TIDMRFX
RNS Number : 6123Z
Ramsdens Holdings PLC
15 January 2024
15 January 2024
Ramsdens Holdings PLC
("Ramsdens", the "Group", the "Company")
Annual Results for the year ended 30 September 2023
Milestone Profit Before Tax of GBP10.1m
Ramsdens, the diversified financial services provider and
retailer, today announces its Annual Results for the year ended 30
September 2023 (the "Period").
FY23 FY22 % change
Revenue GBP83.8m GBP66.1m 27%
--------- -------- ----------
Gross Profit GBP45.8m GBP38.2m 20%
--------- -------- ----------
Profit before tax GBP10.1m GBP8.3m 22%
--------- -------- ----------
Net Assets GBP48.2m GBP41.8m 15%
--------- -------- ----------
Basic EPS 24.5p 20.9p 17%
--------- -------- ----------
Final dividend 7.1p 6.3p 13%
--------- -------- ----------
Full year dividend 10.4p 9.0p 16%
--------- -------- ----------
Highlights:
-- FY23 profit for the Group was driven by strong performances
across all four key income streams.
-- Foreign currency gross profit increased 8% year on year
to GBP13.6m (FY22: 12.7m) and ahead of pre-covid levels.
-- Jewellery retail revenue increased 23% to GBP33.5m (FY22:
GBP27.1m) driven by good growth in each product category
of new jewellery, second hand jewellery and premium watches.
-- Demand for the Group's pawnbroking loans continued to grow.
As at 30 September 2023, the active loan book had increased
by almost 20% to GBP10.3m (FY22: GBP8.6m).
-- The high gold price has helped precious metals buying volume
and values. Revenue across this segment increased by almost
50% to GBP23.5m (FY22: GBP15.8m).
-- Basic EPS increased by 17% to 24.5p per share (FY22: 20.9p).
-- The Board is recommending a final dividend of 7.1p per share
for approval at the forthcoming AGM, taking the total dividend
for the Period to 10.4p per share (FY22: 9.0p) an increase
of 16%, continuing its commitment to a progressive dividend
policy.
Current Trading:
The Board is pleased to provide an update on Q1 FY24 trading
(October to December 2023).
-- Foreign currency (FX) gross profit is flat on last year.
While we are encouraged by growing sales of FX, purchases
of FX from returning holiday makers are still subdued, indicating
they are keeping their leftover FX cash for another trip
or have spent their cash while abroad.
-- Ongoing demand for small sum short term credit has enabled
the pawnbroking loan book to incrementally increase to GBP10.6m
from the year end position of GBP10.3m.
-- Jewellery retail revenue is broadly flat but gross profit
is approximately 5% ahead of last year in this key retail
quarter. There has been a mixed performance within the categories
and channels. Our online premium watch sales on retail finance
have reduced while we have seen strong sales of new, second-hand
and diamond jewellery throughout our store network. This
is testament to our improved offering and greater customer
awareness of the value for money jewellery Ramsdens offers.
-- The purchase of precious metals gross profit has increased
by more than 10% on the prior year due to growing awareness
of the service offered by Ramsdens and the continued high
gold price.
-- Following the year end, new stores have been opened in Cardiff,
Poole and Blackburn, taking the store estate to 165 stores
(including two franchised stores).
In summary, the Group is trading in line with the Board's
expectations and continues to benefit from the diversification of
its activities.
Peter Kenyon, Chief Executive, commented:
"Ramsdens has had a great year, delivering a milestone profit in
excess of GBP10m.
I am hugely grateful for the Ramsdens team's dedication and
commitment and wish to publicly thank them for their efforts and
success. We also recognise their efforts with Company-wide bonus
schemes and by paying the real living wage (RLW) as our entry level
pay which will continue in FY24. At the heart of our business are
our people. This has been recognised by the pawnbroking industry,
with Ramsdens awarded the National Pawnbroker's Association
Employer of the Year for 2023.
While we are very conscious of the tough economic conditions and
the cost pressures of energy pricing, increased interest rates, and
paying the RLW, we have confidence that our long-term strategy,
which remains unchanged, will deliver long-term benefits for all
stakeholders."
Availability of Report and Accounts
The Company confirms that the Annual Report and Financial
Statements for the year ended 30 September 2023, together with
notice of the Company's 2023 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,
Financial Adviser and Broker Tel: +44 (0) 20 3100 2000
Richard Crawley
Lauren Kettle
Hudson Sandler (Financial PR) Tel: +44 (0) 20 7796 4133
Alex Brennan
Lucy Wollam-Coles
Emily Brooker
About Ramsdens
Ramsdens is a growing, diversified, financial services provider
and retailer, operating in the four core business segments of
foreign currency exchange, pawnbroking loans, precious metals
buying and selling and retailing of second hand and new jewellery.
Ramsdens does not offer unsecured high cost short term credit.
Headquartered in Middlesbrough, the Group operates from 165
stores within the UK (including 2 franchised stores) and has a
growing online presence.
Ramsdens is fully FCA authorised for its pawnbroking and credit
broking activities.
www.ramsdensplc.com
www.ramsdensforcash.co.uk
CHAIRMAN'S STATEMENT
This Annual Report covers the 12-month period to 30 September
2023 (FY23).
I am pleased to report that the Group has achieved a milestone
profit before tax of more than GBP10m for the first time. These
strong results are reflective of the benefits of the Group's
diversified income streams and, in particular, the positive impact
from the investments the Group has made in its retail activities
over recent years.
FINANCIAL RESULTS & DIVID
The below table highlights the financial results:
GBP000's FY23 FY22
Revenue GBP83,805 GBP66,101
---------- ----------
Gross Profit GBP45,759 GBP38,219
---------- ----------
Profit Before GBP10,105 GBP8,269
Tax
---------- ----------
Net Assets GBP48,167 GBP41,843
---------- ----------
Net Cash* GBP5,039 GBP8,835
---------- ----------
EPS 24.5p 20.9p
---------- ----------
Final dividend 7.1p 6.3p
---------- ----------
Full year dividend 10.4p 9.0p
---------- ----------
*cash minus bank borrowings
The Group achieved revenue of GBP83.8m (FY22: GBP66.1m) and
Profit Before Tax of GBP10.1m (FY22: GBP8.3m). 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 is recommending a final dividend of 7.1p (FY22: 6.3p)
for approval at the forthcoming AGM. Pending approval, the full
year dividend of 10.4p (FY22: 9.0p) would represent an increase of
16% year on year and 42% of the earnings per share. Subject to
shareholder approval, the final dividend is expected to be paid on
22 March 2024 for those shareholders on the register on 16 February
2024. The ex-dividend date will be 15 February 2024.
LOOKING AHEAD
While the business is very well positioned to build upon its
achievements, the Board remains cognisant of the macroeconomic
challenges currently impacting consumer-facing businesses in the
UK. The Group's diversified income streams provide defensive
qualities in the current environment characterised by higher
interest rates and levels of inflation.
The Group is not immune from rising costs, in particular in
relation to staff and energy costs. The Group's fixed energy
pricing ends in February 2024 which will result in an increase in
costs of approximately GBP0.4m in FY24. Ramsdens also strives to
reward its staff fairly and previously took the decision to pay at
least the Real Living Wage (RLW) to everyone in the business. The
RLW will increase by 10% from May 2024 and we will continue to
offer this entry level of pay for our people, who provide a
tremendous service looking after our customers. I believe we have a
fantastic team and would like to publicly thank them for their
efforts over the last year.
Notwithstanding these cost pressures, the Group still has
significant opportunities to grow each of its income streams. In
the year ahead the ongoing global economic uncertainty is expected
to benefit the gold price, which should remain higher than long
term averages. This will continue to benefit both our pawnbroking
and precious metals buying business segments. Our pawnbroking loan
book grew by approximately 20% in FY23 and there is built up latent
interest income to come through in FY24, as well as an opportunity
to further grow our lending as customer demand for a small sum
short term loan remains high.
The investments made in our retail operations, including our
instore and online offering, produced revenue growth of 25% during
FY23 despite the economic conditions and squeeze on discretionary
spending. This resulted in our online jewellery department
contributing GBP1m of net profit in FY23. This strong momentum and
planned further investment gives us confidence for continued growth
in FY24.
Foreign currency income grew year-on year by 8%, albeit the
summer of 2023 was a little disappointing after a particularly good
first six months of the year. In last year's Annual Report, we
commented that economic conditions had the potential to delay a
full recovery in our foreign currency income division and that
would appear to have been the case in the summer months. While the
numbers of customers we served increased over 2022, economic
challenges led to our customers taking slightly less cash on
holiday with them. This lower average transaction value on sales
also led to less currency being exchanged back into sterling when
customers returned. We are hopeful that travel numbers and holiday
durations in summer 2024 continue to increase back towards 2019
levels. We recently launched the Ramsdens Mastercard(R)
Multi-Currency Card to support our foreign currency segment and
capture a greater share of our customers' holiday spending.
