Financial Results for the Half Year to 30 September 2019 Disclaimer - - PowerPoint PPT Presentation

SLIDE 1

Financial Results for the Half Year to 30 September 2019

SLIDE 2

Disclaimer

This presentation has been prepared by Amigo Holdings PLC (“the Company”) and includes the results of Amigo Loans Group Ltd (“ALGL”) solely for informational purposes. A reconciliation of the results between the Company and ALGL is shown in the Appendix. For the purposes of this disclaimer, the presentation shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on their behalf, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed in connection with the presentation. By attending the meeting at which the presentation is made, dialing into the teleconference during which the presentation is made or reading the presentation, you will be deemed to have agreed to all of the restrictions that apply with regard to the presentation and acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation. The Company has included non-IFRS financial measures in this presentation. These measurements may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS. The information contained in this presentation has not been subject to any independent audit or review. Certain of the information contained in this document is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. The Company has not verified the accuracy of such information, data or predictions contained in this report. In addition, past performance of the Company is not indicative of future performance. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this presentation or the opinions contained herein. The future performance of the Company will depend on numerous factors which are subject to uncertainty. Certain statements contained in this document are forward-looking statements, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof, notwithstanding that such statements are not specifically identified. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of the management of the Company. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While the Company does not know what impact any such differences may have on its business, if there are such differences, the Company’s future results of operations and financial condition, and the market price of the notes, could be materially adversely affected. You should not place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-looking statements speak only as of the date on which such statements are made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any of the information in this presentation to reflect events or circumstances after the date on which this presentation was made, or to reflect the occurrence of unanticipated events. The presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire the Company or the Company’s securities, or an inducement to enter into investment activity in any jurisdiction in which such offer, solicitation, inducement or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not for publication, release or distribution in any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction nor should it be taken or transmitted into such jurisdiction.

2

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

SLIDE 3

Hamish Paton

Chief Executive Officer

SLIDE 4

Welcome and Agenda

4

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

1. Introduction and Highlights 2. Financial Review 3. Regulatory Update 4. Business Update 5. Summary and Outlook Q&A’s

SLIDE 5

Focused on delivery

5

Continued cash generation and flexible balance sheet with further reduction in cost of funding Proposed interim dividend of 3.1p Full year guidance for key operating metrics is unchanged Impairment levels in line with guidance; action plans initiated to drive operational enhancements Strong growth in customer numbers and revenue with lending to new customers at record levels

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Increased provision for complaints reflects both existing and an allowance for forward looking complaints

SLIDE 6

Financial Highlights: YoY and QoQ

6 Net Loan Book2 growth Cost:income ex- complaints Statutory Profit after Tax Impairment:revenue Customer numbers1 Net loan book of £730.7m, an 8.8% increase year on year Impairment:revenue ratio up 7.8ppts to 31.1% (H1 FY19: 23.3%) Customer base of 222,800 (H1 FY19: 188,900), an increase of 17.9% year on year Cost:income ratio, ex-complaints, increased to 20.8% (H1 FY19: 17.8%) 28.0% including complaints provision Statutory profit after tax 1.9% lower than prior year at £37.0m Adjusted profit after tax of £35.8m, 24.2% below prior year 8.8% 7.8ppts 17.9%

1Number of customers represents the number of accounts with a balance greater than zero, now exclusive of charged off accounts. 2Net loan book represents total outstanding loans less provision for impairment excluding deferred broker costs.

Adjusted profit is a non IFRS measure. Adjusted profit after tax for H1 FY20 is profit after tax less impact of profit from senior secured notes buybacks in the period (£0.1m), plus impact on profit of writing off previously capitalised fees relating to our prior revolving credit facility (£1.8m) and less release of tax provision (£2.9m). Adjusted profit after tax for H1 FY19 is profit after tax plus shareholder loan note interest (£5.6m) and IPO costs and related financing (£3.9m).

