TIDMRFX

RNS Number : 0703O

Ramsdens Holdings PLC

08 June 2022

8 June 2022

Ramsdens Holdings PLC

("Ramsdens", the "Group", the "Company")

Interim Results for the six months ended 31 March 2022

Ramsdens, the diversified financial services provider and retailer, today announces its Interim Results for the six months ended 31 March 2022 (the "Period").

Highlights

-- A strong performance as trading conditions started to normalise, with Profit Before Tax of GBP2.2m (HY21: GBP0.1m loss)

   --     Gross revenue increased 51% to GBP29.3m (HY21: GBP19.3m) 

-- Jewellery retail revenue up 62% to GBP13.1m (HY21: GBP8.1m). Online jewellery retail sales increased by 48% year on year to GBP2.0m (HY21: GBP1.3m) and now represent 15% of total jewellery sold

-- Pawnbroking loan book at the period end was GBP7.5m (HY21: GBP5.7m) as customers returned to normal spending habits and required short term cash flow assistance

-- Foreign currency exchange improved as international travel restrictions eased, driving a significant increase in gross profit to GBP3.4m (HY21: GBP1.0m)

   --     Gross profit from the purchase of precious metals increased 34% to GBP3.1m (HY21: GBP2.3m) 
   --     Net Assets increased GBP2.1m to GBP37.6m (HY21: GBP35.5m) 

-- As a result of improving trading conditions, the Board has approved an interim dividend of 2.7 pence per share (HY21: nil pence per share)

-- Trading following the Period end has continued to improve. Foreign currency volumes have increased to approximately 85% of pre-pandemic levels, the pawnbroking loan book has continued to grow, the weight of precious metals purchased has increased and retail jewellery has remained strong.

Financial results for the six months ended 31 March 2022

Two prior comparable periods have been included below to demonstrate the impact of the pandemic. The six-month period ended 31 March 2020 was substantially pre-pandemic whereas the six-month period ended 31 March 2021 was impacted by retail lockdowns and significant travel restrictions.

 
                              6 months       6 months ended   6 months ended 
                           ended 31 March 
                          2022 (unaudited) 
                                              31 March 2021    31 March 2020 
                                               (unaudited) 
                                                                (unaudited) 
 Gross Revenue               GBP29.3m           GBP19.3m         GBP25.3m 
                        ------------------  ---------------  --------------- 
 Gross Profit                GBP15.7m           GBP10.5m         GBP16.7m 
                        ------------------  ---------------  --------------- 
 Profit/(Loss) before         GBP2.2m          (GBP0.1m)         GBP2.3m 
  tax 
                        ------------------  ---------------  --------------- 
 Basic EPS                     5.6p              (0.3p)            5.5p 
                        ------------------  ---------------  --------------- 
 

Peter Kenyon, Chief Executive, commented:

"We are pleased with the Group's very strong performance during the Period, which was characterised by significant increases in customer demand for both our jewellery proposition and our foreign currency offer as customer behaviour continued to normalise.

Our growth strategy action plan remains on track and is working. Of the eight new stores planned to open this financial year, three stores were opened during the first half and have traded above expectations.

We are also encouraged by the increased demand for Ramsdens' foreign currency services since the Period end. We look forward to continuing this strong momentum through the important summer period".

S

Enquiries:

   Ramsdens Holdings PLC                                          Tel: +44 (0) 1642 579957 

Peter Kenyon, CEO

Martin Clyburn, CFO

   Liberum Capital Limited (Nominated Adviser)        Tel: +44 (0) 20 3100 2000 

Richard Crawley

Lauren Kettle

   Hudson Sandler (Financial PR)                                Tel: +44 (0) 20 7796 4133 

Alex Brennan

Lucy Wollam

Emily Brooker

About Ramsdens

Ramsdens is a growing, diversified, financial services provider and retailer, operating in the four core business segments of foreign currency exchange, pawnbroking loans, precious metals buying and selling and retailing of second hand and new jewellery.

Ramsdens does not offer unsecured high-cost short term credit.

