Ramsdens Holdings PLC (AIM:RFX), the pawnbroker, will be hoping that investors can accept it suffering a weaker festive trading period in return for achieving a milestone pre-tax profit of more than £10 million.
Strong demand for pawnbroking loans, high gold prices, positive jewellery sales growth and its foreign exchange business returning to pre-pandemic levels allowed the London-listed company to report pre-tax profits of £10.1 million for the year to 30 September 2023.
Revenues jumped 27% to £83.8 million during the period, leading management to propose a final dividend of 7.1p per share, bringing the total to 10.4p per share, which represents an increase of 16% year on year.
Festive trading
However, business in the first quarter from October to December hasn’t been as strong with categories such as jewellery, its largest revenue-generating channel, seeing sales growth come in flat year on year.
Gross profit in Ramsdens’ jewellery arm lifted 5% in the quarter but management noted a drop in demand for its online sales of premium watches on retail finance.
However, in keeping with wider industry trends of buyers downtrading, customers have instead shown a stronger demand for second-hand products within stores.
The continuation of high gold prices continued to help elevate its precious metals gross profits by over 10%, while its pawnbroking loan book ticked up incrementally from £10.3 million to £10.6 million.
Foreign currency profits remained flat compared to 2022, with management reporting weakened demands as holiday goers are either spending their cash on holiday or saving leftover FX for future trips.
Peter Kenyon, chief executive at the London-listed firm, said: “I am hugely grateful for the Ramsdens team's dedication and commitment and wish to publicly thank them for their efforts and success.
“While we are very conscious of the tough economic conditions and the cost pressures of energy pricing, increased interest rates, and paying the RLW, we have confidence that our long-term strategy, which remains unchanged, will deliver long-term benefits for all stakeholders.”