Our business is underpinned by a great culture of 'doing things
right' and our proven growth strategy remains unchanged. We strive
to operate sustainably, look after our people, play our part in the
communities where we operate and reward our shareholders. Our
dividend policy continues to be progressive with the full year
dividend increasing by 16%. Our long-term dividend strategy is to
move towards distributing approximately 50% of earnings to
shareholders, subject always to the growth opportunities of the
Group.
Andrew Meehan
Non-Executive Chairman
14 January 2024
CHIEF EXECUTIVE'S REVIEW
The Group has had a great year delivering record profit before
tax of GBP10.1m.
As well as the externally visible achievements of this record
profitability, new stores, new websites and the launch of the
Ramsdens Mastercard(R) Multi-Currency Card, a significant amount of
work has gone into developing the culture and sustainability of the
business. During the year, a full review of our ESG strategy was
undertaken to ensure we are challenging ourselves and continuing to
raise the bar higher. Further details can be found in the ESG
report on page 26 of the Annual Report.
At the heart of our business are our people. They continue to be
engaged, motivated and look after our customers with great care,
listening to them and giving them support with whatever they want
or need. Our colleagues serve a diverse mix of customers by
offering support with short term pawnbroking loans, helping to find
that special jewellery item, exchanging travel money for
holidaymakers or helping customers get cash for their unwanted
jewellery. I am hugely grateful for this dedication and commitment
and wish to publicly thank them for their efforts and success. I
believe they are the best team in the industry. We want to be an
employer of choice and therefore offer support and development,
career opportunities, achievable bonus schemes and the real living
wage as our entrant level pay. Ramsdens was recognised by the
pawnbroking industry as a great place to work after being awarded
the National Pawnbroker's Association Employer of the Year award
for 2023.
BUSINESS REVIEW
Our clear growth strategy has remained consistent since our
quotation on the London Stock Exchange's AIM in 2017 and we have
delivered very positive results in FY23.
We have achieved growth across all four of our key income
streams as a result of our ongoing focus on continuous improvement.
Within the core estate, we have relocated two stores to more
attractive locations in Kendal and Dundee. The stores that were
opened in FY22 are all performing well and those relocated in FY22
have seen positive results, generating the benefits expected in
retail and / or foreign currency.
We have expanded our South East presence in Kent and Essex with
three new store openings in Croydon, Basildon and Maidstone as well
as the acquisition of a store in Bexleyheath. We also opened five
stores in Yorkshire and the North West, in Bootle, Bradford,
Warrington, Southport as well as a second store in York. The second
store in York, while offering all services, is aimed at lifting our
retail offering even further. We are pleased to say that all new
stores are trading well, with several well ahead of expectations.
We ended the year with 160 stores and two franchised stores.
Our online retail business comprises online jewellery sales
where goods are shipped direct to customers, with sales of goods
that are sourced online but transacted in store accounted for
within our branch profits. Our online retail activities continue to
achieve strong growth and delivered profit contribution of over
GBP1m during the year. We believe we have a strong foundation to
continue to scale this online retail business in the coming
years.
We launched our new Ramsdens currency website in July 2023 and
we are encouraged by the early results, albeit this new revenue
stream will need time to develop and grow. Our new pawnbroking
website will go live in Q1 2024 and a new gold buying website
shortly after. These product focused websites will support improved
SEO performance, thereby improving overall profitability.
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 and launched the Ramsdens Mastercard(R)
multi-currency card in September 2023 just before the year end.
FY23 FY22
Total Currency exchanged GBP408m GBP364m
--------- ---------
Gross profit GBP13.6m GBP12.7m
--------- ---------
Online click and collect GBP42.0m GBP38.7m
orders
--------- ---------
Percentage of FX online 10% 11%
--------- ---------
Percentage of Group gross
profit 30% 33%
--------- ---------
While changes to purchasing habits in the UK have reduced the
use of cash to c14% of UK transactions, the vast majority of the
customers buying foreign currency are holidaying in Portugal,
Italy, Greece and Spain where cash usage is well in excess of 50%
of all transactions. We have confidence that UK travellers will
continue to take cash abroad for both convenience and to assist
with budgeting whilst on holiday.
The Gross Profit from FX increased by 8% which is a solid
result, albeit the key summer period was slower than originally
anticipated. Transaction volumes increased by 18% to approximately
1 million but remain 30% lower than pre pandemic levels.
The average transaction value for selling currency fell from
GBP469 to GBP446 but remained well ahead of the pre pandemic
average value of GBP401.
As anticipated, as volumes increased, we experienced some
pressure on margins as we sought to maintain our great value for
money proposition. However, FX margins remained higher than pre
pandemic levels and we believe that going forward margins will be
at least at FY23 levels.
International payments income continues to be relatively small
in comparison to total foreign currency commission and the income
from the new multi-currency card was minimal in FY23 following its
launch in September 2023. The new multi-currency card is supported
by a dedicated easy-to-use mobile app and will allow Ramsdens to
capture more of the total holiday expenditure by our customers. The
card offers 18 currencies with the benefit of Ramsdens' great
exchange rates.
Our FX gross profit was 4% ahead of pre pandemic levels and we
are optimistic about future performance as more people travel and
volumes grow.
Pawnbroking
Pawnbroking is a small subset of the consumer credit market in
the UK and a simple form of asset backed lending dating back to the
foundations of banking. In a pawnbroking transaction an item of
value, known as a pledge, (in Ramsdens' case, jewellery and
watches), is held by the pawnbroker as security against a six-month
loan. Customers who repay the capital sum borrowed plus interest
receive their pledged item back. If a customer fails to repay the
loan, the pawnbroker sells the pledged item to repay the amount
owed and returns any surplus funds to the customer. Pawnbroking is
regulated by the FCA in the UK and Ramsdens is fully FCA
authorised.
If consumers have assets to pledge, pawnbroking can provide a
short-term solution or give the customer time to put in place
longer term financial arrangements. Pawnbroking is simple to
understand and is quick and easy to arrange. It also benefits from
there being no further debt consequences should the customer be
unable to repay the loan when due, although Ramsdens works with our
customers to try and ensure repayment where possible so the
customer is able to borrow again should they need to.
000's FY23 FY22
Gross profit GBP10,043 GBP7,533
---------- ---------
Total loan book* (capital value) GBP10,264 GBP8,648
---------- ---------
Past due (capital value) GBP859 GBP721
---------- ---------
In date loan book* (capital GBP9,405 GBP7,927
value)
---------- ---------
Percentage of Group gross profit 22% 20%
---------- ---------
*excludes loans in the course of realisation
Customer demand for small sum short term credit remains strong,
in part driven by the increased costs the UK consumer has faced
this year. While more traditional providers of short term credit
have reduced in number (e.g. home collected credit, guarantor loans
and payday lenders), some of this capacity has moved to unregulated
'lending' including through buy now pay later and salary advance
providers.
Due to the contraction in traditional short-term lenders, and
Ramsdens pawnbroking service being readily accessible in store or
online, new customer volumes have increased by 11% compared to
FY22.
The average loan value as at 30 September 2023 was GBP325, up
from GBP303 as at 30 September 2022. Our median loan value is
GBP174 across the UK but GBP230 in our southern branches. The
broader demographics seen in the southern communities in which we
operate allows for higher loan values with higher carats of gold
jewellery offered as security for a loan.
Our lending remains conservative in line with our long-term
policy and repayment rates are in line with long run averages.
We believe that economic conditions will remain challenging for
the UK consumer in the year ahead and while we are expecting the
loan book to continue to grow, we are not anticipating growth to be
as high in FY24 as the 20% we achieved in 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 FY23 FY22
Revenue GBP33,474 GBP27,107
---------- ----------
Gross Profit GBP12,058 GBP10,263
---------- ----------
Margin % 36% 38%
---------- ----------
Jewellery retail stock GBP24,289 GBP19,683
---------- ----------
Online sales GBP6,656 GBP3,904
---------- ----------
Percentage of sales online 20% 14%
---------- ----------
Percentage of Group gross
profit 26% 27%
---------- ----------
A 23% increase in revenue despite the challenging economic
conditions in the year was achieved following our investments in
stock levels, stock presentation, replenishment systems, staff
training and our retail website.
Retail revenue is now relatively equally spread across three key
categories of premium watches (38% of revenue), new jewellery (31%)
and preowned jewellery (31%). Margins by product category have
remained consistent but the overall gross margin has fallen
slightly due to an increase in the contribution of premium watch
sales to the overall sales mix, which carry a slightly lower
margin.
Online growth continued to be strong with revenue increasing to
GBP6.7m (FY22: GBP3.9m), up 70% against the prior year. Online
sales represented 20% of all jewellery items sold and the online
channel contributed profit in excess of GBP1m.
