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 plc, which operates 158 stores and two franchised locations across the country, said its foreign exchange performance came despite the summer airport chaos that engulfed the travel industry and limited its sales opportunities. Pawnbroking lending increased from £6.1m to a record high of £8.6m during last year but accounted for less of the group's gross profit, which is now 33% foreign currency.
In annual results to the end of September 2022, the high street lender said rebounding consuming spending following the lifting of Covid restrictions had fuelled demand for short-term finance among customers. The average loan value was £303, up from £264 the year before. As cost-of-living pressures squeeze households, the firm said it expected demand to ramp up this year.
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Meanwhile sales of new and second hand jewellery across Ramsdens stores grew considerably - generating revenues of more than £27m in 2022, up from £18.2m the year previously. Bosses think there is further growth potential in the jewellery business and the relatively higher price of gold - which the firm expects to continue in the short to medium term - supported margins.
And there was expansion of the Ramsdens estate with new stores in Bolton, Glasgow and Chatham - with 12 new locations planned for 2023. Overall revenue for the group increased from £40.7m to £66.1m during the year as operating profit jumped from £1.03m to £8.8m.
Peter Kenyon, Ramsdens chief executive, said: "Ramsdens delivered a very strong performance in FY22, once again reflecting the strength of our diversified income streams. 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 Q1, with strong jewellery sales during December driven by continued consumer demand for premium watches. Our team of committed staff have once again been central to our 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."
Speaking to BusinessLive following the results publication, Mr Kenyon said he hoped to progress expansion plans at the firms' Teesside head office. Ramsdens acquired the Middlesbrough property in April last year and is working on plans to extend the location, creating up to 15 jobs over the next 12 to 18 months.
Mr Kenyon added: "We bought our head office location and we're going to expand our head office location. That will allow us to expand our ecommerce team and hopefully that will grow the business. Online is an opportunity for us because it gives us a quicker reach to a national footprint."
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