TIDMRFX
RNS Number : 9014M
Ramsdens Holdings PLC
17 January 2023
17 January 2023
Ramsdens Holdings PLC
("Ramsdens", the "Group", the "Company")
Annual Results for the year ended 30 September 2022
Excellent recovery post pandemic
Ramsdens, the diversified financial services provider and
retailer, today announces its Annual Results for the year ended 30
September 2022 (the "Period").
The financial results for FY22 are significantly ahead of FY21
as the Group recovers from the impact of the Covid-19 pandemic.
FY22 FY21
Revenue GBP66.1m GBP40.7m
--------- --------
Gross Profit GBP38.2m GBP22.3m
--------- --------
Profit before tax GBP8.3m GBP0.6m
--------- --------
Net Assets GBP41.8m GBP36.1m
--------- --------
EPS 20.9p 1.2p
--------- --------
Final dividend 6.3p 1.2p
--------- --------
Full year dividend 9.0p 1.2p
--------- --------
Highlights:
-- FY22 profit for the Group has been driven primarily by the
strong recovery in foreign currency gross profit to GBP12.6m (FY21:
GBP3.3m) as international travel returned to a reasonable
level.
-- Revenue generated by the Group's jewellery retail segment
increased by almost 50% to GBP27.1m (FY21: GBP18.3m), supported by
strategic investments in stock, merchandising and the website.
-- Demand for the Group's pawnbroking loans grew during the year
as a result of customer spending habits returning to normal
following the easing of restrictions related to Covid-19 and fewer
alternative options for small sum short term credit being
available. As at 30 September 2022, the loan book had increased by
over 40% to GBP8.6m (FY21: GBP6.1m).
-- Precious metal buying volumes increased throughout the
summer, aided by the high gold price and increased footfall.
Revenue across this segment increased more than 50% to
approximately GBP16.0m (FY21: GBP10.3m).
-- The Board has recommended a final dividend of 6.3p per share
for approval at the forthcoming AGM taking the total dividend for
the Period to 9.0p per share (FY21: 1.2p), representing a return to
the Group's progressive dividend policy.
Current Trading:
The Board is pleased to provide an update on Q1 FY23 trading
(October to December 2022).
-- Jewellery retail gross profit increased by over 15% primarily
as a result of strong premium watch sales both instore and
online.
-- Q1 volumes of foreign currency exchange remained at
approximately 70% of pre pandemic levels.
-- The pawnbroking loan book has grown further from the year-end
balance of GBP8.6m to GBP9.1m.
-- The purchase of precious metal volumes and our other services
have continued to perform in line with expectations.
-- Following the year end, new stores have been opened in
Bootle, Basildon, Croydon and a second store in Bradford, taking
the store estate to 158 stores (including two franchised
stores).
Peter Kenyon, Chief Executive, commented:
"Ramsdens delivered a very strong performance in FY22, once
again reflecting the strength of our diversified income streams.
The strong rebound in our foreign currency exchange volumes,
coupled with increased demand for our excellent quality and value
for money jewellery, has enabled the Group to deliver significantly
increased profitability.
This momentum continued through Q1, with strong jewellery sales
during December driven by continued consumer demand for premium
watches.
Our team of committed staff have once again been central to our
success. They continue to deliver outstanding service to our
growing customer base, for which I am hugely grateful, and I would
like to take this opportunity to publicly thank them all for their
commitment. We continue to invest in attracting, retaining and
rewarding our staff as we develop what I believe to be the best
team in the industry.
While fully aware of the economic challenges that lie ahead,
with our trusted brand and proven, well invested and diversified
business model, I remain very optimistic about Ramsdens' future
prospects."
Availability of Report and Accounts
The Company confirms that the Annual Report and Financial
Statements for the year ended 30 September 2022, together with
notice of the Company's 2022 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
, 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.
S
Enquiries:
Ramsdens Holdings PLC Tel: +44 (0) 1642 579957
Peter Kenyon, CEO
Martin Clyburn, CFO
Liberum Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3100 2000
Richard Crawley
Lauren Kettle
Hudson Sandler (Financial PR) Tel: +44 (0) 20 7796 4133
Alex Brennan
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 in Middlesbrough, the Group operates from 158
stores within the UK (including 2 franchised stores) and has a
growing online presence.
Ramsdens is FCA authorised for its pawnbroking and credit
broking activities.
www.ramsdensplc.com
www.ramsdensforcash.co.uk
CHAIRMAN'S STATEMENT
I had every confidence that Ramsdens, underpinned by the
strength of its diversified business model and value-for-money
proposition, would emerge from the Covid-19 pandemic
well-positioned for continued growth. I am pleased to say this is
the position we are now in.
This Annual Report covers the 12-month period to 30 September
2022 (FY22).
The financial results for FY22 are significantly ahead of FY21
as the latter were severely impacted by retail closures and reduced
international travel resulting from the pandemic.
FY22 brought the challenges of the Covid-19 Omicron variant in
H1, which impacted retail, particularly in the weeks prior to
Christmas 2021, and also caused disruption to international travel.
While these challenges eased in H2, the trading conditions did not
return to those seen prior to the onset of the pandemic. Despite
these challenges, I am pleased to report that the Group has had an
excellent recovery.
FINANCIAL RESULTS & DIVID
The below table highlights the financial results:
GBP000's FY22 FY21
Revenue GBP66,101 GBP40,677
---------- ----------
Gross Profit GBP38,219 GBP22,262
---------- ----------
Profit Before GBP8,269 GBP564
Tax
---------- ----------
Net Assets GBP41,843 GBP36,143
---------- ----------
Net Cash* GBP8,835 GBP13,032
---------- ----------
EPS 20.9p 1.2p
---------- ----------
Final dividend 6.3p 1.2p
---------- ----------
Full year dividend 9.0p 1.2p
---------- ----------
*cash minus bank borrowings
The Group achieved revenue of GBP66.1m (FY21: GBP40.7m) and
Profit Before Tax of GBP8.3m (FY21: GBP0.6m). The Strategic Report
and Financial Review that follow provide a more in-depth analysis
of the Group's trading performance and financial results.
The Board has recommended a final dividend of 6.3p (FY21: 1.2p)
for approval at the forthcoming AGM. The full year dividend, of
9.0p (FY21: 1.2p) assuming approval at the AGM, would represent 43%
of the earnings per share. This payment recommences the Group's
progressive dividend policy of paying approximately 50% of post-tax
profits to shareholders, always subject to executing on the Group's
growth opportunities. Subject to approval at the AGM, the final
dividend is expected to be paid on 10 March 2023 for those
shareholders on the register on 3 February 2023. The ex-dividend
date will be 2 February 2023.
LOOKING AHEAD
The Board believes Ramsdens' diversified income streams provide
defensive qualities against the macroeconomic challenges that lie
ahead. The uncertainty caused by energy cost increases, general
inflationary pressures and higher interest rates will prove a
challenge to many businesses, and Ramsdens is no different.
However, we also see opportunities. We would hope that after
three years of disruption to summer holidays, 2023 may see the
level of holidays taken by consumers return to 2019 levels,
although it is always possible that economic conditions may delay
that.
Tougher economic conditions will no doubt lead to increased and
sometimes unexpected bills for our customers. As an asset-backed
loan, pawnbroking provides a solution to an immediate borrowing
need and allows customers six months to repay their loans or to
make longer term financial arrangements. We have seen the continued
demand for this simple solution as the Ramsdens pawnbroking loan
book finished the year end at a record high. Due to global economic
uncertainty, the gold price is also expected to remain higher than
long term averages, which will benefit both our pawnbroking and
precious metals buying business segments. While there is greater
uncertainty for the outlook on retail, as jewellery is often a
discretionary spend, Ramsdens has been investing heavily in
upskilling staff, building appropriate stock levels, stock
presentation and replenishment systems and it is expected that the
significant momentum we have seen during FY22 will support a
continued strong performance in FY23.
Of course, the Group is not immune from rising costs. While
energy prices for the vast majority of our stores are fixed until
February 2024, stores opened since February 2021 are not part of
that contract and have been subject to higher energy costs. The
biggest cost to the business is also our most important asset: our
people. We have a duty to look after our people and, in addition to
professional development initiatives, opportunities for career
progression and welfare programmes, we also want to reward our
staff well. In addition to a one off 'thank you' bonus, our January
2023 pay review will again ensure that our staff are paid at least
the Real Living Wage with the potential to earn more through
attractive bonus schemes.
I am extremely proud of the Ramsdens team's skills and their
continued commitment to our customers and the communities in which
we operate. I would personally like to thank each and every one of
my colleagues for their continued dedication.
