REG - Ramsdens Holdings - Annual Results - year ended 30 September 2024
14/01/2025 07:00
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RNS Number : 1664T Ramsdens Holdings PLC 14 January 2025
14 January 2025
Ramsdens Holdings PLC
("Ramsdens", the "Group", the "Company")
Annual Results for the year ended 30 September 2024
Another record year with a 12% increase in Profit Before Tax to £11.4m
Ramsdens, the diversified financial services provider and retailer, today
announces its Annual Results for the year ended 30 September 2024 (the
"Period").
FY24 FY23
% change
Revenue £95.6m £83.8m 14%
Gross Profit £51.5m £45.8m 13%
Profit before tax £11.4m £10.1m 12%
Net Assets £53.6m £48.2m 11%
Basic EPS 26.1p 24.5p 7%
Final dividend 7.6p 7.1p 7%
Full year dividend 11.2p 10.4p 8%
FY24 Highlights:
● Record profit for the Group driven by growth across all four key income
streams:
● Very strong performance delivered by the purchase of precious metals segment,
with volume and values supported by the high gold price. Gross profit for
this segment increased 29% to £11.8m (FY23: £9.2m).
● Foreign currency gross profit increased 4% year on year to £14.2m (FY23:
£13.6m)
● Pawnbroking gross profit increased 16% to £11.7m (FY23: £10.0m).
● Jewellery retail gross profit increased 10% to £13.3m (FY23: £12.1m) with
improved H2 performance providing good momentum into FY25.
● Investment in new Head Office to allow greater processing capacity, improving
operational efficiencies and provide infrastructure for future growth plans.
● Basic EPS increased by 7% to 26.1p per share (FY23: 24.5p) following a full
year at the increased corporation tax rate of 25%.
● The Board is recommending a final dividend of 7.6p per share for approval at
the forthcoming AGM. This takes the total dividend for the Period to 11.2p per
share (FY23: 10.4p) an increase of 8%, reflecting its commitment to a
progressive dividend policy.
Current Trading and Outlook:
The Board is pleased to provide an update on Q1 FY25 trading (1 October to 31
December 2024). The good momentum the Group enjoyed in H2 FY24 has continued
with all segments performing ahead of the prior year:
● The purchase of precious metals segment has continued to perform very
strongly. The weight of gold purchased has increased year on year by 5% with
gross profit increasing approximately 40%. This is due to the continued high
gold price (primarily since March 2024) and the timing of additional gold
sales in the quarter.
● Ongoing demand for small sum short term credit has driven an increase in the
pawnbroking loan book to £10.9m from the year end position of £10.7m. In
November we launched our new designated pawnbroking website which has started
well and is attracting new customers.
● Jewellery retail revenue has increased more than 15% on the prior year with
strong sales of premium watches, continuing the momentum from H2 FY24.
● Foreign currency (FX) gross profit increased approximately 3% on prior year.
Sales of FX continue to show good growth in terms of transaction volumes but
the reduction in the purchases of FX is limiting growth.
● As with many other businesses, the Group faces rising operating costs in 2025.
The main increase is in employment costs as the Group continues to invest in
our people and remains a supporter of paying the Real Living Wage as our entry
level pay, which increased 10% in 2024 and will increase 5% from April 2025.
The Group also faces an annualised impact of c£0.8m from the Government's
decision to increase employer national insurance contributions.
● Following the year end, we have opened a new store in Grantham, closed our
kiosk site at Teesside Airport, and two of our stores in central Glasgow will
shortly merge. Following this, our estate will comprise of 168 stores,
including one franchised store.
It is still early in the new financial year, however, trading performance to
date has been pleasing and the Group continues to benefit from the very strong
gold price. Whilst the economic outturn for the rest of the year is uncertain,
the Group's diversified business model, strong cash generation and cost
management gives the Board confidence that the Group will continue to grow and
create value for all stakeholders.
Peter Kenyon, Chief Executive, commented:
"Ramsdens' record performance in FY24 - with profit before tax increasing by
12% to more than £11m - once again reflects the strength of the Group's
diversified business model. We are pleased with the positive momentum
achieved across each of the Group's income streams, with a particularly strong
performance in our precious metals segment where we continued to benefit from
the high gold price.
"The increase in sales of foreign currency indicate we are taking market share
and - in its first full year of use - our multi-currency card has had a very
encouraging start with opportunities for further growth in FY25 and beyond.
Jewellery retail has continued to grow and was particularly strong in H2, with
our firm focus on stock management ensuring we are generating an optimum
return on the capital employed from our investments in recent years. Our
pawnbroking loan book continues to grow incrementally and the launch of our
new Ramsdens pawnbroking website in November, following the year end, has
started well and is already attracting new customers.
"I would like to thank the dedicated Ramsdens team who all seek to help
customers in their every-day lives, be that treating themselves or a loved one
with a jewellery purchase, exchanging currency to enjoy a holiday, or raising
cash from their jewellery by way of a loan or a sale."
Availability of Report and Accounts
The Company confirms that the Annual Report and Financial Statements for the
year ended 30 September 2024, together with notice of the Company's 2025
annual general meeting, will be published and posted to shareholders shortly
and will be available to view on the Company's investor relations
website: https://www.ramsdensplc.com/investor-relations/reports-and-presentations
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.ramsdensplc.com%2Finvestor-relations%2Freports-and-presentations&data=02%7C01%7Clwollam%40hudsonsandler.com%7C5e65bb6855a840ec736808d6e9028d50%7Ca33bdb157e25438ab1fd5c523a8866f9%7C1%7C0%7C636952594503059063&sdata=Cpng724nGX9wrWhD9NwOlkiZHLeIZZnzg6S71WXuRQE%3D&reserved=0)
, in accordance with AIM Rule 20.
The information contained within this announcement is deemed by the Group to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. The person responsible for making this announcement on
behalf of the Company is Peter Kenyon.
ENDS
Enquiries:
Ramsdens Holdings PLC
Tel: +44 (0) 1642 579957
Peter Kenyon, CEO
Martin Clyburn, CFO
Panmure Liberum (Nominated Adviser and
Broker) Tel: +44 (0) 20 3100 2000
Richard Lindley
Will King
Hudson Sandler (Financial PR)
Tel: +44 (0) 20 7796
4133
Alex Brennan
Lucy Wollam-Coles
Emily Brooker
About Ramsdens
Ramsdens is a growing, diversified, financial services provider and retailer,
operating in the four core business segments of foreign currency exchange,
pawnbroking loans, precious metals buying and selling and retailing of second
hand and new jewellery. Ramsdens does not offer unsecured high-cost short
term credit.
Headquartered on Teesside, the Group operates from 169 stores within the UK
(including 1 franchised stores) and has a growing online presence.
Ramsdens is fully FCA authorised for its pawnbroking and credit broking
activities and as an authorised payments institution.
www.ramsdensplc.com (http://www.ramsdensplc.com/)
CHAIRMAN'S STATEMENT
This Annual Report covers the 12-month period to 30 September 2024 (FY24).
Further to the Group's announcement that I would stand down as Chair of
Ramsdens at the 2025 AGM, this is my final annual report statement for
Ramsdens. I have had great pleasure in contributing to the success of the
Group, during its private equity ownership to its listing on the London Stock
Exchange in February 2017 and beyond. When the Group was first admitted to
AIM, it generated underlying profit before tax of £4m and had net assets of
£23m. Seven and a half years later, the Group has almost tripled its pre-tax
profitability, which has increased to £11.4m this year; has grown its net
assets to over £53m; added over 40 new stores and has created almost 300 new
jobs.
FY24 FINANCIAL RESULTS & DIVIDEND HIGHLIGHTS:
£000's FY24 FY23
Revenue £95,608 £83,805
Gross profit £51,533 £45,759
Profit before tax £11,362 £10,105
Net assets £53,606 £48,167
Net cash* £7,395 £5,039
Basic EPS 26.1p 24.5p
Final dividend 7.6p 7.1p
Full year dividend 11.2p 10.4p
*cash minus bank borrowings
The Group achieved revenues of £95.6m in FY24 (FY23: £83.8m) and profit
before tax of £11.4m (FY23: £10.1m). The Strategic Report and Financial
Review that follow provide a more in-depth analysis of the Group's trading
performance and financial results.
In line with the Group's stated dividend policy, the Board is recommending a
final dividend of 7.6p (FY23: 7.1p) for approval at the forthcoming AGM.
Pending approval, the full year dividend of 11.2p (FY23: 10.4p) would
represent an increase of 8% year on year and 43% of the earnings per share.
Subject to shareholder approval, the final dividend is expected to be paid on
21 March 2025 for those shareholders on the register on 14 February 2025.
The ex-dividend date will be 13 February 2025.
ESG
The Group has strong foundations and reset its ESG strategy in 2023. There
is a simple mantra at Ramsdens: to be good citizens and do the right thing.
By doing this and living our values, the team continues to be engaged,
motivated and looks after our customers with great skill and care. I am
hugely grateful for this dedication and commitment and wish to publicly thank
the team for their efforts and recognise their success.
LOOKING AHEAD
Central to the Group's progress during recent years are a number of key
strengths, namely strong cash generation from four diversified income streams,
a very talented management team, exceptional store colleagues and a strong,
trusted brand. With all these attributes, I am confident that Ramsdens is well
placed to continue to execute its proven growth strategy and generate further
shareholder returns in the years to come. As I sign off from my role as Chair
of Ramsdens, I am certain that the future of the Group is bright.
Andrew Meehan
Non-Executive Chairman
13 January 2025
CHIEF EXECUTIVE'S REVIEW
The Group has had a strong year delivering record profit before tax of £11.4m
with growth across all key income streams. The Group's diversified income
streams not only expose Ramsdens to multiple growth opportunities, but also
provide resilience in challenging times. This model has consistently allowed
the business to move forward against a backdrop of more challenging economic
climates. While the macro-economic landscape continues to impact consumer
facing businesses with rising costs, in particular energy and employment
costs, at the same time the Group has benefitted from the high gold price that
has risen as a result of numerous global events.
The Group's proven growth strategy remains unchanged and the Ramsdens team
have again excelled at implementing it during FY24, allowing us to further
enhance and expand our store estate as well as growing the use of our new
multi-currency card in its first year of operation along with progressing our
new dedicated websites. I am exceptionally proud of the team's commitment
and wish to publicly thank them for their continued effort and to recognise
their success.
BUSINESS REVIEW
During the year we continued to improve the core estate, grew our
multi-currency card customer base, expanded the store estate with seven new
stores and one acquisition, and invested in our online operations. We also
expanded into a new head office, cementing our roots in Teesside, which will
allow for greater expansion across operations, and were authorised by the FCA
as an authorised payment institution to add to our consumer credit
permissions. This authorisation will allow Ramsdens to offer international
money transfers directly for customers and not through a third-party
relationship going forward.
The improvements in the core estate have been supported by a programme to
invest in refreshing our stores with a range of initiatives including new LED
lighting, modern flooring, and stronger in-store branding. We relocated
three stores in Scunthorpe, Cumbernauld and Cardiff during the period.
Scunthorpe was relocated in April and all income streams have seen
transformational performance. Cumbernauld was relocated from the old retail
centre to the new centre and we are making excellent progress in improving our
retail jewellery performance. Cardiff was relocated in September out of
necessity following issues with the previous property's condition. All
stores that have been open for more than three years are operating profitably
at a contribution to head office costs level. Given the breadth of the estate
this is testament to the strength of our model, our store portfolio and most
importantly our teams.