Headquartered in Middlesbrough, the Group operates from 156 stores within the UK (including 3 franchised stores) and has a growing online presence.

Ramsdens is fully FCA authorised for its pawnbroking and credit broking activities.

www.ramsdensplc.com

www.ramsdensforcash.co.uk

www.ramsdensjewellery.co.uk

CHIEF EXECUTIVE'S REPORT

This interim report covers the six months ended 31 March 2022 (the "Period"), which saw consumer behaviour continuing to transition back to that seen prior to the onset of Covid-19. The prior comparative period (six months to 31 March 2021 - HY21) featured trading with a retail lockdown environment for a substantial part of the six months. With that in mind to provide additional context, this segmental analysis also presents figures for HY20 (the six months to 31 March 2020), which saw the majority of trading take place prior to the onset of Covid-19.

The Group has delivered a profitable performance, supported by the marked uptick in demand for foreign currency as international travel restrictions eased and consumers became increasingly comfortable with travelling abroad.

We are pleased with the Group's performance and look forward to building on this through the remainder of the year.

FINANCIAL REVIEW

The Group reported a Profit Before Tax of GBP2.2m (HY21: loss of GBP0.1m). Gross revenue increased by 51% to GBP29.3m (HY21: GBP19.3m) as trading activity increased in line with the easing of Covid-19 restrictions.

Administration expenses increased by 27% to GBP13.3m (HY21: GBP10.4m) as stores returned to standard opening hours and variable costs increased in line with this higher level of trading. The cessation of Government furlough support and reduction in business rates support increased costs by c.GBP1.2m.

The Group's balance sheet remains strong, with net assets of GBP37.6m (HY21: GBP35.5m). The Group's main assets are cash (including foreign currency), pawnbroking loans secured on gold jewellery and watches, and retail jewellery stock. The reduction in net cash at 31 March 2022 to GBP9.3m (HY21 GBP15.0m) was due to the Group investing heavily in its jewellery stock and the rebuilding of the pawnbroking loan book.

Capital expenditure in the Period totalled GBP0.8m (HY21: GBP0.9m) including the cost of opening two new stores and relocating one store. In addition, the Group invested GBP0.9m acquiring a jewellery and pawnbroking business based in Boscombe.

The Group has the benefit of a GBP10.0m revolving credit facility which expires in March 2024 and had drawn GBP1.5m of this facility at the end of the Period to support currency stock increases.

The Board is pleased to announce an interim dividend of 2.7 pence per share (HY21: nil pence per share). The dividend will be payable on 30 September 2022 to those shareholders on the register on 2 September 2022. The ex-dividend date will be 1 September 2022.

REVIEW

Foreign Currency Exchange

The foreign currency exchange (FX) segment primarily comprises the sale and purchase of foreign currency notes to holidaymakers.

 
                                     HY22      HY21    YOY       HY20 
 Total currency exchanged          GBP94m    GBP20m   372%    GBP181m 
                                 --------  --------  -----  --------- 
 Gross profit                     GBP3.4m   GBP1.0m  236 %    GBP4.7m 
                                 --------  --------  -----  --------- 
 Online C&C orders               GBP10.0m   GBP1.6m   547%   GBP18.5m 
                                 --------  --------  -----  --------- 
 % of online FX                       11%        8%               10% 
                                 --------  --------  -----  --------- 
 Segment as a % of total gross 
  profit                              22%       10%               28% 
                                 --------  --------  -----  --------- 
 

The easing of travel restrictions in the UK and abroad has increased confidence and encouraged more people to travel. As a result, the demand for foreign currency has increased despite the Omicron variant of Covid-19 impacting travel in Q1.

By the end of the Period, daily foreign currency exchange volumes had increased to approximately 60% of pre-pandemic levels. In addition, we continue to be able to manage our margin to minimise the impact to profitability of the lower volumes.

As we look forward, the income from this service is anticipated to grow in line with the continued growth of international travel. We strongly believe that customers' desire to travel abroad remains high.