During the year, Steve Smith took the decision to retire from
Ramsdens prior to the 2023 AGM. The Nominations Committee undertook
a recruitment process and I am pleased to report that Karen Ingham
joined the Board on 1 November 2022. I would like to thank Steve
for his contribution to Ramsdens and wish him all the best for the
future and welcome Karen to our board.
Andrew Meehan
Non-Executive Chairman
16 January 2023
CHIEF EXECUTIVE'S REVIEW
Despite the challenges faced during the year, I am pleased that
our diversified income streams have performed extremely well to
deliver strong annual profits, in line with those achieved prior to
the onset of the pandemic.
We started the year with optimism. We knew consumers had saved
significant sums and paid down debts through the pandemic and that
as restrictions were removed, normalised spending habits would
resume, and as a result there would be a greater need to borrow.
The Covid-19 Omicron variant slowed down the return to more
normalised trading conditions until after Christmas 2021. In early
2022, we saw the end of the red and green 'traffic light'
destination lists and constraints on international travel reduced,
most notably the uncertainty of a pre-departure Covid-19 test.
However, it soon became clear that many airlines and airports were
unable to manage the increased volume of consumers travelling
during peak holiday months which led to a reduced number of
international flights. As a result, our opportunity to sell foreign
currency was more limited than we initially expected.
The war in Ukraine and the resulting energy crisis combined with
other inflationary pressures has impacted on both our business and
customers. However, the Group has fixed energy pricing across the
majority of its estate until February 2024 which provides
mitigation in the short term.
Our staff have once again delivered outstanding service to our
growing customer base during the year for which I'm hugely
grateful. I would like to take this opportunity to publicly thank
them all for their commitment. We continue to invest in attracting,
retaining and rewarding our staff as we develop what I believe to
be the best team in the industry.
I remain very optimistic for the future of Ramsdens given our
diversified income streams, robust business model and strong
balance sheet.
BUSINESS REVIEW
Despite the external challenges faced during recent period, the
Group has remained committed to its growth strategy.
Our continuous improvement ethos has led to the core store
estate delivering growth across all income streams and gives us
momentum as we move forward. Within the core estate, we have
relocated four stores, namely Carlisle, Kilmarnock, Newcastle and
Manchester. We opened new stores in Bolton and Glasgow and
successfully expanded into the South East of England with a new
store opening in Chatham. We acquired a further store on the South
coast at Boscombe. All of the new stores and relocations have
performed well.
Two stores have been closed and merged locally in line with our
approach of regularly appraising individual store performance, new
opportunities and return on investment, and we ended the financial
year with 152 stores and two franchised locations.
Our online activities continue to grow. We commenced a project
to refresh the retail jewellery website to improve the search
facility for customers and for organic reach. The refreshed website
went live in Q1 FY23. In H1 2023, we will have individual websites
for our four key income streams, further improving the online
customer journey.
During the year we acquired the freehold of our head office
premises. This will allow us to expand this bespoke building to
support our long-term growth plans as well as introduce a greener
energy solution.
The performance of each of the Group's key income streams is
discussed 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.
Ramsdens also offers international bank-to-bank payments through a
third-party arrangement.
FY22 FY21
Total Currency exchanged GBP364m GBP77m
--------- --------
Gross profit GBP12.7m GBP3.3m
--------- --------
Online click and collect GBP38.7m GBP6.9m
orders
--------- --------
Percentage of FX online 11% 9%
--------- --------
Percentage of Group gross
profit 33% 15%
--------- --------
October 2021 volumes were approximately 30% of pre-pandemic
levels, rising to over 80% in May 2022 before settling through the
summer at circa 70% of pre-pandemic levels.
During this period of supressed volumes, the industry has
widened margins, and Ramsdens has benefited from this while still
offering attractive and competitive exchange rates to our
customers. The overall margin achieved on all foreign currency
exchanged was 3.5%, down from 4.2% due to the changes in mix of
foreign currency sales and purchases.
The average foreign currency sale transaction value (ATV) was
GBP469, an increase on the pre pandemic level of GBP401. We
continue to have confidence that UK travellers will continue to
take cash abroad for both convenience and to assist with budgeting
whilst on holiday.
In line with our multi-channel strategy, the Group is refreshing
its currency travel card proposition with a new multi-currency card
due to be launched in 2023.
International payments income continues to be relatively small
in comparison to total foreign currency commission but we have a
loyal repeat customer base using the service.
We strongly believe that customers' desire to go on holiday
abroad remains high, especially after three summers of disruption.
We are optimistic that more holiday makers will travel during
summer 2023 than did during 2022, and that numbers may return to
2019 levels. However, it is also possible that economic conditions
may delay the return to pre-pandemic levels.
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.
000's FY22 FY21
Gross profit GBP7,533 GBP6,678
--------- ---------
Total loan book* (capital value) GBP8,648 GBP6,137
--------- ---------
Past due (capital value) GBP721 GBP536
--------- ---------
In date loan book* (capital GBP7,927 GBP5,601
value)
--------- ---------
Percentage of Group gross profit 20% 30%
--------- ---------
*excludes loans in the course of realisation
As Covid-19 restrictions eased, as expected, consumers started
to spend more which resulted in an increase in some customers'
short-term requirements for financial assistance. This occurred
across both mainstream consumer credit, such as credit cards where
card balances increased in the last 12 months, as well as across
the consumer base using a pawnbroker. At the same time, the number
of small sum short term credit providers in the market reduced. As
a consequence, demand for pawnbroking loans has increased and the
loan book at the year-end was at a record high of GBP8.6m (FY21
GBP6.1m).
The average loan value as at 30 September 2022 was GBP303, up
from GBP264 as at 30 September 2021. Our lending remains
conservative in line with our long-term policy.
We predict that increased energy bills, high inflation and
higher interest rates will squeeze household incomes in FY23
leading to an increased demand for consumer borrowing. If consumers
have assets to pledge, pawnbroking can provide a short-term
solution and therefore our loan book is expected to increase during
FY23.
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 Group
aims to cross-sell its retail proposition to existing customers of
the Group's other services as well as attracting new customers.
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 FY22 FY21
Revenue GBP27,107 GBP18,252
---------- ----------
Gross Profit GBP10,263 GBP6,965
---------- ----------
Margin % 38% 38%
---------- ----------
Jewellery retail stock GBP19,683 GBP13,979
---------- ----------
Online sales GBP3,904 GBP2,822
---------- ----------
Percentage of sales online 14% 15%
---------- ----------
Percentage of Group gross
profit 27% 31%
---------- ----------
The Group's retail performance is at a record high and continues
to perform well following investments in stock levels, stock
presentation, replenishment systems, staff training and our retail
website over recent years.
Retail revenue is now approximately equally spread across three
key categories of premium watches, new jewellery and preowned
jewellery. Margins by product category have remained consistent as
has the overall gross margin as all product categories have
performed well.
Online growth remains strong with revenue increasing to GBP3.9m,
up 38% for the year. Online sales represented 14% of all jewellery
items sold.
As well as 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. For example, our top watch sales branches have circa 60
watches in store but there are now over 1,800 watches available on
our website for customers to browse, choose from and buy.
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 depending
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 FY22 FY21
Revenue GBP15,847 GBP10,369
---------- ----------
Gross Profit GBP6,626 GBP4,240
---------- ----------
Percentage of Group gross
profit 17% 19%
---------- ----------
The Sterling price for 9ct gold has remained high in comparison
to long run averages, at an average of GBP17.15 per gram during the
year (FY21: GBP16.05).
While in the first half of the year the weight of gold purchased
was subdued in line with reduced footfall, during the second half
year, the weight purchased has returned to pre-pandemic levels.
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 cheque cashing, Western Union money
transfer, credit broking and receives franchise fees.
000's FY22 FY21
Revenue GBP1,114 GBP1,122
--------- ---------
Gross Profit GBP1,114 GBP1,122
--------- ---------
Percentage of Group gross
profit 3% 5%
--------- ---------
This remains a steady source of income albeit we believe that
cheque cashing will continue to decline over the medium term.
STRATEGY
Following an extensive review, the Board believes that its
existing strategy, communicated over the last few years, remains
the right course for growing our business and delivering value for
all our stakeholders in a sustainable manner. Our staff and their
development are a core component of achieving our aims.
We continue to concentrate on:
1. Improving the performance of our existing store estate
2. Expanding the Ramsdens branch footprint in the UK
3. Developing our online proposition
4. Appraising market opportunities presented by operating in challenging markets.
5. Focusing on sustainability through our ESG policies
1. Improving the performance of the existing store estate
All income segments have shown significant growth over FY21
levels, as the Group has recovered from the pandemic
restrictions.