We have opened 15 new stores in the last two financial years and all are
making good progress, with further profitability to come as these stores
mature. The stores opened in FY24 were Blackburn, Central Cardiff, Poole,
Romford, Burnley, Telford, and Blackpool. Since the period end, we opened a
new store in Grantham in October 2024. We are pleased to say that all new
stores are trading well, with several well ahead of expectations. We
completed the purchase of one of our two franchised stores (located in Bury)
in March 2024. We ended the financial year with 169 stores including one
franchised store.
The performance of each of the Group's key income streams is set out in
greater detail below.
OUR DIVERSIFIED BUSINESS MODEL: PRODUCT OFFERING
Ramsdens operates in the four core business segments of: foreign currency
exchange; pawnbroking; jewellery retail; and purchase of precious metals.
Foreign Currency Exchange
The foreign currency exchange (FX) segment primarily comprises the sale and
purchase of foreign currency notes to holidaymakers. The Group launched the
Ramsdens Mastercard® multi-currency card in September 2023. For the last
seven years, the Group has introduced customers wanting to make international
money transfers to TorFX. However, since the year end, the Group has now
been authorised by the FCA to make international money transfers and will
shortly launch an in-house service.
FY24 FY23
Total currency exchanged £423m £408m
Gross profit £14.2m £13.6m
Online click and collect orders £51.7m £42.0m
Percentage of FX online 12% 10%
Percentage of Group gross profit 28% 30%
The sales of currency to customers increased in total value and in
transactional count, although the average transaction value decreased by 5% to
£406. A slight increase in the sales margin resulted in income from sales
of FX increasing by 6%. It has also been noted that the seasonality of
sales has shifted in the last two years, with more customers travelling
outside of the traditional summer holiday period. The growth in sales of FX
cash is encouraging given commentary about customers switching to cards and
indicates that we are taking market share.
Cash remains a great way for consumers to budget on holiday and continues to
be a necessity in some locations where there may be uncertainty about the
acceptance of cards, however to ensure Ramsdens provides choice and meets
demands for its customers, we introduced the new Ramsdens Mastercard®
multi-currency card in September 2023 and we are pleased to report that almost
17,000 new cards were issued to customers during the year. The card provides
customers with competitive exchange rates and segregation from their main bank
account. We are encouraged by the value and frequency of reloads onto the
card, typically while the customer is on holiday.
The purchases of currency from customers have fallen in number, total value
and average transaction value. This indicates that customers are spending
almost all of their foreign currency while on holiday. In addition, a slight
reduction in margin, due to currency mix, has resulted in income from
purchases of FX falling by 13%.
Our Ramsdens currency website continued to improve, driving 23% growth in our
click and collect sales of foreign currency notes. We are working to
integrate the sale of the new multi-currency card into the click and collect
process. Our home delivery service is growing, but remains a less well used
service.
Following the Group's approval in October 2024 by the FCA to remit
international payments, this service will receive greater focus moving forward
as it presents an opportunity given the high numbers of customers using our
foreign currency service, our brand strength, store network and online offer.
The Gross Profit from the FX segment increased by over 4%, which the Board
believes is a good result given the fall in income from purchases of FX.
Pawnbroking
Pawnbroking is a small subset of the consumer credit market in the UK and a
simple form of asset backed lending dating back to the foundations of
banking. In a pawnbroking transaction an item of value, known as a pledge,
(in Ramsdens' case, jewellery and watches), is held by the pawnbroker as
security against a six-month loan. Customers who repay the capital sum
borrowed plus interest receive their pledged item back. If a customer fails to
repay the loan, the pawnbroker sells the pledged item to repay the amount owed
and returns any surplus funds to the customer. Pawnbroking is regulated by
the FCA in the UK and Ramsdens is fully FCA authorised.
If consumers have assets to pledge, pawnbroking can provide a short-term
solution or give the customer time to put in place longer term financial
arrangements. Pawnbroking is simple to understand and is quick and easy to
arrange. The customer's debt is capped at the value of the goods pledged and
therefore there are no further debt consequences should the customer be unable
to repay the loan. Ramsdens works with its customers to try and ensure
repayment where possible so the customer is able to borrow again should they
need to.
000's FY24 FY23
Gross profit £11,657 £10,043
Total loan book* (capital value) £10,677 £10,264
Past due (capital value) £882 £859
In date loan book* (capital value) £9,794 £9,405
Percentage of Group gross profit 23% 22%
*excludes loans in the course of realisation
Following strong customer demand for small sum short term credit in recent
years, FY24 saw lower incremental growth against what was a strong comparable
performance. The Group has been giving additional interest forbearance to
customers in financial difficulty and has also been successfully encouraging
customers to make reductions to their loan capital should they need more time
to repay.
The average loan value as at 30 September 2024 was £347, up from £325 as at
30 September 2023, with this figure rising to £519 in our branches in the
South of England. The demographics seen in the southern communities in which
we operate allow for higher loan values with higher carats of gold jewellery
offered as security for a loan. The median loan value was £187 as at 30
September 2024 (FY23: £174).
Our lending remains conservative in line with our long-term policy, and
repayment rates are in line with long run averages.
The new pawnbroking website was launched in November 2024, post the year end,
and has made a good start, attracting new customers, and delivering an
improved SEO performance, thereby supporting our strategy of lowering customer
acquisition costs and improving overall profitability.
Jewellery Retail
The Group offers new and second-hand jewellery, including premium watches, for
sale. The Board continues to believe there is significant growth potential in
this segment by leveraging Ramsdens' retail store estate and ecommerce
operations.
The retailing of new jewellery products complements the Group's second-hand
offering to give our customers greater choice in breadth of products and price
points. In addition, new jewellery retailing enables the Group to attract
customers who prefer not to buy second-hand.
000's FY24 FY23
Revenue £35,607 £33,474
Gross profit £13,293 £12,058
Margin % 37% 36%
Jewellery retail stock £23,937 £24,289
Online sales £7,200 £6,656
Percentage of sales online 20% 20%
Percentage of Group gross profit 26% 26%
We are pleased with the progress we have made in the period with a 6% increase
in revenue and 10% increase in gross profit, when considering the challenging
economic conditions during the year and the slow start in H1, which included
the major retailing periods of Black Friday, Christmas and January sales. H2
sales were stronger than those during H1, both in store and online.
Our online retail business comprises online jewellery sales where goods are
shipped direct to customers, with sales of goods that are sourced online but
transacted in store accounted for within our branch profits. In addition to
being a profitable sales channel, the jewellery website also serves as a
catalogue for our branches, assisting our staff with serving customers where
stock choice in a branch may be limited. There are over 15,000 items available
on the Ramsdens jewellery website.
Approximately 65% of all online revenue is from premium watch sales. FY24
had a mixed online retail performance with H1 impacted by softer premium watch
sales, a pattern also reported by other watch retailers. However, H2 was
much improved and resulted in online revenue growth for the full year of
£0.5m or 8% (despite being £0.5m down in H1). This demonstrates the strength
of the H2 performance which took annual online revenue to £7.2m (FY23:
£6.7m) and delivered a profit contribution of over £1m during the year.
Given the improved momentum of H2 we believe we have a strong foundation to
continue to scale the online retail business in the coming years.
There has been significant upward inflationary pressure in our Jewellery
Retail operations from the increasing gold price. Second-hand jewellery and
new jewellery have been repriced accordingly and still represent excellent
value for money. In H1 there was uncertainty in the pricing of second-hand
premium watches, which led to some product price corrections with many popular
brands and models falling in price. The Group has always maintained a focus
on turning its premium watch stock quickly and was able to realign pricing to
drive strong growth in H2. Overall margins by product category have remained
consistent, resulting in a slight increase in overall margin to 37% which is
reflective of the mix of product sales. Retail revenue is spread across the
three key categories of premium watches (38% of revenue), new jewellery (28%)
and preowned jewellery (34%).
While the focus is always on driving up gross profit, after several years of
major investment into our retail jewellery stock, the Group continues to focus
on having the right stock in the right quantity in the right location. In
FY24, the return on capital employed on jewellery stock has improved from 50%
to 56%. The Group will invest more in retail jewellery stock in FY25 and
beyond having identified growth opportunities during FY24.
We believe there is an ongoing opportunity, instore and online, across our
product categories, to develop and grow our jewellery retail business.
Purchase of precious metals
Through our precious metals buying and selling service, Ramsdens buys unwanted
jewellery, gold and other precious metals from customers. Typically, a
customer brings unwanted jewellery into a Ramsdens store and a price is agreed
with the customer dependent upon the retail potential, weight or carat of the
jewellery. Ramsdens has various second-hand dealer licences and other
permissions and adheres to the Police approved "gold standard" for buying
precious metals.
Once jewellery has been bought from the customer, the Group's dedicated
jewellery department decides whether or not to retail the item through the
store network or online. Income derived from jewellery which is purchased and
then retailed is reflected in jewellery retail income and profits. If the
items are not retailed, they are smelted and sold to a bullion dealer for
their intrinsic value and the proceeds are reflected in the Group's accounts
as precious metals buying income.
000's FY24 FY23
Revenue £31,151 £23,522
Gross profit £11,822 £9,161
Percentage of Group gross profit 23% 20%
While the gold price has been high for a number of years compared to long-term
averages, this year the gold price has achieved record levels both in US
Dollars and Sterling.
The weight purchased increased and together with a high gold price, revenues
were 32% higher at £31.1m and gross profit increased by 29% to £11.8m.
In FY24, as part of its retail jewellery stock review, the Group took
advantage of the high gold price to sell more purchased items for their
intrinsic value rather than refurbishing for retail.
The average 9ct gold price for FY24 was £21.05 per gram (FY23: £18.48) and
at the year-end was £23.83.
Given the wider global political and economic situation, we believe the gold
price will remain high in the short to medium term, supporting the Group's
margins.
Other services
In addition to the four core business segments, the Group also provides
additional services in Western Union money transfer and receives franchise
fees. Following the acquisition of the Bury franchise in March 2024, the
Group had one remaining franchisee.
Up to April 2023, the Group also received income for cheque cashing services
and small commissions for credit broking of £0.2m, however these services
were stopped to enable greater focus on the key services.
000's FY24 FY23
Revenue £563 £849
Gross Profit £563 £849
Percentage of Group gross profit 1% 2%
STRATEGY
The Board believes that its existing strategy remains the right one to grow
our business and deliver sustainable value for all our stakeholders.
We continue to concentrate on:
1. Improving the performance of the existing store estate
2. Developing our online proposition
3. Expanding the Ramsdens branch footprint in the UK
4. Acquisition opportunities
5. Focusing on sustainability through our ESG strategy
1. Improving the performance of the existing store estate
The Group has an ethos of continuous improvement and believes that every store
has an opportunity to grow further. At the same time, the younger stores
will continue to mature, the relocated stores continue to grow and this will
add to Group profitability.
Our mission statement is to have a great customer offering backed up by
fantastic service leading to customers being ambassadors for Ramsdens. This
remains a focus for the Group because recommendations from family and friends
continues to be the biggest source of new customers.
We are extremely proud of our 5-star Trustpilot ratings for our retail
jewellery and foreign currency services.
Our cross-sell penetration rates are growing but remain low in absolute terms,
which is a great indicator of the significant opportunity that exists. For
example, only 2.2% of FX customers bought jewellery from Ramsdens in FY24.
In addition, we continually aim to improve the performance of our key income
streams:
Foreign currency:
· The three key drivers for foreign currency remain trust,
convenience and price.
o Trust - stock availability and transparent pricing continue to build trust
among consumers.
o Convenience - our stores are conveniently located in high footfall areas,
on high streets and in shopping centres.
o Price - our exchange rates are competitive online and in store and we can
continue to be competitive as we can spread our operating expenses across more
services.