Pawnbroking

Pawnbroking is a small subset of the consumer credit market in the UK and a simple form of asset-backed lending that dates back to the foundations of banking. In a pawnbroking transaction an item of value, known as a pledge (in Ramsdens' case this is jewellery and watches) is held by the pawnbroker as security against a six-month loan. Customers pay interest on this loan, repay the capital sum borrowed and recover their pledged item. If a customer defaults on the loan, the pawnbroker sells the pledged item to repay the amount owed and returns any surplus funds to the customer. Pawnbroking is regulated by the FCA in the UK and Ramsdens is fully FCA authorised.

 
000's                   HY22      HY21    YOY      HY20 
Gross profit        GBP3,694  GBP3,480     6%  GBP4,706 
                    --------  --------  -----  -------- 
Total loan book     GBP7,506  GBP5,749    31%  GBP7,747 
                    --------  --------  -----  -------- 
Past Due              GBP567    GBP893  (37%)  GBP1,115 
                    --------  --------  -----  -------- 
In date loan book   GBP6,939  GBP4,856    43%  GBP6,632 
                    --------  --------  -----  -------- 
Percentage of GP         23%       33%              28% 
                    --------  --------  -----  -------- 
 

The pawnbroking loan book grew in line with expectations during the Period.

The loan to value on plain gold was approximately two thirds of the gold price at the period end. The average loan value at 31 March 2022 was GBP286 (31 March 2021: GBP265).

With restrictions in the availability of other forms of credit, and the squeeze on household incomes, we believe that the ease and simplicity of pawnbroking will lead to further loan book growth in the coming year.

Jewellery Retail

The Group retails new and second-hand jewellery to customers both in store and online. The Board continues to believe there is further growth potential for Ramsdens in this segment which can be achieved by leveraging the Group's store estate and e-commerce operations, by cross-selling to existing customers and through acquiring new customers.

Retailing of new jewellery products complements the Group's second-hand offering, giving customers greater choice in both breadth of products and price. In addition, the Group continues to build its reputation for the sale of premium second-hand watches.

 
 000's                         HY22        HY21  YOY       HY20 
 Revenue                  GBP13,085    GBP8,074  62%   GBP7,054 
                          ---------  ----------  ---  --------- 
 Gross Profit              GBP4,923    GBP3,168  55%   GBP3,113 
                          ---------  ----------  ---  --------- 
 Margin %                       38%         39%             44% 
                          ---------  ----------  ---  --------- 
 Jewellery retail stock   GBP20,070   GBP10,810        GBP8,919 
                          ---------  ----------  ---  --------- 
 Online sales              GBP1,963    GBP1,323  48%     GBP654 
                          ---------  ----------  ---  --------- 
 % of sales online              15%         16%              9% 
                          ---------  ----------  ---  --------- 
 Percentage of GP               31%         30%             19% 
                          ---------  ----------  ---  --------- 
 

The retail segment achieved significant growth due to the Group's continued investment during the Period. We invested in the presentation of our jewellery with improved in-store concept design window displays which have resulted in a wider, clearer choice for our customers and greater stock levels all supported by improvements in our stock replenishment systems.

The investment in our e-commerce activities continued to deliver improved results during the Period, increasing retail revenue by 48% to GBP2.0m (HY21: GBP1.3m). Online jewellery sales now account for 15% (HY20: 9%) of the Group's total retail sales. Further improvements to the customer journey and how we promote and market the website ( www.ramsdensjewellery.co.uk ) are in the planning and early implementation stages. The e-commerce department is managed as a separate business unit and is profitable.

Watch sales grew 176% year on year. Watch sales attract new customers to the Group and this product offering has received significant investment in stock, presentation and staffing levels during the Period, which benefits buying, lending and retailing.

As we look forward, despite the anticipated macro challenges that higher inflation and rising interest rates will bring, we believe there is an ongoing opportunity for improving and growing our jewellery retail business.