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 120
watches in store but there are approximately 2,000 watches
available on our website for customers to browse 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 FY23 FY22
Revenue GBP23,522 GBP15,847
---------- ----------
Gross Profit GBP9,161 GBP6,626
---------- ----------
Percentage of Group gross
profit 20% 17%
---------- ----------
Revenue from our purchase of precious metals grew by 48% with
the gross profit growing by 38%. The Sterling price for 9ct gold
has remained high in comparison to long run averages, which of
course helps the divisional performance - during FY23 the average
price for 9ct gold was GBP18.48 per gram (FY22: GBP17.15).
Given the wider global political and economic situation, we
believe the gold price will remain high in the short to medium
term, supporting the Group's margins.
Other services
In addition to the four core business segments, the Group also
provides additional services in Western Union money transfer and
receives franchise fees. Up to April 2023, the Group also received
income for cheque cashing services and small commissions for credit
broking, however these services were stopped to enable greater
focus on the key services. In FY22, income from the now ceased
services was approximately GBP0.35m.
000's FY23 FY22
Revenue GBP849 GBP1,114
------- ---------
Gross Profit GBP849 GBP1,114
------- ---------
Percentage of Group gross
profit 2% 3%
------- ---------
STRATEGY
Following an extensive review, the Board believes that its
existing strategy remains the right one to grow our business and
deliver sustainable value for all our stakeholders. Included in
that review was an in-depth review of our ESG strategy. See page 26
of the Annual Report for further details.
We continue to concentrate on:
1. Improving the performance of the existing store estate
2. Expanding the Ramsdens branch footprint in the UK
3. Developing our online proposition
4. Appraising opportunities presented by operating in challenging markets.
5. Focusing on sustainability through our ESG strategy
1. Improving the performance of the existing store estate
The Group's established stores continue to perform well and all
income segments have shown significant growth over FY22 levels with
future opportunities for further improvement.
Our mission statement is to have a great customer offering
backed up by fantastic customer service leading to customers being
ambassadors for Ramsdens. Recommendations from family and friends
continues to be the biggest source of new customers. We are also
extremely proud of both of our 5-star Trustpilot ratings for our
retail jewellery and foreign currency services. Living our values
of being trusted, open and passionate helps deliver our mission
statement and build our culture of doing the right thing, whatever
that 'thing' may be.
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 performance across all key income streams. This focus
remains unchanged.
Our people are key to implementing our strategy, and staffing
remains the largest cost within the business. During the year, we
continued to pay the real living wage (RLW) as our entry pay level.
This resulted in pay increases of 10% for our people in more junior
or entry level roles.
The RLW announcement in October 2023 was for another increase in
pay of 10%, well ahead of inflation, effective from May 2024. We
remain committed to paying the RLW which will result in 85% of the
employees receiving a pay rise of greater than 8%, with more than
40% receiving an increase of 10% or more in FY24.
The people in our business live and breathe the Ramsdens ethos
and we are committed to ensuring that our staff not only remain
productive but also feel valued and rewarded in their careers at
Ramsdens. We are continually investing in our training capabilities
and how we develop our staff. We understand that there is a desire
to continue to learn so that everybody can enjoy their role more,
and benefit from higher remuneration with the development of new
skills and responsibilities. We are conscious that as the entry
level pay increases, there are challenges that need to be met to
keep pay differentials across our grading structure.
Our fixed price energy contract ends in February 2024. A new
contract has been entered into and the new energy pricing will
result in an expected cost increase of GBP0.4m in FY24 and GBP0.6m
in FY25 over FY23. Once the new contract commences all of our
electricity will come from renewable sources.
Rents generally 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. We continue to actively manage
our portfolio, including relocating stores to improve our
footfall-reliant services of foreign currency exchange and
jewellery retail while potentially reducing operating costs at the
same time. Our two relocations this year in Kendal and Dundee were
examples of this.
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. We are confident that
investment in the recently launched foreign currency website will
drive footfall to stores in addition to increasing click and
collect volumes. We also believe the investment in the two new
websites for pawnbroking and gold buying will also assist store
performance.
In addition, we continually aim to improve the performance
across 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
for when they next need foreign currency.
-- By introducing 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 FCA's 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 their pledged items.
-- 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. The 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:
-- Continued investment in our jewellery stock levels will give
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.
-- Our concept window display design and stock presentation has
been well received by consumers. The simplicity of the display and
strong signposting has improved display standards across the store
estate where it has been implemented. The role out of this design
will be completed in FY24.
-- We are 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 and improve the jewellery offer with larger window
display areas, often at similar rents to current locations.
Purchase of precious metals:
-- We are increasing the awareness amongst our existing customer
base, primarily foreign currency exchange customers who are unaware
of the service or the value held in damaged or simply unwanted or
unworn jewellery.
-- When launched, our new gold buying website will identify new
customers who may be unaware of the service or the value of their
unwanted or unworn jewellery.
2. Expanding the Ramsdens branch footprint in the UK
The Group offers its services across a portfolio of stores and
online, and the Board believes there are important growth
opportunities through both of these channels. The Group's model of
diversified income streams sharing the operational costs of the
store has been successful in both small towns and larger cities.
There are c350 towns and cities with a population of 30,000 or more
in the UK, London counting as one location. We believe that there
are significant opportunities to grow the store footprint over
coming years given we have proven, successful stores in towns with
a population of less than 15,000 where we have successfully
established a community of returning customers.
The retail property market is currently attractive and flexible
deals can be achieved as many towns have too much retail space. As
a consequence, shorter lease terms can be agreed, however, this
results in higher levels of depreciation (as spread over the lease
term) at a time when shop fit costs have also increased to
cGBP0.2m. A retail focused store also requires cGBP0.3m of working
capital investment, which comprises mainly jewellery stock.
Expanding the store estate allows the Group to leverage off the
services and centralised costs of its head office.
As at 30 September 2023, we had 160 stores plus two franchised
stores.
During the year, we opened eight greenfield sites and acquired a
pawnbroker in Bexleyheath. We closed one store in Blyth which was a
casualty of the storms in November 2021 and the landlord chose not
to repair the property.
We now have five stores in the South East. Our store in Chatham,
which has been open for two years, continues to trade exceptionally
well. During the year we opened new stores in Basildon, Croydon,
and Maidstone and a new store in Romford will open in early 2024.
While early trading across the new stores has been good, especially
retail jewellery, new staff in a new region require significant
support as well as ongoing training and development.
We also opened five stores in Yorkshire and the North West, in
Bootle, Bradford, Warrington, Southport and York. All are trading
in line with or ahead of our new store model expectation.
We have nine new stores planned for FY24. Poole, Blackburn and
Cardiff all opened in Q1 FY24. We have three stores with the legals
completed, awaiting shop fit completion and three new stores in
various stages of the legal process.
We have a strong pipeline of researched towns where we are
awaiting the right unit to take forward.
3. Developing our online proposition
We see the development of our online capabilities as being
complementary to our store estate and both will benefit as the
store estate expands and the websites generate increased brand
recognition.
Jewellery retail website
www.ramsdensjewellery.co.uk
Revenue from the online retail jewellery website increased by
70% to GBP6.7m (FY22: GBP3.9m) and the online retail channel
contributed over GBP1m of profitability.
This performance excludes jewellery sales in branches which use
the in-store digital facility to access the website as a catalogue
of stock.
During the year we conducted in-depth reviews of our SEO and pay
per click activities. We continue to seek improvements in
alternative payment options, photography and product descriptions
and we are learning from integrated AI. The Board believes this
ongoing development will continue to deliver online retail
jewellery sales growth over the coming years.
Foreign currency website
www.ramsdenscurrency.co.uk
The new currency focused website launched in July 2023. The
first objective of a seamless transition from the legacy website,
www.ramsdensforcash.co.uk , has been achieved and we are now
investing in building our SEO.
Click and Collect currency sales account for 10% of all currency
sold (FY22: 11%).
The website has been enhanced to include the launch of the
Ramsdens Mastercard(R) Multi-Currency Card and offer a buy back
guarantee which has been rolled out to the stores. We will
re-launch a home delivery option in 2024.
Pawnbroking website
www.ramsdenspawnbrokers.co.uk
A new website dedicated to pawnbroking will launch in Q1 2024.
The first objective will be a seamless transition from the legacy
website, www.ramsdensforcash.co.uk , so that customers who are
already benefiting from the online payment facility to save
interest continue to do so.
Our SEO will then be developed so that we can enhance the
awareness of pawnbroking at Ramsdens to identify new higher value
lending and attract customers to stores. An online digital
marketing campaign has already been prepared ready for when the
website launches. The true online only pawnbroking loan book, where
goods are posted into Ramsdens, is minimal, with customers
preferring the immediacy that a local pawnbroker provides for their
small sum borrowing need.
Gold buying website
www.ramsdensgoldbuyers.co.uk
A new website dedicated to gold buying will launch in 2024. This
will enable focused SEO and other online advertising to attract
customers to utilise this service which they may be unaware of.
Legacy website
www.ramsdensforcash.co.uk
The ramsdensforcash.co.uk website will become a portal to
individual websites for each of our four key income streams as well
as providing background information to who we are and what we
do.