The strategic focus we have placed on attracting new customers
and driving a higher wallet share from our repeat customers has led
to a record pawnbroking loan book and record jewellery retail
revenue. Our focus remains the same across the existing store
estate.
Our costs are well controlled, with our largest cost being our
staff. We fully understand the important role our staff play in
achieving our strategic objectives and as a result we have budgeted
for a positive pay review which has been brought forward to January
2023 from April. We are committed to ensuring that our staff remain
not only productive but also feel rewarded in their careers at
Ramsdens.
Rents continue to be negotiated downwards where there is an
opportunity to do so, balanced with a desire for flexibility with
lease expiry and break dates, especially if the town has some
demographic challenges. In recognising this high street challenge,
where the return on capital justifies a relocation, we will
actively move a store to improve our footfall-reliant services of
foreign currency exchange and jewellery retail while potentially
reducing operating costs at the same time.
We believe our store estate performance is complemented by a
strong online proposition. By investing in our retail jewellery
website in recent years we have improved each store's access to a
wider range of jewellery which has improved customer service levels
and resulted in increased in-store sales.
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. Having available stock and transparent
pricing continues to build trust among consumers.
-- By having branches conveniently located on high streets and
in shopping centres, we will continue to attract consumers wanting
foreign exchange services.
-- By having competitive exchange rates, we will attract new and
retain existing customers whilst continuing to manage margins
closely, with due regard to local market conditions.
-- By improving the frequency of contact we have with our
foreign currency customers, we will stay in our customers' thoughts
when they next need foreign currency.
-- By developing a market-leading multi-currency travel card, we
will seek to capture more of the customer's holiday spend while
abroad.
Pawnbroking:
-- We have fully embraced the FCAs New Consumer Duty initiative.
We have always had the consumer at the heart of what we do and this
has been demonstrated by our loyal customer base. We will continue
doing what we believe are the right things for our customers - this
includes reducing interest rates for customers needing longer to
pay and, if a customer defaults, by continuing to obtain the best
price possible for them by selling by private treaty and not using
an auction process which we believe disadvantages customers.
-- We will continue to have prudent lending policies while
examining opportunities to lend more when the customer's borrowing
history suggests greater capacity to repay and where the pledged
assets are more desirable and readily saleable. Our improvement in
our retail jewellery operations gives the Group confidence that it
is able to lend more on higher value jewellery items.
-- We will continue to build upon the trust and high repeat
customer volumes earned by giving a great service and grow the
customer base through word-of-mouth recommendation.
Jewellery retail:
-- Stock levels have significantly increased over the last 18
months. This has been a deliberate strategy to give our customers
more choice in-store and online and enable improved replenishment
capabilities. This investment continues with the benefit of lessons
learned during recent years and with the belief there is room for
further improvement across both jewellery and premium watches.
-- We are continuing to work on the display of our products to
create more customer appeal as well as continuing to invest in our
retail website which also acts as a stock catalogue for our
branches to facilitate further in store sales.
-- Where appropriate, we will relocate to higher footfall
locations to 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 or simply unwanted or
unworn jewellery.
2. Expanding the branch footprint in the UK
The Group has a successful branch-based model. With diversified
income streams, stores generate a good return on capital while
leveraging the head office cost base. We have successful stores in
small towns and large cities which gives us confidence that we can
be successful on most high streets that have a nucleus of returning
shoppers.
As at 30 September 2022, we had 152 stores plus two franchised
stores.
During the year, we opened three greenfield sites and acquired a
pawnbroker in Boscombe. We closed stores in Middlesbrough
(secondary foreign currency kiosk) and Ripon; both of these stores
were merged with other local Ramsdens stores.
The year also saw the first new store opened in the South East
of England in Chatham, Kent. This store has had a good first year,
well ahead of expectations, and we plan to open up to another seven
stores in the South East in FY23.
Overall, we have targeted 12 locations to open in FY23. In Q1,
we have now opened stores in Bootle in the North West, a second
store in Bradford in Yorkshire, and Basildon in Essex. . In Q2 we
have stores scheduled to open in Croydon in Greater London,
Maidstone in Kent and additional stores in Yorkshire and the North
West of England.
3. Developing our online proposition
Jewellery retail website
www.ramsdensjewellery.co.uk
We continue to make good progress with the online sales of
jewellery items. Sales have increased to GBP3.9m, up 38% from
GBP2.8m in FY21. This performance excludes jewellery sales in
branches which used the in-store digital facility to access the
website as a catalogue of stock.
As part of our ongoing review of performance, the retail website
was refreshed in Q1 FY23. This review improved the website layout
and should significantly increase the success rates of our search
and filter functions. Together with improved search engine
visibility, investment in pay per click advertising, social media
and affiliate advertising, use of differing payment options,
improved photography and descriptions and learning from integrated
AI, this should drive ongoing retail jewellery sales growth.
We see the development of our online retail jewellery website as
complementary to our store estate and both will benefit as the
store estate expands and the website generates increased brand
recognition.
Website strategy - other key income streams
www.ramsdensforcash.co.uk
The ramsdensforcash website is currently being updated to create
a portal to individual websites for each of our four key income
streams.
Three new websites for foreign currency exchange, gold buying
and pawnbroking will launch early in 2023 and will be supported by
investment in search engine optimisation. By having this broadened
online offering we hope to enhance our online channel revenues and
profitability as well as support the performance of the branch
estate in these segments.
4. Appraising opportunities presented by operating in challenging markets
The high street retail landscape has been challenging for a
number of years. Following on from the impact of the pandemic,
retailers are more likely to have higher debt burdens and now face
increased energy costs and increased staff costs at a time when
consumer income is being squeezed by high levels of inflation and
increasing interest rates. This will impact some travel agents and
jewellers who may leave the high street or indeed the market
altogether, presenting opportunities for Ramsdens to attract new
customers, takeover prime retail locations or acquire
businesses.
Our estimate of the number of pawnbroking outlets in the UK
remains at approximately 870 - operated by circa 130 pawnbroking
businesses. The Ramsdens operating board are well networked within
the industry and should a pawnbroking business come up for sale in
the UK, we would expect to hear of it and then evaluate the
opportunity against our target rate of return. This was evidenced
by the purchase of Geo A Payne & Sons pawnbrokers in Boscombe
in February 2022. This business has performed well and in line with
expectations since acquisition.
While most pawnbrokers have seen increased lending levels in the
last 12 months and have optimism for future lending given the
macroeconomic conditions, the administration and cost burden of
increased regulation may mean some participants seek to exit the
industry, which may present further acquisition and expansion
opportunities.
The South East has the highest concentration of pawnbroking
outlets in the UK and presents a compelling expansion opportunity
for the Group. Our continued expansion into the South East is aimed
at creating a nucleus of Ramsdens stores that build brand
recognition and then, as opportunities arise, acquiring further
pawnbroking outlets or loan books to supplement our organic
growth.
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. Without reform, we fear some towns
and high streets may suffer further decline and more empty shops.
Our property portfolio has been purposefully managed to be as
flexible as possible to provide a defensive quality in case any of
our stores become isolated and performance deteriorates.
When looking at new town and relocation opportunities,
investments will only be made in new stores after significant
research of footfall and adjacent retailer quality. The demise of
certain retailers in a town can however provide an opportunity to
obtain reductions in rental levels in certain towns while not
compromising on location.
5. Focusing on sustainability through our ESG policies
Our ESG policies are detailed on page 24.
Our long-term strategic aims will only be delivered if we have
good foundations.
We remain:
-- conscious of the impact of our activities on the environment
and aim to reduce our energy use and recycle where we can;
-- focused on our place in the communities in which we operate;
how we look after our staff; how we play a wider societal role with
respect to our customers, suppliers and charitable organisations;
and
-- committed to having the highest standards of governance throughout the business.
LOOKING AHEAD
With the gradual removal of restrictions put in place during the
pandemic, FY22 saw the Group recommence the growth journey which it
had been on since its IPO in February 2017.
The graphs below set out the Group's performance in adjusted
profit before tax and in each of the four main income streams since
the IPO.
To enhance comparability, the profit before tax below, has been
adjusted in 2017 by adding back the IPO fees and in 2020 by
removing the one-off profit from scrapping of aged stock. In
addition, the six-month period from April to September 2020, which
was the period severely impacted by the pandemic including the
closure of all stores and furloughing of 692 colleagues, has been
excluded from the graphs.
