- Positive momentum in H1
- Retail jewellery outperforms
- Profit to be ‘at least £13 million’
Pawnbroker-to-financial services provider Ramsdens (RFX:AIM) has upgraded its full-year profit guidance yet again after benefiting from the high price of gold, north of $3,000 per ounce, and a stronger-than-anticipated performance from its retail jewellery business.
Shares in the Middlesbrough-headquartered company rose 10% to 225p on the news pre-tax profit for the year to September 2025 is now expected to be ‘at least £13 million’, ahead of previous expectations, after Ramsdens enjoyed ‘continued positive momentum’ in the half to March.
STRONG CORE
Ramsdens, which has delivered consistent upgrades for the past four years, said its precious metals buying business continued to perform ‘very strongly’ in the first half, with gross profit shooting up 50% year-on-year driven by the continued high gold price coupled with a 5% increase in the weight of gold purchased.
The company also called out a sparkling performance from the jewellery retail business, where profits perked up by a better-than-expected 15%, despite the scrapping of some aged stock, as watches continue to recover in the mix.
With the UK population continuing to grapple with cost-of-living pressures, Ramsdens’ pawnbroking profits grew by 10% with a boost from the recent investment in the firm’s new dedicated pawnbroking website which lured in new customers.
The one fly in the ointment was the foreign currency business, where first-half profit was flat, although this was partly attributable to this year’s later Easter, a time where many customers go on holiday, which leaves scope for an uptick in the second-half performance.
WHAT DID THE CEO SAY?
Chief executive Peter Kenyon said the firm was ‘pleased to have delivered a strong performance during the first half of the year, underpinned by our diversified model as well as benefiting from investments made across our four operating segments, including the launch of new dedicated customer websites and services.’
Kenyon added: ‘This positive trading momentum, together with the continued benefit to the group presented by the sustained high gold price, has led the board to increase profit expectations for full-year 2025. We look forward to building on this positive performance throughout the second half of the financial year.’
MORE THAN A GOLD PLAY
‘Given the robust cost control, there is strong drop-through to bottom-line profit from the increase in our gross profit estimates,’ said Panmure Liberum.
‘Management now guides to full-year 2025 pre-tax of at least £13 million. We therefore increase our full-year 2025 estimate by 10% from £12 million to £13.1 million. We also increase our earnings per share estimates by 10% in both full-year 2025 and full-year 2026. This adds to Ramsdens’ excellent track record of upgrades over the last three years.’
The broker also stressed that Ramsdens is ‘not just a play on the gold price, given its diversified operating model. Looking back to full-year 2023 and full-year 2024, Ramsdens saw numerous upgrades across both pawnbroking and retail jewellery too. Looking forward to the second half of this year, the gold price is currently running ahead of where we expect it to land at the year-end, even after upgrading, so there could be further upside to come.’
