercisable at
March — — — — — — — —
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 (2021: £0.6m).
Financial statements
146
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Annual report and accounts 2022
Notes to the consolidated financial statements continued
for the year ended 31 March 2022
24. Related party transactions
The Group had no related party transactions during the twelve month period to 31 March 2022 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
0.58% of the voting shares of the Company as at 31 March 2022 (2021: 0.65%). The remuneration of key management is disclosed
in note 10.
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 2022. 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).
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note 1.1. There has been no significant impact to the Group as a result of their issue.
•
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
•
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)
IFRS and interpretations with effective dates after 31 March 2022 relevant to the Group will be implemented in the financial year when
thestandards become effective.
Other standards
The IASB has also issued the following standards, amendments to standards and interpretations that will be effective for the Group from
1 April 2022. 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
•
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
•
Accounting Policies, Changes in Accounting Estimates and Errors: Definition (Amendments to IAS 8)
•
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Making Materiality Judgements
27. Immediate and ultimate parent undertaking
The immediate and ultimate parent undertaking as at 31 March 2022 is Amigo Holdings PLC, a company incorporated in England
and Wales.
147
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Financial statements
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 is included
in the presentation pack on the Company’s website as part of ALGL’s senior secured note reporting requirements.
The following are subsidiary undertakings of the Company at 31 March 2022 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, aside from AMGO Funding (No. 1) Ltd which is an orphaned structured
entity (see note 25).
Class of Ownership Ownership
Name Country of incorporation shares held   Principal activity
Direct holding
Amigo Loans Group Ltd
United Kingdom Ordinary % % Holding company
ALL Scheme Ltd
United Kingdom Ordinary % % Special purpose vehicle
Indirect holdings
Amigo Loans Holdings Ltd
United Kingdom Ordinary % % Holding company
Amigo Loans Ltd
United Kingdom Ordinary % % Trading company
Amigo Management Services Ltd
United Kingdom Ordinary % % Trading company
Amigo Luxembourg S.A.
Luxembourg Ordinary % % Financing company
AMGO Funding (No.) Ltd
United Kingdom n/a SE SE Special purpose vehicle
Amigo Car Loans Limited
United Kingdom Ordinary % % Dormant company
Vanir Financial Limited
* United Kingdom Ordinary % % Dormant company
Vanir Business Financial Limited
** United Kingdom Ordinary % % Dormant company
Amigo Store Limited
United Kingdom Ordinary % % Dormant company
Amigo Group Limited
United Kingdom Ordinary % % Dormant company
Amigo Finance Limited
United Kingdom Ordinary % % Dormant company
Amigo Loans International Limited
Ireland Ordinary % % Holding company
Amigo Loans Ireland Limited
Ireland Ordinary % % Trading company
1 Registered at Nova Building, 118-128 Commercial Road, Bournemouth BH2 5LT, England.
2 Registered at 19, Rue de Bitbourg, L-1273 Luxembourg.
3 Registered at Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2.
4 Registered at Level 37, 25 Canada Square, London E14 5LQ.
* Previously Amigo Motor Finance Limited. Name changed on 24 August 2021.
** Previously Amigo Car Finance Limited. Name changed on 24 August 2021.
29. Post balance sheet events
Scheme of Arrangement
On 11th April Amigo announced the FCA had written to it, notifying that the FCA did not intend to oppose the Schemes, subject to any
further information coming to light in the time between that date and the Court hearing. Further that it believed the Schemes represented
a substantial improvement over previous proposals made in 2021. In the event, the FCA did not oppose the Schemes.
A Creditors meeting was held on 12th May. Creditors were asked to vote for one or both of two proposed Schemes of Arrangement, the
New Business and the Wind Down Schemes. To qualify for subsequent Court approval each Scheme required that more than 50% of all
creditors who voted did so in favour, and the total value of their claims to represent at least 75% of the value of the claims of all creditors
who voted. The following day, Amigo announced that of the creditors who chose to vote, 88.8% by number representing 90.0% by value,
voted in favour of the New Business Scheme. In total, the Company had received 145,532 votes in favour of the New Business Scheme
and 18,401 votes against the New Business Scheme, with values of £459,526,003 in favour and £50,894,131 against. Slightly fewer votes,
by number and value, were received for the Wind Down Scheme.
