- Continued strong trading in first five months
- Record gold price boosts gross profit
- Board highly confident in meeting full year expectations
Pawnbroker and financial services provider Ramsdens (RFX:AIM) said trading in the five months to 29 February continued to be strong, positive news that boosted the shares by 5% to 190p.
In a statement ahead of the company’s annual general meeting, the board said it was ‘highly confident’ in the group’s growth prospects and expectations for the year ending 30 September 2024.
Consensus analyst estimates see 2024 revenue increasing 5.6% to £88.5 million, which is around a tenth higher than estimates a year ago, according to Refinitiv data.
Earnings per share is forecast to rise 4% to 25p, which puts Ramsdens on a forward PE (price to earnings) ratio of 7.6 times.
The shares are down 12% year-to-date compared with a 3% drop in the FTSE AIM index.
RECORD GOLD PRICE BOOSTS PROFIT
The high price of gold, up 14% over the last year and trading at all-time highs around $2,200 per troy ounce, has benefited Ramsdens’ precious metals business with gross profit up approximately 20% on the prior year.
Foreign currency gross profit is up around 3% year-on-year with ‘encouraging’ momentum building ahead of the busy summer trading period.
The firm’s recently launched Ramsdens Mastercard Multi Currency card is expected to support efforts to capture a greater share of customers’ holiday spending.
The company saw continued growth in the pawnbroking loan book which increased by £0.4 million or around 4% in the period. Jewellery retail revenue was flat on the prior period but benefited from growing sales of high margin second hand diamond jewellery, which pushed gross profit up 5%.
Two stores opening in February, in Romford and Burnley, took the number of new store openings for the year to five and expanded the total estate to 167.
Ramsdens negotiated a new five-year £15 million revolving credit facility, replacing a £10 million facility on better financial terms.