3.0ppts (1.9)%

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

5.9% 0.3% 0.6ppts 0.4ppts 4.4% H1FY20 v H1FY19 FY20 Q2 v Q1

SLIDE 7

Nayan Kisnadwala

Chief Financial Officer

SLIDE 8

Key Financials

8

P&L (£m)

• Strong customer and net loan book growth of 17.9% and 8.8%

respectively, drives double digit revenue growth

• Underlying savings in finance costs (i.e. excluding RCF & senior

secured notes fee write offs) reflect the revised capital structure

• Impairment increase is driven primarily by operational capacity

constraints in the collections function. Investment in people and technology is underway to address these issues

• Operating expense increases versus the prior year reflect the

growth in investment in operations combined with increased complaints costs. Complaints costs total £10.4m in H1 FY20

• A £2.9m tax provision has been released in H1 FY20, partially offset

by £2.2m, £1.8m net of tax, of previously capitalised fees relating to the RCF written off as a result of the modification and extension of the facility

• Basic earnings per share decreased 9.3% to 7.8p. Adjusted basic

earnings per share decreased 30.6% to 7.5p due to lower Adjusted PAT, alongside the increase in the average number of shares post IPO

• Net borrowings / adjusted tangible equity has improved to 2.0x

Commentary

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Adjusted profit is a non IFRS measure. Adjusted profit after tax for H1 FY20 is profit after tax less impact of profit from senior secured notes buybacks in the period (£0.1m), plus impact on profit of writing off previously capitalised fees relating to our prior revolving credit facility (£1.8m) and less release of tax provision (£2.9m). Adjusted profit after tax for H1 FY19 is profit after tax plus shareholder loan note interest (£5.6m) and IPO costs and related financing (£3.9m).

Six months ended Six months ended £'millions 30-Sep-18 30-Sep-19 % Change Net Loan Book 671.7 730.7 8.8% Customer numbers ('000) 188.9 222.8 17.9% Revenue 130.1 145.4 11.8% Interest payable (18.2) (17.2) (5.5)% Shareholder loan note interest (6.0)

• Total interest payable

(24.2) (17.2) (28.9)% Impairments (30.3) (45.2) 49.2% Operating expenses (23.3) (40.7) 74.7% Exceptional Items (3.9)

• Profit before tax

48.4 42.3 (12.6)% Tax on profit (10.7) (5.3) (50.5)% Profit after tax 37.7 37.0 (1.9)% Senior Secured Notes buybacks

• (0.1)

RCF Fees

• 1.8

Shareholder Loan Note interest 5.6

• IPO and related financing costs

3.9

• Tax Provision
• (2.9)

Adjusted profit after tax 47.2 35.8 (24.2)% EPS (Pence) 8.6 7.8 (9.3%) Adjusted EPS (Pence) 10.8 7.5 (30.6%) Net Borrowings/ adj. tangible equity 2.3 2.0 (13.0%)

SLIDE 9

Customer Numbers 17.9% higher than H1 FY19

9

Customer Numbers (’000) Commentary

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

• Customer growth has continued to perform strongly. H1 FY20

customer numbers of 222,800 are 17.9% higher year on year

• There is a renewed focus on customer growth
• Customer growth primarily driven by increase in lead volume

SLIDE 10

Lending mix continues to shift to a higher proportion of New Business

10

Lending Mix (£m) Channel mix (%)

Amigo UK only, excludes Ireland originations

• New lending represents 69% of total originations in H1 FY20 versus

62% in H1 FY19, an increase of £10.1m year on year in absolute terms

• Volumes from both Direct and Third Party channels continue to

grow year on year

• The reduction in Q2 FY20 repeat lending is consistent with

enhanced credit policy and a more conservative approach to repeat lending

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

SLIDE 11

Double digit revenue growth

11

1 Revenue is presented net of commission paid to brokers which is amortised over the behavioural life of the loan on an EIR basis.