4. Appraising opportunities presented by operating in challenging markets
The high street retail landscape remains challenging. Some
locations are thriving and others less so with an over-supply of
shops often larger in size following the demise of well-known high
street chains. However, that brings opportunities in the potential
availability of prime sites that may have been occupied by
jewellers or travel agents. 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 risk mitigation in
case any of our stores become isolated and performance
deteriorates.
We continue to be discerning in the acquisitions we are
interested in. Often jewellers have too much old and obsolete stock
and we have the costs of store conversion to consider. This can be
the same for a pawnbroking purchase where we have to consider
whether it is more attractive to open a new store and build a
business.
While most pawnbrokers have seen increased lending levels in the
last 12 months and have optimism for future lending given the
macroeconomic conditions and high gold price, 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 number of pawnbrokers operating in the UK continues to fall.
The main reasons for closures tend to be the cost of regulatory
compliance as well as a lack of internal succession structures at
what are typically one store, family businesses. We believe the
number of outlets overall has remained stable at c.870 as we and
H&T Pawnbrokers have opened new stores during the last
year.
We purchased Broadway Jewellers and Pawnbrokers in Bexleyheath
in April 2023. This business has performed in line with
expectations since acquisition.
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.
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 strategy
We know that our long-term strategic aims will only be delivered
if we have good sustainable practices built on firm
foundations.
Our foundations are:
-- Environment - we are very conscious of the impact of our
activities on the environment and our aim is to reduce our energy
use and recycle where we can
-- Social - our people. How we look after our people, their
wellbeing, our inclusiveness and creating opportunities for all
staff to learn, develop and progress their careers is critical in
how we then serve and help our customers
-- Social - our communities in which we operate. How we look
after customers, suppliers and the wider community including
supporting local charitable organisations helps define our
Business
-- Governance - we are committed to having the highest standards
of governance throughout the business. We have a strong structure
of oversight of what we do and how we do it, utilising our market
leading in house bespoke software to provide the necessary controls
and reporting.
LOOKING AHEAD
The Group has momentum in all key income streams and we need to
maximise that opportunity. While we are not immune from the
economic challenges and increased energy and payroll costs, the
Group is in a great place to make further progress.
Looking at each income stream in turn:
-- Foreign Currency Exchange
The recently launched Ramsdens Mastercard(R) Multi-Currency Card
has enjoyed a good start and will supplement our cash offering by
participating in the customer's card spend while on holiday.
The new website will improve awareness of Ramsdens as a foreign
currency supplier as will our continued pricing policies of having
great rates on offer to customers.
Subject to the economic conditions, we are confident that
consumers have a growing desire to travel, and this will continue
to drive long-term demand in overseas holidays and a need for
foreign currency.
-- Pawnbroking
With a backdrop of higher interest rates, ongoing inflationary
pressure and a reduction in the number of lenders offering small
sum short term credit, we believe pawnbroking will continue to be
in demand and grow.
The gold price is favourable and we are not anticipating any
major fall in the gold price in the short term.
Our new website will create awareness that Ramsdens is able to
not only lend small sums but also that we have the expertise and
skills to offer higher value loans at attractive interest
rates.
In line with recent years we anticipate that we will have the
opportunity to acquire at least one pawnbroker during the year,
subject to identifying an attractive proposition.
-- Retail Jewellery
Our continued investment in display, stock levels, processes and
staff development should allow the business to grow its retail
jewellery income.
We have managed the inflationary cost pressures well and our
pricing still provides customers with exceptional value for
money.
Our retail jewellery website is a scalable online business and
this continues to receive focus and investment.
-- Purchase of precious metals
The high gold price and challenging economic conditions will
generate demand from customers once they are aware of the
service.
Our new website when launched will assist with awareness of this
service.
We will increase awareness as more customers visit our
stores.
The Group has great foundations on which to build and create
value for all stakeholders. As well as the positive momentum in
each of our income streams, we will benefit from the maturing of
the stores opened in the last two years in addition to the stores
that we are investing in this year.
Underpinned by the strength of the Ramsdens brand and
diversified business model, the Board has continued optimism for
the future and confidence in the Group's ability to deliver on its
growth strategy for the long-term benefit of all stakeholders.
Peter Kenyon
Chief Executive Officer
14 January 2024
FINANCIAL DIRECTOR'S REVIEW
FINANCIAL RESULTS
For the year ended 30 September 2023, the Group's reported
revenue increased by 27% to GBP83.8m (FY22: GBP66.1m) with growth
across each of the four key income streams. Gross profit increased
by 20% to GBP45.8m (FY22: GBP38.2m).
The Group's administrative expenses increased by 20% to GBP35.1m
(FY22: GBP29.4m), reflecting an increase in staff costs as the
business returned to more normalised trading levels. Finance costs
increased 48% to GBP0.8m (FY22 GBP0.6m) due to higher interest base
rates. Investments in working capital, particularly jewellery
retail stock, over the last two years have enabled the Group to
grow its retail proposition.
Profit before tax increased to GBP10.1m (FY22: GBP8.3m) as the
Group benefited from improved trading conditions.
The Group's cash position remains strong with GBP5.0m net cash
at the year-end (FY22: GBP8.8m), with the reduction in the year
reflecting increased investment in new stores, jewellery stock and
the growth of the pawnbroking loan book.
The table below shows the headline financial results:
GBP000's FY23 FY22
Revenue GBP83,805 GBP66,101
---------- ----------
Gross Profit GBP45,759 GBP38,219
---------- ----------
Profit Before Tax GBP10,105 GBP8,269
---------- ----------
Net Assets GBP48,167 GBP41,843
---------- ----------
Net Cash* GBP5,039 GBP8,835
---------- ----------
EPS 24.5p 20.9p
---------- ----------
*Cash less bank borrowings
EARNINGS PER SHARE AND DIVID
The statutory basic earnings per share for FY23 was 24.5p, up
from 20.9p in the previous year.
The Board is recommending a final dividend of 7.1p in respect of
FY23 (FY22: 6.3p). Subject to approval at the AGM, the final
dividend is expected to be paid on 22 March 2024 for those
shareholders on the register on 16 February 2024. The ex-dividend
date will be 15 February 2024. This would bring the total dividend
for FY23 to 10.4p (FY22: 9.0p). 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 42% pay-out ratio of FY23 EPS. The
long-term dividend strategy is to move towards approximately 50% of
post-tax profits being distributed subject to the financial
performance and growth opportunities.
FINANCIAL POSITION
At 30 September 2023, cash and cash equivalents amounted to
GBP13.0m (FY22: GBP15.3m) and the Group had net assets of GBP48.2m
(FY22: GBP41.8m).
CAPITAL EXPITURE
During the reporting period, the Group invested in the store
estate by opening eight new stores, one store acquisition and
relocating two existing stores. Capital expenditure for tangible
and intangible assets was GBP2.7m.
CASH FLOW
Working capital outflows in the year include the significant
investment in stock of GBP4.7m, and the growth of the pawnbroking
loan book which has resulted in trade and other receivables
increasing by GBP2.0m. Trade and other payables reduced by GBP2.3m.
The net cash flow from operating activities for the year was
GBP3.3m (FY22: GBP2.9m)
Net cash at the year-end was GBP5.0m (FY22: GBP8.8m).
T he Group continues to have access to its GBP10m revolving
credit facility which expires in March 2026. The Group has two
covenants: 1 x cash cover and 2 x EBITDA cover. At 30 September
2023, this facility was GBP8.0m drawn to support the currency cash
held. The cash position and headroom on the bank facility provide
the Group with the funds required to continue to deliver its
current stated strategy.
TAXATION
The tax charge for the year was GBP2.3m (FY22: GBP1.7m)
representing an effective rate of 23% (FY22: 20%). The tax rate
increased during the second half of the year from 19% to 25%. A
full reconciliation of the tax charge is shown in note 10 of the
financial statements.
SHARE BASED PAYMENTS
The share-based payment expense in the year was GBP462,000
(FY22: GBP314,000). 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 prices of 200.5p and 230.0p.
During the year, the LTIP award from 2019 partially met the
performance criteria and 73,425 share options vested. 71,775 share
options were exercised during the year with 1,650 fully vested
options remaining unexercised.
GOING CONCERN
The Board has conducted an extensive review of forecast earnings
and cash over the next 12 months, considering various scenarios and
sensitivities given the ongoing economic challenges and has
concluded that it has adequate resources to continue in business
for the foreseeable future. For this reason, the Board has been
able to conclude the going concern basis is appropriate in
preparing the financial statements.
