Ramsdens: Pawnbroker ups guidance on high gold price
Pawnbroker Ramsdens reported good trading momentum in its third quarter, with profit before tax expected to come in ahead of expectations, mainly thanks to higher gold prices.
The company said it expected profit to rise eight per cent this year, from £10.1m in 2023 to £11m.
Revenue was helped by the high gold price, which “[drove] a better-than-expected performance in the Precious Metals segment,” the company said.
Analysts had previously expected the company to report profit before tax of £10.5m.
Peter Kenyon, CEO of Ramsdens, said: “Ramsdens’ positive trading momentum has continued into the second half of the year, once again reflecting the strengths of our diversified model, trusted brand and the hard work and commitment of our team.
“We continue to benefit from the ongoing investments made in enhancing our multi-channel customer proposition, including our online presence and new multi-currency card, as well as the sustained high gold price, which is encouraging greater awareness and demand for our precious metals buying services.”
Demand from central banks and private investors drove the price of gold to an all-time high in the second quarter of 2024. Demand in the over-the-counter gold market rose around 50 per cent year on year.
A report from the World Gold Council said the metal’s reputation as a safe-haven asset has pushed its price up 18 per cent in the past year, as investors continue to seek refuge from sticky inflation and geopolitical turmoil.
Demand for pawnbrokers tends to spike, too, well in times of economic downturn as people grow desperate to shore up extra cash.
Ramsdens reported a ‘milestone’ year in 2023 after profits rose a staggering 22 per cent and revenue rose 27 per cent on demand for second-hand jewellery and watches.
While the effect has been smaller in 2024, the lingering tail of the cost-of-living crisis is likely to have sustained demand for Ramsden’s services throughout the year to date.