Revenue1: 11.8% year on year increase (£m)

11.8%

• Revenue grew by £15.3m (11.8%) to £145.4m versus H1 FY19
• Amigo’s 49.9% APR is equivalent to a 41.2% simple annual rate of

interest

Revenue Yield, NIM , RAM

• The underlying reduction in cost of funds in H1 FY20 is partially
• ffset by the write off of capitalised fees relating to the RCF
• modification. Consequently the reported NIM improvement is

0.2 percentage points

• The reduction in RAM is driven by the increased impairment % of

revenue in H1 FY20

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

H1 FY19 H1 FY20 Revenue Yield 36.9% 36.3% NIM 31.0% 31.2% RAM 28.3% 25.0%

SLIDE 12

Increased impairment primarily reflects operational capacity constraints in collections

12

Commentary Impairment charge as a % of revenue1

1 Impairment charge as a % of revenue presented excludes debts sales of £1.1m in Q2 FY19, £2.0m in Q4 FY19 and £2.1m in Q1 FY20

• Impairment stabilised in Q2 FY20 in line with

expectations, improving from 33.3% of revenue (ex. Debt sale) in Q1 to 31.6% in Q2

• Strategic measures are being taken to combat the

increased proportion of customers falling into arrears

• wing to capacity constraints
• Investment in the teams, technology and processes

increased during Q2 and will continue to ramp up throughout the rest of the financial year

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

SLIDE 13

Operational constraints resulted in an ageing of the loan book with higher provision levels

13

Loan book ageing Provision transition

• Provision coverage has increased to 10.6% of gross loan book
• Provision coverage is 1.6x for greater than 31 days past due

receivables

• Increased Stage 2 and 3 provisions are consistent with increasing

levels of arrears experienced as a result of operational capacity constraints in collections

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix £'million H1 FY19 H1 FY20 Current 658.0 699.9 1-30 days 52.1 63.9 31 - 60 days 10.2 16.2 > 61 days 22.8 37.3 Gross Loan Book 743.1 817.3 Provision (71.4) (86.6) Net Loan book 671.7 730.7 Provision coverage 9.6% 10.6% > 31 days past due coverage 2.2 1.6

SLIDE 14

Continued strong operating leverage

14

Cost:income ratio trends (excluding impairment) Commentary

• Including £10.4m of complaint costs the
• perating cost:income ratio is 28.0% for H1

FY20

• Operating cost:income ratio (ex. complaints)

is 20.8% for H1 FY20, in line with expectations as investment in operations to improve customer experience and

• perational resilience continues
• Cost:income ratio remains best in class and a

key competitive advantage

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

The cost:income ratio is defined as operating expenses divided by revenue

SLIDE 15

Complaints Provision increased to £7.5m

15

Complaints Provision Commentary

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

• The complaints provision has increased to £7.5m. The

provision includes a combination of estimated redress for known open cases and an allowance for future claims

• The FOS updated their approach to complaints assessment

during H1 FY20 and highlighted a backlog of complaints that were awaiting their judgement and offered us the

• pportunity to review these again in-house. We have been

working with FOS to clear through this backlog, which is now being unwound

• Although complaint levels have been low historically, we

have recently seen an increase in volumes. We have reviewed our complaints process in detail and examined the root cause of complaints received

• We have further tightened processes and are upskilling our

Complaints team. With the FOS backlog unwinding, we expect to revert to more normalised, lower uphold rates and a reduced average redress

SLIDE 16

Growing cash generation

16

Cash flow statement1 Commentary

• High cash flow reduces gearing even with loan book

growth

• Decrease in the adjustment made for tax reflects

additional two payments made in FY20 and the release of a £2.9m tax provision

• H1 FY20 includes an £86.8m cash outflow for open

market bond repurchases (including costs)

