Pawnbroker Albemarle & Bond has issued its second profit warning in as many months and resorted to melting down gold to stay within its debt limits.
Britain’s second-biggest chain of pawnbrokers said further falls in gold prices and competition would mean losses in the first five months of its financial year.
New boss Chris Gillespie, who joined last month from doorstep lender Provident Financial, said: “Tough trading conditions have continued to impact our results, but we are making progress controlling costs and managing within our constrained banking facilities.”
The group was given a three-month reprieve by its lenders at the end of last month to patch up its overstretched finances.
Measures taken to remain within its £53.5 million borrowing limit included a clampdown on lending and a “programme of exceptional smelting” of gold items bought by its stores.
Its shares slumped 33.6 per cent, or 12.5p, to 24.75p as it warned City expectations for the current year were “significantly more optimistic” than its own.
It said this was partly due to delays in reporting full-year results, which have been postponed amid talks with lenders.
Albemarle warned in September that there was “significant uncertainty” over its profits because it has been hammered by the falling price of gold, which is 27 per cent lower than in March.
Its woes have been compounded by a bill for its failed attempt to secure a £35m cash injection from its biggest shareholder Ezcorp.