Shares in financial and retail group Ramsdens (RFX:AIM) jumped 9% to 155p after it delivered strong results for the 12 months to 31 March and said could reopen stores with minimal additional investment.

Revenue for the period climbed 27% to £59.5m, while pre-tax profit rose 30% to £8.5m helped by the rise in the gold price and the timely sale of old jewellery stock which netted £0.8m of profits.

Foreign exchange revenue grew 13% to £13.1m, despite just a 5% rise in the total amount of currency exchanged, as the firm raised its sales margin.

Jewellery retail revenue rose 28% to £12.6m as the market for new and second-hand items continued to grow and the firm’s market share increased thanks to its clear value proposition.

Online jewellery sales jumped 94%, but still only represented 6% of items sold by value which demonstrates the long-term growth potential of Ramsdens’ web offering.

The pawnbroking business generated interest income of £9m, up 19% on the previous year net of impairments, representing a yield on the average pledge book over the year of 116%.

Revenue from buying unwanted jewellery and precious metals to sell on for melting down were up 53% including the one-off sale of scrap stock at a profit thanks to the 20% surge in gold prices over the year.


Next month the firm intends to reopen its stores on a phased basis as government legislation allows. Given that most of its stores already feature glass screens between staff and customers the cost to upgrade the store estate is likely to be ‘minimal.’

As restrictions on foreign travel are lifted, it’s likely that foreign exchange operators will look to improve their margins to make up for lost time which will allow Ramsdens to do the same.

Meanwhile in the jewellery business big rival Signet - which operates thousands of stores under the Ernest Jones, H Samuel and Kay Jewelers banners - is downsizing its store estate which means less competition in the long run.


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Issue Date: 27 May 2020