The graphs show the adjusted profit before tax, pawnbroking
gross profit, purchase of precious metals gross profit and foreign
currency exchange gross profit trajectories being interrupted by
the pandemic and the growth in jewellery retail revenue throughout
the time period as a result of the ongoing self-help
investments.
Adjusted profit before tax
The graph below demonstrates the growth in profit before tax
over the period and shows that profitability has now returned to
pre-Covid levels, despite performance in the first six months of
FY22 being impacted by Covid-related restrictions.
The adjustments are (1) adding back IPO fees in 2017 and (2)
removing the one-off profit from scrapping of aged stock in
2020.
Foreign Currency Exchange
The expected number of international travellers in FY23 is
subject to some debate given the squeeze on household incomes, but
with disrupted holiday travel over the past three years it is
anticipated that summer 2023 will bring normalised levels of
demand. Due to rising costs for bureau de change operators, we
believe that the margins will remain higher than pre-pandemic
levels.
Pawnbroking
It is reasonable to expect that the demand for pawnbroking loans
may continue to be high in FY23 due to the cost-of-living increases
and the squeeze on household incomes at a time when there are fewer
providers of short-term loans. There is potentially a greater risk
of default on the repayment of loans but the pawnbroker is secured
and would sell the jewellery to repay the loan, potentially at a
value which can return surplus funds to borrowers.
Jewellery Retail
Our jewellery retail segment may experience the greatest
headwinds in FY23 as a result of the inflationary environment and
rising cost of living, but we are pleased to be starting from a
strong position. This will be enhanced by several 'self-help'
initiatives - higher stock levels, staff training, improved window
displays and a website refresh, which means we have momentum to
navigate those headwinds and the confidence to continue to
grow.
Purchase of precious metals
We believe the gold price will remain high and with increasing
footfall over recent years our ability to cross sell should enable
gold purchases to remain strong in FY23.
SUMMARY
Our diversified income streams and our strong financial base
have allowed the Group to trade through the pandemic successfully.
We believe we have made good progress as a business since the
Group's IPO in 2017 and are well positioned for the future
particularly with regards to our well-invested staff development
and our pipeline of new stores.
The Board has continued optimism for the future and confidence
in our ability to deliver on our growth strategy for the long-term
benefit of all our stakeholders.
Peter Kenyon
Chief Executive Officer
16 January 2023
FINANCIAL DIRECTOR'S REVIEW
FINANCIAL RESULTS
For the year ended 30 September 2022, the Group's reported
Revenue increased by 63% to GBP66.1m (FY21: GBP40.7m) with growth
across each of the four key income streams. Gross profit increased
by GBP16.0m (72%) to GBP38.2m (FY21: GBP22.3m).
The Group's administrative expenses increased by GBP7.9m (37%)
to GBP29.4m (FY21: GBP21.5m), reflecting an increase in staff costs
as the business returned to more normalised trading operating
levels. Finance costs remained low reflecting the seasonal use of
the Group's revolving credit facility during peak holiday
periods.
Profit before tax increased to GBP8.3m (FY21: GBP0.6m) as the
Group benefited from improved trading conditions.
The Group's cash position remains strong with GBP8.8m net cash
at the year-end (FY21: GBP13.0m), with the reduction in the period
reflecting increased investment into jewellery stock and the
recovery of the pawnbroking loan book.
The table below shows the headline financial results:
GBP000's FY22 FY21
Revenue GBP66,101 GBP40,677
---------- ----------
Gross Profit GBP38,219 GBP22,262
---------- ----------
Profit Before Tax GBP8,269 GBP564
---------- ----------
Net Assets GBP41,843 GBP36,143
---------- ----------
Net Cash* GBP8,835 GBP13,032
---------- ----------
EPS 20.9p 1.2p
---------- ----------
*Cash less bank borrowings
EARNINGS PER SHARE AND DIVID
The statutory basic earnings per share for FY22 was 20.9p, up
from 1.2p in the previous year.
The Board is recommending a final dividend of 6.3p in respect of
FY22 (FY21: 1.2p). Subject to approval at the AGM, the final
dividend is expected to be paid on 10 March 2023 for those
shareholders on the register on 3 February 2023. The ex-dividend
date will be 2 February 2023. This brings the total dividend for
FY22 to 9.0p (FY21: 1.2p). 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 FY22 EPS. The
FY22 ratio is mindful of the forthcoming changes to the rate of
corporation tax and allows for future dividends to be increased
incrementally in line with profits generated and our stated policy
of approximately 50% of post-tax profits being distributed.
Moving forward, the Board intends to pay interim dividends in
October and final dividends in March in the approximate proportion
of one third and two thirds respectively, subject always to the
financial performance of the Group and growth opportunities.
FINANCIAL POSITION
At 30 September 2022, cash and cash equivalents amounted to
GBP15.3m (FY21: GBP13.0m) and the Group had net assets of GBP41.8m
(FY21: GBP36.1m).
CAPITAL EXPITURE
During the reporting period, the Group invested in the store
estate by opening three new stores and relocating four existing
stores. Capital expenditure for tangible and intangible assets was
GBP2.8m which also included the purchase of the head office
building for GBP0.5m. A business in Boscombe was acquired during
the year for GBP0.9m which included its pawnbroking loan book and
jewellery stock.
CASH FLOW
Working capital outflows in the year include the significant
investment in stock of GBP7.2m, and the growth of the pawnbroking
loan book which has resulted in trade and other receivables
increasing by GBP2.6m. Trade and other payables increased by
GBP1.1m mainly due to the increased currency creditor which was
lower in the prior year due to the impact of Covid-19. The net cash
flow from operating activities for the year was GBP2.9m (FY21:
GBP1.1m)
Net cash at the period end was GBP8.8m (FY21: GBP13.0m).
T he Group continues to have access to its GBP10m revolving
credit facility which expires in March 2024. The Group has one
covenant of 1.5x cash cover. At 30 September 2022, this facility
was GBP6.5m 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 period was GBP1.7m (FY21: GBP0.2m)
representing an effective rate of 20% (FY21: 33%). The tax rate was
higher than the standard UK rate of corporation tax mainly due to
non-deductible expenses including the amortisation of certain
customer lists. 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 period was GBP314,000
(FY21: GBP254,000). This charge relates to the Long-Term Incentive
Plans (LTIP) and Company Share Option Plans (CSOP). Both schemes
are discretionary share incentive schemes under 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 price of 200.5p.
During the year, the LTIP award from 2018 did not meet the
performance criteria and therefore none of the share options
vested. 250,000 share options, which vested in the 2017 LTIP
scheme, were exercised during the year.
