TIDMRFX
RNS Number : 6761I
Ramsdens Holdings PLC
15 December 2020
15 December 2020
Ramsdens Holdings PLC
("Ramsdens", the "Group", the "Company")
Preliminary Results for the 18 months ended 30 September
2020
Strong growth prior to COVID-19 impact; resilient and profitable
performance since
Ramsdens, the diversified financial retailer, is pleased to
announce its unaudited preliminary results for the 18-month period
to 30 September 2020 (the "Period"), following the previously
announced change of the Group's accounting reference date from the
end of March.
Financial summary
To assist comparison, the previously announced second interim
unaudited figures for the 12 months to 31 March 2020 have been
included in the Financial Summary table below.
18 months 12 months 12 months 12-month
ended 30 ended 31 increase
September March 2020
2020
(unaudited) (unaudited) ended 31
March 2019
(audited)
Group Revenue GBP76.9m GBP59.5m GBP46.8m 27%
Gross Profit GBP47.1m GBP37.2m GBP30.5m 22%
Profit Before
Tax GBP9.2m GBP8.5m GBP6.5m 30%
Net cash GBP15.9m GBP11.1m GBP8.2m 35%
Basic EPS 23.1p 21.4p 16.7p 28%
Financial highlights
-- Strong growth in the 12-month period to March 2020 and
profitable performance in the final 6-month period despite the
impact of Covid-19;
-- Revenue of GBP76.9m for the Period; Revenue growth of 27% for
the comparable 12-month period ended 31 March 2020;
-- Gross Profit of GBP47.1m for the Period; Gross profit growth
of 22% for the comparable 12-month period ended 31 March 2020;
-- Profit Before Tax of GBP9.2m for the Period; Profit Before
Tax growth of 30% for the comparable 12-month period ended 31 March
2020;
-- Robust cash position, with net cash of GBP15.9m as at 30
September 2020 and an undrawn GBP10m revolving credit facility;
-- Against the backdrop of considerable ongoing uncertainty,
challenging trading conditions and continuing to receive government
support to protect jobs, the Board believes it is both prudent and
in the long-term interest of shareholders to retain its cash
resources to trade through this period. This will position the
Group to maximise the opportunity when the 'new normal' returns. As
a result, the Board is not recommending a final dividend for the
Period.
Operational highlights
-- One net store opening after merging eight stores with nearby
Ramsdens stores resulting in 153 owned stores at the Period end;
four stores relocated in the Period;
-- Continued progress in jewellery retail with GBP1.9m of
e-commerce sales in the Period, representing 9% of all jewellery
items sold; 40% of online jewellery sales now made to customers
living outside the natural catchment area of the store network;
-- Prior to the impact of COVID-19, during the year to March
2020, a record of approximately 784,000 customers used the Group's
foreign currency service;
-- 6 pawnbroking loan books acquired during the Period; the loan
book is considered of high quality with a low loan to value ratio
of approximately 60% and an average loan value of GBP248 as at 30
September 2020;
Peter Kenyon, Chief Executive, commented:
"The 18-month period covered by this statement can be broken
down into two distinct sections. Firstly, Ramsdens delivered its
strongest ever 12-month performance prior to the impact of COVID-19
when the business achieved further growth and made strategic
progress across each of its income streams. The subsequent impact
of COVID-19 and the enforced closures of stores and restrictions on
international travel demonstrated the resilience of our diversified
business model. Despite the significant headwinds experienced since
March as a result of the pandemic, we have continued to trade
profitably and maintain a strong cash position.
The credit for the Group's performance and continued progress
despite these truly unprecedented conditions must go to our
committed team and loyal customers. I would like to thank everyone
in the Ramsdens community for their fantastic support during this
period.
As we move into 2021, a lot of uncertainties remain. However,
there are promising signs in the form of a vaccine and - whatever
the outcome is - we will have greater clarity regarding what Brexit
means for consumers and businesses. Whilst the pandemic has had an
unimaginable impact on communities and companies across the UK, we
remain very confident that underpinned by our great value customer
proposition, strong balance sheet and diversified model, we remain
well positioned to continue our growth trajectory as normality
resumes."
Enquiries:
Ramsdens Holdings PLC Tel: +44 (0) 1642 579957
Peter Kenyon, CEO
Martin Clyburn, CFO
Liberum Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3100 2000
Richard Crawley
Joshua Hughes
Hudson Sandler (Financial PR) Tel: +44 (0) 20 7796 4133
Alex Brennan
Lucy Wollam
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 157
stores within the UK (including 4 franchised stores) and has a
growing online presence.
In the last financial period, the Group served over 930,000
customers across its different services. Ramsdens is fully FCA
authorised for its pawnbroking and credit broking activities.
www.ramsdensplc.com
www.ramsdensforcash.co.uk
CHAIRMAN'S STATEMENT
INTRODUCTION
The Group is publishing its unaudited preliminary results to
cover the 18 month period from 1 April 2019 to 30 September 2020,
at a time when there is still uncertainty over the ongoing impact
of the COVID-19 pandemic. Since the outbreak of the virus, our
priority has been the safety and wellbeing of Ramsdens' staff,
customers and wider stakeholders.