Purchases of Precious Metals

Through this service, Ramsdens buys unwanted jewellery, gold and other precious metals from customers for cash. Typically, a customer brings unwanted jewellery into a Ramsdens store and a price is agreed with the customer depending upon the retail potential, weight or carat of the jewellery. The Group has second-hand dealer licences and other permissions and adheres to the approved "gold standard" for buying precious metals.

Once jewellery has been bought from the customer, the Group's dedicated jewellery department decides whether or not to retail the item through the store network or online. Income derived from jewellery, which is purchased and then retailed, is reflected in jewellery retail income and profits. The residual items are smelted and sold to a bullion dealer for their intrinsic value and the proceeds are reflected in the accounts as precious metals buying income.

 
 000's                           HY22       HY21  YOY       HY20 
 Revenue                     GBP7,779   GBP5,623  38%   GBP7,499 
                             --------  ---------  ---  --------- 
 Gross Profit                GBP3,112   GBP2,330  34%   GBP3,214 
                             --------  ---------  ---  --------- 
 Average gold price in GBP   GBP16.44   GBP16.45        GBP14.41 
                             --------  ---------  ---  --------- 
 Percentage of GP                 20%        22%             19% 
                             --------  ---------  ---  --------- 
 

As customer behaviour and spending patterns have normalised, more people have sold their unwanted jewellery. As the Group's foreign currency volumes have improved, so too has the opportunity to cross sell this service, leading to improved gold buying volumes during the Period.

The Sterling gold price has remained high as a result of the Ukraine / Russia war and the strength of the US dollar. This is also encouraging more customers to sell unwanted jewellery as the selling price is more favourable.

In the short to medium term, we expect the gold price to remain high and as a result to benefit this area of the business.

Other services

In addition to the four core business segments, the Group also provides additional services in cheque cashing, Western Union money transfer, credit broking and receives franchise fees.

 
 000's                HY22     HY21  YOY       HY20 
 Revenue            GBP557   GBP540   3%   GBP1,029 
                    ------  -------  ---  --------- 
 Gross Profit       GBP557   GBP540   3%     GBP937 
                    ------  -------  ---  --------- 
 Percentage of GP       4%       5%              6% 
                    ------  -------  ---  --------- 
 

This remains a steady source of income to the Group.

OPERATIONAL REVIEW

Our retail estate continues to be actively managed. Lease renewals have generally resulted in rent reductions, greater flexibility or sometimes both. On occasion it has been necessary to relocate to take advantage of lower rents in a much better footfall location. Our store in Carlisle was relocated in the Period, with two further stores, in Newcastle and Durham, relocated in May. A further four stores are in the legal and planning process for relocating later in 2022.

During the Period, new stores were opened in Chatham and Glasgow and a new store was acquired in Boscombe. We anticipate opening five new stores in the second half of the financial year and have a healthy pipeline of targeted new stores for FY23 and beyond.

The Group has, like other businesses, experienced staffing challenges with higher-than-normal staff turnover and challenges in recruitment. The Ramsdens team is happy and engaged, as evidenced by our staff survey results, but the impact of Covid-19 has caused many to review their lifestyle choices. While Ramsdens' head office staff have greater flexibility in their working arrangements, high street retail presents challenges in this regard, with relatively fixed opening hours and a need to be in-store. We have awarded significant pay rises to reward loyal staff and to retain Ramsdens' position as an attractive place to come and work.

I would like to take this opportunity to thank each and every staff member for their dedication, commitment, willingness to strive for continuous improvement, and their steadfast focus on delivering fantastic service to our customers every day.

OUTLOOK

We believe that FY22 is a transitional year, with an expected return to substantially normal trading conditions by the end of the financial year, albeit against a trading environment that is experiencing a number of wider global macroeconomic events. Despite these challenges, the Board is confident in the Group's ability to withstand the inflationary impact to the cost base and anticipates delivering growth across all of the Group's income streams over the medium term.

The Board is confident that Ramsdens is well-placed to continue to grow and deliver our strategy to create value for all stakeholders.

