Revenue at the pawnbroker Ramsdens has reached an all-time high, driven by increased demand from customers capitalizing on soaring gold prices. For the year ending September 2023, the London-listed company reported a remarkable 22 percent jump in turnover, totaling £117 million. The surge in revenue is largely attributed to a more than 50 percent increase in profit from its precious metals segment.
The chief executive of Ramsdens, Peter Kenyon, noted a notable shift in customer behavior. Many individuals approach the counter expressing a desire to sell their gold due to favorable market conditions. Others, however, are looking to purchase gold, reflecting a mixed sentiment among consumers. “We have a lot of customers who come to the counter who say, ‘Can I sell my gold because I think it’s a great time to sell?’ but we also get customers saying, ‘Gold’s only going one way, can I buy some gold?’” Kenyon explained to City AM.
Rising gold prices have also enabled customers to secure larger loans against their jewellery, making pawnbroking an increasingly attractive alternative to traditional bank lending. According to Kenyon, “Whereas we might have offered someone £100 for gold before, now we’re offering £140.” This adjustment reflects the growing value of gold and its appeal as a means of obtaining quick financing.
In addition to strong revenue growth, Ramsdens is issuing a final dividend of 9p, which raises the total dividends for the year to 16p, marking a 43 percent increase over the previous year. The firm has plans for further expansion, targeting six new store openings in 2026, which will enhance its presence across the UK.
Despite a slight decline in share price, with Ramsdens shares slipping 2.1 percent to 411p following the opening bell, the stock has seen a remarkable increase of approximately 75 percent over the past year. The growing interest in gold has been evident, with the gold spot price reaching a record high of $4,600, a staggering rise of 74 percent in the last twelve months. Investors have gravitated towards gold amid escalating political and economic uncertainty.
According to Neil Wilson, UK investor strategist at Saxo, “Gold’s ascent reflects geopolitics and fragmentation of the global financial system, particularly as it seems trust in the almighty greenback and Treasuries is being fundamentally questioned.” This perspective underscores the broader implications of rising gold prices and their influence on market dynamics.
Ramsdens’ impressive performance amid fluctuating market conditions highlights the ongoing significance of precious metals and the evolving landscape of consumer finance in the UK. With ambitious plans for expansion and a commitment to meeting customer needs, the company is well-positioned to navigate the challenges and opportunities ahead.