• Increase in proceeds from external funding relate

primarily to securitisation drawdown to facilitate

• pen market bond buybacks and dividend payment.
• Collections exceeded originations by £80.9m in the

period, compared to £40m in H1 FY19

1Includes Ireland

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Six months ended Six months ended £'millions 30-Sep-18 30-Sep-19 % Change Profit after tax 37.7 37.0 (2%) Tax 4.1 (15.0) NM Finance costs 7.0 4.4 (37%) Movements in working capital 3.4 7.9 132% Operating cash flow (excluding loan book movements) 52.2 34.3 (34%) Loans issued (220.7) (216.9) (2%) Collections 260.7 297.8 14% Interest accrued (143.2) (154.7) 8% Impairment 30.3 45.2 49% Other Loan Book Movements

• 0.5

NM Net movement in loan book (72.9) (28.1) (61%) Net cash used in operating activities (20.7) 6.2 (130%) Purchases of Senior Secured Notes

• (86.8)

NM Purchase of PPE

• (0.4)

NM Dividend paid

• (35.4)

NM Proceeds from external funding 40.0 168.6 322% Repayment of external funding (12.0) (39.5) 229% Net cash used in investing and financing activities 28.0 6.5 (77%) Net increase in cash 7.3 12.7 74% Cash at beginning of period 12.2 15.2 25% Cash at end of period 19.5 27.9 43%

SLIDE 17

Securitisation provides diversification, reduced cost of funding and balance sheet flexibility

RCF amount excluding capitalised fees; Securitisation is a 3 year revolving term with 4 year amortisation period

Current Facilities and Borrowings (£m) Commentary

17

• Opportunistic open market repurchases (and subsequent

cancellation) of bonds since year end total £85.9m

• Total undrawn committed facilities of £116m at Sep-19
• Senior secured notes (Jan-24) carry coupon of 7.625% and

become callable in Jan-20, at premium of 3.8%

• Securitisation capacity increased to £300m in Q1 FY20. This

facility is now committed until Jun-22 and unless renewed amortises thereafter over 4 years to Jun-26

• In Q1 FY20 the RCF capacity reduced from £159.5m to £109.5m

and in doing so the number of banks in the syndicate was reduced from four to three. In addition, the term was extended by five years to May 2024 and the margin was reduced

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

SLIDE 18

A strong start in Ireland

18

• First loans offered in February 2019
• Customer numbers and loan book growing

strongly

• Loan book of €4.8m as at end of H1 FY20

Commentary

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Gross Loan Book & Customer Numbers

SLIDE 19

Nicholas Beal

Chief Regulatory and Public Affairs Officer

SLIDE 20

Working closely with our regulators

20

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

FCA FOS

FCA

• Full affordability assessment for

all borrowers and guarantors

• Enhanced verification checks for

more borrowers

• Draft new guidance published

earlier this year

• Amigo helping FCA with review
• Guidance expected Spring 2020
• 10 step process to ensure

guarantor understanding of their responsibilities

• Percent of payments made by

guarantor remains stable at <10%

• Enhanced eligibility criteria

announced Q1, implemented in July 2019

• Repeat lending reduced from 38%

in Q1 to 22% in Q2 Affordability Guarantor lending review Repeat lending Vulnerable customers

SLIDE 21

Hamish Paton

Chief Executive

SLIDE 22

• Increase applicant flow
• Improve pipeline flow-through
• Address collections capacity issues
• Improve offer competitiveness and relevance

Strategic plan

22

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Be a role model for the alternative credit sector

• Customer interests first
• Responsible and affordable lending
• Implement actions from FCA review

Keep Amigo special Develop additional growth opportunities Drive sustainable growth of core

• Critical focus on attracting and retaining talent

➢

Become an employer of choice

➢

Remaining a unique place to work

• New rewards and benefits structure in place
• Enhanced e-learning platform
• Developing and testing product extensions
• Focused international growth

SLIDE 23

Optimising the core: strong growth in customer numbers driven by increase in applicant flow

23

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

• Significantly increased applicant volume

➢ New advertising campaign ➢ Increased digital effectiveness ➢ New digital advertising platform ➢ New bidding solutions ➢ More impactful ad messages ➢ Continued development of existing and new broker

relationships

• Improving pipeline flow-through

➢ Increased support and assistance for borrowers during

application journey

➢ Customised journey for key broker channels ➢ Support borrower’s search for a guarantor ➢ Increased loan handling capacity (agent numbers and

effectiveness)

