Wonga’s profits halved last year, as the controversial payday lender paid the price of mounting operating costs.
Analysts had expected to see a sharp fall in profits of around 41 per cent, but Wonga’s 2013 results told and even sorrier story.
Net profit plummeted 51 per cent in 2013 to £30.6m, compared with £62.6m a year earlier. Pre-tax profit was down 53 per cent from £84.5m to £39.7m.
As profit fell, costs increased at a similar rate. Over the year, operating costs rose 56 per cent from £85.8m to £133.7m.
The company said it expects to be “smaller and less profitable” in the near term.
Wonga interim chief executive Tim Weller, said:
Investment in people, processes and our international businesses were key factors in the decline in Wonga’s 2013 profits, and we will continue to invest to build a sustainable business.
Wonga has been struck with various problems over the last year. In June the company, which sponsors Newcastle United, was forced to pay out a total of £2.6m to 45,000 customers by the Financial Conduct Authority (FCA).
The FCA found that Wonga had sent letters to customers in arrears from non-existent law firms, threatening legal action. The payday lender was forced to issue a public apology.