· The sales of our foreign currency have strong momentum from FY24.
· The growing reach of Ramsdenscurrency.co.uk has driven a 30%
increase in click and collect transactions in our stores. While the average
commission rate is lower online, the average transaction value is 60% greater,
plus we have the opportunity to cross sell our other services.
· Our market-leading multi-currency travel card customer base is
growing. We are confident this will grow in FY25 and beyond as customers
maximise the competitive exchange rates on offer and the flexibility and ease
of using the card and the accompanying app. This allows the Group to capture
more of our customers' holiday spend while abroad.
· The International Money Transfer service will be relaunched in
FY25 following the Group's approval by the FCA as an Authorised Payment
Institution. Our branch network will be able to facilitate smaller value
payments for customers in addition to a digital offer for the service. This
service will need to grow over the coming years, and has potential in time to
be a significant income stream for the Group.
Pawnbroking:
· We will continue to build on the trust and high repeat customer
volumes earned by providing a high level of service and grow the customer base
through word-of-mouth recommendations, alongside our other marketing
initiatives.
· Our loan to value ratios are continuously reviewed in line with
second hand retail pricing and the customer's history of repaying loans.
This may allow more to be lent to customers but the Group's ethos is to have
prudent lending policies.
· Our new dedicated website will create new business for the stores
by creating awareness of the pawnbroking service available at Ramsdens. The
website will also be focusing on attracting higher value lending and the Group
will use its experienced branch and area managers to offer a bespoke
service.
· We will maintain focus on giving customers a fair deal and will
continue where required to reduce interest rates to support customers in
financial difficulty to get their pledged goods back.
· Customers who require longer term support will continue to be
encouraged to repay part of their capital borrowed so that the loan has an
improved chance of being repaid and the pledged jewellery being returned to
the customer.
· Where in some cases customers default, we will continue to use
our growing retail expertise to obtain the best price possible for their
pledged items.
Jewellery retail:
· The focus in FY24 on stock levels, quality and price and the
progress made in H2 gives confidence and optimism that the Group is on track
for future growth in its retail jewellery segment.
· The investment in the new head office will allow greater
processing capacity which will assist improvements in the replenishment of
each store's stock.
· The concept window design roll out was completed in FY24 and this
brings greater efficiency in stock replenishment.
· We are continuing to invest in our retail website which acts as a
stock catalogue for our branches to facilitate further in store sales while
allowing customers to fully transact online.
· Where appropriate, we will relocate to higher footfall locations
and improve the jewellery offer with larger window display areas, often at
similar rents to current locations.
Purchase of precious metals:
· We are increasing the awareness amongst our existing customer
base, primarily foreign currency exchange customers who are unaware of the
service or the value held in damaged, unwanted or unworn jewellery. In FY24,
2.5% of our FX customers sold unwanted jewellery to the Group.
· When launched, our new gold buying website will seek to attract
new customers who may be unaware of the service or the value of their unwanted
or unworn jewellery.
Our people are key to implementing our strategy. We invest heavily in staff
training and communication, focussing on the necessary product skills but also
the customer conversation. We are pleased to say that the excellent feedback
we receive in our staff engagement surveys has resulted in greater staff
retention. With more experienced staff, customer interactions improve,
driving improved customer service, revenue and ultimately branch
profitability. The people in our business live and breathe the Ramsdens ethos
and we are committed to ensuring that our staff not only remain productive but
also feel valued and rewarded in their careers at Ramsdens.
The changes in the Budget, announced in October 2024, will increase staffing
costs from April 2025. The change to the employer's national insurance rate
and threshold, will increase costs by £0.8m per annum. The Government also
increased the National Living Wage (NLW) by 6.7% for those over 21 to £12.21
per hour. The Group will continue to pay the Real Living Wage (RLW), which
has increased by 5% to £12.60 per hour, as its minimum pay for staff,
effective from April 2025. Our 2025 pay review will result in our people
receiving an above inflation pay review.
Furthermore, our fixed price energy contract was renewed in February 2024 for
two years. The full year impact in FY25 will add an additional £0.25m over
FY24. All of our electricity supply comes from renewable sources.
The Group believes that it can continue to make progress despite the
aforementioned increased costs.
We continue to negotiate rents downwards where there is an opportunity to do
so, balanced with a desire for flexibility with lease expiry and break
dates. Our property portfolio has been purposefully managed to be as
flexible as possible to provide risk mitigation in case any of our stores
become isolated and performance deteriorates.
We believe our store estate performance is complemented by a strong online
proposition.
2. Developing our online proposition
We see the development of our online capabilities as being complementary to
our store estate and both will benefit as the store estate expands and the
websites generate increased brand recognition.
Jewellery retail website
www.ramsdensjewellery.co.uk (http://www.ramsdensjewellery.co.uk)
Revenue from the online retail jewellery website increased by 8% to £7.2m
(FY23: £6.7m). H2 performance was particularly strong with revenue growth
of £1m over FY23 following a slower than anticipated H1. This performance
excludes jewellery sales in branches, which use the in-store digital facility
to access the website as a catalogue of stock of over 17,000 items.
The website is continually reviewed for search engine optimisation, pay per
click return on investment and affiliate schemes. Each area is refined on an
ongoing basis to drive future success. The jewellery website will undergo a
platform refresh in 2025.
The retail website revenue is still low when compared to other retail
jewellery websites and therefore provides an opportunity for growth.
Foreign currency website
www.ramsdenscurrency.co.uk (http://www.ramsdenscurrency.co.uk)
The currency website continues to grow. Click and collect sales generated by
the website grew by 23% in FY24 to £51.7m (FY23: £42.0m) and now represents
12% (FY23: 10%) of all currency sales. Home delivery volumes are low but
offered to complement the services.
The currency website includes the ability to order and reload the Ramsdens
Mastercard® Multi-Currency Card. Online card sales are still only a small
proportion of all card sales and we are working with Mastercard to improve the
online buying journey.
The currency website is also the conduit for attracting leads for
International Money Transfers and the digital gateway to making a payment.
Pawnbroking website
www.ramsdenspawnbrokers.co.uk (http://www.ramsdenspawnbrokers.co.uk)
The pawnbroking website was launched in November 2024 and has two areas of
focus. Firstly, it provides customers with 24/7 access to repay their loan
when it is convenient for them and secondly, it is a lead generator for
customers wanting to use their assets to borrow cash.
We are investing in developing SEO and pay per click campaigns for this
service now that it is on a standalone website. The first few weeks since
launch have been encouraging.
Gold buying website
www.ramsdensgoldbuyers.co.uk (http://www.ramsdensgoldbuyers.co.uk)
This new website is dedicated to gold buying and will launch in Q1 2025.
While Ramsdens buys a lot of unwanted gold jewellery from customers, a
significant number of consumers are unaware of the value in their unworn and
potentially damaged jewellery. This website will benefit branches as well as
develop into a profitable online income stream.
Legacy website
www.ramsdensforcash.co.uk (http://www.ramsdensforcash.co.uk)
The ramsdensforcash.co.uk website will become a portal to the above four
individual websites for each of our key income streams as well as providing
background information to who we are and what we do.
3. Expanding the Ramsdens branch footprint in the UK
The Group ended the financial year with a portfolio of 169 stores offering the
same services in small towns and larger cities. While the proportion
attributed to each key income stream differs across the estate, the sum of the
parts is that all mature stores are profitable and immature stores will grow
their income streams and in turn, increase profitability.
This tried and tested operating model can be replicated in new locations and
allows for leveraging off the centralised costs of the head office support
services.
There are c.350 towns and cities with a population of 30,000 or more in the
UK. We believe that there are significant opportunities to grow the store
footprint over coming years given we have proven, successful stores in towns
with a population of less than 15,000 where we have successfully established a
community of returning customers.
A typical new store is an investment of approximately £0.5m, split equally
into the store design and appearance and working capital assets such as
jewellery and cash. We will continue to open new stores on a geographic
rippling basis to leverage our existing operational strength and capacity.
During the year, we opened seven greenfield sites and acquired our franchised
store in Bury. Romford opened in the South East, as well as stores in Poole
to complement Boscombe in Dorset, in Cardiff city centre, in Telford to expand
towards the Midlands and in Blackpool, Burnley and Blackburn in the North
West.
We are very happy with the progress made by the FY24 new store cohort.
Grantham opened following the year end in October 2024 and its early weeks of
trading have been encouraging.
We have a strong pipeline of researched towns where we are awaiting the right
unit to become available. Units in towns are identified by taking into
account footfall and adjacent retailer quality. The challenges at present
are the state of some high streets and shopping centres with significant
temporary lets and voids. We continue to hope for a full reform of the
non-domestic rates system which may encourage more retailers to open stores
and recreate vibrant high streets. For these reasons, we have reduced the
planned number of store openings in FY25 to a further four, however, we expect
to increase new store openings in FY26 and beyond.
4. Acquisition opportunities
We continue to look for acquisition opportunities in the market, considering
any potential acquisition against the alternative of opening a new store using
our successful branch model.
Historically we have benefited from acquiring pawnbroking businesses, however,
the industry is quite fragmented and often businesses are under invested and
generate lower returns on the capital employed. The number of pawnbrokers
operating in the UK continues to fall. The main reasons for closures tend to
be the cost of regulatory compliance as well as a lack of internal succession
structures at what are typically one store, family businesses. We remain
active in speaking to pawnbroking businesses who may potentially be looking to
sell in the upcoming years and are well positioned should opportunities arise.
We have previously converted independent jewellery stores into successful
Ramsdens branches, but recent opportunities have not been attractive with them
holding too much obsolete stock.
We have and will continue to consider vertical diversification with repair or
watch repair businesses and if the right opportunity presents itself at the
right price, we would be interested.
We purchased our Bury franchisee in March 2024. This business has performed
in line with expectations since acquisition with the franchisee remaining with
the Group as the branch manager.
5. Focusing on sustainability through our ESG strategy
We know that our long-term strategic aims will only be delivered if we
maintain our good sustainable practices built on firm foundations.
Our foundations are:
· Environment - we are very conscious of the impact of our
activities on the environment and our aim is to minimise our energy use and
recycle where we can
· Social - our people. How we look after our people, their
wellbeing, our inclusiveness and creating opportunities for all staff to
learn, develop and progress their careers is critical in how we then serve and
help our customers
· Social - our communities in which we operate. How we look after
customers, suppliers and the wider community including supporting local
charitable organisations helps define our business
· Governance - we are committed to having the highest standards of
governance throughout the business. We have a strong structure of oversight
covering what we do and how we do it, using our market leading in house
bespoke software to provide the necessary controls and reporting.
OUTLOOK
Underpinned by its strong, trusted brand and diversified income streams the
Group is well positioned for the year ahead. We will build on the continuous
improvement culture we have and will always strive to do the right thing for
the long term good of the Group's stakeholders.
We are fortunate to have investment choices from our strong cash generation
and see a blended strategy as the way to progress.
Our H2 performance in the retail jewellery segment gives us confidence and
momentum as we enter FY25. Our continued growth in sales of foreign currency
indicates that we are taking market share and we believe we can capitalise on
this with the currency card and in time the international money transfer
service. We believe the gold price will remain high in the short to medium
term and as a consequence assist the pawnbroking and the precious metals
segments.
As with many other businesses, due to the increases in the Real Living Wage
and Employers' National Insurance the Company faces rising operating costs in
2025. However, the Group will seek to recover these costs by improving the
scale of the Group and focusing on its value for money, competitive pricing
strategy.
