Hard times are pure gold for pawnbroker Albermarle & Bond

Demand for short-term loans from cash-strapped consumers and a strong gold price are continuing to boost business at pawnbroker Albemarle & Bond.

The group, which has 169 stores and 38 gold-buying “pop-up” shops, told investors yesterday that it had traded well in the four months to the end of October as more hard-up households pawned or sold jewellery in return for loans or cash.

Despite comparisons with an “exceptional” 2010, the firm said the pledge book in its largest division of pawnbroking showed further growth.

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Gold buying also performed strongly, with gains in volumes and the margin achieved, Albermarle added in a trading update to coincide with its annual general meeting.

The current conditions mean it expects to open a further 15 stores by the end of the financial year, with an additional two gold pop-up outlets by Christmas. The firm recently posted higher profits for the 20th year in a row, up 5 per cent to £21 million in the year to the end of June.

Chairman Greville Nicholls told shareholders at the annual meeting: “During this most recent period, demand for short-term cash has remained high, and with a strong gold price, the group’s services enabling customers to access good value loans by pawning gold jewellery and realise cash by selling unwanted gold jewellery have continued to grow.

“The good start to the year leaves us well placed to meet management expectations for the full year.”

Shore Capital reiterated its “buy” recommendation on the company.

In a note, analyst Owen Jones said: “The group’s financial position remains strong and it recently completed a refinancing of its debt facilities… creating substantial headroom for further store expansion.

“Combined with the newly installed rolling gold hedge programme… group profits are set to see a positive impact.”