Peter Kenyon

Chief Executive Officer

Interim Condensed Financial Statements

Unaudited condensed consolidated statement of comprehensive income

For the six months ended 31 March 2022

 
 
                                        6 months             6 months       12 months 
                                           Ended                ended           ended 
                                        31 March             31 March    30 September 
                                            2022      2021 (restated)            2021 
                                       Unaudited            Unaudited         Audited 
                                Note     GBP'000              GBP'000         GBP'000 
 
 
 Revenue                         2        29,265         19,326                40,677 
 Cost of sales                          (13,532)              (8,781)        (18,415) 
                                      ----------  -------------------  -------------- 
 Gross profit                    2        15,733         10,545                22,262 
 
 Other income                                  -                    -             284 
 Administrative expenses                (13,287)             (10,446)        (21,510) 
                                      ----------  -------------------  -------------- 
 Operating profit                          2,446                   99           1,036 
 
 Finance costs                   3         (230)                (232)           (472) 
                                      ----------  -------------------  -------------- 
 Profit / (loss) before tax                2,216                (133)             564 
 
 Income tax expense                        (465)                   29           (198) 
 
 Total comprehensive income 
  / (loss) for the period                  1,751                (104)             366 
                                      ----------  -------------------  -------------- 
 
 
 Basic earnings per share in 
  pence                          4           5.6                (0.3)             1.2 
 Diluted earnings per share 
  in pence                       4           5.6                (0.3)             1.2 
 
 
 

Unaudited condensed consolidated statement of changes in equity

For the six months ended 31 March 2022

 
 
                                      6 months    6 months      12 months 
                                         ended       ended          ended 
                                      31 March    31 March   30 September 
                                          2022        2021           2021 
                                     Unaudited   Unaudited        Audited 
                                       GBP'000     GBP'000        GBP'000 
 
 Opening total equity                   36,143      35,555         35,555 
 Total comprehensive income 
  for the period                         1,751       (104)            366 
                                    ----------  ----------  ------------- 
 Transactions with shareholders: 
 Share capital issued                        2           6              6 
 Dividends paid                          (377)           -              - 
 Share based payments                      155         103            254 
 Deferred tax on share based 
  payments                                (51)        (42)           (38) 
                                    ----------  ----------  ------------- 
 Total transactions with 
  shareholders                           (271)          67            222 
                                    ----------              ------------- 
 Closing total equity                   37,623      35,518         36,143 
                                    ----------  ----------  ------------- 
 
 
 
 

Unaudited condensed consolidated statement of financial position

At 31 March 2022

 
                                           6 months           6 months       12 months 
                                              ended              ended           ended 
                                           31 March           31 March    30 September 
                                               2022    2021 (restated)            2021 
                                          Unaudited          Unaudited         Audited 
                                   Note     GBP'000            GBP'000         GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                5,343              5,207           5,195 
 Intangible assets                              850                807             714 
 Investments                                      -                  -               - 
 Right-of-use assets                          9,055              8,286           8,164 
 Deferred tax assets                              -                 76              80 
                                         ----------  -----------------  -------------- 
                                             15,248             14,376          14,153 
 Current Assets 
 Inventories                                 21,279             11,576          15,151 
 Trade and other receivables                 11,853              9,797          10,379 
 Cash and short term deposits                10,718             14,996          13,032 
                                         ----------  -----------------  -------------- 
                                             43,850             36,369          38,562 
                                         ----------  -----------------  -------------- 
 Total assets                                59,098             50,745          52,715 
                                         ----------  -----------------  -------------- 
 
 Current liabilities 
 Trade and other payables                     9,885              6,169           7,673 
 Lease liability                              2,206              1,745           2,159 
 Interest bearing loans                       1,423                  -               - 
  and borrowings 
 Income tax payable                             403                 70              61 
                                         ----------  -----------------  -------------- 
                                             13,917              7,984           9,893 
                                         ----------  -----------------  -------------- 
 Net current assets                          29,933             28,385          28,669 
                                         ----------  -----------------  -------------- 
 