As a result, the Board is confident that Ramsdens is well placed to continue
to make progress for the benefit of all stakeholders.
Peter Kenyon
Chief Executive Officer
13 January 2025
CHIEF FINANCIAL OFFICER'S REVIEW
FINANCIAL RESULTS
For the year ended 30 September 2024, the Group increased Revenue by 14% to
£95.6m (FY23: £83.8m) with growth across each of the four key income
streams. Gross profit increased by 13% to £51.5m (FY23: £45.8m).
The Group's administrative expenses increased by 11% to £39.1m (FY23:
£35.1m), reflecting an increase in staff costs with the RLW increasing by 10%
and the additional stores which were opened or acquired in the current and
prior year. Finance costs have increased by 33% to £1.1m (FY23: £0.8m) due
to having an increased bank facility and a higher interest base rate.
Profit before tax increased to £11.4m (FY23: £10.1m), a record for the
business, as the Group benefited from the high gold price and its diversified
offering.
The Group's cash position remains strong with £7.4m net cash at the year-end
(FY23: £5.0m). Investments have been made in new stores and the growth of
the pawnbroking loan book.
The table below shows the headline financial results:
£000's FY24 FY23
Revenue £95,608 £83,805
Gross profit £51,533 £45,759
Profit before tax £11,362 £10,105
Net assets £53,606 £48,167
Net cash* £7,395 £5,039
Basic EPS 26.1p 24.5p
*Cash less bank borrowings
EARNINGS PER SHARE AND DIVIDEND
The statutory basic earnings per share for FY24 was 26.1p, up from 24.5p in
the previous year.
The Board is recommending a final dividend of 7.6p in respect of FY24 (FY23:
7.1p). Subject to approval at the AGM, the final dividend is expected to be
paid on 21 March 2025 for those shareholders on the register on 14 February
2025. The ex-dividend date will be 13 February 2025. This would bring the
total dividend for FY24 to 11.2p (FY23: 10.4p). This dividend is in line
with the Board's progressive dividend policy reflecting the cash flow
generation and earnings potential of the Group.
This dividend represents a 43% pay-out ratio of FY24 basic EPS (FY23: 42%).
The long-term dividend strategy is to move towards approximately 50% of
post-tax profits being distributed subject to the financial performance and
growth opportunities.
FINANCIAL POSITION
At 30 September 2024, cash and cash equivalents amounted to £15.8m (FY23:
£13.0m) and the Group had net assets of £53.6m (FY23: £48.2m).
CAPITAL EXPENDITURE
During the reporting period, the Group invested in the store estate by opening
seven new stores, one store acquisition and relocating three existing stores.
Capital expenditure for the year was £2.6m (FY23: £2.7m) and acquisitions
were £0.6m (FY23: £0.3m).
The Group also purchased a new head office building for £1.0m on a long
leasehold with 995 years remaining. The purchase is recognised within lease
payments in the Consolidated Statement of Cash Flows.
CASH FLOW
Working capital outflows in the year include a £1.9m increase in inventories
and growth of the pawnbroking loan book which has resulted in trade and other
receivables increasing by £1.0m. Trade and other payables increased by
£0.9m. The net cash flow from operating activities for the year was £11.9m
(FY23: £3.3m)
Net cash at the year-end was £7.4m (FY23: £5.0m).
During the year the Group secured a new £15m revolving credit facility
(RCF) with Bank of Scotland PLC with a 5-year term, which replaces
the £10m RCF with Virgin Money on more attractive terms. The new facility
expires in March 2029 and has three covenants: flexible cash cover to the
amount drawn, a cash and jewellery stock cover in relation to amount drawn,
and gross borrowings ratio in relation to EBITDA. As at 30 September 2024,
this facility was £8.5m drawn to support the currency cash held. The cash
position and headroom on the bank facility provide the Group with the funds
required to continue to deliver its current stated strategy.
TAXATION
The tax charge for the year was £3.1m (FY23: £2.3m) representing an
effective rate of 27% (FY23: 23%). The increase is due to the 25% corporation
tax rate applying for the full year, compared to only half of the prior
year. A full reconciliation of the tax charge is shown in note 10 of the
financial statements.
SHARE BASED PAYMENTS
The share-based payment expense in the year was £504,000 (FY23: £462,000).
This charge relates to the Long-Term Incentive Plans (LTIP) and Company Share
Option Plans (CSOP). Both schemes are discretionary share incentive schemes
through which the Remuneration Committee can grant options to purchase
ordinary shares. The shares under option in the LTIP scheme can be purchased
at a nominal 1p cost to Executive Directors and other senior management,
subject to certain performance and vesting conditions. The shares under
option in the CSOP scheme can be purchased at their issue prices of 200.5p,
230.0p and 205.0p.
During the year, the LTIP award from 2021 partially met the performance
criteria and 341,250 share options vested. 180,000 share options were
exercised during the year with 161,250 fully vested options remaining
unexercised.
GOING CONCERN
The Board has conducted an extensive review of forecast earnings and cash over
the next 12 months, considering various scenarios and sensitivities given the
ongoing economic challenges and has concluded that it has adequate resources
to continue in business for the foreseeable future. For this reason, the
Board has been able to conclude the going concern basis is appropriate in
preparing the financial statements.
Martin Clyburn
Chief Financial Officer
13 January 2025
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2024
2024 2023
Notes
£'000 £'000
Revenue 5 95,608 83,805
Expected credit loss charges (1,751) (1,834)
Other cost of sales (42,324) (36,212)
Total cost of sales 5 (44,075) (38,046)
Gross profit 5 51,533 45,759
Other income - 300
Administrative expenses (39,068) (35,126)
Operating profit 12,465 10,933
Finance costs 6 (1,103) (828)
Profit before tax 11,362 10,105
Income tax expense 10 (3,065) (2,349)
Profit for the year 8,297 7,756
Other comprehensive income - -
Total comprehensive income 8,297 7,756
Basic earnings per share in pence 8 26.1 24.5
Diluted earnings per share in pence 8 25.7 24.0
Consolidated Statement of Financial Position
As at 30 September 2024
2024 2023
Assets Notes £'000 £'000
Non-current assets
Property, plant and equipment 11 8,853 7,949
Right-of-use assets 11 10,066 9,615
Intangible assets 12 903 673
Investments 13 - -
19,822 18,237
Current assets
Inventories 15 29,649 27,662
Trade and other receivables 16 16,432 15,355
Cash and cash equivalents 17 15,782 13,022
61,863 56,039
Total assets 81,685 74,276
Current liabilities
Trade and other payables 18 7,225 6,305
Interest bearing loans and borrowings 18 8,387 7,983
Lease liabilities 18 2,350 2,462
Income tax payable 18 1,731 1,225
19,693 17,975
Net current assets 42,170 38,064
Non-current liabilities
Lease liabilities 19 7,328 7,661
Contract liabilities 19 - 50
Deferred tax liabilities 19 158 96
Provisions 21 900 327
8,386 8,134
Total liabilities 28,079 26,109
Net assets 53,606 48,167
Equity
Issued capital 22 319 317
Share premium 4,892 4,892
Retained earnings 48,395 42,958
Total equity 53,606 48,167
The financial statements of Ramsdens Holdings PLC, registered number 08811656,
were approved by the directors and authorised for issue on 13 January 2025.
Consolidated Statement of Changes in Equity
For the year ended 30 September 2024
Issued capital Share premium Retained earnings Total
Notes
£'000 £'000 £'000 £'000
As at 1 October 2022 316 4,892 36,635 41,843
Profit for the year - - 7,756 7,756
Total comprehensive income - - 7,756 7,756
Transactions with owners:
Dividends paid 23 - - (1,994) (1,994)
Issue of share capital 22 1 - - 1
Share based payments 26 - - 462 462
Deferred tax on share-based payments - - 99 99
Total transactions with owners 1 - (1,433) (1,432)
As at 30 September 2023
317 4,892 42,958 48,167
As at 1 October 2023 317 4,892 42,958 48,167
Profit for the year - - 8,297 8,297
Total comprehensive income - - 8,297 8,297
Transactions with owners:
Dividends paid 23 - - (3,298) (3,298)
Issue of share capital 22 2 - - 2
Share based payments 26 - - 504 504
Deferred tax on share-based payments - - (66) (66)
Total transactions with owners 2 - (2,860) (2,858)
As at 30 September 2024 319 4,892 48,395 53,606
Consolidated Statement of Cash Flows
For the year ended 30 September 2024
2024 2023
Operating activities Notes £'000 £'000
Profit before tax 11,362 10,105
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and impairment of property, plant
and equipment 11 1,644 1,383
Depreciation and impairment of right-of-use assets 11 2,270 2,214
Profit on disposal of right-of-use assets 7 (48) (72)
Amortisation and impairment of intangible assets 12 141 137
Loss on disposal of property, plant and equipment 7 49 62
Share based payments 26 504 462
Finance costs 6 1,103 828
Working capital adjustments:
Movement in trade and other receivables and prepayments (889) (1,996)
Movement in inventories (1,925) (4,692)
Movement in trade and other payables 870 (2,638)
Movement in provisions 563 327
15,644 6,120
Interest paid (1,199) (828)
Income tax paid (2,565) (2,010)
Net cash flows from operating activities 11,880 3,282
Investing activities
Proceeds from sale of property, plant and equipment - 15
Purchase of property, plant and equipment 11 (2,576) (2,721)
Payment for acquisition 27 (631) (298)
Net cash flows used in investing activities (3,207) (3,004)
Financing activities
Issue of share capital 22 2 1
Dividends paid 23 (3,298) (1,994)
Payment of principal portion of lease liabilities 20 (3,117) (2,041)
Increase in bank borrowings 20 500 1,500
Net cash flows used in financing activities (5,913) (2,534)
Net increase / (decrease) in cash and cash equivalents 2,760 (2,256)
Cash and cash equivalents at 1 October 13,022 15,278
Cash and cash equivalents at 30 September 17 15,782 13,022
Notes to the consolidated financial statements
1. Corporate information
Ramsdens Holdings PLC (the "Company") is a public limited company incorporated
and domiciled in England and Wales. The registered office of the Company is
Unit 16, Parkway Shopping Centre, Coulby Newham, Middlesbrough, TS8 0TJ. The
registered company number is 08811656. A list of the Company's subsidiaries is
presented in note 13.
The principal activities of the Company and its subsidiaries (the "Group") are
the supply of foreign exchange services, pawnbroking, jewellery sales, and the
sale of precious metals purchased from the general public.
2. Changes in accounting policies and presentation
There are no changes to accounting policies in the current year. There are
no known future changes in accounting standards which are expected to
materially impact the Group.
There is a change in presentation within the Consolidated Statement of
Comprehensive Income with regards to the disclosure of expected credit loss
charges. These charges have been disclosed separately within cost of sales.
Given cost of sales represent the material costs per segment these have been
disclosed within the segmental analysis in note 5 following the July 2024
IFRIC agenda decision.
3. Significant accounting policies
3.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted international accounting standards.
The consolidated financial statements have been prepared on a historical cost
basis. The consolidated financial statements are presented in pounds sterling
which is the functional currency of the parent and presentational currency of
the Group. All values are rounded to the nearest thousand (£000), except when
otherwise indicated.
