Ramsdens profits rise as more people turn to pawnbroking

15 January 2024 , 14:19

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Growing demand for pawnbroking services and higher gold prices have driven up profits for Ramsdens (Image: No credit)

Ramsdens, the retailer and lender who runs around 160 stores across the UK, has seen its profits boosted through its pawnbroking services and the rising price of gold.

It reported that a growing number of customers, up by 11% compared to last year, are turning to its pawnbroking service due to higher living costs. The company mentioned an increase in the average loan amount to £325 from £303 last year, as well as more demand for both new and secondhand jewellery, which has increased nearly a quarter in sales.

Ramsdans has revealed its pre-tax profit rose by more than a fifth to £10.1 million (No credit)

Additionally, precious metals sales have jumped by almost 50 percent thanks to the soaring price of gold. Ramsdens generates profit by buying unused jewellery or precious metals then selling it in its shops or melting it down to sell to a dealer.

The chain is also benefiting from higher gold prices, which are often considered a "safe haven" investment during times of economic uncertainty and market volatility.

The company announced that its pre-tax profit has rocketed by more than a fifth to £10.1 million in the year up to September end, up from £8.3 million the previous year. However, it admitted that it is "not immune" to increasing costs such as higher wages for staff and electricity bills.

Income from its foreign currency department rose by 8% year-on-year. Despite this, the company expressed some disappointment over the summer period due to cost-of-living pressures leading customers to take less spending money on their holidays.

Peter Kenyon, Chief Executive at Ramsdens, stated: "Ramsdens has had a great year, delivering a milestone profit in excess of £10 million." He added: "While we are very conscious of the tough economic conditions and the cost pressures of energy pricing, increased interest rates, and paying the real living wage, we have confidence that our long-term strategy, which remains unchanged, will deliver long-term benefits for all stakeholders."

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Lawrence Matheson