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
Consolidated statement of comprehensive income
For the year ended 30 September 2022
2022 2021
Notes
GBP'000 GBP'000
Revenue 5 66,101 40,677
Cost of sales (27,882) (18,415)
--------- ---------
Gross profit 5 38,219 22,262
Other income 7 1 284
Administrative expenses (29,392) (21,510)
--------- ---------
Operating profit 8,828 1,036
Finance costs 6 (559) (472)
--------- ---------
Profit before tax 8,269 564
Income tax expense 10 (1,683) (198)
--------- ---------
Profit for the year 6,586 366
--------- ---------
Other comprehensive income - -
Total comprehensive income 6,586 366
--------- ---------
Earnings per share in pence 8 20.9 1.2
Diluted earnings per share in pence 8 20.7 1.2
Consolidated statement of financial position
As at 30 September 2022
2022 2021
Assets Notes GBP'000 GBP'000
Non-current assets
Property, plant and equipment 11 6,681 5,195
Right of use of assets 11 9,551 8,164
Intangible assets 12 779 714
Investments 13 - -
Deferred tax assets 10 - 80
-------- ----------
17,011 14,153
Current assets
Inventories 15 22,764 15,151
Trade and other receivables 16 13,264 10,379
Cash and short-term deposits 17 15,278 13,032
-------- ----------
51,306 38,562
-------- ----------
Total assets 68,317 52,715
-------- ----------
Current liabilities
Trade and other payables 18 8,905 7,673
Interest bearing loans and borrowings 18 6,443 -
Lease liabilities 18 2,086 2,159
Income tax payable 18 932 61
-------- ----------
18,366 9,893
-------- ----------
Net current assets 32,940 28,669
-------- ----------
Non-current liabilities
Lease liabilities 19 7,871 6,442
Contract liabilities 19 88 119
Deferred tax liabilities 19 149 118
-------- ----------
8,108 6,679
-------- ----------
Total liabilities 26,474 16,572
-------- ----------
Net assets 41,843 36,143
-------- ----------
Equity
Issued capital 21 316 314
Share premium 4,892 4,892
Retained earnings 36,635 30,937
-------- ----------
Total equity 41,843 36,143
-------- ----------
The financial statements of Ramsdens Holdings PLC, registered
number 08811656, were approved by the directors and authorised
for issue on 16 January 2023 and signed on their behalf by:
M A Clyburn
Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 30 September
2022
Issued Share Retained
capital premium earnings Total
Notes
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2020 308 4,892 30,355 35,555
Profit for the year - - 366 366
--------- --------- ---------- --------
Total comprehensive income - - 366 366
--------- --------- ---------- --------
Transactions with owners:
Dividends paid 22 - - - -
Issue of share capital 6 - - 6
Share based payments 25 - - 254 254
Deferred tax on share-based
payments - - (38) (38)
--------- --------- ---------- --------
Total transactions with owners 6 - 216 222
As at 30 September 2021
--------- --------- ---------- --------
314 4,892 30,937 36,143
--------- --------- ---------- --------
As at 1 October 2021 314 4,892 30,937 36,143
Profit for the period - - 6,586 6,586
--------- --------- ---------- --------
Total comprehensive income - - 6,586 6,586
Transactions with owners:
Dividends paid 22 - - (1,231) (1,231)
Issue of share capital 21 2 - - 2
Share based payments 25 - - 314 314
Deferred tax on share-based
payments - - 29 29
--------- --------- ---------- --------
Total transactions with owners 2 - (888) (886)
As at 30 September 2022 316 4,892 36,635 41,843
--------- --------- ---------- --------
Consolidated statement of cash
flows
For the year ended 30 September
2022
2022 2021
Operating activities Notes GBP'000 GBP'000
Profit before tax 8,269 564
-------- --------
Adjustments to reconcile profit
before tax to net cash flows:
Depreciation and impairment of property,
plant
and equipment 11 1,265 1,074
Depreciation and impairment of right
of use assets 11 2,261 2,223
Profit on disposal of right of use
assets 7 (81) (45)
Amortisation and impairment of intangible
assets 12 163 218
Loss on disposal of property, plant
and equipment 7 78 140
Share based payments 25 314 254
Finance costs 6 559 472
Working capital adjustments:
Movement in trade and other receivables
and prepayments (2,583) 565
Movement in inventories (7,221) (3,992)
Movement in trade and other payables 1,144 1,217
-------- --------
4,168 2,690
Interest paid (559) (472)
Income tax paid (672) (1,135)
-------- --------
Net cash flows from operating activities 2,937 1,083
-------- --------
Investing activities
Proceeds from sale of property,
plant and equipment 3 10
Purchase of property, plant and
equipment 11 (2,817) (1,574)
Purchase of intangible assets 12 (28) (62)
Payment for acquisition 26 (909) -
-------- --------
Net cash flows used in investing
activities (3,751) (1,626)
Financing activities
Issue of share capital 21 2 6
Dividends paid 22 (1,231) -
Payment of principal portion of
lease liabilities (2,211) (2,304)
Bank loans drawn down 8,000 -
Repayment of bank borrowings (1,500) -
Net cash flows from financing activities 3,060 (2,298)
-------- --------
Net increase / decrease in cash
and cash equivalents 2,246 (2,841)
Cash and cash equivalents at 1 October 13,032 15,873
-------- --------
Cash and cash equivalents at 30
September 28 15,278 13,032
-------- --------
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 and related financial services, jewellery sales, and
the purchase of gold jewellery from the general public.
2. Changes in accounting policies
There are no changes to accounting policies in the current year.
There are no future changes in accounting standards which would
materially impact the Group.
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 (GBP000), except when otherwise
indicated.
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 2024 considering
various scenarios and sensitivities given the residual effects
Covid-19 and the ongoing cost of living crisis and uncertainty it
has produced around the future economic environment.
At 30 September 2022 the Group has significant cash balances of
GBP15.3m, readily realisable stock of gold jewellery and access to
the GBP3.5m unutilised element of a GBP10m revolving credit
facility with an expiry date of March 2024. In the year ended 30
September 2022 the Group has traded profitably and generated cash
from operations.
The Board have been able to conclude that they 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 2024.
3.4 Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred which represents the fair value of
the assets transferred and liabilities incurred or assumed.
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% & 33% reducing balance
* Computer equipment - 25% & 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 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 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 GBP75, 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 short-term deposits 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 are recognised as cash at point of transaction.
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
outstanding bank overdrafts as they are considered an integral part
of the Group's cash management.
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 Company
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 Company 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.
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: The Group has the right
to operate the asset; or
-- 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 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 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 of machinery that have a
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. No provision is made until a board decision has
been taken to exit the lease. Additionally, 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 costs are expensed as
incurred.
3.14 Pensions and other post-employment benefits
The company 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).
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 Carle model depending on the vesting conditions attached to
the share option. The fair value is expensed on a straight line
basis over the vesting period based on an estimate of the number of
options that will eventually vest. The expense is recognised in the
entity in which the beneficiary is remunerated. Further details are
provided in note 25.
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. At the point the loan becomes 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.
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 and full payment has been received. Customers either
pay in full at the time of the transaction and receive the goods,
or pay in instalments and receive the goods once the sale is fully
paid. Instalment payments are recognised as deferred income until
the item is fully paid. The Company has a 7 day refund policy in
store, and a 14 day refund policy online reflecting the distance
selling regulations.
Other financial income
Other financial income comprises cheque cashing and other
miscellaneous revenues. Cheque cashing revenue is recognised when
the service is provided under IFRS 15 which includes making a
payment to the customer.
3.17 Administrative expenses
Administrative expenses includes branch staff and establishment
costs.
3.18 Government grants
Government grants that are a contribution to a specific
administrative expense are recognised in the income statement as a
reduction to administrative expenses in the period to which the
expense relates. Other government grants are recognised as other
income when there is reasonable assurance that the entity will
comply with the conditions and the grants will be received.
The grants recognised in the financial statements all relate to
Covid-19 support with job retention scheme support shown net of the
wage cost in administrative expenses and retail grants shown as
other income. There are no unfulfilled conditions and contingencies
attaching to recognised grants.
2022 2021
GBP'000 GBP'000
Other income 1 134
Administrative expenses - 1,472
-------- --------
Total 1 1,606
-------- --------
Any grants recognised in the Statement of Comprehensive Income
but not received are included within the Statement of Financial
position under Trade and other Receivables
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
Pawnbroking loans interest and impairment
The group recognises interest on pawnbroking loans as disclosed
in note 3.16.
For active pawnbroking loans (loans not in the course of
realisation) the Group 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;
1. Non Redemption Rate
This is based upon current and historical data held in respect
of non-redemption rates.
2. Realisation Value
This based upon either;
- The current price of the metal that will be received through
the sale of the metal content via disposal through a bullion
dealer.
- The expected resale value of those jewellery items within the
pledge that can be retailed through the branch network.
For pawnbroking loans in the course of realisation the Group
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;
1. Proceeds of sale
This is based upon the retail price the goods are offered for
sale at.
2. Time to sell
This is based upon current and historical data in respect of the
average time to sell.
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
and intangibles 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 selecting 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 12%.
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 &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.
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 term
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:
2022 2021
Revenue GBP'000 GBP'000
United Kingdom 65,948 40,665
Other 153 12
-------- --------
66,101 40,677
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.
2022 2021
Revenue GBP'000 GBP'000
Contracts with customers 57,134 33,151
Pawnbroking interest income 8,967 7,526
66,101 40,677
Pawnbroking interest income is recognised over time as each loan
progresses whereas all other revenue is recognised at a point in
time.
2021 2021
Revenue GBP'000 GBP'000
Pawnbroking 8,967 7,526
Purchases of precious metals 15,847 10,369
Retail jewellery sales 27,107 18,252
Foreign currency margin 13,066 3,408
Income from other financial
services 1,114 1,122
Total revenue 66,101 40,677
-------- --------
Gross profit
Pawnbroking 7,533 6,678
Purchases of precious metals 6,626 4,240
Retail jewellery sales 10,263 6,965
Foreign currency margin 12,683 3,257
Income from other financial services 1,114 1,122
Total gross profit 38,219 22,262
--------- ---------
Other income 1 284
Administrative expenses (29,392) (21,510)
Finance costs (559) (472)
Profit before tax 8,269 564
--------- ---------
Income from other financial services comprises of cheque cashing
fees and agency commissions on miscellaneous financial
products.
Revenue from the purchases of precious metals is currently from
one bullion dealer. There is no reliance on key customers in other
revenue streams.
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.