 Non-current liabilities 
 Lease liability                              7,313              7,049           6,442 
 Accruals and deferred 
  income                                         93                133             119 
 Deferred tax liabilities                       152                 61             118 
                                         ----------  -----------------  -------------- 
                                              7,558              7,243           6,679 
                                         ----------  -----------------  -------------- 
 Total liabilities                           21,475             15,227          16,572 
                                         ----------  -----------------  -------------- 
 Net assets                                  37,623             35,518          36,143 
                                         ----------  -----------------  -------------- 
 
 Equity 
 Issued capital                     5           316                314             314 
 Share premium                                4,892              4,892           4,892 
 Retained earnings                           32,415             30,312          30,937 
                                         ----------  -----------------  -------------- 
 Total equity                                37,623             35,518          36,143 
                                         ----------  -----------------  -------------- 
 
 
 
 

Unaudited condensed consolidated statement of cash flows

For the six months ended 31 March 2022

 
                                               6 months           6 months      12 months 
                                                  ended              ended          ended 
                                               31 March           31 March   30 September 
                                                   2022    2021 (restated)           2021 
                                              Unaudited          Unaudited        Audited 
                                                GBP'000            GBP'000        GBP'000 
 Operating activities 
 Profit / (loss) before tax                       2,216              (133)            564 
                                             ----------  -----------------  ------------- 
 Adjustments to reconcile profit 
  before tax to net cash flows: 
 Depreciation and impairment 
  of property, plant & equipment                    655                506          1,074 
 Depreciation of right-of-use 
  assets                                          1,116              1,080          2,223 
 Profit on disposal of right-of-use 
  assets                                              -                  -           (45) 
 Amortisation and impairment 
  of intangible assets                               64                 76            218 
 Loss on disposal of property, 
  plant and equipment                                10                 10            140 
 Share based payments                               155                103            254 
 Finance costs                                      230                232            472 
 Working capital adjustments: 
 Movement in trade and other receivables 
  and prepayments                               (1,249)              1,257            565 
 Movement in inventories                        (5,736)              (417)        (3,992) 
 Movement in trade and other 
  payables                                        2,186              (273)          1,217 
                                             ----------  -----------------  ------------- 
                                                  (353)              2,441          2,690 
 
 Interest paid                                    (230)              (232)          (472) 
 Income tax paid                                   (60)            (1,066)        (1,135) 
                                             ----------  -----------------  ------------- 
 Net cash flows from operating 
  activities                                      (643)              1,143          1,083 
                                             ----------  -----------------  ------------- 
 Investing activities 
 Proceeds from sales of property, 
  plant and equipment                                 -                 10             10 
 Purchase of property, plant 
  and equipment                                   (798)              (888)        (1,574) 
 Purchase of intangible assets                        -               (13)           (62) 
 Acquisitions                                     (909)                  -              - 
                                             ----------  -----------------  ------------- 
 Net cash flows used in investing 
  activities                                    (1,707)              (891)        (1,626) 
 
 Financing Activities 
 Dividends paid                                   (377)                  -              - 
 Share capital issued                                 2                  6              6 
 Payment of lease liabilities                   (1,089)            (1,135)        (2,304) 
 Bank loans drawn down                            1,500                  -              - 
 Repayment of bank borrowings                         -                  -              - 
                                             ----------  -----------------  ------------- 
 Net cash flows from financing 
  activities                                         36            (1,129)        (2,298) 
                                             ----------  -----------------  ------------- 
 Net (decrease) in cash and 
  cash equivalents                              (2,314)              (877)        (2,841) 
 Cash and cash equivalents 
  at start of period                             13,032             15,873         15,873 
                                             ----------  -----------------  ------------- 
 Cash and cash equivalents 
  at end of period                               10,718             14,996         13,032 
                                             ----------  -----------------  ------------- 
 

Unaudited notes to the interim condensed financial statements

For the six months ended 31 March 2022

   1.    Basis of preparation 

The interim condensed financial statements of the group for the six months ended 31 March 2022, which are neither audited or reviewed, have been prepared in accordance with the International Financial Reporting Standards ('IFRS') accounting policies adopted by the group and set out in the annual report and accounts for the year ended 30 September 2021. As permitted, this interim report has been prepared in accordance with the AIM rules and not in accordance with IAS 34 "Interim financial reporting". While the financial figures included in this preliminary interim earnings announcement have been computed in accordance with IFRS's applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in IFRS's.

