The boss of Non-Standard Finance denied the doorstep lender was “on the brink” after it revealed the Covid crisis had sparked material uncertainty about whether it can continue as a going concern.
NSF could be forced to ask shareholders for fresh investment as the pandemic recession imperils its access to funding.
The company, which lends money at high interest rates to more than 100,000 consumers with poor credit ratings, temporarily halted lending during lockdown and only managed to start handing out money again last month.
John van Kuffeler, chief executive of NSF, said his company had suffered a difficult and disappointing 18 months but insisted an economic downturn was an opportunity to win more business as consumers struggle to access cash.
He said: “We are not on the brink. We are a highly experienced team who know exactly what to do and which levers to pull.”
Shares tumbled 28.6pc to 8.2p in afternoon trading, valuing the firm at just £26m.
It comes a year after NSF’s audacious attempt to take over Provident Financial, its much larger rival, which Mr van Kuffeler once ran.
The hostile bid, which failed after a bitter war of words between the two sides, cost NSF nearly £13m in fees for bankers and advisers, it reported on Thursday.
NSF increased revenues by £23m to £181m last year but the gains were wiped out by a £66m writedown of goodwill, which widened pre-tax losses to £76m compared to