Key Actions

+44% +20% +16%

Applications started Applications signed Paid out

Pipeline growth (new customers), H1FY20 vs H1FY19

SLIDE 24

Optimising the core: addressing collections capacity issues

24

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

• Significantly increasing the size of the collections team

➢ Recruitment drive ➢ Outsourced support

• Outsourcing later stage collections activity
• Increasing agent effectiveness:

➢ Investment in call handling technology ➢ Introduction of more structured and effective collections

processes and working methods

➢ Prioritising activity on the most effective areas through

use of predictive analytics

• Increasing ability to serve through website
• Improving communications

➢ Proactive early contact with riskier accounts ➢ Use of behavioral science to increase impact

Key actions Indexed loans and agent numbers

Rebased to 100 Jan 2015

50 100 150 200 250 300 01/16 01/17 01/18 01/19 Loans (+167%) Agents (+93%)

SLIDE 25

Confirming guidance for FY20

25 Net loan book Broadly flat Net Borrowings / Adj tangible equity Dividend Operate in the range of 1.5 to 3.0x FY19 full year DPS and/or 50% of statutory profit whichever is higher* Impairment as a % of revenue Low to mid 30s (%)

KPIs Guidance

Operating cost:incomeratio Low 20s (%)

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

*Subject to bond covenants

SLIDE 26

Summary & Outlook

26

Half year results demonstrate continued demand for the guarantor loan product With customers our priority, we are focused on building a sustainable business for the long term Full year guidance for key operating metrics remains unchanged Robust business model, leading market position, growing cash generation and lower funding costs

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Action plans initiated to drive operational improvements, encouraging start made over second quarter

SLIDE 27

Q&A

SLIDE 28

Key Contacts

28

Nayan Kisnadwala – Chief Financial Officer Email: nayan.kisnadwala@amigo.me Telephone: +44 (0)7384 876094 Kate Patrick – Head of Investor Relations Email: kate.patrick@amigo.me Telephone: +44 (0) 7785 512539 Harriet Shaw – Executive PA Email: harriet.shaw@amigo.me Telephone: +44 (0)7734 778862 Victoria Ainsworth – Hawthorn Advisors Email: v.ainsworth@hawthornadvisors.com Telephone: +44 (0)20 3745 3815

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

SLIDE 29

Appendix

SLIDE 30

Covenant Position of ALGL

30

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Source: Company

1 Excludes unamortised fees for banking covenant purposes.

² Net SSRCF is SSRCF less cash available.

3 Gross loan book represents total outstanding loans excluding deferred broker costs.

Bonds 234.1 SSRCF 0.0 Securitisation 296.0 Less: Cash available (27.9) Debt for banking purposes 502.2 Less: Unamortised bond/SSRCF/Seciritisation fees (5.9) Net Debt 496.4 Gross loan book3 817.3 LTM EBITDA 144.2 Actual Covenant Net debt1 / Gross loan book 61.5% 80.0% Net SSRCF2 / Gross loan book (3.4%) 17.5% Fixed charge cover ratio 4.5 x 2.5 x LTM Impairment / Gross loan Book 9.7% 17.5% As of Sep 2019 (£m)

SLIDE 31

Reconciliation of the Group results to ALGL

31

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

ALGL - Consolidated Revenue 145.4

• - 145.4

Interest payable and funding facility fees (17.2)

• -

(17.2) Shareholder loan note interest

• - - -

Impairment charge (45.2)

• (45.2)

Operating expenses (40.7) (1.2)

• (39.5)

IPO costs and related financing

• - - -

Profit before tax 42.3 (1.2)

• 43.5

Tax on profit (5.3) 0.3

• (5.6)

Profit attributable to equity shareholders of the Company 37.0 (0.9)