The financial information set out herein does not constitute the Group's
statutory accounts for the year ended 30 September 2024 or the year ended 30
September 2023 within the meaning of sections 434 of the Companies Act 2006,
but is derived from those accounts. The audited accounts for the year ended 30
September 2024 will be posted to all shareholders in due course and will be
available on the Group's website. The auditors have reported on those accounts
and expressed an unmodified audit opinion which did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
The financial information for the year ended 30 September 2023 is derived from
the statutory accounts for that year, which have been delivered to the
Registrar of Companies. The auditors have reported on those accounts and
expressed an unmodified audit opinion which did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006
3.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and all of its subsidiary undertakings (as detailed above). The
financial information of all Group companies is adjusted, where necessary, to
ensure the use of consistent accounting policies. In line with IFRS10, an
investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
3.3 Going concern
The Group has prepared the financial statements on a going concern basis, with
due consideration to the present economic situation.
The Board have conducted an extensive review of forecast earnings and cash for
the period to 31 January 2026 considering various scenarios and sensitivities
given the ongoing uncertainty around the future economic environment.
At 30 September 2024 the Group has significant cash balances of £15.8m,
readily realisable stock of gold jewellery and access to the £6.5m unutilised
element of a £15m revolving credit facility with an expiry date of March
2029. In the year ended 30 September 2024 the Group has traded profitably and
generated cash from operations.
The Board have been able to conclude that they have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. Accordingly, the Group continues to adopt the going
concern basis in preparing the financial statements. The going concern
assessment covers the period to 31 January 2026.
3.4 Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The
consideration transferred in the acquisition is measured at fair value, as are
the identifiable assets acquired and liabilities incurred. Acquisition related
costs are expensed as incurred and included in administrative expenses.
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred over the fair value of the identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still results in an
excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the Statement of
Comprehensive Income as a gain on bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date, allocated to each of the
Group's cash generating units (CGU) that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
3.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at
cost. The cost of intangible assets acquired in a business combination is
their fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses, if any. Internally generated intangible assets,
excluding capitalised development costs, are not capitalised and expenditure
is recognised in the Statement of Comprehensive Income when it is incurred.
The useful lives of intangible assets are assessed as either finite or
indefinite and at each date of the Statement of Financial Position only
goodwill assets are accorded an indefinite life.
Intangible assets with finite lives are amortised over their useful economic
lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.
Amortisation is calculated over the estimated useful lives of the assets as
follows:
• Customer relationships - 40% reducing balance
• Software - 20% straight line
Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on intangible assets with
finite lives is recognised in the Statement of Comprehensive Income in the
expense category consistent with the function of the intangible assets.
3.6 Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated
depreciation and accumulated impairment losses (if any). All other repair
and maintenance costs are recognised in the Statement of Comprehensive Income
as incurred.
Depreciation is calculated over the estimated useful lives of the assets as
follows:
· Freehold property - 2% straight line
· Leasehold improvements - straight line over the lease term
· Fixtures & fittings - 20% and 33% reducing balance
· Computer equipment - 25% and 33% reducing balance
· Motor vehicles - 25% reducing balance
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the Statement of Comprehensive Income when the asset is
derecognised.
The residual values, useful lives and methods of depreciation of property,
plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.
3.7 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's or CGU's
fair value less costs of disposal and its value in use. It is determined for
an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate
valuation model is used.
The Group bases its impairment calculation on detailed budgets and forecasts
which are prepared separately for each of the Group's CGUs to which the
individual assets are allocated, which is usually taken to be each individual
branch store and the jewellery retail website, based on the independence of
cash inflows. Central costs and assets are allocated to CGUs based on revenue.
These budgets and forecast calculations are estimated for three years and
extrapolated to cover a total period of ten years.
Impairment losses of continuing operations are recognised in the Statement of
Comprehensive Income in those expense categories consistent with the function
of the impaired asset.
For assets excluding goodwill, an assessment is made at each reporting date as
to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists,
the Group estimates the asset's or CGU's recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since the last
impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation or amortisation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in
the Statement of Comprehensive Income unless the asset is carried at a
revalued amount, in which case the reversal is treated as a revaluation
increase.
Goodwill
Goodwill is tested for impairment at the end of each accounting period and
when circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of
each CGU (or group of CGUs) to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than their carrying
amount, an impairment loss is recognised. Impairment losses relating to
goodwill cannot be reversed in future periods. Goodwill is allocated to CGUs
based on the price paid of the relevant acquisition.
3.8 Inventories
Inventories comprise of retail jewellery and precious metals held to be
scrapped and are valued at the lower of cost and net realisable value.
Cost represents the weighted average purchase price plus overheads directly
related to bringing the inventory to its present location and condition.
When the Group takes title to pledged goods on default of pawnbroking loans up
to the value of £75, cost represents the principal amount of the loan plus
term interest.
Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and estimated costs to sell.
3.9 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets
Financial assets are all recognised and derecognised on a trade date basis.
All recognised financial assets are measured and subsequently measured at
amortised cost or fair value depending on the classification of the financial
asset.
Classification of financial assets
Financial assets that meet the following criteria are measured at amortised
cost:
· the financial asset is held within the business model whose
objective is to hold financial assets in order to collect contractual cash
flows; and
· the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
In accordance with IFRS 9 Financial Instruments the Group has classified its
financial assets as amortised cost.
The amortised cost of a financial asset is the amount at which the financial
asset is measured at initial recognition less the principal repayments, plus
the cumulative amortisation using the effective interest method of any
difference between that initial amount and the maturity amount, adjusted for
any loss allowance. The gross carrying amount of a financial asset is the
amortised cost of a financial asset before adjusting for any loss allowance.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash
at banks and on hand, foreign currency held for resale and short-term deposits
held with banks with a maturity of three months or less from inception. Debit
/ credit card receipts processed by merchant service providers are recognised
as cash at point of transaction. Foreign currency bank notes are ordered for
next day delivery and are recognised once the control of these has been
transferred, which is usually on receipt.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash
equivalents consist of cash, foreign currency held for resale and short-term
deposits as defined above, net of any outstanding bank overdrafts.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial
assets that are measured at amortised cost. The amount of credit losses is
updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Group recognises lifetime expected credit losses when there has been a
significant increase in credit risk since initial recognition. However, if the
credit risk on the financial instrument has not increased significantly since
initial recognition, the Group recognises the 12 month expected credit losses.
As pawnbroking loans are typically over a six-month term the lifetime credit
losses are usually the same as the 12 month expected credit losses.
In assessing whether the credit risk on a financial instrument has increased
significantly since initial recognition, the Group compares the risk of a
default occurring on the financial instrument at the reporting date with the
risk of a default occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both quantitative
and qualitative information that is reasonable and supportable including
historical experience.
The measurement of expected credit losses is a function of the probability of
default, and the loss (if any) on default. The assessment of the probability
of default is based on historical data. The loss on default is based on the
assets gross carrying amount less any realisable security held. The expected
credit loss calculation considers both the interest income and the capital
element of the pawnbroking loans. Interest on loans in default is accrued net
of expected credit losses. Details of the key assumptions for pawnbroking
expected credit losses are given in note 4.
Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
to another entity. On derecognition of a financial asset measured at amortised
cost, the difference between the assets carrying amount and the sum of the
consideration received and receivable is recognised in the Statement of
Comprehensive Income. Pawnbroking loans in the course of realisation
continue to be recognised as loan receivables until the pledged items are
realised.
Financial liabilities
Debt and equity instruments are classified as either financial liabilities or
equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and equity instrument.
All financial liabilities are recognised initially at amortised cost or at
fair value through profit and loss (FVTPL).
The Group's financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
method (EIR). Gains and losses are recognised in the Statement of
Comprehensive Income when the liabilities are derecognised as well as through
the (EIR) amortisation process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance costs in
the Statement of Comprehensive Income.
Given interest bearing loans and borrowings are short-term with a typical
maturity period of three months or less, individual drawdowns and repayments
are presented on a net basis through the Consolidated Statement of Cash Flows.
Only the Group's derivative financial instruments are classified as financial
liabilities at fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated at fair
value, with any resultant gain or loss recognised in the Statement of
Comprehensive Income. The net gain or loss recognised in the Statement of
Comprehensive Income incorporates any interest paid on the financial
liability.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the Statement of Comprehensive
Income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount
reported in the Statement of Financial Position only if there is a current
enforceable legal right to offset the recognised amounts and intent to settle
on a net basis, or to realise the assets and settle the liabilities
simultaneously.
3.10 Fair value measurement
The Group measures financial instruments, such as derivatives, at fair value
at the date of each Statement of Financial Position.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy. This
is described, as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or indirectly
observable
• Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is unobservable
3.11 Taxation
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the Consolidated Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group's liability for current tax is
calculated using tax rates and laws that have been enacted or substantively
enacted by the date of the Statement of Financial Position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the date of each
statement of financial position and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates and laws that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in
equity. Deferred tax is recognised on an undiscounted basis.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
3.12 Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:
· The contract involves the use of an identified asset - this may
be specified explicitly or implicitly and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset. If
the supplier has a substantive substitution right, then the asset is not
identified;
· The Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of use; and
· The Group has the right to direct the use of the asset. The Group
has this right when it has the decision-making rights that are most relevant
to changing how and for what purpose the asset is used. In rare cases where
the decision about how and for what purpose the asset is used is
predetermined, the Group has the right to direct the use of the asset if
either:
o The Group has the right to operate the asset; or
o The Group designed the asset in a way that predetermines how and for what
purpose it will be used.
As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of the right-of-use assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Generally, the Group uses
its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the
following:
· Fixed payments, including in-substance fixed payments;
· Variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;
· Amounts expected to be payable under a residual value guarantee;
and
· The exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional renewal period
if the Group is reasonably certain to exercise an extension option, and
penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise
a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have an initial lease term of 12 months
or less and leases of low-value assets, including IT equipment. The Group
recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
3.13 Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are measured using the directors' best estimate of the
expenditure required to settle the obligation at the date of each statement of
financial position.
If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
The majority of the Group's premises are leased and include an end of lease
rectification clause to return the property to its original state. The Group
provides for rectification costs throughout the life of the lease as required.
The Group maintains stores to a high standard and completes any necessary
repairs and maintenance on a timely basis using the in-house property
department and external contractors. These repair costs are expensed as
incurred.
3.14 Pensions and other post-employment benefits
The Group operates a defined contribution pension scheme. The assets of the
scheme are held and administered separately from those of the Group.
Contributions payable for the year are charged in the Statement of
Comprehensive Income. Total contributions for the year are disclosed in note 9
to the accounts. Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or prepayments in the
Statement of Financial Position.
3.15 Employee share incentive plans
The group grants equity settled share option rights to the parent entity's
equity instruments to certain directors and senior staff members under a LTIP
(Long-term Incentive Plan) and a CSOP (Company Share Option Plan).
The employee share options are measured at fair value at the date of grant by
the use of either the Black-Scholes Model or a Monte Carlo model depending on
the vesting conditions attached to the share option. For market based vesting
conditions the expense recognised over the vesting period reflects the extent
to which the vesting period has expired. For non-market based vesting
conditions the expense recognised over the vesting period reflects the extent
to which the vesting period has expired and the Group's best estimate of the
number of share options that will ultimately vest. The expense is recognised
in the entity in which the beneficiary is remunerated. Further details are
provided in note
26.
3.16 Revenue recognition
The major sources of revenue come from the following:
· Pawnbroking
· Foreign currency exchange
· Purchase of precious metals
· Retail jewellery sales
· Income from other financial services
Pawnbroking revenue is recognised in accordance with IFRS 9, whereas revenue
from other sources is recognised in accordance with IFRS 15.
