Ramsdens hikes dividend after bumper year

Financial services provider and retailer Ramsdens reported full-year revenue of £66.1m in its annual results on Tuesday, up from £40.7m a year earlier.

The AIM-traded company said its gross profit for the year ended 30 September improved to £38.2m from £22.3m, while its profit before tax surged to £8.3m from £0.6m.

Net assets at year-end stood at £41.8m, up from £36.1m, while earnings per share rocketed to 20.9p from the 1.2p it reported in the 2021 financial period.

The board declared a final dividend of 6.3p per share, taking the full-year dividend to 9p, up from a final and total dividend of 1.2p per share in the prior year.

Operationally, Ramsdens said its full-year profit was primarily driven by the strong recovery in foreign currency gross profit to £12.6m, from £3.3m in 2021, as international travel returned to a “reasonable” level.

Revenue generated by the group's jewellery retail segment increased by almost 50% to £27.1m from £18.3m, supported by “strategic investments” in stock, merchandising and the website.

Demand for the firm’s pawnbroking loans grew during the year as a result of customer spending habits returning to normal following the easing of Covid-19 restrictions and fewer alternative options for small-sum short-term credit.

As at 30 September, the loan book had increased by more than 40% to £8.6m, from £6.1m a year earlier.

Precious metal buying volumes meanwhile increased through the summer, aided by a high gold price and increased footfall.

Revenue across that segment increased by more than 50% to £16m, from £10.3m in the prior year.

Looking at the first quarter of the new year, meanwhile, Ramsdens said jewellery retail gross profit increased by more than 15%, primarily as a result of strong premium watch sales both instore and online.

It said first-quarter volumes of foreign currency exchange remained at about 70% of pre-pandemic levels, while the pawnbroking loan book had grown further from the year-end balance of £8.6m to £9.1m.

The purchase of precious metal volumes and its other services had continued to perform in line with expectations.

Following the end of the 2022 financial year, new stores had been opened in Bootle, Basildon, Croydon and a second store in Bradford, taking the store estate to 158 stores, including two franchised locations.

“Ramsdens delivered a very strong performance in the 2022 financial year, once again reflecting the strength of our diversified income streams,” said chief executive officer Peter Kenyon.

“The strong rebound in our foreign currency exchange volumes, coupled with increased demand for our excellent quality and value for money jewellery, has enabled the group to deliver significantly increased profitability.

“This momentum continued through the first quarter, with strong jewellery sales during December driven by continued consumer demand for premium watches.”

Kenyon said the firm’s “committed staff” were again central to its success.

“They continue to deliver outstanding service to our growing customer base, for which I am hugely grateful, and I would like to take this opportunity to publicly thank them all for their commitment.

“We continue to invest in attracting, retaining and rewarding our staff as we develop what I believe to be the best team in the industry.

“While fully aware of the economic challenges that lie ahead, with our trusted brand and proven, well invested and diversified business model, I remain very optimistic about Ramsdens' future prospects.”

At 1243 GMT, shares in Ramsdens Holdings were up 3.58% at 217p.

Reporting by Josh White for Sharecast.com.