2022 2021
Other information GBP'000 GBP'000
Tangible & intangible capital
additions (*) 3,060 1,636
Depreciation and amortisation
(*) 3,689 3,515
Assets
Pawnbroking 11,853 9,173
Purchases of precious metals 3,081 1,172
Retail jewellery sales 20,125 14,306
Foreign currency margin 10,123 5,314
Income from other financial
services 139 139
Unallocated (*) 22,996 22,611
------- -------
68,317 52,715
------- -------
Liabilities
Pawnbroking 613 492
Purchases of precious metals 3 21
Retail jewellery sales 2,012 3,433
Foreign currency margin 2,042 1,335
Income from other financial
services 392 541
Unallocated (*) 21,412 10,750
------- -------
26,474 16,572
------- -------
(*) 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
2022 2020
GBP'000 GBP'000
Interest on debts and borrowings 163 84
Lease charges 396 388
-------- --------
Total finance costs 559 472
-------- --------
7. Profit before taxation has been arrived at after
charging/(crediting)
2022 2021
GBP'000 GBP'000
Items reported within Other income
-
Compensation for surrendering a lease - (150)
Retail grants (1) (134)
Items reported within Cost of sales
-
Cost of inventories recognised as
an expense 26,065 17,416
Pawnbroking expected credit losses 1,434 848
Items reported within Administrative
expenses -
Depreciation of property, plant and
equipment 1,265 1,073
Impairment of property, plant and
equipment - 1
Depreciation of right of use of assets 2,261 2,223
Profit on disposal of right of use
assets (81) (45)
Amortisation of intangible assets 163 172
Impairment of intangible assets - 46
Loss on disposal of property, plant
and equipment 78 140
Staff costs (see note 9) 16,643 11,452
Foreign currency exchange losses/(gains) 265 135
Auditor's remuneration 145 140
Short term lease payments 470 441
Share based payments (see note 25) 314 254
The Company paid an additional GBP5,000 to the auditor in
respect of non-audit services for a first half of the year
review.
8. Earnings per share
2022 2021
GBP'000 GBP'000
Profit for the year 6,586 366
Weighted average number of shares in
issue 31,559,874 31,161,726
----------- -----------
Earnings per share (pence) 20.9 1.2
Weighted average number of dilutive
shares 291,939 481,481
Effect of dilutive shares on earnings
per share (pence) (0.2) (0.0)
----------- -----------
Fully Diluted earnings per share (pence) 20.7 1.2
----------- -----------
9. Information regarding directors and employees
Directors' emoluments (GBP'000)
2022 2021
-------------------------------------
Emoluments Pension LTIP Total Emoluments Pension LTIP Total
Executive
Peter Kenyon 427 10 435 872 201 10 - 211
Martin Clyburn 295 12 - 307 134 13 204 351
Non Executive
Andrew Meehan 68 - - 68 66 - - 66
Simon Herrick 49 - - 49 48 - - 48
Steve Smith 41 - - 41 40 - - 40
----------- -------- ----- ------ ----------- -------- ------ ------
Total 880 22 435 1,337 489 23 204 716
2022 2021
GBP'000 GBP'000
Included in administrative expenses:
Wages and salaries 14,890 10,011
Social security costs 1,089 856
Share option scheme 314 254
Pension costs 350 331
-------- --------
Total employee benefits expense 16,643 11,452
-------- --------
The average number of staff employed by the Group during the
financial period amounted to:
2022 2021
No. No.
Head office and management 115 106
Branch counter staff 578 586
----- -----
693 692
----- -----
10. Income tax
The major components of income tax expense are:
Consolidated statement of comprehensive income
2022 2021
GBP'000 GBP'000
Current income tax:
Current income tax charge 1,552 32
Adjustments in respect of current income
tax of previous year (9) 7
-------- --------
1,543 39
Deferred tax:
Relating to origination and reversal
of temporary differences 140 159
------ ----
Income tax expense reported in the statement
of comprehensive income 1,683 198
------ ----
A reconciliation between tax expense and the product of
accounting profit multiplied by the UK domestic tax rate is as
follows:
2022 2021
GBP'000 GBP'000
Profit before income tax 8,269 564
UK corporation tax rate at 19% (2021
19%) 1,571 107
Expenses not deductible for tax purposes 122 84
Prior period adjustment (10) 7
-------- --------
Income tax reported in the statement
of comprehensive income 1,683 198
-------- --------
Deferred tax
Deferred tax relates to the following:
2022 2021
GBP'000 GBP'000
Deferred tax assets
Share based payments - 80
Deferred tax assets - 80
Deferred tax liabilities
Accelerated depreciation for tax
purposes 180 112
Other short-term differences (31) 6
-------- --------
Deferred tax liabilities 149 118
-------- --------
Reconciliation of deferred tax (asset)
/ liabilities net
2022 2021
GBP'000 GBP'000
Opening balance as of 1 October 38 (159)
Deferred tax recognised in the statement
of comprehensive income 140 159
Other deferred tax (29) 38
-------- --------
Closing balance as at 30 September 149 38
-------- --------
Factors affecting tax charge
The standard rate of UK corporation tax for the year was 19%
(2021: 19%). An increase in the UK corporation tax rate from 19% to
25% (effective 1 April 2023) was substantively enacted on 24 May
2021.
11. Property, plant and equipment
Freehold Leasehold Fixtures Computer Motor Total
property improvements & Fitting equipment vehicles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 October
2021 210 6,356 3,629 840 53 11,088
Additions 485 1,280 926 126 - 2,817
Acquisition (note
26) - - 15 - - 15
Disposals - (623) (389) (370) - (1,382)
At 30 September
2022 695 7,013 4,181 596 53 12,538
---------- -------------- ----------- ----------- ---------- --------
Depreciation
At 1 October
2021 2 3,518 1,867 486 20 5,893
Depreciation
charge for the
year 9 622 520 106 8 1,265
Disposals - (617) (341) (343) - (1,301)
At 30 September
2022 11 3,523 2,046 249 28 5,857
---------- -------------- ----------- ----------- ---------- --------
Net book value
At 30 September
2022 684 3,490 2,135 347 25 6,681
At 30 September
2021 208 2,838 1,762 354 33 5,195
Right of use of assets
Leasehold Property Motor
Cost GBP'000 Vehicles Total
GBP'000 GBP'000
At 1 October 2021 12,919 174 13,093
Additions 4,039 - 4,039
Disposals (2,659) (129) (2,788)
--------------------- ----------- ----------
At 30 September 2022 14,299 45 14,344
--------------------- ----------- ----------
Depreciation
At 1 October 2021 4,800 129 4,929
Depreciation Charge for the year 2,221 40 2,261
Disposals (2,268) (129) (2,397)
----------
At 30 September 2022 4,753 40 4,793
--------------------- ----------- ----------
Net Book Value
At 30 September 2022 9,546 5 9,551
--------------------- ----------- ----------
At 30 September 2021 8,119 45 8,164
--------------------- ----------- ----------
12. Intangible assets
Customer Website Goodwill Total
relationships
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 October 2021 2,179 105 526 2,810
Additions 28 - - 28
Acquisition (note
26) 200 - - 200
--------------- -------- --------- --------
At 30 September 2022 2,407 105 526 3,038
--------------- -------- --------- --------
Amortisation
At 1 October 2021 1,938 85 73 2,096
Amortisation charge
for the year 158 5 - 163
Impairment - - - -
At 30 September 2022 2,096 90 73 2,259
--------------- -------- --------- --------
Net book value
At 30 September 2022 311 15 453 779
--------------- -------- --------- --------
At 30 September 2021 241 20 453 714
--------------- -------- --------- --------
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 GBPnil 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 Activity
of voting
rights
and shares
held
Subsidiary undertaking
Ramsdens Financial Ordinary 100% Supply of foreign exchange
Limited Shares services, pawnbroking,
(Registered office: purchase of gold jewellery,
Unit 16 Parkway jewellery retail and related
Centre, Coulby Newham, financial services.
TS8 0TJ)
14. Financial assets and financial liabilities
At 30 September 2022 Fair value Loans Financial Book Fair
through and receivables liabilities value value
statement at amortised
of comprehensive cost
income
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Financial assets at
amortised cost - 12,683 - 12,683 12,683
Cash and cash equivalents - 15,278 - 15,278 15,278
Financial liabilities
Trade and other payables - - (8,700) (8,700) (8,700)
Interest bearing loans
and borrowings - - (6,443) (6,443) (6,443)
Lease liabilities - - (9,957) (9,957) (9,957)
Net financial assets/(liabilities) - 27,961 (25,100) 2,861 2,861
At 30 September 2021 Fair value Loans Financial Book Fair
through and receivables liabilities value value
statement at amortised
of comprehensive cost
income
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
Financial assets at
amortised cost - 9,723 9,723 9,723
Cash and cash equivalents - 13,032 - 13,032 13,032
Financial liabilities
Trade and other payables - - (7,514) (7,514) (7,514)
Lease liabilities - - (8,601) (8,601) (8,601)
Net financial assets/(liabilities) - 22,755 (16,115) 6,440 6,440
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 & 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 short-term deposits,
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. 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.