Pawnbroking revenue
Revenue from pawnbroking loans comprises interest earned over time by
reference to the principal outstanding and the effective rate applicable,
which is the rate that discounts the estimated cash receipts through the
expected life of the financial asset to that asset's net carrying value.
When a customer defaults on a pawnbroking loan, the pledged goods held as
security are sold to repay the customer debt. As a pawnbroking loan has a
single repayment, an increase in credit risk occurs at the point the loan
becomes overdue. Once overdue the loan is classified as in default and
interest income is accrued net of expected credit losses. At the start of
the realisation process the expected credit loss calculation is re-performed
based on the expected cash flows of the retail process, with any increase in
expected credit losses recognised as a cost of sale. Further details of the
expected credit loss calculations are provided in note 4.1 and note 14.
Foreign currency exchange income
Revenue is earned in respect of the provision of Bureau de Change facilities
offered and represents the margin earned which is recognised at the point the
currency is collected by the customer as this represents when the service
provided under IFRS 15 has been delivered.
Sale of precious metals acquired via over the counter purchases
Revenue is recognised when control of the goods has transferred, being at the
point the goods are received by the bullion dealer and a sell instruction has
been issued. If a price has been fixed in advance of delivery, revenue is
recognised at the point the goods are received by the bullion dealer.
Jewellery retail sales
Revenue is recognised at the point the goods are transferred to the customer.
Customers either pay in full at the time of the transaction and receive the
goods, purchase goods online using a third party finance provider and receive
the goods by delivery once the finance has been authorised or pay by layby in
instalments and receive the goods once the sale is fully paid. Instalment
payments are recognised as a creditor until the item is fully paid. The Group
has a 7-day refund policy in store, and a 14-day refund policy online
reflecting the distance selling regulations. Premium watches are sold with a
limited 12-month warranty. A provision for warranties is recognised when the
underlying products are sold, based on management's best estimate, and is
included as a cost of sale.
Other financial income
Other financial income comprises of agency commissions.
3.17 Administrative expenses
Administrative expenses include branch staff and establishment costs.
4. Key sources of estimation uncertainty and significant accounting judgements
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
4.1 Key sources of estimation uncertainty
Revenue recognition - pawnbroking loans interest and impairment
The Company recognises interest on pawnbroking loans as disclosed in note
3.15.
For active pawnbroking loans (loans not in the course of realisation) the
Company estimates the expected credit losses. An assessment is made on a
pledge by pledge basis of the carrying value represented by original capital
loaned plus accrued interest to date and its corresponding realisation value
on sale of unredeemed pledges to identify any credit losses. The key estimates
within the expected credit loss calculation are;
· Non-redemption rate - This is based upon current and historical
data held.
· Realisation value - This is based upon either;
o The estimated proceeds from the sale of the metal content via disposal
through a bullion dealer.
o The expected resale value of the pledged goods that can be retailed.
For pawnbroking loans in the course of realisation the Company estimates the
expected credit losses based on the expected outcome from selling the pledged
goods. The key estimates within the expected credit loss calculation are;
· Proceeds of sale - This is based upon the retail price the goods
are offered for sale at.
· Time to sell - This is based upon current and historical data in
respect of the average time to sell and is assumed to be 12 months.
See note 14 for further details on pawnbroking credit risk and provision
values, including sensitivity.
Impairment of property, plant and equipment, right-of-use assets and
intangible assets estimate
Determining whether property, plant and equipment, right-of-use assets and
intangible assets are impaired requires an estimation of the value in use of
the CGU to which the assets have been allocated. The value in use calculation
requires the Group to estimate the future cash flows expected to arise from
the CGU and select a suitable discount rate in order to calculate present
value. The review is conducted annually, in the final quarter of the year. The
impairment review is conducted at the level of each CGU, which is usually
taken to be each individual branch store.
Management have determined that the key sources of estimation uncertainty, to
which the impairment analysis of property plant and equipment, right-of-use
assets and intangible assets is most sensitive, relate to the following
assumptions:
1. The Group prepares pre-tax cash flow forecasts for each branch.
Cash flows represent management's estimate of the revenue of the relevant CGU,
based upon the specific characteristics of the branch and its stage of
development.
2. The Group has discounted the forecast cash flows at a pre-tax, risk
adjusted rate of 16%.
Whilst the impairment review has been conducted based on the best available
estimates at the impairment review date, the Group notes that actual events
may vary from management expectation. If outcomes within the next financial
year are different from the assumptions made in relation to future cash flows,
this could lead to a material adjustment to the carrying amount of the assets
affected. The carrying amounts for tangible assets, right-of-use assets and
intangible assets are disclosed in notes 11 and 12.
Where the recoverable amount of the CGU was estimated to be less than its
carrying amount, the carrying amount of the CGU was reduced to the estimated
recoverable amount.
Reinstatement provision
The Group recognises a provision for reinstatement of leasehold property as
disclosed in note 21. This provision reflects management's best estimate of
the costs required to restore leased properties to their original condition at
the end of expected occupation, as required by the lease agreements,
discounted to the present value.
The reinstatement provision is calculated using the following key estimates:
1. Scope and cost of reinstatement work required.
2. The expected occupation and therefore time until the
reinstatement works are required.
3. The time value of money used to discount the future expected
cost of reinstatement work.
4.2 Significant accounting judgements
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
Lease terms
For leases which contain a break clause an assessment is made on entering a
lease on the likelihood that the lease break would be exercised. If the lease
break is not expected to be exercised the break clause is ignored in
establishing the lease term.
5. Segmental analysis
The Group's revenue from external customers is shown by geographical location
below:
2024 2023
Revenue £'000 £'000
United Kingdom 95,394 83,805
Other 214 -
95,608 83,805
The Group's assets are located entirely in the United Kingdom therefore, no
further geographical segments analysis is presented. The Group is organised
into operating segments, identified based on key revenue streams, as detailed
in the CEO's review.
The Group's revenue is analysed below between revenue from contracts with
customers and other sources which comprises interest income earned on
pawnbroking loans.
2024 2023
Revenue £'000 £'000
Contracts with customers 82,200 71,928
Pawnbroking interest income 13,408 11,877
95,608 83,805
Pawnbroking interest income is recognised over time as each loan progresses
whereas all other revenue is recognised at a point in time.
2024 2023
Revenue £'000 £'000
Pawnbroking 13,408 11,877
Purchases of precious metals 31,151 23,522
Retail jewellery sales 35,607 33,474
Foreign currency 14,879 14,083
Income from other financial services 563 849
Total revenue 95,608 83,805
Cost of sales 2024 2023
£'000 £'000
Pawnbroking (1,751) (1,834)
Purchases of precious metals (19,329) (14,361)
Retail jewellery sales (22,314) (21,416)
Foreign currency (681) (435)
Income from other financial services - -
Total cost of sales (44,075) (38,046)
Gross profit
2024 2023
£'000 £'000
11,657 10,043
Pawnbroking
Purchases of precious metals 11,822 9,161
Retail jewellery sales 13,293 12,058
Foreign currency 14,198 13,648
Income from other financial services 563 849
Total gross profit 51,533 45,759
Other income - 300
Administrative expenses (*) (39,068) (35,126)
Finance costs (*) (1,103) (828)
Profit before tax 11,362 10,105
Revenue from the purchases of precious metals is currently from one bullion
dealer. There is no reliance on key customers in other revenue streams.
Income from other financial services comprises of agency commissions.
(*) The Group is unable to meaningfully allocate administrative expenses, or
financing costs or income between the segments. Accordingly, the Group is
unable to meaningfully disclose an allocation of items included in the
Consolidated Statement of Comprehensive income below gross profit, which
represents the reported segmental results.
In addition to the segmental reporting on products and services the Group also
manages each branch as a separate CGU and makes local decisions on that basis.
2024 2023
Other information £'000 £'000
Tangible & intangible capital additions (*) 2,967 2,759
Depreciation and amortisation (*) 4,055 3,734
Assets
Pawnbroking 15,220 14,262
Purchases of precious metals 5,708 3,373
Retail jewellery sales 24,296 24,647
Foreign currency 8,262 6,061
Income from other financial services 40 44
Unallocated (*) 28,159 25,889
81,685 74,276
Liabilities
Pawnbroking 494 596
Purchases of precious metals 2 5
Retail jewellery sales 1,771 1,744
Foreign currency 729 453
Income from other financial services 369 339
Unallocated (*) 24,714 22,972
28,079 26,109
(*) The Group cannot meaningfully allocate this information by segment due to
the fact that all segments operate from the same stores and the assets in use
are common to all segments.
Fixed assets and sterling cash and cash equivalents are therefore included in
the unallocated assets balance.
6. Finance costs
2024 2023
£'000 £'000
Interest on debts and borrowings 566 368
Lease charges (note 20) 537 460
Total finance costs 1,103 828
7. Profit before taxation has been arrived at after charging/(crediting)
2024 2023
£'000 £'000
Items reported within cost of sales -
Cost of inventories recognised as an expense 41,643 35,777
Pawnbroking expected credit losses 1,751 1,834
Items reported within administrative expenses -
Depreciation of property, plant and equipment (note 11) 1,644 1,383
Depreciation of right-of-use assets (note 11) 2,270 2,209
Profit on disposal of right-of-use assets (note 11) (48) (72)
Amortisation of intangible assets (note 12) 141 137
Loss on disposal of property, plant and equipment (note 11) 49 62
Staff costs (note 9) 22,739 20,107
Foreign currency exchange losses 201 318
Auditor's remuneration - audit fees 195 175
Auditor's remuneration - non-audit fees 7 6
Short term lease payments 546 418
Share based payments (note 26) 504 462
8. Earnings per share
2024 2023
£'000 £'000
Profit for the year 8,297 7,756
Weighted average number of shares in issue 31,805,807 31,679,095
Basic earnings per share (pence) 26.1 24.5
Weighted average number of dilutive shares 509,450 622,907
Effect of dilutive shares on earnings per share (pence)* (0.4) (0.5)
Fully diluted earnings per share (pence) 25.7 24.0
*All dilution relates to share options
9. Information regarding directors and employees
Directors' emoluments (£'000)
2024 2023
Salary/ Pension LTIP* Total Salary/ Pension LTIP* Total
bonus/PHI
bonus/PHI
Executive
Peter Kenyon 472 10 - 482 385 10 37 432
Martin Clyburn 352 10 - 362 266 10 18 294
Non Executive
Andrew Meehan 75 - - 75 69 - - 69
Simon Herrick 55 - - 55 51 - - 51
Karen Ingham 44 - - 44 37 - - 37
Steve Smith - - - - 14 - - 14
Total 998 20 - 1,018 822 20 55 897
*represents gains made by Directors on the exercise of share options
2024 2023
£'000 £'000
Included in administrative expenses:
Wages and salaries 20,034 17,640
Social security costs 1,710 1,571
Share option scheme 504 462
Pension costs 491 434
Total employee benefits expense 22,739 20,107
The average number of staff employed by the Group during the financial period
amounted to:
2024 2023
No. No.