I always knew that a big strength of the business was its people
and culture. The hard work, flexibility and extraordinary
commitment of our teams in dealing with the unprecedented
challenges presented in 2020 only reinforces that belief. I would
like to personally thank each and every one of my colleagues at
Ramsdens for their dedication during this period.
The Group has continued to make good progress over the 18
months. Profit before tax for the 18 months is GBP9.2m (FY19:
GBP6.5m) which indicates relatively linear growth on a time basis
but the reality of the 18 month period is far from linear. The
reporting period has two distinct time periods with contrasting
trading conditions. We have the pre COVID-19 trading period through
to March 2020 and the subsequent 6 months through to the end of the
reporting period:
Pre COVID-19 - trading to 23 March 2020 was ahead of the Board's
expectations
We achieved tremendous progress in the first 12 months of the 18
month period through to March 2020. The business performed ahead of
the Board's expectation over that time and achieved record levels
of profitability. Furthermore, we were maintaining momentum by
maximising the opportunity that the Money Shop acquisition from
March 2019 presented and continuing to roll out new stores in line
with our growth strategy.
COVID-19 impact to 30 September 2020 - trading showed strength
in diversification
March 2020 brought a slowdown in activity following the onset of
COVID-19, resulting in all stores closing on 23 March 2020 in line
with government guidelines. Since that time, the Group's
diversified business model has again shown its strength, enabling
the Group to trade profitably through to the end of the financial
period.
As a result of the COVID-19 disruption, we announced on 27 March
2020 that Ramsdens would change its accounting reference date from
31 March to 30 September. This decision was made by the Board in
consultation with the Group's auditors. This then created a one off
18 month reporting period. Going forward, the Company's year-end
will remain 30 September.
In April to June 2020 our stores were predominantly closed.
While there was some customer demand online for our retail
products, the vast majority of those products were located in
stores and the sales were only fulfilled following store
re-openings as government restrictions were eased.
During the period of the stores being closed, a significant
proportion of staff were furloughed under the Coronavirus Job
Retention Scheme. During this time Ramsdens topped up employees'
pay to 100% of their normal salaries.
By the end of July 2020, 152 stores had re-opened and b y August
2020, the significant majority of staff across the Group's store
estate had returned to work. We traded through to September safely,
always prioritising the protection of our staff and customers.
Following the re-opening of the Group's stores, foreign currency
commission through to the end of the reporting period was
approximately 30% of the comparable prior year period, due to
ongoing restrictions on international travel as a result of the
pandemic. However, the performance of the Group's jewellery retail
segment enhanced by online sales was encouraging and the purchase
of precious metals segment benefited from the strong gold price.
During lockdown, the Group's pawnbroking customer base had a
reduced need for borrowing while at the same time continuing to
repay their loans, improving the Group's cash position. The Group
completed two loan book acquisitions at the end of the Period,
which added a combined GBP0.25m to the in-date loan book.
Six of the Group's stores did not reopen after the period of
enforced closure in the Spring as we took the opportunity to take
advantage of flexible leases and merged these branches into nearby
Ramsdens stores.
Financial year starting October 2020 - positioned for long term
growth
The beginning of the new financial year has brought further
challenges with the introduction and expected continuation of both
national and local lockdowns across the UK. While Ramsdens is a
provider of certain services which the government has categorised
as essential and therefore has been able to remain open during the
latest lockdowns, consumer sentiment and footfall have inevitably
been impacted.
In addition, UK businesses continue to face macroeconomic
uncertainty with the scheduled end on 31 December 2020 of the
Brexit transition period and, as yet, no clear idea of what will
happen next.
Looking beyond the near term, the Group has a strong cash
position, diversified income streams, a strong management team and
a trusted brand, all of which position it well to deliver on the
strategic ambitions of sustainable long-term growth as a sense of
normality resumes.
FINANCIAL RESULTS & DIVID
As stated above, the Financial Statements cover an 18 month
reporting period. The results show that revenue increased to
GBP76.9m and PBT increased to GBP9.2m.
The Board believes that comparing performance to the prior year,
especially with a six-month period severely impacted by COVID-19,
does not represent the achievements and progress made.
The below table highlights the financial results:
GBP000's FY19 12M 20 FP20
(12 months) (12 months) (18 months)
(audited) (unaudited) (unaudited)
Revenue GBP46,785 GBP59,504 GBP76,938
------------- ------------- -------------
Gross Profit GBP30,522 GBP37,204 GBP47,149
------------- ------------- -------------
Profit Before GBP6,492 GBP8,452 GBP9,221
Tax
------------- ------------- -------------
Net Assets GBP30,908 GBP34,961 GBP35,555
------------- ------------- -------------
Net Cash GBP8,236 GBP11,051 GBP15,873
------------- ------------- -------------
EPS 16.7p 21.4p 23.1p
------------- ------------- -------------
The table above illustrates that the unaudited 12 month period
to March 2020, (12M 20) as reported in our Second Interim Report on
27 May, compares very favourably to the financial year ended 31
March 2019 (FY19) and also that the Group traded profitably in the
final 6 month period.