The financial information contained in the interim report also does not constitute statutory accounts for the purpose of section 434 of the Companies Act 2006. The financial information for the period ended 30 September 2021 is based on the statutory accounts for period ended 30 September 2021 which have been filed with the Registrar of Companies and are available on the group's website www.ramsdensplc.com. The auditors, Grant Thornton UK LLP, reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The financial information for the 6 months ended 31 March 2021 is based on the unaudited interim financial information for that period. Due to a change in accounting policy for pawnbroking loans in the course of realisation, certain figures have been restated for this period as detailed in note 7.

The Board have conducted an extensive review of forecast earnings and cash over the next twelve months, considering various scenarios and sensitivities given the Covid-19 situation and uncertainty around the future economic environment. At 31 March 2022 the Group had cash resources of cGBP11m and a GBP10m RCF facility expiring in March 2024, of which GBP1.5m was drawn.

The Group's activities include services deemed essential services by the government and therefore the Group's stores are likely to be able to open in the event of a further lockdown. The Group's essential services include pawnbroking, foreign currency, money transfer and cheque cashing. The Group has a strong asset base and the ability to generate cash quickly through the sale of jewellery stock for its intrinsic value or by restricting new pawnbroking lending. The Group has shown resilient trading through the last year of Covid-19 restrictions, assisted by government support.

The Board have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim condensed financial statements.

Unaudited notes to the interim condensed financial statements (continued)

For the six months ended 31 March 2022

 
 2. Segmental Reporting 
                                  6 months            6 months      12 months 
                                     ended               ended          ended 
                                  31 March            31 March   30 September 
                                      2022     2021 (restated)           2021 
                                 Unaudited           Unaudited        Audited 
                                   GBP'000             GBP'000        GBP'000 
 Revenue 
 Pawnbroking                         4,248               4,062          7,526 
 Purchases of precious metals        7,779               5,623         10,369 
 Retail Jewellery sales             13,085               8,074         18,252 
 Foreign currency margin             3,596               1,027          3,408 
 Income from other financial 
  services                             557                 540          1,122 
                                ----------  ------------------  ------------- 
 Total revenue                      29,265              19,326         40,677 
                                ----------  ------------------  ------------- 
 
 Gross profit 
 Pawnbroking                         3,694               3,480          6,678 
 Purchases of precious metals        3,112               2,330          4,240 
 Retail Jewellery sales              4,923               3,168          6,965 
 Foreign currency margin             3,447               1,027          3,257 
 Income from other financial 
  services                             557                 540          1,122 
                                ----------  ------------------  ------------- 
 Total gross profit                 15,733              10,545         22,262 
                                ----------  ------------------  ------------- 
 
 Other income                            -                   -            284 
 Administrative expenses          (13,287)            (10,446)       (21,510) 
 Finance costs                       (230)               (232)          (472) 
                                ----------  ------------------  ------------- 
 Profit / (loss) before tax          2,216               (133)            564 
                                ----------  ------------------  ------------- 
 
 

Income from other financial services comprises of cheque cashing fees, agency commissions on miscellaneous financial products and franchise fees.

The Group is unable to meaningfully allocate administrative expenses or financing costs between the segments because these expenses include the cost of staff and stores which undertake all services. Accordingly, the Group is unable to disclose an allocation of items included in the Consolidated Statement of Comprehensive Income below Gross profit, which represents the reported segmental results.