2022 2021
Net carrying Net carrying
Gross amount Loss allowance amount Gross amount Loss allowance amount
Category GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Performing 9,510 178 9,332 6,747 173 6,574
Default 3,366 844 2,522 3,127 528 2,599
------------- --------------- ------------- ------------- --------------- -------------
Total 12,876 1,022 11,854 9,874 701 9,173
The pawnbroking expected credit losses which have been provided
on the period end pawnbroking assets are:
Pawnbroking
loans
GBP'000
At 1 October 2020 1,521
Statement of comprehensive income
charge 847
Utilised in the period (1,667)
------------
At 30 September 2021 701
Statement of comprehensive income
charge 1,434
Utilised in period (1,113)
------------
Balance at 30 September
2022 1,022
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 GBP6k/(GBP6k). 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
(GBP100k)/GBP100k.
Cash and cash equivalents
The cash and cash equivalents balance comprise of both bank
balances and cash floats at the stores. 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.
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 cash flows from the group's
borrowing arrangements that expose the group to liquidity risk are
as follows:
As at 30 September <3 months 3-12 months 1-5 years >5 years Total
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Lease liabilities 422 1,664 6,426 1,445 9,957
Trade payables 4,870 - - - 4,870
Interest bearing
loans and borrowings 6,443 - - - 6,443
Total 11,735 1,664 6,426 1,445 21,270
As at 30 September <3 months 3-12 months 1-5 years >5 years Total
2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Lease liabilities 621 1,757 5,388 2,579 10,345
Trade payables 5,406 - - - 5,406
---------- ------------ ---------- --------- ---------
Total 6,027 1,757 5,388 2,579 15,751
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 GBP10million revolving credit facility was fully
utilised then a 1% increase in the base rate would increase finance
costs by GBP100,000 pre-tax and reduce post-tax profits by
GBP81,000.
15. Inventories
2022 2021
GBP'000 GBP'000
New and second-hand inventory
for resale (at lower
of cost or net realisable
value) 22,764 15,151
16. Trade and other receivables
2022 2021
GBP'000 GBP'000
Trade receivables - Pawnbroking 11,854 9,173
Trade receivables - other 601 489
Other receivables 228 61
Prepayments 581 656
-------- --------
13,264 10,379
-------- --------
Trade receivables - Pawnbroking is disclosed net of expected
credit losses, details of which are shown in note 14.
17. Cash and cash equivalents
2022 2021
GBP'000 GBP'000
Cash and cash equivalents 15,278 13,032
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)
2022 2021
GBP'000 GBP'000
Trade payables 4,870 5,406
Other payables 844 767
Other taxes and social security 293 277
Accruals 2,858 1,170
Contract liabilities 40 53
-------- --------
Subtotal 8,905 7,673
Lease liabilities (note 20) 2,086 2,159
Interest bearing loans and 6,443 -
borrowings
Income tax liabilities 932 61
-------- --------
18,366 9,893
-------- --------
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
For explanations on the Group's liquidity risk management
processes, refer to note 14.
Bank borrowings
Details of the RCF facility are as follows:
Key Term Description
Facility Revolving Credit Facility with Clydesdale Bank
Plc (trading as Yorkshire Bank)
Total facility GBP10m
size
Termination date March 2024.
Utilisation The GBP10m facility is available subject to the
ratio of cash at bank in hand (inclusive of currency
balances) to the RCF borrowing exceeding 1.5 as
stipulated in the banking agreement.
Interest Interest is charged on the amount drawn down at
2.4% above base rate when the initial drawdown
is made and for unutilised funds interest is charged
at 0.84% from the date when the facility was made
available. The base rate is reset to the prevailing
rate at every interest period which is typically
one and three months.
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 2022 the group had available GBP3.5m
of undrawn committed facilities.
19. Non-current liabilities
2022 2021
GBP'000 GBP'000
Lease liabilities (note 20) 7,871 6,442
Contract liabilities 88 119
Deferred tax (note 10) 149 118
-------- --------
8,108 6,679
-------- --------
20. Lease Liability
2022 2021
GBP'000 GBP'000
Lease Liabilities as at 1
October 8,601 9,099
Additions 4,039 2,506
Disposals (472) (700)
Interest 396 388
Payments (2,607) (2,692)
-------- --------
As at 30 September 9,957 8,601
-------- --------
Current lease liability 2,086 2,159
-------- --------
Non-current lease liability 7,871 6,442
-------- --------
The cash flows relating to financing activities for repayment of
lease principal amounts is GBP2,211,000 (2021: GBP2,304,000).
Amounts repaid in the year are shown in the consolidated Statement
of Cash Flows.
Short term lease payments recognised in administrative expenses
in the year total GBP470,000 (2021: GBP441,000). 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 is note 11.
21. Issued capital and reserves
Ordinary shares issued No. GBP'000
and fully paid
At 30 September 2021 31,393,207 314
Issued during the year 250,000 2
----------- --------
At 30 September 2022 31,643,207 316
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.
22. Dividends
Amounts recognised as distributions to equity holders in the
year:
2022 2021
GBP'000 GBP'000
Final dividend for the year ended 30 September 377 -
2021 of 1.2p per share
Interim dividend for the period ended 30 854 -
September 2022 of 2.7p per share
(30 September 2020 Nil)
--------- ---------
1,231 -
Amounts proposed and not recognised:
Final dividend for the year ended 30 September
2022 of 6.3p per share
(Final dividend for 30 September 2021 of
1.2p per share) 1,994 377
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.
23. Pensions
The company operates a defined contribution scheme for its
directors and employees. The assets of the scheme are held
separately from those of the company in an independently
administered fund.
The outstanding pension contributions at 30 September 2022 are
GBP62,000 (2021: GBP57,000)
24. 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:
2022 2021
GBP'000 GBP'000
Short term employee benefits 880 688
Post employment benefits 22 39
Share based payments 136 139
-------- --------
1,038 866
-------- --------
25. Share based payments
The Company operates a Long-term Incentive Plan (LTIP). The
charge for the year in respect of the scheme was:
2022 2021
GBP'000 GBP'000
LTIP 314 254
-------- --------
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:
Weighted
average
Number exercise
of conditional price in
Shares pence
Outstanding at the beginning
of the year 1,126,500 -
Granted during the year 338,000 -
Forfeited during the year (220,000) -
Exercised during the year (250,000) 1
----------------
Outstanding at the end of the
year 994,500
----------------
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. 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 17/03/22 17/03/22 08/02/2021 08/02/2021 16/07/2019 16/07/2019
Share Price GBP1.67 GBP1.67 GBP1.48 GBP1.48 GBP1.88 GBP1.88
Exercise Price GBP0.01 GBP0.01 GBP0.01 GBP0.01 GBP0.01 GBP0.01
Vesting period 2.5 years 2.5 years 2.64 years 2.64 years 2.71 years 2.71 years
Risk Free return 1.4% 1.4% 0.01% 0.01% 0.5% 0.5%
Volatility 53% 53% 51% 51% 26% 26%
Dividend Yield 3.5% 3.5% 0.0% 0.0% 3.9% 3.9%
Fair value of Option
(GBP) 0.77 1.51 0.64 1.47 0.52 1.68
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 Company. The maximum term of the share
options is 10 years.
26. Fair value of acquisition
On the 14th February 2022 the company purchased the trade and
certain assets of Geo A Payne & Son Limited for a total
consideration of GBP909,000, which was fully paid in cash. The fair
value of the assets acquired were as follows:
GBP'000
Tangible fixed assets (fixtures and
fittings 15
Intangible assets (customer relationships) 200
Trade receivables - Pawnbroking 302
Inventories 392
--------
Net assets acquired 909
--------
27. Post Balance Sheet Events
There were no post balance sheets events that require further
disclosure in the financial statements.