The High Court hearing was held on 23 May. During the Court hearing, trading in the Company’s shares on the London Stock Exchange
was suspended, due to the risk of asymmetric information in the market at this time. The judge stated during the hearing that the New
Business Scheme would be sanctioned; this was announced to the market by Amigo that day, and trading in the Company’s shares
restored on 24 May. The Scheme became formally effective on 26 May.
On 1 June Amigo Loans Limited made its first payment under the Scheme; a £60m transfer to ALL Scheme Ltd.
Financial statements
148
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Annual report and accounts 2022
 Mar   Mar 
Notes £m £m
Non-current assets
Investments a . .
. .
Total assets . .
Current liabilities
Other payables a (.) (.)
Total liabilities (.) (.)
Net assets (.) .
Equity
Share capital a . .
Share premium . .
Merger reserve . .
Retained earnings (including loss for the year of £.m (: £.m)) (.) (.)
(.) .
The parent company financial statements were approved and authorised for issue by the Board and were signed on its behalf by:
Danny Malone
Director
8 July 2022
Company no. 10024479
The accompanying notes form part of these financial statements.
Company statement of financial position
as at 31 March 2022
149
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Annual report and accounts 2022
Financial statements
Share Share Merger Retained Total
capital premium reserve

earnings equity
£m £m £m £m £m
At  March  . . . (.) .
Total comprehensive (loss) — — — (.) (.)
Share-based payments — — — . .
At  March  . . . (.) .
Total comprehensive (loss) — — — (.) (.)
Share-based payments — — — (.) (.)
At  March  . . . (.) (.)
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 2022
Financial statements
150
Amigo Holdings PLC
Annual report and accounts 2022
Year to Year to
 Mar   Mar 
£m £m
Loss for the period (.) (.)
Adjustments for:
Impairment of investment in subsidiaries . .
Income tax credit (.) (.)
Share-based payment (.) .
Operating cash flows before movements in working capital (.) (.)
Decrease in receivables — .
Increase/(decrease) in payables . (.)
Net cash used in operating activities (.) (.)
Financing activities
Proceeds from intercompany funding . .
Net cash from financing activities . .
Net movement in cash and cash equivalents — —
Cash and cash equivalents at beginning of period — —
Cash and cash equivalents at end of period — —
The accompanying notes form part of these financial statements.
Company statement of cash flows
for the year ended 31 March 2022
151
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Financial statements
Notes to the financial statements – Company
for the year ended 31 March 2022
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 individuals with guarantor loans up to £10,000 over one to five years.
The financial statements have been prepared under the historical cost convention and in accordance with international accounting
standards 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
See note 1.1 to the Group financial statements for further details.
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 1.11.
2a. Investments
 Mar   Mar 
£m £m
At  March / March  . .
Impairment of investment (.) (.)
Movement in share-based payment investment (.) .
At  March / March  . .
At 31 March 2022 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 2022 is a readily available indication of the price for an orderly transaction between market participants.
A share price of 5.4p and market capitalisation of £25.7m therefore represents the fair value of the investment in subsidiary at 31 March 2022. It has been
estimated that costs to sell would represent 5% of the fair value.
To derive the value in use of the asset, four scenarios regarding Amigo’s future possible scenarios have been modelled: base, downside, orderly wind down
of the loan book and insolvency. Each scenario was assigned probability weightings to arrive at an expected value. The orderly wind down and insolvency
scenarios generated no value. As a consequence, estimated value in use for the investment is lower than the fair value and hence the investment in subsidiary
has been measured using fair value less expected costs to sell as at 31 March 2022. As such an impairment charge of £47.7m was charged as a result
(2021:£105.1m).
The table below demonstrates the sensitivity of the valuation of the investment in subsidiary to a change in the share price at 31 March 2022.
Sensitivity
Assumption £m
+%
+.m
-%
-.m
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.