Head office and management 148 131
Branch counter staff 679 653
827 784
10. Income tax
The major components of income tax expense are:
Consolidated Statement of Comprehensive Income
2024 2023
£'000 £'000
Current income tax:
Current income tax charge 3,100 2,364
Adjustments in respect of current income tax of previous year (31) (60)
3,069 2,304
Deferred tax:
Relating to origination and reversal of temporary differences (4) 45
Income tax expense reported in the Statement of Comprehensive Income 3,065 2,349
A reconciliation between tax expense and the product of accounting profit
multiplied by the UK domestic tax rate is as follows:
2024 2023
£'000 £'000
Profit before income tax 11,362 10,105
UK corporation tax rate at 25% (2023: 22%) 2,841 2,223
Expenses not deductible for tax purposes 255 186
Prior period adjustment (31) (60)
Income tax reported in the Statement of Comprehensive Income 3,065 2,349
Deferred tax
Deferred tax relates to the following:
2024 2023
£'000 £'000
Deferred tax liabilities
Accelerated depreciation for tax purposes 432 403
Other short-term differences (274) (307)
Deferred tax liabilities 158 96
Reconciliation of deferred tax (asset) / liabilities net
2024 2023
£'000 £'000
Opening balance as at 1 October 96 149
Deferred tax recognised in the Statement of Comprehensive Income (4) 46
Other deferred tax 66 (99)
Closing balance as at 30 September 158 96
Factors affecting tax charge
The standard rate of UK corporation tax for the year was 25% (2023: 22%).
The UK corporation tax rate increased from 19% to 25% on 1 April 2023.
11. Property, plant and equipment
Freehold property Leasehold improvements Fixtures & Fittings Computer equipment Motor vehicles Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 695 7,013 4,181 596 53 12,538
Additions - 1,590 928 157 46 2,721
Acquisition - - 7 - - 7
Disposals - (492) (278) (144) (26) (940)
At 1 October 2023 695 8,111 4,838 609 73 14,326
Additions - 1,633 767 148 28 2,576
Acquisition (note 27) - - 20 - - 20
Disposals - (135) (369) (209) - (713)
At 30 September 2024 695 9,609 5,256 548 101 16,209
Depreciation
At 1 October 2022 11 3,523 2,046 249 28 5,857
Depreciation charge for the year 14 726 525 108 10 1,383
Disposals - (440) (265) (138) (20) (863)
At 1 October 2023 25 3,809 2,306 219 18 6,377
Depreciation charge for the year 14 895 605 116 14 1,644
Disposals - (135) (342) (188) - (665)
At 30 September 2024 39 4,569 2,569 147 32 7,356
Net book value
At 30 September 2024 656 5,040 2,687 401 69 8,853
At 30 September 2023 670 4,302 2,532 390 55 7,949
Right-of-use assets
Leasehold property
Cost
At 1 October 2022 14,299
Additions 2,846
Disposals (2,373)
At 1 October 2023 14,772
Additions 3,039
Disposals (2,031)
At 30 September 2024 15,780
Depreciation
At 1 October 2022 4,753
Depreciation charge for the year 2,209
Disposals (1,805)
At 1 October 2023 5,157
Depreciation charge for the year 2,270
Disposals (1,713)
At 30 September 2024 5,714
Net Book Value
At 30 September 2024 10,066
At 30 September 2023 9,615
12. Intangible assets
Customer relationships Website Goodwill Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 2,407 105 526 3,038
Acquisition 31 - - 31
At 1 October 2023 2,438 105 526 3,069
Acquisition (note 27) 177 - 194 371
At 30 September 2024 2,615 105 720 3,440
Amortisation
At 1 October 2022 2,096 90 73 2,259
Amortisation charge for the year 132 5 - 137
At 1 October 2023 2,228 95 73 2,396
Amortisation charge for the year 136 5 - 141
At 30 September 2024 2,364 100 73 2,537
Net book value
At 30 September 2024 251 5 647 903
At 30 September 2023 210 10 453 673
13. Investments
The Group has a minor holding in Big Screen Productions 5 LLP.
Big Screen Productions 5 LLP, whilst still trading, has wound down its
operations and made a capital distribution equivalent to the value of the
carrying value of the investment in 2015. The investment now has a £nil
carrying value.
Group Investments
Details of the investments in which the group and company holds 20% or more of
the nominal value of any class of share capital are as follows:
Name of company Holding Proportion of voting rights and shares held Activity
Subsidiary undertaking
Ramsdens Financial Limited Ordinary Shares 100% Supply of foreign exchange services, pawnbroking, purchase of precious metals,
jewellery retail and other financial services.
(Registered office: Unit 16 Parkway Centre, Coulby Newham, TS8 0TJ)
14. Financial assets and financial liabilities
At 30 September 2024 Financial assets at amortised cost Financial liabilities at amortised cost Book value Fair value
£'000 £'000 £'000 £'000
Financial assets
Trade and other receivables 15,708 - 15,708 15,708
Cash and cash equivalents 15,782 - 15,782 15,782
Financial liabilities
Trade and other payables - (7,508) (7,508) (7,508)
Interest bearing loans and borrowings - (8,387) (8,387) (8,387)
Lease liabilities - (9,678) (9,678) (9,678)
Net financial assets/(liabilities) 31,490 (25,573) 5,917 5,917
At 30 September 2023 Financial assets at amortised cost Financial liabilities at amortised cost Book value Fair value
£'000 £'000 £'000 £'000
Financial assets
Trade and other receivables 14,698 - 14,698 14,698
Cash and cash equivalents 13,022 - 13,022 13,022
Financial liabilities
Trade and other payables - (5,834) (5,834) (5,834)
Interest bearing loans and borrowings - (7,983) (7,983) (7,983)
Lease liabilities - (10,123) (10,123) (10,123)
Net financial assets/(liabilities) 27,720 (23,940) 3,780 3,780
Financial assets at amortised cost shown above comprises trade receivables,
other receivables and pledge accrued income as disclosed in note 16.
Trade and other payables comprise of trade payables, other payables as
disclosed in notes 18 and 19.
Loans and receivables are non-derivatives financial assets carried at
amortised cost which generate a fixed or variable interest income for the
Group. The carrying value may be affected by changes in the credit risk of the
counterparties.
Management have assessed that for cash and cash equivalents, trade
receivables, trade payables, bank overdrafts and other current liabilities
their fair values approximate to their carrying amounts largely due to the
short-term maturities of these instruments. Book values are deemed to be a
reasonable approximation of fair values.
Financial risks
The Group monitors and manages the financial risks relating to the financial
instruments held. The principal risks include credit risk on financial assets,
and liquidity and interest rate risk on financial liability borrowings. The
key risks are analysed below.
Credit risk
Pawnbroking loans
Pawnbroking loans are not credit impaired at origination as customers are
expected to repay the capital plus interest due at the contractual term. As a
pawnbroking loan has a single repayment, an increase in credit risk occurs at
the point the loan becomes overdue. Once overdue the loan is classified as in
default and interest income is accrued net of expected credit losses. The
Group is exposed to credit risk through customers defaulting on their loans.
The key mitigating factor to this risk is the requirement for the borrower to
provide security (the pledge) in entering a pawnbroking contract. The security
acts to minimise credit risk as the pledged item can be disposed of to realise
the loan value on default.
The Group estimates that the current fair value of the security is equal to
the current book value of pawnbroking receivables.
In addition to holding security, the Group further mitigates credit risk by:
1) Applying strict lending criteria to all pawnbroking loans. Pledges are
rigorously tested and appropriately valued. In all cases where the Group
lending policy is applied, the value of the pledged items is in excess of the
pawn loan.
2) Seeking to improve redemption ratios. For existing customers, loan history
and repayment profiles are factored into the loan making decision. The Group
has a high customer retention ratio and all customers are offered high
customer service levels.
3) The carrying value of every pledge comprising the pawnbroking loans is
reviewed against its expected realisation proceeds should it not be redeemed
and expected credit losses are provided for based on current and historical
non redemption rates.
The Group continually monitors, at both store and at Board level, its internal
controls to ensure the adequacy of the pledged items. The key aspects of this
are:
- Appropriate details are kept on all customers the Group transacts with;
- All pawnbroking contracts comply with the Consumer Credit Act 2006;
- Appropriate physical security measures are in place to protect pledged
items; and
- An internal audit department monitors compliance with policies at the
Group's stores.
Expected credit losses
The Group measures loss allowances for pawnbroking loans using IFRS 9 expected
credit losses model. The Group's policy is to begin the disposal process one
month after the loan expiry date unless circumstances exist indicating the
loan may not be credit impaired.
2024
2023
Category Gross amount Loss allowance Net carrying amount Gross amount Loss allowance Net carrying amount
£'000 £'000 £'000 £'000 £'000 £'000
Performing 11,822 (202) 11,620 11,299 (203) 11,096
Default 4,626 (1,026) 3,600 4,227 (1,061) 3,166
Total 16,448 (1,228) 15,220 15,526 (1,264) 14,262
The pawnbroking expected credit losses which have been provided on the period
end pawnbroking assets are:
Pawnbroking loans
£'000
At 1 October 2022 1,022
Statement of Comprehensive Income charge 1,834
Utilised in the period (1,592)
At 30 September 2023 1,264
Statement of Comprehensive Income charge 1,751
Utilised in period (1,787)
Balance at 30 September 2024 1,228
A 1% increase/(decrease) in the Group's redemption ratio is a reasonably
possible variance based on historical trends and would result in an impact on
Group pre-tax profit of £7k/(£7k). A one month increase/(decrease) in the
Group's time to sell assumption is a reasonably possible variance based on
historical trends and would result in an impact on Group pre-tax profit of
(£130k)/£130k.
Cash and cash equivalents
The cash and cash equivalents balance comprise cash at banks and on hand,
foreign currency held for resale and short-term deposits held with banks with
a maturity of three months or less from inception. The bank balances are
subject to very limited credit risk as they are held with banking institutions
with high credit ratings assigned by international credit rating agencies. The
cash floats are subject to risks similar to any retailer, namely theft or loss
by employees or third parties. These risks are mitigated by the security
systems, policies and procedures that the Group operates at each store, the
Group recruitment and training policies and the internal audit function.
Market risk
Pawnbroking trade receivables
The collateral which protects the Group from credit risk on non-redemption of
pawnbroking loans is principally comprised of gold, jewellery items and
watches. The value of gold items held as security is directly linked to the
price of gold. The Group is therefore exposed to adverse movements in the
price of gold on the value of the security that would be attributable for sale
in the event of default by the borrower.
The Group considers this risk to be limited for a number of reasons. First of
all, the Group applies conservative lending policies in pawnbroking pledges
reflected in the margin made on retail sales and scrap gold when contracts
forfeit. The Group is also protected due to the short-term value of the
pawnbroking contract. In the event of a significant drop in the price of gold,
the Group could mitigate this risk by reducing its lending policy on
pawnbroking pledges, by increasing the proportion of gold sold through retail
sales or by entering gold hedging instruments. Management monitors the gold
price on a constant basis.
Considering areas outside of those financial assets defined under IFRS 9, the
Group is subject to higher degrees of pricing risk. The price of gold will
affect the future profitability of the Group in three key ways:
i) A lower gold price will adversely affect the scrap
disposition margins on existing inventory, whether generated by pledge book
forfeits or direct purchasing. While scrap profits will be impacted
immediately, retail margins may be less impacted in the short term.
ii) While the Group's lending rates do not track gold
price movements in the short term, any sustained fall in the price of gold is
likely to cause lending rates to fall in the longer term thus potentially
reducing future profitability.
iii) A lower gold price may reduce the attractiveness of
the Group's gold purchasing operations.
Conversely, a lower gold price may dampen competition as lower returns are
available and hence this may assist in sustaining margins and volumes.
Financial assets
The Group is not exposed to significant interest rate risk on the financial
assets, other than cash and cash equivalents, as these are lent at fixed
rates, which reflect current market rates for similar types of secured or
unsecured lending, and are held at amortised cost.
Cash and cash equivalents are exposed to interest rate risk as they are held
at floating rates, although the risk is not significant as the interest
receivable is not significant.