• 37.9

H1 FY20

(£m) Group - Consolidated AH PLC - Standalone company Consolidation Adjustment

SLIDE 32

Reconciliation of the Group results to ALGL

Statement of financial position (£m)

32

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Group - Consolidated AH PLC - Standalone company Consolidation Adjustment ALGL - Consolidated

Non-current assets Amounts receivable from customers 316.7

• 316.7

Property, plant and equipment 1.0

• 1.0

Right of use asset 0.4

• 0.4

Intangibles 0.1 302.1 (302.1) 0.1 Deferred tax 6.3

• 6.3

324.5 302.1 (302.1) 324.5 Current assets Amounts receivable from customers 436.5

• 436.5

Other receivables 3.5 (44.3)

• 47.8

Hedging asset 0.1

• 0.1

Cash at bank and in hand 27.9

• 27.9

468.0 (44.3)

• 512.3

Total assets 792.5 257.8 (302.1) 836.8 Current liabilities Trade and other payables (13.9) (0.1)

• (13.8)

Lease liability (0.2)

• (0.2)

Provision (7.5)

• (7.5)

Corporation Tax (0.5) 0.7 (1.2) (22.1) 0.6

• (22.7)

Non-current liabilities Borrowings (524.2)

• (524.2)

Lease liability (0.5)

• (0.5)

Shareholder loan notes

• Provision
• Deferred tax
• (524.7)
• (524.7)

Total liabilities (546.8) 0.6

• (547.4)

Net assets / (liabilities) 245.7 258.4 (302.1) 289.4 Capital and reserves Share capital 1.2 1.2

• Share premium

207.9 207.9 (302.0) 302.0 Merger reserve (295.2) 4.8

• (300.0)

Retained earnings 331.8 44.5 (0.1) 287.4 Shareholder equity 245.7 258.4 (302.1) 289.4 H1 FY20

SLIDE 33

Reconciliation of the Group results to ALGL

Consolidated statement of cash flows (£m)

33

Introduction & Highlights Regulatory Update Financial Review Business Update Summary & Outlook Appendix

Group - consolidated AH PLC - standalone company Consolidation adjustment ALGL - consolidated Profit for the period 37.0 (0.9)

• 37.9

Adjustments for:

• Impairment provision

45.2

• 45.2

Complaints provision 10.4

• 10.4

Income tax expense 5.3 (0.2)

• 5.5

Shareholder loan note interest accrued

• Interest expense

17.2

• 17.2

Interest charged on loan book (154.7)

• (154.7)

(Profit)/Loss on bonds 0.8

• 0.8

Share-based payment

• 0.1

Depreciation of property, plant and equipment

• 0.2

Operating cash flows before movements in working capital (38.5) (1.1)

• (37.4)

(Increase)/decrease in receivables (2.6)

• (2.6)

Increase/(decrease) in payables 1.0

• 1.0

Complaints redress paid (1.4)

• (1.4)

Tax paid (20.3)

• (20.3)

Interest paid (13.6)

• (13.6)

Net proceeds from intercompany funding 0.2 36.4

• (36.2)

Net cash used in operating activities before loans issued and collections on loans (75.2) 35.3

• (110.5)

Loans issued (216.9)

• (216.9)

Collections 297.8

• 297.8

Other loan book movements 0.5

• 0.5

Net cash used in operating activities 6.2 35.3

• (29.1)

Purchases of Property, Plant and Equipment (0.4)

• (0.4)

Net cash used in investing activities (0.4)

• (0.4)

Financing activities Purchases of senior secured notes (86.8)

• (86.8)

Dividend paid (35.4) (35.4)

• Proceeds from external funding

168.6

• 168.6

Repayment of external funding (39.5)

• (39.5)

Net cash from financing activities 6.9 (35.4)

• 42.3

Net increase / (decrease) in cash and cash equivalents 12.7 (0.1)

• 12.8

Cash and cash equivalents at beginning of period 15.2 0.1

• 15.1

Cash and cash equivalents at end of period 27.9 (0.0)

• 27.9

H1 FY20