Hard times bonanza for Albemarle & Bond

PAWNBROKER Albemarle & Bond will this week post a surge in profits as it cashes in on consumer hardship and a soaring gold price.

The company is opening a swathe of stores under its Cheque and Pawn and Herbert Brown brands to capitalise, with a further 25 shops due in the current financial year to add to the 15 outlets in the year to 30 June.

It has also recently completed a pilot for nine temporary "pop-up" shops dedicated to purchasing gold, and plans to open a further six after the trials made "excellent returns and short paybacks". The stores are typically located in shopping malls on flexible three to six-month leases.

Driven by the financial crisis and economic uncertainty, the cost of gold hit a fresh record high around $1,300 an ounce last week, leading more cash-strapped consumers to convert old jewellery to cash.

Albemarle, which runs more than 110 outlets, including half a dozen north of the Border, recently said the pledge book in its core pawnbroking arm accounted for 60 per cent of profits after 10 per cent growth year on year.

The City is expecting the group's annual results to highlight a pre-tax profit of 19.8 million, up from 14.6m a year earlier, on sales of 76.3m, against 55.5m in 2009.

Collins Stewart analyst Michael O'Brien forecast profits of 18.9m and said he anticipated a "solid performance".

Albemarle & Bond was founded in Bristol in 1983, but is now headquartered in Reading.

Some commentators have suggested the gold price bubble may be about to burst. Michael Hewson, an analyst at CMC Markets, said it "could be silver's turn to play catch up".