Unaudited notes to the interim condensed financial statements (continued)

For the six months ended 31 March 2022

 
 2. Segmental Reporting (continued) 
                                        6 months    6 months      12 months 
                                           ended       Ended          ended 
                                        31 March    31 March   30 September 
                                            2022        2021           2021 
                                       Unaudited   Unaudited        Audited 
 Other information                       GBP'000     GBP'000        GBP'000 
 Capital additions (*)                     1,013       1,742          1,636 
 Depreciation and amortisation 
  (*)                                      1,845       1,672          3,515 
 
 Assets 
 Pawnbroking                              10,837       8,557          9,173 
 Purchases of precious metals                120         768          1,172 
 Retail Jewellery sales                   21,590      11,005         14,306 
 Foreign currency margin                   5,903       3,345          5,314 
 Income from other financial 
  services                                   150         175            139 
 Unallocated (*)                          20,498      26,895         22,611 
                                      ----------              ------------- 
                                          59,098      50,745         52,715 
                                      ----------  ----------  ------------- 
 Liabilities 
 Pawnbroking                                 531         434            492 
 Purchases of precious metals                  1           3             21 
 Retail Jewellery sales                    4,845       3,061          3,433 
 Foreign currency margin                   1,626          70          1,335 
 Income from other financial 
  services                                   357         469            541 
 Unallocated (*)                          14,115      11,190         10,750 
                                      ----------              ------------- 
                                          21,475      15,227         16,572 
                                      ----------  ----------  ------------- 
 
 

(*) The Group is unable to meaningfully allocate this information by segment because all segments operate from the same stores and the assets and liabilities are common to all segments.

Fixed assets are therefore included in unallocated assets and lease liabilities are included in unallocated liabilities.

Unaudited notes to the interim condensed financial statements (continued)

For the six months ended 31 March 2022

 
 
 3. Finance costs 
                                      6 months    6 months       12 months 
                                         ended       ended           ended 
                                      31 March    31 March    30 September 
                                          2022        2021            2021 
                                     Unaudited   Unaudited         Audited 
                                       GBP'000     GBP'000         GBP'000 
 
 Interest on debts and borrowings           42          42              84 
 Interest on right-of-use assets           188         190             388 
 Total finance costs                       230         232             472 
                                    ----------  ----------  -------------- 
 
 
 4. Earnings per share 
                                        6 months     6 months       12 months 
                                           ended        ended           ended 
                                        31 March     31 March    30 September 
                                            2022         2021            2021 
                                       Unaudited    Unaudited         Audited 
 
 Profit for the period (GBP'000)           1,751        (104)             366 
 Weighted average number of shares 
  in issue                            31,476,540   30,930,245      31,161,762 
 Earnings per share (pence)                  5.6        (0.3)             1.2 
 Fully diluted earnings per share 
  (pence)                                    5.6        (0.3)             1.2 
 
 
 5. Issued capital and reserves 
 
 Ordinary shares issued and fully paid            No.   GBP'000 
 
 At 30 September 2021                      31,393,207       314 
 Share capital issued                         250,000         2 
 
 At 31 March 2022                          31,643,207       316 
 
 

During the period 250,000 (2021: 555,554) ordinary 1p shares were issued at par pursuant to the Group's Long Term Incentive Plan (LTIP).

Unaudited notes to the interim condensed financial statements (continued)

For the six months ended 31 March 2022

   6.   Dividends 

The final dividend for the year ended 30 September 2021 of 1.2p per share was paid 10 March 2022 totaling GBP377,000.

7. Change in accounting policy

As detailed in notes 2 & 28 in the Annual Report for the year ended 30 September 2021 the Group changed its accounting policy for the treatment of pawnbroking loans in the course of realisation. This change was made after the publication of the interim results to 31 March 2021, therefore certain figures for that period, shown as a comparative period in these financial statements, have been restated under the new accounting policy. The main impact is a reduction in both revenue and cost of sales for the pawnbroking segment, however this change has no effect on gross profit or net assets. Pawnbroking loans in the course of realisation are recognised in the statement of financial position as trade receivables rather than as inventories under the previous accounting policy.

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END

IR VDLFBLQLXBBV

(END) Dow Jones Newswires

June 08, 2022 02:01 ET (06:01 GMT)

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