The foreign exchange cash held in store is exposed to the risks of currency
fluctuations. The value exposed is mainly in Euro and US dollars. There is
the daily risk of buying today, receiving the currency the next day, and
subsequently selling it and being susceptible to movements in the exchange
rate. The Company uses monthly forward contracts to hedge against adverse
exchange rate movements in its two key currencies, Euros and US dollars. There
are no contracts in place at the year-end (2023: none). A 1% adverse movement
in exchange rates would result in a reduction to cash and cash equivalents of
£82,000.
Liquidity risk
Cash and cash equivalents
Bank balances are held on short term / no notice terms to minimise liquidity
risk.
Trade and other payables
Trade and other payables are non-interest bearing and are normally settled on
30 day terms, see note 18.
Borrowings
The maturity analysis of the undiscounted cash flows from the Group's
borrowing arrangements that expose the Group to liquidity risk are as follows:
As at 30 September 2024 <3 months £'000 3-12 months £'000 1-5 years £'000 >5 years £'000 Total
£'000
Lease liabilities 638 1,857 7,016 1,745 11,256
Trade payables 3,257 - - - 3,257
Interest bearing loans and borrowings 8,500 - - - 8,500
Total 12,395 1,857 7,016 1,745 23,013
As at 30 September 2023 <3 months £'000 3-12 months £'000 1-5 years £'000 >5 years £'000 Total
£'000
Lease liabilities 641 1,821 6,872 2,447 11,781
Trade payables 2,936 - - - 2,936
Interest bearing loans and borrowings 8,000 - - - 8,000
Total 11,577 1,821 6,872 2,447 22,717
The interest charged on bank borrowings is based on a fixed percentage above
Bank of England base rate. There is therefore a cash flow risk should there be
any upward movement in base rates. Assuming the £15million revolving credit
facility was fully utilised then a 1% increase in the base rate would increase
finance costs by £150,000 pre-tax and reduce post-tax profits by £112,500.
15. Inventories
2024 2023
£'000 £'000
New and second-hand inventory for resale (at lower of cost or net realisable 29,649 27,662
value)
16. Trade and other receivables
2024 2023
£'000 £'000
Trade receivables - pawnbroking 15,220 14,262
Trade receivables - other 484 431
Other receivables 4 5
Prepayments 724 657
16,432 15,355
Trade receivables - pawnbroking is disclosed net of expected credit losses,
details of which are shown in note 14.
17. Cash and cash equivalents
2024 2023
£'000 £'000
Sterling cash and cash equivalents 7,602 6,990
Other currency cash and cash equivalents 8,180 6,032
15,782 13,022
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits.
Further details on financial instruments, including the associated risks to
the Group and allowances for expected credit losses is provided in note 14.
18. Trade and other payables (current)
2024 2023
£'000 £'000
Trade payables 3,257 2,936
Other payables 805 781
Other taxes and social security 617 521
Accruals 2,513 2,027
Contract liabilities 33 40
Subtotal 7,225 6,305
Lease liabilities (note 20) 2,350 2,462
Interest bearing loans and borrowings 8,387 7,983
Income tax liabilities 1,731 1,225
19,693 17,975
Terms and conditions of the above financial liabilities:
· Trade and other payables are non-interest bearing and are
normally settled on up to 60-day terms
· Trade and other payables include amounts received from customers
in relation to layby jewellery purchases of £1,174,000 (2023: £1,120,000).
Materially all of the prior year balance was released to revenue in the
current year
For explanations on the Group's liquidity risk management processes, refer to
note 14.
Bank borrowings
During the year the Group secured a revolving credit facility with Bank of
Scotland PLC, replacing the previous revolving credit facility with Virgin
Money. Details of the facility are as follows:
Key Term Description
Facility Revolving Credit Facility with Bank of Scotland PLC
Total facility size £15m
Termination date March 2029
Utilisation The £15m facility is available subject to financial covenants covering:
- the ratio of total debt to EBITDA
- the ratio of cash at bank/in hand (inclusive of currency
balances) to total debt
- the ratio of the sum of cash at bank/in hand (inclusive of
currency balances) and jewellery/precious metals value to total debt
Interest Interest is charged on the amount drawn down at 2.15% above base rate when the
initial drawdown is made. For unutilised funds interest is charged at 0.7525%
from the date when the facility was made available
Interest Payable Interest is payable at the end of a drawdown period which is typically between
one and three months
Repayments The facility can be repaid at any point during its term and re-borrowed
Security The facility is secured by a debenture over all the assets of Ramsdens
Financial Ltd and cross guarantees and debentures have been given by Ramsdens
Holdings PLC
Undrawn facilities At 30 September 2024 the Company had available £6.5m of undrawn committed
facilities
19. Non-current liabilities
2024 2023
£'000 £'000
Lease liabilities (note 20) 7,328 7,661
Contract liabilities - 50
Deferred tax (note 10) 158 96
Provisions (note 21) 900 327
8,386 8,134
20. Changes in liabilities arising from financing activities
Lease liabilities Bank borrowings
£'000 £'000
As at 1 October 2022 9,957 6,443
Cash flows (2,041) 1,500
Financing cash flows
Interest paid (460) (368)
Non-cash flows
New leases 2,846 -
Disposed leases (639) -
Interest expense 460 368
Other movement - 40
As at 1 October 2023 10,123 7,983
Cash flows
Financing cash flows (3,117) 500
Interest paid (537) (662)
Non-cash flows
New leases 3,039 -
Disposed leases (367) -
Interest expense 537 566
As at 30 October 2024 9,678 8,387
Short term lease payments recognised in administrative expenses in the year
total £546,000 (2023: £418,000). The maturity analysis of lease liabilities
is disclosed in note 14, the finance cost associated with lease liabilities is
disclosed in note 6, and the depreciation and impairment of right-of-use
assets associated with lease liabilities are disclosed in note 11.
21. Provisions
Reinstatement provision
£'000
At 1 October 2023 327
Statement of Comprehensive Income charge 563
Fair value on acquisition 10
Utilised in the period -
At 30 September 2024 900
The Group provides for the reinstatement cost of returning leased properties
to their original state. Further details are included in note 4.1.
22. Issued capital and reserves
Ordinary shares issued and fully paid No. £'000
At 30 September 2023 31,714,982 317
Issued during the year 181,650 2
At 30 September 2024 31,896,632 319
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising the return to stakeholders
through the optimisation of the debt and equity balance. The capital structure
of the Group consists of cash and cash equivalents and equity attributable to
the equity holders of the parent, comprising issued capital, reserves and
retained earnings. The Group has a debt facility as disclosed in note 18.
23. Dividends
Amounts recognised as distributions to equity holders in the year:
2024 2023
£'000 £'000
Final dividend for the year ended 30 September 2023 of 7.1p per share 2,252 1,994
(year ended 30 September 2022 of 6.3p per share)
Interim dividend for the year ended 30 September 2023 of 3.3p per share 1,046 -
3,298 1,994
Amounts paid and not recognised:
Interim dividend for the year ended 30 September 2024 of 3.6p per share paid 1,148 1,046
in October 2024
(year ended 30 September 2023 of 3.3p per share paid in October 2023)
Amounts proposed and not recognised:
Final dividend for the year ended 30 September 2024 of 7.6p per share 2,424 2,252
(year ended 30 September 2023 of 7.1p per share)
The proposed final dividend is subject to approval at the Annual General
Meeting and accordingly has not been included as a liability in these
financial statements.
24. Pensions
The Group operates a defined contribution scheme for its directors and
employees. The assets of the scheme are held separately from those of the
Group in an independently administered fund.
The outstanding pension contributions at 30 September 2024 are £93,000 (2023:
£2,000)
25. Related party disclosures
Ultimate controlling party
The Company has no controlling party.
Transactions with related parties
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Transactions with key management personnel
The remuneration of the directors of the Company, who are the key management
personnel of the Group, is set out below in aggregate:
2024 2023
£'000 £'000
Short term employee benefits 998 823
Post employment benefits 20 20
Share based payments 224 200
1,242 1,043
26. Share based payments
The Group operates a Long-term Incentive Plan (LTIP) and Company Share Option
Plan (CSOP). The charge for the year in respect of the schemes was:
2024 2023
£'000 £'000
LTIP 446 420
CSOP 58 42
504 462
The LTIP is a discretionary share incentive scheme under which the
Remuneration Committee of Ramsdens Holdings PLC can grant options to purchase
ordinary shares at nominal 1p per share cost to Executive Directors and other
senior management. A reconciliation of LTIP options is set out below:
Number of conditional Shares Weighted average exercise price in pence
Outstanding at the beginning of the year 1,152,650
Granted during the year 350,000
Lapsed/Forfeited during the year (134,750)
Exercised during the year (181,650) 1
Outstanding at the end of the year 1,186,250
At 30 September 2024 a total of 161,250 share options have met the required
performance conditions and are exercisable.
The options vest according to the achievement against two criteria:
Total Shareholder Return - TSR - 50% of options awarded
Earnings per Share - EPS - 50% of options awarded
The fair value of services received in return for share options granted is
based on the fair value of share options granted and are measured using the
Monte Carlo method for TSR performance condition as this is classified as a
market condition under IFRS2 and using the Black Scholes method for the EPS
performance condition which is classified as a non- market condition under
IFRS2. Volatility has been calculated based on the historical volatility of
the Group's shares over a 2.5 year period. The fair values have been computed
by an external specialist and the key inputs to the valuation model were:
TSR condition EPS condition TSR condition EPS condition TSR condition EPS condition
Model Monte Carlo Black Scholes Monte Carlo Black Scholes Monte Carlo Black Scholes
Grant date 18/04/24 18/04/24 05/04/23 05/04/23 17/03/22 17/03/22
Share price £2.00 £2.00 £2.30 £2.30 £1.67 £1.67
Exercise price £0.01 £0.01 £0.01 £0.01 £0.01 £0.01
Vesting period 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years 2.5 years
Risk free return 4.4% 4.4% 3.5% 3.5% 1.4% 1.4%
Volatility 31.9% 31.9% 33.6% 33.6% 53% 53%
Dividend yield 5.0% 5.0% 5.0% 5.0% 3.5% 3.5%
Fair value of option (£) 0.73 1.76 0.98 2.02 0.77 1.51
Early exercise of the options is permitted if a share award holder ceases to
be employed by reason of death, injury, disability, or sale of the Group. The
maximum term of the share options is 10 years.
The CSOP is a discretionary share incentive scheme under which the
Remuneration Committee of Ramsdens Holdings PLC can grant options to purchase
ordinary shares at an agreed exercise price subject to certain conditions.
The CSOP schemes in place at 30 September 2024 were as follows:
Grant date Exercise price (pence) Number of share options (after forfeits) Earliest date of exercise Expiry date
CSOP 2022 23/06/2022 200.50 104,500 23/06/2025 23/06/2032
CSOP 2023 05/04/2023 230.00 142,500 05/04/2026 05/04/2033
CSOP 2024 18/04/2024 205.00 142,500 18/04/2027 18/04/2034
27. Fair value of acquisition
On 13 March 2024 the Group purchased the trade and certain assets of Cantwells
The Jewellers Limited for a total consideration of £631,000, which was fully
paid in cash. The fair value of the assets acquired were as follows:
£'000
Tangible fixed assets (fixtures & fittings) 20
Intangible assets (customer relationships) 177
Intangible assets (goodwill) 194
Trade receivables - pawnbroking 188
Inventories 62
Reinstatement provision (10)
Net assets acquired 631
28. Post Balance Sheet Events
There were no post balance sheets events that require further disclosure in
the financial statements.
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