Financial statements
152
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Annual report and accounts 2022
3a. Other payables
 Mar   Mar 
£m £m
Amounts owed to Group undertakings . .
Accruals and deferred income . .
. .
4a. Share capital
For details of share capital, see note 21 to the consolidated financial statements. £nil dividends were paid in the year (2021: £nil).
5a. Share-based payment
For details of share-based payments in the year, see note 22 to the consolidated financial statements.
6a. Capital commitments
The Company had no capital commitments as at 31 March 2022.
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 10 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 2022
153
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Financial statements
This financial report provides alternative performance measures (“APMs”) which are not defined or specified under the requirements
ofInternational Financial Reporting Standards. The Board believes these APMs provide readers with important additional information
onthe Group. To support this, details of the APMs used, how they are calculated and why they are used are set out below. With the
exception of the below key performance indicators included in the notes to the financial statements, the remainder of the alternative
performance measures are unaudited.
Key performance indicators
Other financial data
Year to Year to Year to
Figures in £m, unless otherwise stated  Mar   Mar   Mar 
Average gross loan book . . .
Gross loan book . . .
Percentage of book < days past due .% .% .%
Net loan book . . .
Net cash/(debt)
. (.) (.)
Net (cash)/debt over gross loan book
(.)% .% .%
Net (cash)/debt over equity
(.)x (.)x .x
Revenue yield .% .% .%
Risk adjusted revenue . . .
Risk adjusted margin .% .% .%
Net interest margin .% .% .%
Adjusted net interest margin .% .% .%
Cost of funds percentage .% .% .%
Impairment:revenue ratio .% .% .%
Impairment charge as a percentage of loan book .% .% .%
Cost:income ratio (.)% .% .%
Operating cost:income ratio (ex. complaints) .% .% .%
Adjusted (loss)/profit after tax . (.) (.)
Return on assets .% (.)% (.)%
Adjusted return on average assets .% (.)% (.)%
Return on equity
.%
(,.)% (.)%
Adjusted return on average equity
.%
(,.)% (.)%
Amendments to alternative performance measures
1 Net cash/(debt), net (cash)/debt over gross loan book and net (cash)/debt over equity – the definition of these alternative performance measures
(“APMs”) have been amended fromnet borrowings, net borrowings/gross loan book and net borrowings/equity to net debt, net debt/gross loan book
and net debt/equity with allcomparatives restated accordingly. The term ‘net borrowings’ was relevant historically due to the Group having borrowings
in excess ofcash, butsince this is no longer the case the term ‘net cash/(debt)’ is now used.
1. Average gross loan book
 Mar   Mar   Mar 
£m £m £m
Opening gross loan book . . .
Closing gross loan book . . .
Average gross loan book
. . .
1 Gross loan book represents total outstanding loans and excludes deferred broker costs.
Appendix: alternative performance measures (unaudited)
Financial statements
154
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Annual report and accounts 2022
Key performance indicators continued
Other financial data continued
2. The percentage of balances up to date or less than 31 days overdue is presented as this is useful in reviewing the quality of the
loan book.
 Mar   Mar   Mar 
Ageing of gross loan book by days overdue £m £m £m
Current . . .
– days . . .
– days . . .
> days . . .
Gross loan book . . .
Percentage of book < days past due .% .% .%
3. “Net loan book” is a subset of customer loans and receivables and represents the interest yielding loan book when the IFRS 9 impairment
provision is accounted for, comprised of:
 Mar   Mar   Mar 
£m £m £m
Gross loan book
(see APM number ) . . .
Provision
(.) (.) (.)
Net loan book
. . .
1 Gross loan book represents total outstanding loans and excludes deferred broker costs.
2 Provision for impairment represents the Group’s estimate of the portion of loan accounts that are not in arrears or are up to five payments in arrears for
which the Group will not ultimately be able to collect payment. Provision for impairment excludes loans that are six or more payments in arrears, which
are charged off the statement of financial position and are therefore no longer included in the loan book.
3 Net loan book represents gross loan book less provision for impairment.
4. “Net cash/(debt)” is comprised of:
 Mar   Mar   Mar 
£m £m £m
Borrowings (.) (.) (.)