28. Cash and cash equivalents
30 September 30 September
2022 2021
GBP'000 GBP'000
Sterling cash and cash equivalents 5,190 7,747
Other currency cash and cash equivalents 10,088 5,285
-------------- -------------
15,278 13,032
-------------- -------------
Parent Company Statement of
Financial Position
As at 30 September 2022
2022 2021
Notes
Assets GBP'000 GBP'000
Non-current assets
Investments D 8,383 8,205
Deferred tax E 37 80
8,420 8,285
Current assets
Receivables F 3,683 450
Cash and short-term deposits 1 3,968
---------- ----------
3,684 4,418
---------- ----------
Total assets 12,104 12,703
---------- ----------
Current liabilities
Trade and other payables G 409 94
---------- ----------
409 94
---------- ----------
Net current assets 3,275 4,324
---------- ----------
Total assets less current
liabilities 11,695 12,609
Net assets 11,695 12,609
---------- ----------
Equity
Issued capital H 316 314
Share Premium 4,892 4,892
Retained earnings 6,487 7,403
---------- ----------
Total equity 11,695 12,609
---------- ----------
The loss after tax for the Company for the year ended 30 September
2022 was GBP9,000 (2021: Profit GBP55,000)
These financial statements were approved by the directors and
authorised for issue on 16 January 2023 and signed on their
behalf by:
M A Clyburn
Chief Financial Officer
Company Registration Number:
8811656
Parent Company statement of changes in equity
For the year ended 30 September 2022
Share Share Retained
Capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2020 308 4,892 7,180 12,380
Profit for the year - - 55 55
--------- --------- ---------- --------
Total comprehensive income - - 55 55
--------- --------- ---------- --------
Transactions with owners:
Issue of share capital 6 - - 6
Share based payments - - 254 254
Deferred tax on share based
payments - - (86) (86)
--------- --------- ---------- --------
Total transactions with owners 6 - 168 174
As at 30 September 2021 314 4,892 7,403 12,609
--------- --------- ---------- --------
As at 1 October 2021 314 4,892 7,403 12,609
Loss for the period - - (9) (9)
--------- --------- ---------- --------
Total comprehensive income - - (9) (9)
--------- --------- ---------- --------
Transactions with owners:
Issue of share capital 2 - - 2
Dividends paid (note I) - - (1,231) (1,231)
Share based payments - - 314 314
Deferred tax on share based
payments - - 10 10
--------- --------- ---------- --------
Total transactions with owners 2 - (907) (905)
As at 30 September 2022 316 4,892 6,487 11,695
--------- --------- ---------- --------
Notes to the parent company financial statements
A. ACCOUNTING POLICIES
BASIS OF PREPARATION
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 D.
The principal activities of the Company and its subsidiaries
(the "Group") are the supply of foreign exchange services,
pawnbroking and related financial services, jewellery sales, and
the purchase of gold jewellery from the general public.
The separate financial statements of the Company are presented
as required by the Companies Act 2006. The Company meets the
definition of a qualifying entity under FRS 100 (Financial
Reporting Standard 100) issued by the Financial Reporting Council.
Accordingly, the financial statements have been prepared in
accordance with FRS 101 (Financial Reporting Standard 101) 'Reduced
disclosure Framework' as issued by the FRC in July 2015 and July
2016
The financial statements have been prepared on the historical
cost basis.
As permitted by FRS 101, the Company has taken advantage of the
disclosure exemptions available under that standard in relation to
business combinations, share-based payment, non-current assets held
for sale, financial instruments, capital management, presentation
of comparative information in respect of certain assets,
presentation of a cash-flow statement, standards not yet effective,
impairment of assets and related party transactions.
Where required, equivalent disclosures are given in the Group
financial statements of Ramsdens Holdings PLC. The Group financial
statements of Ramsdens Holdings PLC are available to the
public.
The financial statements have been prepared on a going concern
basis as discussed in the Directors' Report.
The particular accounting policies adopted are described
below.
TAXATION
Current tax
The tax currently payable is based on taxable profit for the
year. The Company'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.
INVESTMENTS
Fixed assets investments are shown at cost less provision for
impairment.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the company after deducting
liabilities
Equity instruments issued are recorded at the proceeds received,
net of direct issue costs.
DIVIDS
Dividends receivable from subsidiary undertakings are recorded
in the statement of comprehensive income on the date that the
dividend becomes a binding liability on the subsidiary company.
Dividends payable are recorded as a distribution from retained
earnings in the period in which they become a binding liability on
the Company.
Employee Share Incentive Plans
Ramsdens Holdings PLC 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). The
employee share options are measured at fair value at the date of
grant by the use either the Black- Scholes Model or a Monte Carle
model depending on the vesting conditions attached to the share
option. The fair value is expensed on a straight line basis over
the vesting period based on an estimate of the number of options
that will eventually vest. The expense is recognised in the entity
in which the beneficiary is remunerated. The share based payment
expense in the period which relates to subsidiaries increases the
carrying value of the investment held.
B. COMPANY STATEMENT OF COMPREHENSIVE INCOME
As permitted by s408 of the Companies Act 2006 the Company has
elected not to present its statement of comprehensive income for
the year.
The auditor's remuneration for the current and preceding
financial years is borne by a subsidiary undertaking, Ramsdens
Financial Limited. Note 7 to the Group financial statements
discloses the amount paid.
C. STAFF AND KEY PERSONNEL COSTS
Other than the Directors who are the key personnel, the Company
has no employees, details of their remuneration are set out
below
2022 2021
GBP'000 GBP'000
Remuneration receivable 880 489
Social security cost 65 90
Value of company pension contributions
to money purchase schemes 22 23
Share based payments 136 95
-------- --------
1,103 697
-------- --------
Some of the directors of the Company are also directors of
Ramsdens Financial Ltd. These directors did not receive
remuneration from Ramsdens Financial Limited and amounts paid
through the Company were GBP947,000 (2021: GBP519,000). The
directors do not believe it is practicable to apportion this amount
between their services as directors of the Company and other group
companies.
Remuneration of the highest paid director:
2022 2021
GBP'000 GBP'000
Remuneration receivable 427 201
Value of company pension contributions
to money purchase schemes 10 10
Share Based Payments 82 60
-------- --------
519 271
-------- --------
The number of directors accruing retirement benefits under the
money purchase scheme is 2 (2020: 2)
D. INVESTMENTS
Shares in subsidiary undertakings 2022 2021
GBP'000 GBP'000
Cost
Cost brought forward 8,205 8,046
Additions - Share based payments 178 159
Cost carried forward 8,383 8,205
-------- --------
Additions represent share based payment expense recognised in
Ramsdens Financial Limited.
The Investments in Group Companies which are included in the
consolidated statements are as follows
Name of company Holding Proportion Activity
of voting
rights
and shares
held
Subsidiary undertakings
Ramsdens Financial Ordinary 100% Supply of foreign exchange
Limited Shares services, pawnbroking,
(Registered office: purchase of gold jewellery,
Unit 16 Parkway Centre, jewellery retail and related
Coulby Newham, TS8 financial services.
0TJ)
E. DEFERRED TAX
Deferred tax relates to the following:
2022 2021
GBP'000 GBP'000
Deferred tax assets
Share based payments 37 80
--------- ---------
37 80
--------- ---------
Reconciliation of deferred tax assets
2022 2021
GBP'000 GBP'000
Opening balance as of 1 October / 1
April 80 182
Deferred tax credit recognised in the
statement of comprehensive income (53) (64)
Other deferred tax 10 (38)
-------- --------
Closing balance as at 30 September 37 80
-------- --------
F. RECEIVABLES
2022 2021
GBP'000 GBP'000
Amounts owed by subsidiary companies 3,671 439
Prepayments 12 11
3,683 450
-------- --------
Amounts owed by subsidiary companies is payable on demand and no
interest is charged.
G LIABILITIES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
GBP'000 GBP'000
Trade Payables 10 10
Other Creditors 379 63
Other taxes and Social Security 20 21
Current tax liabilities - -
-------- --------
409 94
-------- --------
H. CALLED UP SHARE CAPITAL
Details of the called up share capital including share shares
issued during the year can be found in note 21 within the Group
financial statements of Ramsdens Holdings PLC.
I. Dividends
Amounts recognised as distributions to equity holders in the
year:
2022 2021
GBP'000 GBP'000
Final dividend for the year ended 30 September 377 -
2021 of 1.2p per share
Interim dividend for the period ended 30 854 -
September 2022 of 2.7p per share
(30 September 2020 Nil)
--------- ---------
1,231 -
Amounts proposed and not recognised:
Final dividend for the year ended 30 September
2022 of 6.3p per share
(Final dividend for 30 September 2021 of
1.2p per share) 1,994 377
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.
J. POST BALANCE SHEET EVENTS
There were no post balance sheets events that require further
disclosure in the financial statements.
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END
FR NKABKKBKBQDD
(END) Dow Jones Newswires
January 17, 2023 02:00 ET (07:00 GMT)
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