Martin Clyburn
Chief Financial Officer
14 January 2024
Consolidated statement of comprehensive income
For the year ended 30 September 2023
2023 2022
Notes
GBP'000 GBP'000
Revenue 5 83,805 66,101
Cost of sales (38,046) (27,882)
--------- ---------
Gross profit 5 45,759 38,219
Other income 300 1
Administrative expenses (35,126) (29,392)
--------- ---------
Operating profit 10,933 8,828
Finance costs 6 (828) (559)
--------- ---------
Profit before tax 10,105 8,269
Income tax expense 10 (2,349) (1,683)
--------- ---------
Profit for the year 7,756 6,586
--------- ---------
Other comprehensive income - -
Total comprehensive income 7,756 6,586
--------- ---------
Earnings per share in pence 8 24.5 20.9
Diluted earnings per share in pence 8 24.0 20.7
Consolidated statement of financial position
As at 30 September 2023
2023 2022
Assets Notes GBP'000 GBP'000
Non-current assets
Property, plant and equipment 11 7,949 6,681
Right of use assets 11 9,615 9,551
Intangible assets 12 673 779
Investments 13 - -
18,237 17,011
Current assets
Inventories 15 27,662 22,764
Trade and other receivables 16 15,355 13,264
Cash and short-term deposits 17 13,022 15,278
-------- ----------
56,039 51,306
-------- ----------
Total assets 74,276 68,317
-------- ----------
Current liabilities
Trade and other payables 18 6,305 8,905
Interest bearing loans and borrowings 18 7,983 6,443
Lease liabilities 18 2,462 2,086
Income tax payable 18 1,225 932
-------- ----------
17,975 18,366
-------- ----------
Net current assets 38,064 32,940
-------- ----------
Non-current liabilities
Lease liabilities 19 7,661 7,871
Contract liabilities 19 50 88
Deferred tax liabilities 19 96 149
Provisions 29 327 -
-------- ----------
8,134 8,108
-------- ----------
Total liabilities 26,109 26,474
-------- ----------
Net assets 48,167 41,843
-------- ----------
Equity
Issued capital 21 317 316
Share premium 4,892 4,892
Retained earnings 42,958 36,635
-------- ----------
Total equity 48,167 41,843
-------- ----------
The financial statements of Ramsdens Holdings PLC, registered
number 08811656, were approved by the directors and authorised
for issue on 14 January 2024 and signed on their behalf by:
M A Clyburn
Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 30 September
2023
Issued Share Retained
capital premium earnings Total
Notes
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 October 2021 314 4,892 30,937 36,143
Profit for the year - - 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 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
--------- --------- ---------- --------
As at 1 October 2022 316 4,892 36,635 41,843
Profit for the year - - 7,756 7,756
--------- --------- ---------- --------
Total comprehensive income - - 7,756 7,756
Transactions with owners:
Dividends paid 22 - - (1,994) (1,994)
Issue of share capital 21 1 - - 1
Share based payments 25 - - 462 462
Deferred tax on share-based
payments - - 99 99
--------- --------- ---------- --------
Total transactions with owners 1 - (1,433) (1,432)
As at 30 September 2023 317 4,892 42,958 48,167
--------- --------- ---------- --------
Consolidated statement of cash
flows
For the year ended 30 September
2023
2023 2022
Operating activities Notes GBP'000 GBP'000
Profit before tax 10,105 8,269
-------- --------
Adjustments to reconcile profit
before tax to net cash flows:
Depreciation and impairment of property,
plant
and equipment 11 1,383 1,265
Depreciation and impairment of right
of use assets 11 2,214 2,261
Profit on disposal of right of use
assets 7 (72) (81)
Amortisation and impairment of intangible
assets 12 137 163
Loss on disposal of property, plant
and equipment 7 62 78
Share based payments 25 462 314
Finance costs 6 828 559
Working capital adjustments:
Movement in trade and other receivables
and prepayments (1,996) (2,583)
Movement in inventories (4,692) (7,221)
Movement in trade and other payables (2,638) 1,144
Movement in provisions 327 -
-------- --------
6,120 4,168
Interest paid (828) (559)
Income tax paid (2,010) (672)
-------- --------
Net cash flows from operating activities 3,282 2,937
-------- --------
Investing activities
Proceeds from sale of property,
plant and equipment 15 3
Purchase of property, plant and
equipment 11 (2,721) (2,817)
Purchase of intangible assets 12 - (28)
Payment for acquisition 28 (298) (909)
-------- --------
Net cash flows used in investing
activities (3,004) (3,751)
Financing activities
Issue of share capital 21 1 2
Dividends paid 22 (1,994) (1,231)
Payment of principal portion of
lease liabilities (2,041) (2,211)
Bank loans drawn down 2,500 8,000
Repayment of bank borrowings (1,000) (1,500)
Net cash flows used in / from financing
activities (2,534) 3,060
-------- --------
Net (decrease) / increase in cash
and cash equivalents (2,256) 2,246
Cash and cash equivalents at 1 October 15,278 13,032
-------- --------
Cash and cash equivalents at 30
September 27 13,022 15,278
-------- --------
Notes to the consolidated financial statements
1. Corporate information
Ramsdens Holdings PLC (the "Company") is a public limited
company incorporated and domiciled in England and Wales. The
registered office of the Company is Unit 16, Parkway Shopping
Centre, Coulby Newham, Middlesbrough, TS8 0TJ. The registered
company number is 08811656. A list of the Company's subsidiaries is
presented in note 13.
The principal activities of the Company and its subsidiaries
(the "Group") are the supply of foreign exchange services,
pawnbroking, jewellery sales, and the sale of precious metals
purchased from the general public.
2. Changes in accounting policies
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 2025 considering
various scenarios and sensitivities given the ongoing cost of
living crisis and uncertainty it has produced around the future
economic environment.
At 30 September 2023 the Group has significant cash balances of
GBP13m, readily realisable stock of gold jewellery and access to
the GBP2m unutilised element of a GBP10m revolving credit facility
with an expiry date of March 2026. In the year ended 30 September
2023 the Group has traded profitably and generated cash from
operations.
The Board have been able to conclude that they have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
Group continues to adopt the going concern basis in preparing the
financial statements. The going concern assessment covers the
period to 31 January 2025.
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% and 33% reducing balance
* Computer equipment - 25% and 33% reducing balance
* Motor vehicles - 25% reducing balance
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the
statement of comprehensive income when the asset is
derecognised.
The residual values, useful lives and methods of depreciation of
property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
3.7 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the
Group estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or CGU's fair value
less costs of disposal and its value in use. It is determined for
an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into
account. If no such transactions can be identified, an appropriate
valuation model is used.
The Group bases its impairment calculation on detailed budgets
and forecasts which are prepared separately for each of the Group's
CGUs to which the individual assets are allocated, which is usually
taken to be each individual branch store based on the independence
of cash inflows. Central costs and assets are allocated to CGUs
based on revenue. These budgets and forecast calculations are
estimated for three years and extrapolated to cover a total period
of ten years.
Impairment losses of continuing operations are recognised in the
statement of comprehensive income in those expense categories
consistent with the function of the impaired asset.
For assets excluding goodwill, an assessment is made at each
reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the
asset's or CGU's recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since
the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation or
amortisation, had no impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the Statement of
Comprehensive income unless the asset is carried at a revalued
amount, in which case the reversal is treated as a revaluation
increase.
Goodwill
Goodwill is tested for impairment at the end of each accounting
period and when circumstances indicate that the carrying value may
be impaired.
Impairment is determined for goodwill by assessing the
recoverable amount of each CGU (or group of CGUs) to which the
goodwill relates. Where the recoverable amount of the
cash-generating unit is less than their carrying amount, an
impairment loss is recognised. Impairment losses relating to
goodwill cannot be reversed in future periods. Goodwill is
allocated to CGUs based on the price paid of the relevant
acquisition.
3.8 Inventories
Inventories comprise of retail jewellery and precious metals
held to be scrapped and are valued at the lower of cost and net
realisable value.
Cost represents the weighted average purchase price plus
overheads directly related to bringing the inventory to its present
location and condition.
When the Group takes title to pledged goods on default of
pawnbroking loans up to the value of 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 processed by merchant service providers are recognised as
cash at point of transaction. Foreign currency bank notes are
ordered for next day delivery and are recognised once the control
of these has been transferred.
For the purpose of the consolidated statement of cash flows,
cash and cash equivalents consist of cash, foreign currency held
for resale and short-term deposits as defined above, net of any
outstanding bank overdrafts.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses
on financial assets that are measured at amortised cost. The amount
of credit losses is updated at each reporting date to reflect
changes in credit risk since initial recognition of the respective
financial instrument.
The Group recognises lifetime expected credit losses when there
has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial
instrument has not increased significantly since initial
recognition, the Group recognises the 12 month expected credit
losses. As pawnbroking loans are typically over a six-month term
the lifetime credit losses are usually the same as the 12 month
expected credit losses.
In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial
instrument at the reporting date with the risk of a default
occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both
quantitative and qualitative information that is reasonable and
supportable including historical experience.
The measurement of expected credit losses is a function of the
probability of default, and the loss (if any) on default. The
assessment of the probability of default is based on historical
data. The loss on default is based on the assets gross carrying
amount less any realisable security held. The expected credit loss
calculation considers both the interest income and the capital
element of the pawnbroking loans. Interest on loans in default is
accrued net of expected credit losses. Details of the key
assumptions for pawnbroking expected credit losses are given in
note 4.
