Payday lender Wonga profits plummet by more than 50 per cent

 
Joe Hall
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Wonga profits plummeted last year (Source: Getty)
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.
That same month founder and chairman Errol Damelin stepped down from his role to be replaced by Andy Haste, who has swiftly set about cleaning up the brand’s public image.

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