Cash and cash equivalents . . .
Net cash/(debt) . (.) (.)
This is deemed useful to show total borrowings if unrestricted cash available at year end was used to repay borrowings.
5. The Group defines “loan to value” (“LTV”) net (cash)/debt divided by gross loan book. This measure shows if the borrowings’ year-on-year
movement is in line with loan book growth.
 Mar   Mar   Mar 
£m £m £m
Net cash/(debt) (see APM number ) . (.) (.)
Gross loan book (see APM number ) . . .
Net (cash)/debt over gross loan book (.)% .% .%
6. Net (cash)/debt over equity
 Mar   Mar   Mar 
£m £m £m
Shareholder equity . (.) .
Net cash/(debt) (see APM number ) . (.) (.)
Net (cash)/debt over equity (.)x (.)x .x
This is one of the Group’s metrics to assess gearing.
Appendix: alternative performance measures (unaudited) continued
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Financial statements
Key performance indicators continued
Other financial data continued
7. The Group defines “revenue yield” as annualised revenue over the average of the opening and closing gross loan book for the period.
 Mar   Mar   Mar 
Revenue yield £m £m £m
Revenue . . .
Opening loan book . . .
Closing loan book . . .
Average loan book (see APM number ) . . .
Revenue yield .% .% .%
This is deemed useful in assessing the gross return on the Group’s loan book.
8. The Group defines “risk adjusted revenue” as revenue less impairment charge.
 Mar   Mar   Mar 
£m £m £m
Revenue . . .
Impairment of amounts receivable from customers (.) (.) (.)
Risk adjusted revenue . . .
Risk adjusted revenue is not a measurement of performance under IFRS, and is not an alternative to profit/(loss) before tax as a measure
of the Group’s operating performance, Group’s ability to meet its cash needs or as any other measure of performance under IFRS.
9. The Group defines “risk adjusted margin” as risk adjusted revenue divided by the average of gross loan book.
 Mar   Mar   Mar 
£m £m £m
Risk adjusted revenue (see APM number ) . . .
Average gross loan book (see APM number ) . . .
Risk adjusted margin .% .% .%
This measure is used internally to review an adjusted return on the Group’s loan book.
10. The Group defines “net interest margin” as annualised net interest income divided by average interest-bearing assets (being both
gross loan book and cash) at the beginning of the period and end of the period.
 Mar   Mar   Mar 
£m £m £m
Revenue . . .
Interest payable and receivable and funding facility fees (.) (.) (.)
Net interest income . . .
Opening interest-bearing assets (gross loan book plus unrestricted cash) . . .
Closing interest-bearing assets (gross loan book plus unrestricted cash) . . .
Average interest-bearing assets (customer loans and receivables plus unrestricted cash) . . .
Net interest margin .% .% .%
Adjusted net interest margin, being net interest income divided by average gross loan book, is also presented below:
 Mar   Mar   Mar 
£m £m £m
Net interest income . . .
Average gross loan book (see APM number ) . . .
Adjusted net interest margin .% .% .%
Financial statements
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Key performance indicators continued
Other financial data continued
11. The Group defines “cost of funds” as annualised interest payable divided by the average of gross loan book at the beginning and end
of the period.
 Mar   Mar   Mar 
£m £m £m
Cost of funds . . .
Less complaints discount unwind expense (notes  and ) — (.) —
Adjusted cost of funds . . .
Average gross loan book (see APM number ) . . .
Cost of funds percentage .% .% .%
This measure is used by the Group to monitor the cost of funds and impact of diversification of funding. The measure has been amended
to reflect on true interest expenses related to borrowings, accounting related adjustments have been removed to provide a better
understanding for users.
12. Impairment charge as a percentage of revenue, “impairment:revenue ratio”, represents the Group’s impairment charge for the period
divided by revenue for the period.
 Mar   Mar   Mar 
£m £m £m
Revenue . . .
Impairment of amounts receivable from customers . . .
Impairment charge as a percentage of revenue .% .% .%
This is a key measure for the Group in monitoring risk within the business.
13. “Impairment charge as a percentage of loan book” represents the Group’s impairment charge for the period divided by closing
gross loan book.