Derecognition
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset to another entity. On
derecognition of a financial asset measured at amortised cost, the
difference between the assets carrying amount and the sum of the
consideration received and receivable is recognised in the
Statement of Comprehensive Income. Pawnbroking loans in the course
of realisation continue to be recognised as loan receivables until
the pledged items are realised.
Financial liabilities
Debt and equity instruments are classified as either financial
liabilities or equity in accordance with the substance of the
contractual arrangements and the definitions of a financial
liability and equity instrument.
All financial liabilities are recognised initially at amortised
cost or at fair value through profit and loss (FVTPL).
The Group's financial liabilities include trade and other
payables, loans and borrowings including bank overdrafts, and
derivative financial instruments.
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the effective
interest rate method (EIR). Gains and losses are recognised in the
Statement of Comprehensive Income when the liabilities are
derecognised as well as through the (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance costs
in the Statement of Comprehensive Income.
Only the Group's derivative financial instruments are classified
as financial liabilities at fair value through profit or loss.
Financial liabilities at fair value through profit or loss are
stated at fair value, with any resultant gain or loss recognised in
the Statement of Comprehensive Income. The net gain or loss
recognised in the Statement of Comprehensive Income incorporates
any interest paid on the financial liability.
Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognised in the Statement of
Comprehensive Income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset with the
net amount reported in the Statement of Financial Position only if
there is a current enforceable legal right to offset the recognised
amounts and intent to settle on a net basis, or to realise the
assets and settle the liabilities simultaneously.
3.10 Fair value measurement
The Group measures financial instruments, such as derivatives,
at fair value at the date of each statement of financial
position.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy. This is described, as follows, based on the
lowest level input that is significant to the fair value
measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
3.11 Taxation
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
Consolidated Statement of Comprehensive Income because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated
using tax rates and laws that have been enacted or substantively
enacted by the date of the statement of financial position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the
date of each statement of financial position and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates and laws that are
expected to apply in the period when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the
Consolidated Statement of Comprehensive Income, except when it
relates to items charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity. Deferred tax is
recognised on an undiscounted basis.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities when they relate to income taxes levied by
the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
3.12 Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses
whether:
The contract involves the use of an identified asset - this may
be specified explicitly or implicitly and should be physically
distinct or represent substantially all of the capacity of a
physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
-- The Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of
use; and
-- The Group has the right to direct the use of the asset. The
Group has this right when it has the decision-making rights that
are most relevant to changing how and for what purpose the asset is
used. In rare cases where the decision about how and for what
purpose the asset is used is predetermined, the Group has the right
to direct the use of the asset if either:
o The Group has the right to operate the asset; or
o The Group designed the asset in a way that predetermines how
and for what purpose it will be used.
As a lessee
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
estimate 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 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. The Group provides for rectification costs
throughout the life of the lease as required. The Group maintains
stores to a high standard and completes any necessary repairs and
maintenance on a timely basis using the in-house property
department and external contractors. These repair costs are
expensed as incurred.
3.14 Pensions and other post-employment benefits
The Group operates a defined contribution pension scheme. The
assets of the scheme are held and administered separately from
those of the Group. Contributions payable for the year are charged
in the statement of comprehensive income. Total contributions for
the year are disclosed in note 9 to the accounts. Differences
between contributions payable in the year and contributions
actually paid are shown as either accruals or prepayments in the
statement of financial position.
3.15 Employee share incentive plans
The group grants equity settled share option rights to the
parent entity's equity instruments to certain directors and senior
staff members under a LTIP (Long-term Incentive Plan) and a CSOP
(Company Share Option Plan).
The employee share options are measured at fair value at the
date of grant by the use of either the Black-Scholes Model or a
Monte 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 by layby in instalments and receive the goods once the sale
is fully paid. Instalment payments are recognised as a creditor
until the item is fully paid. The Group has a 7-day refund policy
in store, and a 14-day refund policy online reflecting the distance
selling regulations. Premium watch sales are sold with a limited
12-month warranty. A provision for warranties is recognised when
the underlying products are sold, based on management's best
estimate, and is included as a cost of sale.
Other financial income
Other financial income comprises 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 include 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.
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 is 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 and is assumed to be 12 months.
See note 14 for further details on pawnbroking credit risk and
provision values, including sensitivity.
Impairment of property, plant and equipment, right-of-use assets
and intangible assets estimate
Determining whether property, plant and equipment, right-of-use
assets and intangibles assets are impaired requires an estimation
of the value in use of the CGU to which the assets have been
allocated. The value in use calculation requires the Group to
estimate the future cash flows expected to arise from the CGU and
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 16%.
Whilst the impairment review has been conducted based on the
best available estimates at the impairment review date, the Group
notes that actual events may vary from management expectation. If
outcomes within the next financial year are different from the
assumptions made in relation to future cash flows, this could lead
to a material adjustment to the carrying amount of the assets
affected. The carrying amounts for tangible assets, right-of use
assets and intangible assets are disclosed in notes 11 and 12.
Where the recoverable amount of the CGU was estimated to be less
than its carrying amount, the carrying amount of the CGU was
reduced to the estimated recoverable amount.
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:
2023 2022
Revenue GBP'000 GBP'000
United Kingdom 83,805 65,948
Other - 153
-------- --------
83,805 66,101
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.
2023 2022
Revenue GBP'000 GBP'000
Contracts with customers 71,928 57,134
Pawnbroking interest income 11,877 8,967
83,805 66,101
Pawnbroking interest income is recognised over time as each loan
progresses whereas all other revenue is recognised at a point in
time.
2023 2022
Revenue GBP'000 GBP'000
Pawnbroking 11,877 8,967
Purchases of precious metals 23,522 15,847
Retail jewellery sales 33,474 27,107
Foreign currency 14,083 13,066
Income from other financial
services 849 1,114
Total revenue 83,805 66,101
-------- --------
Gross profit
Pawnbroking 10,043 7,533
Purchases of precious metals 9,161 6,626
Retail jewellery sales 12,058 10,263
Foreign currency 13,648 12,683
Income from other financial services 849 1,114
Total gross profit 45,759 38,219
--------- ---------
2023 2022
GBP'000 GBP'000
Total gross profit 45,759 38,219
--------- ---------
Other income 300 1
Administrative expenses (35,126) (29,392)
Finance costs (828) (559)
Profit before tax 10,105 8,269
--------- ---------
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.
2023 2022
Other information GBP'000 GBP'000
Tangible & intangible capital
additions (*) 2,759 3,060
Depreciation and amortisation
(*) 3,734 3,689
Assets
Pawnbroking 14,262 11,853
Purchases of precious metals 3,373 3,081
Retail jewellery sales 24,647 20,125
Foreign currency 6,061 10,123
Income from other financial
services 44 139
Unallocated (*) 25,889 22,996
------- -------
74,276 68,317
------- -------
Liabilities
Pawnbroking 596 613
Purchases of precious metals 5 3
Retail jewellery sales 1,744 2,012
Foreign currency 453 2,042
Income from other financial
services 339 392
Unallocated (*) 22,972 21,412
------- -------
26,109 26,474
------- -------
(*) 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
2023 2022
GBP'000 GBP'000
Interest on debts and borrowings 368 163
Lease charges 460 396
-------- --------
Total finance costs 828 559
-------- --------
7. Profit before taxation has been arrived at after
charging/(crediting)
2023 2022
GBP'000 GBP'000
Items reported within Cost of
sales -
Cost of inventories recognised
as an expense 35,777 26,065
Pawnbroking expected credit losses 1,834 1,434
Items reported within Administrative
expenses -
Depreciation of property, plant
and equipment 1,383 1,265
Depreciation of right of use assets 2,214 2,261
Profit on disposal of right of
use assets (72) (81)
Amortisation of intangible assets 137 163
Loss on disposal of property, plant
and equipment 62 78
Staff costs (see note 9) 20,107 16,643
Foreign currency exchange losses 318 265
Auditor's remuneration - Audit
fees 192 140
Auditor's remuneration - Non-Audit
fees 6 5
Short term lease payments 418 470
Share based payments (see note
25) 462 314
8. Earnings per share
2023 2022
GBP'000 GBP'000
Profit for the year 7,756 6,586
Weighted average number of shares in
issue 31,679,095 31,559,874
----------- -----------
Earnings per share (pence) 24.5 20.9
Weighted average number of dilutive
shares 622,907 291,939
Effect of dilutive shares on earnings
per share (pence) (0.5) (0.2)
----------- -----------
Fully Diluted earnings per share (pence) 24.0 20.7
----------- -----------
9. Information regarding directors and employees
Directors' emoluments (GBP'000)
2023 2022
------------------------------------
Emoluments Pension LTIP Total Emoluments Pension LTIP Total
Executive
Peter Kenyon 383 9 37 429 427 10 435 872
Martin Clyburn 265 10 18 293 295 12 - 307
Non Executive
Andrew Meehan 69 - - 69 68 - - 68
Simon Herrick 51 - - 51 49 - - 49
Steve Smith 14 - - 14 41 - - 41
Karen Ingham 37 - - 37 - - - -
----------- -------- ----- ------ ----------- -------- ----- ------
Total 819 19 55 893 880 22 435 1,337
2023 2022
GBP'000 GBP'000
Included in administrative expenses:
Wages and salaries 17,640 14,890
Social security costs 1,571 1,089
Share option scheme 462 314
Pension costs 434 350
-------- --------
Total employee benefits expense 20,107 16,643
-------- --------
The average number of staff employed by the Group during the
financial period amounted to:
2023 2022
No. No.
