Liberum has upgraded its target price for pawnbroker Ramsdens Holdings PLC (AIM:RFX) from 240p to 260p following the company's full-year results, which revealed strong growth across all four revenue streams and group profits above pre-pandemic levels.
The City broker also expects strong growth in pawnbroking for 2023, due to disruption at the chain’s major competitor and pressure on disposable incomes.
For the precious metals business, performance should be supported by the gold price remaining high for at least the medium term. The retail jewellery business, meanwhile, is expected to maintain its momentum.
Pawnbroker Ramsdens has seen a big increase in operating profits thanks to a strong rebound in its travel money business and jewellery sales.
The Middlesbrough-based group, which operates 152 stores and two franchised locations across the UK, said its foreign exchange performance came despite the summer airport chaos that engulfed the travel industry and limited its sales opportunities.
Its revenues grew to £66.1mln from £40.7mln in the year ended 30 September, while operating profit was £8.8mln, up from just over £1mln.
Liberum, in its note, repeated its ‘buy’ advice on the stock, which was 3.6% higher at 216.95p.