 Mar   Mar   Mar 
£m £m £m
Impairment of amounts receivable from customers . . .
Closing gross loan book (see APM number ) . . .
Impairment charge as a percentage of loan book .% .% .%
This allows review of the impairment charge relative to the size of the Group’s gross loan book.
14. The Group defines “cost:income ratio” as operating expenses excluding strategic review, formal sale process and related financing
costs divided by revenue. In the current year, operating expenses are negative due to the release of the complaints provision
of £159.9m.
 Mar   Mar   Mar 
£m £m £m
Revenue . . .
Total operating expenses (.) . .
Cost:income ratio (.)% .% .%
15. “Operating cost:income ratio”, defined as the cost:income ratio excluding the complaints provision, is:
 Mar   Mar   Mar 
£m £m £m
Revenue . . .
Administrative and other operating expenses . . .
Operating cost:income ratio .% .% .%
This measure allows review of cost management.
Appendix: alternative performance measures (unaudited) continued
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Financial statements
Key performance indicators continued
Other financial data continued
16. The following table sets forth a reconciliation of profit/loss after tax to “adjusted profit/(loss) after tax” for the year to 31 March 2022,
2021 and 2020.
 Mar   Mar   Mar 
£m £m £m
Reported profit/(loss) after tax . (.) (.)
Write back of complaints provision (.) — —
Senior secured note buyback . — (.)
Revolving credit facility (RCF) fees — . .
Securitisation fees . . —
Strategic review and formal sale process costs — . .
Tax provision release (.) (.) (.)
Tax asset write off — . —
Less tax impact (.) (.) (.)
Adjusted profit/(loss) after tax . (.) (.)
The above items were all excluded due to their exceptional nature. The Directors’ believe that adjusting for these items is useful in
making year-on-year comparisons.
•
Write back of the complaints provision is due to the cash redress liability being reduced to the £97.0m contribution as per the Scheme.
•
Senior secured notes redemption adjustments relate to accelerated bond cost and premium write off triggered by the early bond
redemption in January 2022.
•
RCF fees relate to fees written off following the modification and extension of the revolving credit facility in FY20, and in FY21 relates
tofees written off following cancellation of the facility. Modification, extension and cancellation of the facility were all deemed substantial
modifications of the financial instrument leading to the derecognition of previously capitalised fees. The facility was cancelled in May2020
and hence these amounts have been excluded. Senior secured note buybacks are not underlying business-as-usual transactions.
•
Following the renegotiation of the securitisation facility on 14 August 2020 a substantial modification of the facility occurred; as such
all previous capitalised fees relating to the facility have been written off. This has been adjusted for above as it was a one-off event in
the period.
•
In prior year, due to inherent uncertainty surrounding future profitability existing on the balance sheet date, current and deferred tax
assets were written off and charged to the consolidated statement of comprehensive income in the year. The tax provision release
refers to the release of a tax provision no longer required. These adjustments result in a tax charge for the year despite the large
lossmaking position as at 31 March 2021 andhence have been adjusted for in the calculation.
•
In prior year, strategic review and formal sale process costs relate to the strategic review and formal sale processes both announced
inJanuary2020. They are one-off costs and hence have been adjusted.
None are business-as-usual transactions. Hence, removing these items is deemed to give a view of underlying profit/(loss) adjusting
fornon-business-as-usual items within the financial year.
17. “Return on assets” (“ROA”) refers to annualised profit/(loss) over tax as a percentage of average assets.
 Mar   Mar   Mar 
Adjusted return on assets £m £m £m
Profit/(loss) after tax . (.) (.)
Customer loans and receivables at year end . . .
Other receivables and current assets at year end . . .
Cash and cash equivalents at year end . . .
Total . . .
Average assets . . .
Return on assets .% (.)% (.)%
Financial statements
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Key performance indicators continued
Other financial data continued
18. “Adjusted return on assets” refers to annualised adjusted profit/(loss) over tax as a percentage of average assets.
 Mar   Mar   Mar 
Adjusted return on assets £m £m £m
Adjusted profit/(loss) after tax (see APM number ) . (.) (.)