Head office and management 131 115
Branch counter staff 653 578
----- -----
784 693
----- -----
10. Income tax
The major components of income tax expense are:
Consolidated statement of comprehensive income
2023 2022
GBP'000 GBP'000
Current income tax:
Current income tax charge 2,364 1,552
Adjustments in respect of current income
tax of previous year (60) (9)
-------- --------
2,304 1,543
Deferred tax:
Relating to origination and reversal
of temporary differences 45 140
------ ------
Income tax expense reported in the statement
of comprehensive income 2,349 1,683
------ ------
A reconciliation between tax expense and the product of
accounting profit multiplied by the UK domestic tax rate is as
follows:
2023 2022
GBP'000 GBP'000
Profit before income tax 10,105 8,269
UK corporation tax rate at 22% (2022:
19%) 2,223 1,571
Expenses not deductible for tax purposes 186 122
Prior period adjustment (60) (10)
-------- --------
Income tax reported in the statement
of comprehensive income 2,349 1,683
-------- --------
Deferred tax
Deferred tax relates to the following:
Deferred tax liabilities
Accelerated depreciation for tax
purposes 403 180
Other short-term differences (307) (31)
------ -----
Deferred tax liabilities 96 149
------ -----
Reconciliation of deferred tax (asset)
/ liabilities net
2023 2022
GBP'000 GBP'000
Opening balance as at 1 October 149 38
Deferred tax recognised in the statement
of comprehensive income 46 140
Other deferred tax (99) (29)
-------- --------
Closing balance as at 30 September 96 149
-------- --------
Factors affecting tax charge
The standard rate of UK corporation tax for the year was 25%
(2022: 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 & Fittings equipment vehicles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 October
2022 695 7,013 4,181 596 53 12,538
Additions - 1,590 928 157 46 2,721
Acquisition (note
28) - - 7 - - 7
Disposals - (492) (278) (144) (26) (940)
At 30 September
2023 695 8,111 4,838 609 73 14,326
---------- -------------- ------------ ----------- ---------- --------
Depreciation
At 1 October
2022 11 3,523 2,046 249 28 5,857
Depreciation
charge for the
year 14 726 525 108 10 1,383
Disposals - (440) (265) (138) (20) (863)
At 30 September
2023 25 3,809 2,306 219 18 6,377
---------- -------------- ------------ ----------- ---------- --------
Net book value
At 30 September
2023 670 4,302 2,532 390 55 7,949
At 30 September
2022 684 3,490 2,135 347 25 6,681
Right of use of assets
Leasehold Property Motor Vehicles Total
Cost
At 1 October 2022 14,299 45 14,344
Additions 2,846 - 2,846
Disposals (2,373) (45) (2,418)
--------------------- ----------------- --------
At 30 September 2023 14,772 - 14,772
--------------------- ----------------- --------
Depreciation
At 1 October 2022 4,753 40 4,793
Depreciation Charge for the year 2,209 5 2,214
Disposals (1,805) (45) (1,850)
--------
At 30 September 2023 5,157 - 5,157
--------------------- ----------------- --------
Net Book Value
At 30 September 2023 9,615 - 9,615
--------------------- ----------------- --------
At 30 September 2022 9,546 5 9,551
--------------------- ----------------- --------
12. Intangible assets
Customer Website Goodwill Total
relationships
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 October 2022 2,407 105 526 3,038
Acquisition (note
28) 31 - - 31
At 30 September 2023 2,438 105 526 3,069
--------------- -------- --------- --------
Amortisation
At 1 October 2022 2,096 90 73 2,259
Amortisation charge
for the year 132 5 - 137
Impairment - - - -
At 30 September 2023 2,228 95 73 2,396
--------------- -------- --------- --------
Net book value
At 30 September 2023 210 10 453 673
--------------- -------- --------- --------
At 30 September 2022 311 15 453 779
--------------- -------- --------- --------
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 precious metals,
Unit 16 Parkway jewellery retail and other
Centre, Coulby Newham, financial services.
TS8 0TJ)
14. Financial assets and financial liabilities
At 30 September 2023 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 - 14,698 - 14,698 14,698
Cash and cash equivalents - 13,022 - 13,022 13,022
Financial liabilities
Trade and other payables - - (5,834) (5,834) (5,834)
Interest bearing loans
and borrowings - - (7,983) (7,983) (7,983)
Lease liabilities - - (10,123) (10,123) (10,123)
Net financial assets/(liabilities) - 27,720 (23,940) 3,780 3,780
At 30 September Fair value Loans Financial Book Fair
2022 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
Financial assets at amortised cost shown above comprises trade
receivables, other receivables and pledge accrued income as
disclosed in note 16.
Trade and other payables comprise of trade payables, other
payables as disclosed in notes 18 and 19.
Loans and receivables are non-derivatives financial assets
carried at amortised cost which generate a fixed or variable
interest income for the Group. The carrying value may be affected
by changes in the credit risk of the counterparties.
Management have assessed that for cash and 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.
2023 2022
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 11,299 203 11,096 9,510 178 9,332
Default 4,227 1,061 3,166 3,366 844 2,522
------------- --------------- ------------- ------------- --------------- -------------
Total 15,526 1,264 14,262 12,876 1,022 11,854
The pawnbroking expected credit losses which have been provided
on the period end pawnbroking assets are:
Pawnbroking
loans
GBP'000
At 1 October 2021 701
Statement of comprehensive income
charge 1,434
Utilised in the period (1,113)
------------
At 30 September 2022 1,022
Statement of comprehensive income
charge 1,834
Utilised in period (1,592)
------------
Balance at 30 September
2023 1,264
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 GBP7k/(GBP7k). 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
(GBP120k)/GBP120k.
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
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Lease liabilities 641 1,821 6,872 789 10,123
Trade payables 2,936 - - - 2,936
Interest bearing
loans and borrowings 7,983 - - - 7,983
Total 11,560 1,821 6,872 789 21,042
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
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
GBP75,000.
15. Inventories
2023 2022
GBP'000 GBP'000
New and second-hand inventory
for resale (at lower
of cost or net realisable
value) 27,662 22,764
16. Trade and other receivables
2023 2022
GBP'000 GBP'000
Trade receivables - Pawnbroking 14,262 11,854
Trade receivables - other 431 601
Other receivables 5 228
Prepayments 657 581
-------- --------
15,355 13,264
-------- --------
Trade receivables - Pawnbroking is disclosed net of expected
credit losses, details of which are shown in note 14.
17. Cash and cash equivalents
2023 2022
GBP'000 GBP'000
Cash and cash equivalents 13,022 15,278
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)
2023 2022
GBP'000 GBP'000
Trade payables 2,936 4,870
Other payables 781 844
Other taxes and social security 521 293
Accruals 2,027 2,858
Contract liabilities 40 40
-------- --------
Subtotal 6,305 8,905
Lease liabilities (note 20) 2,462 2,086
Interest bearing loans and
borrowings 7,983 6,443
Income tax liabilities 1,225 932
-------- --------
17,975 18,366
-------- --------
Terms and conditions of the above financial liabilities:
-- Trade and other payables are non-interest bearing and are
normally settled on up to 60-day terms
-- Trade and other payables include amounts received from
customers in relation to layby jewellery purchases of GBP1,120,000
(2022: GBP956,000). Materially all of the prior year balance was
released to revenue in the current year
For explanations on the Group's liquidity risk management
processes, refer to note 14.
Bank borrowings
Details of the RCF facility are as follows:
Key Term Description
Facility Revolving Credit Facility with Virgin Money
Total facility GBP10m
size
Termination date March 2026.
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 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 2023 the group had available GBP2m
of undrawn committed facilities.
19. Non-current liabilities
2023 2022
GBP'000 GBP'000
Lease liabilities (note 20) 7,661 7,871
Contract liabilities 50 88
Deferred tax (note 10) 96 149
Provisions (note 29) 327 -
-------- --------
8,134 8,108
-------- --------
20. Lease Liability
2023 2022
GBP'000 GBP'000
Lease Liabilities as at 1
October 9,957 8,601
Additions 2,846 4,039
Disposals (639) (472)
Interest 460 396
Payments (2,501) (2,607)
-------- --------
As at 30 September 10,123 9,957
-------- --------
Current lease liability 2,462 2,086
-------- --------
Non-current lease liability 7,661 7,871
-------- --------
The cash flows relating to financing activities for repayment of
lease principal amounts is GBP2,041,000 (2022: GBP2,211,000).
