- Analysts: Ramsdens ‘should be a top 10 UK jewellery retailer in next few years’
Ramsdens shares moved sharply higher on Tuesday after the pawnbroker and lender told shareholders higher gold prices helped lift profits ahead of expectations last year.
The group, which upgraded guidance for the second time in eight months, expects to report a forecast-beating pre-tax profit of £13million for the year to 31 March after strong demand for the precious yellow metal.
Currently trading at around $3,019/oz, gold is up by almost 30 per cent over the last 12 months thanks to a highly volatile geopolitical and macroeconomic environment.
Ramsdens, which launched a dedicated gold buying website last month, said on Tuesday that gross profits from purchases of precious metals were 50 per cent higher in the second half, as the number of purchases of gold by weight increased by 5 per cent.
Boss Peter Kenyon added: ‘This positive trading momentum, together with the continued benefit to the group presented by the sustained high gold price, has led the board to increase profit expectations for FY25.’
Analysts at Panmure Liberum upgraded its target price for Ramsdens from 320p to 340p.
Expansion: Ramsdens also launched a dedicated gold buying website last month, as prices of the precious metal soared (stock image)
They said: ‘Ramsdens has delivered consistent upgrades for the last four years and counting.
‘The outlook for H2 remains positive, FY 26 forecasts feel prudent based on our analysis of the store estate, there is downside protection should the gold price fall, and Ramsdens has quietly grown what should be a top 10 jewellery retailer in the UK in the next few years.’
Ramsdens shares were up 16 per cent to 238p this afternoon, bringing 12-month gains to around 27 per cent.
The group also saw pawnbroking gross profits grow 10 per cent year-on-year, while jewellery retail earnings increased ahead of expectations at 15 per cent.
Foreign exchange gross profits were in-line with expectations, but Ramsdens noted it expects a boost from the Easter holidays.
Kenyon added: ‘We are pleased to have delivered a strong performance during the first half of the year, underpinned by our diversified model as well as benefitting from investments made across our four operating segments, including the launch of new dedicated customer websites and services.
‘We look forward to building on this positive performance throughout the second half of the financial year.’
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