Customer loans and receivables at year end . . .
Other receivables and current assets at year end . . .
Cash and cash equivalents at year end . . .
Total . . .
Average assets . . .
Adjusted return on assets .% (.)% (.)%
19. “Return on equity” (“ROE)” is calculated as annualised loss/profit after tax divided by the average of equity at the beginning of the
period and the end of the period.
 Mar   Mar   Mar 
£m £m £m
Profit/(loss) after tax . (.) (.)
Shareholder equity . (.) .
Average equity (.) . .
Return on average equity .% (,.)% (.)%
20. “Adjusted return on equity” is calculated as annualised adjusted profit/(loss) after tax divided by the average of equity at the
beginning of the period and the end of the period.
 Mar   Mar   Mar 
£m £m £m
Adjusted profit/(loss) after tax (see APM number ) . (.) (.)
Shareholder equity . (.) .
Average equity (.) . .
Adjusted return on average equity .% (,.)% (.)%
Appendix: alternative performance measures (unaudited) continued
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Financial statements
Glossary
The following definitions apply throughout this Annual Report unless the context requires otherwise:
Adjusted profit after tax profit after tax plus RCF fees, 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 . 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.) Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number . AMGO Funding (No.) 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 .
Thisisthe Group’s Irish trading entity
Amigo Loans Ltd a private company limited by shares incorporated under the laws of England and Wales,
registered under company number . 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 . 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 . 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 B
Amigo Management
Services Ltd
a private company limited by shares incorporated under the laws of England and Wales,
registered under company number . 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 
Financial statements
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Glossary continued
Cost:income ratio operating expenses excluding strategic review costs, IPO costs and related financing
dividedbyrevenue
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  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  and  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  (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/EU-IFRS International Financial Reporting Standards, as adopted by the European Union
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; for loans made to borrowers where they are increasing
anexisting loan, only the incremental value is included
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 interest margin net interest income divided by average interest-bearing assets being both gross loan book
andcash at the beginning of the period and the end of the period
Net loan book loan book less provision for impairment
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Financial statements
Non-Executive Directors the Non-Executive Directors of the Company
Operating cost:
incomeratio
operating expenses excluding complaints, strategic review costs, IPO costs and related
financing divided by revenue
Revolving credit
facility(“RCF”)
a £.m bank loan (revolving credit facility), made available to the Company for working
capital purposes, maturing in May , cancelled by the Company on  May 
Risk adjusted revenue revenue less impairment charge
Risk adjusted margin risk adjusted revenue divided by the average of loan book at the beginning of the period
andthe end of the period
Scheme of Arrangement a Scheme of Arrangement is an arrangement under part  of the Companies Act , 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 currently has a gross principal amount of £,, outstanding
.% seniorsecured notes due . The initial bond had an aggregate value of
£,,, including £,, issued on  January , £,, issued as
additional notes on May and £,, issued as additional notes on  September
 pursuant to the indenture. £,, worth of bonds were opportunistically bought
back in prior financial years, and in the current financial year a further £,, worth of
bonds were redeemed at par on  January 
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 days
(if already in arrears) or  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
December 
UK Corporate
GovernanceCode
the  UK Corporate Governance Code issued by the Financial Reporting Council
VReq on  May  Amigo entered into a Voluntary Requirement with the FCA regarding
complaints to clear the backlog of approximately , 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  June  to  October ; Amigo reviewed and decided on all
outstanding complaints within the VReq by  October 
Financial statements
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Information for shareholders
Financial calendar
The Company’s Annual General Meeting is expected to be held
on28 September 2022 – 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
Nova Building
118–128 Commercial Road
Bournemouth
BH2 5LT
investors@amigo.me
companysecretary@amigo.me
Website: www.amigoplc.com
Company number: 10024479
Independent auditor
KPMG LLP
66 Queen Square
Bristol
BS1 4BE
Brokers
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
CBP013457
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 Annual report and accounts 2022
Amigo Holdings PLC
Nova Building
118–128 Commercial Road
Bournemouth BH2 5LT
United Kingdom
www.amigoplc.com