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 GBP418,000 (2022: GBP470,000). The maturity
analysis of lease liabilities is disclosed in note 14, the finance
cost associated with lease liabilities is disclosed in note 6, and
the depreciation and impairment of right-of-use assets associated
with lease liabilities are disclosed in note 11.
21. Issued capital and reserves
Ordinary shares issued No. GBP'000
and fully paid
At 30 September 2022 31,643,207 316
Issued during the year 71,775 1
----------- --------
At 30 September 2023 31,714,982 317
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:
2023 2022
GBP'000 GBP'000
Final dividend for the year ended 30 September
2022 of 6.3p per share
(year ended 30 September 2021 of 1.2p per
share) 1,994 377
Interim dividend for the year ended 30 September
2023 of 3.3p per share
(year ended 30 September 2022 of 2.7p per
share) 1,047 854
--------- ---------
3,041 1,231
Amounts proposed and not recognised:
Final dividend for the year ended 30 September
2023 of 7.1p per share
(year ended 30 September 2022 of 6.3p per
share) 2,252 1,994
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 Group operates a defined contribution scheme for its
directors and employees. The assets of the scheme are held
separately from those of the Group in an independently administered
fund.
The outstanding pension contributions at 30 September 2023 are
GBP2,000 (2022: GBP62,000)
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:
2023 2022
GBP'000 GBP'000
Short term employee benefits 819 880
Post employment benefits 19 22
Share based payments 200 136
-------- --------
1,038 1,038
-------- --------
25. Share based payments
The Group operates a Long-term Incentive Plan (LTIP) and Company
Share Option Plan (CSOP). The charge for the year in respect of the
schemes was:
2023 2022
GBP'000 GBP'000
LTIP 420 314
CSOP 42 -
-------- --------
462 314
-------- --------
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 994,500
Granted during the year 358,000
Expired during the year (120,575)
Forfeited during the year (7,500)
Exercised during the year (71,775) 1
----------------
Outstanding at the end of the
year 1,152,650
----------------
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 05/04/23 05/04/23 17/03/22 17/03/22 08/02/2021 08/02/2021
Share Price GBP2.30 GBP2.30 GBP1.67 GBP1.67 GBP1.48 GBP1.48
Exercise Price GBP0.01 GBP0.01 GBP0.01 GBP0.01 GBP0.01 GBP0.01
Vesting period 2.5 years 2.5 years 2.5 years 2.5 years 2.64 years 2.64 years
Risk Free return 3.5% 3.5% 1.4% 1.4% 0.01% 0.01%
Volatility 33.6% 33.6% 53% 53% 51% 51%
Dividend Yield 5.0% 5.0% 3.5% 3.5% 0.0% 0.0%
Fair value of Option
(GBP) 0.98 2.02 0.77 1.51 0.64 1.47
Early exercise of the options is permitted if a share award
holder ceases to be employed by reason of death, injury,
disability, or sale of the Group. The maximum term of the share
options is 10 years.
The CSOP is a discretionary share incentive scheme under which
the Remuneration Committee of Ramsdens Holdings PLC can grant
options to purchase ordinary shares at an agreed exercise price
subject to certain conditions.
The CSOP schemes in place at 30 September 2023 were as
follows:
Number Earliest
Exercise of share date of Expiry
Grant date price (pence) options exercise date
CSOP 2022 23/06/2022 200.50 110,000 23/06/2025 23/06/2032
CSOP 2023 05/04/2023 230.00 150,000 05/04/2026 05/04/2033
26. Post Balance Sheet Events
There were no post balance sheets events that require further
disclosure in the financial statements.
27. Cash and cash equivalents
2023 2022
GBP'000 GBP'000
Sterling cash and cash equivalents 6,990 5,190
Other currency cash and cash equivalents 6,032 10,088
-------- --------
13,022 15,278
-------- --------
28. Fair value of acquisition
On the 12(th) April 2023 the Group purchased the trade and
certain assets of Broadway Jewellers (Kent) Ltd for a total
consideration of GBP298,000, which was fully paid in cash. The fair
value of the assets acquired were as follows:
GBP'000
Tangible fixed assets (fixtures & fittings) 7
Intangible assets (customer relationships) 31
Trade receivables - Pawnbroking 54
Inventories 206
--------
Net assets acquired 298
--------
29. Provisions
2023 2022
GBP'000 GBP'000
Reinstatement provision 327 -
The Group provides for the reinstatement cost of returning
leased properties to their original state.
Parent Company Statement of
Financial Position
As at 30 September 2022
2023 2022
Notes
Assets GBP'000 GBP'000
Non-current assets
Investments D 8,645 8,383
Deferred tax E 144 37
8,789 8,420
Current assets
Receivables F 2,908 3,683
Cash and short-term deposits 1,035 1
---------- ----------
3,943 3,684
---------- ----------
Total assets 12,732 12,104
---------- ----------
Current liabilities
Trade and other payables G 380 409
---------- ----------
380 409
---------- ----------
Net current assets 3,563 3,275
---------- ----------
Total assets less current
liabilities 12,352 11,695
Net assets 12,352 11,695
---------- ----------
Equity
Issued capital H 317 316
Share Premium 4,892 4,892
Retained earnings 7,143 6,487
---------- ----------
Total equity 12,352 11,695
---------- ----------
The profit after tax for the Company for the year ended 30
September 2023 was GBP2,139,000 (2022: Loss GBP9,000)
These financial statements were approved by the directors and
authorised for issue on 14 January 2024 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 2021 314 4,892 7,403 12,609
Loss for the year - - (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
--------- --------- ---------- --------
As at 1 October 2022 316 4,892 6,487 11,695
Profit for the period - - 2,139 2,139
--------- --------- ---------- --------
Total comprehensive income - - 2,139 2,139
--------- --------- ---------- --------
Transactions with owners:
Issue of share capital 1 - - 1
Dividends paid (note I) - - (1,994) (1,994)
Share based payments - - 462 462
Deferred tax on share based
payments - - 49 49
--------- --------- ---------- --------
Total transactions with owners 1 - (1,483) (1,482)
As at 30 September 2023 317 4,892 7,143 12,352
--------- --------- ---------- --------
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, jewellery sales, and the sale of precious metals
purchased 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.
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.
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.
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) and
CSOP (Company Share Option 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
2023 2022
GBP'000 GBP'000
Remuneration receivable 819 880
Social security cost 169 65
Value of company pension contributions
to money purchase schemes 19 22
Share based payments 200 136
-------- --------
1,207 1,103
-------- --------
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 GBP937,000 (2022: GBP947,000). 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:
2023 2022
GBP'000 GBP'000
Remuneration receivable 383 427
Value of company pension contributions
to money purchase schemes 9 10
Share Based Payments 118 82
-------- --------
510 519
-------- --------
The number of directors accruing retirement benefits under the
money purchase scheme is 2 (2022: 2)
D. INVESTMENTS
Shares in subsidiary undertakings 2023 2022
GBP'000 GBP'000
Cost
Cost brought forward 8,383 8,205
Additions - Share based payments 262 178
Cost carried forward 8,645 8,383
-------- --------
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 precious metals,
Unit 16 Parkway Centre, jewellery retail and other
Coulby Newham, TS8 financial services.
0TJ)
E. DEFERRED TAX
Deferred tax relates to the following:
2023 2022
GBP'000 GBP'000
Deferred tax assets
Share based payments 144 37
-------- --------
144 37
-------- --------
Reconciliation of deferred tax assets
2023 2022
GBP'000 GBP'000
Opening balance as of 1 October 37 80
Deferred tax credit recognised in the
statement of comprehensive income 58 (53)
Other deferred tax 49 10
-------- --------
Closing balance as at 30 September 144 37
-------- --------
F. RECEIVABLES
2023 2022
GBP'000 GBP'000
Amounts owed by subsidiary companies 2,892 3,671
Prepayments 16 12
2,908 3,683
-------- --------
Amounts owed by subsidiary companies is payable on demand and no
interest is charged.
G LIABILITIES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
GBP'000 GBP'000
Trade Payables 1 10
Other Creditors 291 379
Other taxes and Social Security 25 20
Current tax liabilities 63 -
-------- --------
380 409
-------- --------
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:
2023 2022
GBP'000 GBP'000
Final dividend for the year ended 30 September
2022 of 6.3p per share
(year ended 30 September 2021 of 1.2p per
share) 1,994 377
Interim dividend for the year ended 30 September
2023 of 3.3p per share
(year ended 30 September 2022 of 2.7p per
share) 1.047 854
--------- ---------
3,041 1,231
Amounts proposed and not recognised:
Final dividend for the year ended 30 September
2023 of 7.1p per share
(year ended 30 September 2022 of 6.3p per
share) 2,252 1,994
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 QKQBKFBKDODD
(END) Dow Jones Newswires
January 15, 2024 02:00 ET (07:00 GMT)
Grafico Azioni Ramsdens (LSE:RFX)
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Grafico Azioni Ramsdens (LSE:RFX)
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