The information that follows provides a more in-depth analysis
of the trading performance and financial results of the Group.
The Board did not recommend a second interim dividend, as
announced in May 2020, owing to the significant uncertainty at the
time. Against the backdrop of ongoing considerable levels of
uncertainty, continuing to receive government support to protect
jobs and challenging trading conditions, the Board believes it is
both prudent and in the long-term interest of shareholders to
retain its cash resources to trade through this uncertainty. This
will position the Group to maximise the opportunity when the 'new
normal' returns. As a result, the Board is not recommending a final
dividend for the Period. Aligned with this decision, no salary
increases have been awarded to directors and senior executives and
both Peter Kenyon, CEO and Martin Clyburn, CFO, have voluntarily
foregone part of their bonus entitlement as will be outlined in the
Remuneration Committee report. It is the Board's intention to
return to its previous progressive dividend policy as soon as it is
prudent to do so.
Andrew Meehan
Non-Executive Chairman
CHIEF EXECUTIVE'S REVIEW
INTRODUCTION
The 18 month reporting period has included the high of
delivering a record 12 month performance through to March 2020
reflecting the investments made in our staff, brand, IT systems,
store locations, retail jewellery proposition and digital
operations. This was unfortunately followed by the low of having to
close all Ramsdens stores between March and the end of May 2020,
resulting in a deceleration of online operations owing to stock
being held in closed stores and the pausing of our planned store
roll-out strategy.
Excellent trading through to March had positioned the business
well for growth with good liquidity and growing diversified income
streams. We then entered a period, which I relate to the Ramsdens
ship getting caught in the eye of a storm. The storm was not of our
making, we could not navigate around it, and we had - and continue
to have - no control over its severity or duration. We have however
navigated through the first six months of the storm reasonably
successfully and are grateful for the UK Government's support,
which has helped us to protect the jobs of our colleagues.
Pleasingly we have also remained profitable during this period, but
at materially lower levels than we would have expected under normal
trading conditions. The waters are still choppy, but I am pleased
to say that the Ramsdens ship is still moving forward. We are still
able to make progress notwithstanding the continuing stormy
outlook.
As I look forward and see the storm calming - as it inevitably
will at some point - either when a vaccine is developed and widely
rolled out or we further adapt to living with the virus - I believe
that Ramsdens will be in a great position to maximise the
opportunities for continued, long term growth.
COVID-19 IMPACT AND ACTIONS
The pandemic has had a huge impact on the lives of many who work
for, engage with, or supply Ramsdens. We have seen periods of
national lockdown and regional restrictions, which have affected
the high street unlike anything contemplated prior to the onset of
the pandemic. More broadly, we have seen a significant reduction in
demand for international travel and the movement of people.
Faced with this, the strength of the Ramsdens team spirit has
never been more evident. Our staff have been flexible, considerate
and collaborative, and did whatever it took to re-open our stores
in the summer and trade in a COVID secure way. I have immense pride
in being able to lead such a committed and talented group of people
and would like to thank them all for their response to the
unprecedented challenges faced during the period.
The safety of our staff, customers and community
Our first priority throughout the pandemic has been the health,
safety and wellbeing of our staff, customers and the community at
large.
During March 2020, we facilitated more staff being able to work
from home and securely connect to our centralised IT systems. We
then closed our stores in line with the UK Government guidance. In
the early weeks of the first national lockdown, we planned our
reopening and how we could operate in a safe way. The layout of our
stores supported this as they already feature segregated financial
services tills with private spaces for our customers and glass
screens offering additional safety. While Ramsdens became eligible
to open for our essential services, mainly pawnbroking, within a
week of lockdown we implemented an online portal for customers
which enabled them to manage their existing in store loans and
apply for new loans by posting their goods to our ecommerce team.
Our message to customers was that we would not disadvantage them
because of the stores being closed. We ensured we did this when we
re-opened and waived interest where customers were
disadvantaged.
Our stores started to reopen at the end of May, initially
trialling three stores. This re-opening gathered pace through
England in June, with Wales and Scotland in July. Our head office
staff slowly returned to the workplace, adhering to additional
social distancing rules and with screens introduced to aid staff
segregation.
Once our stores were open, we strived to continue to provide the
services, for which our loyal customers visit Ramsdens, in our
usual friendly way. We were also able to fulfil the many pending
online orders we had received for jewellery items during the
lockdown period where the items had been securely stored in our
closed stores.
During the two week 'firebreak' lockdown in Wales in October and
the national lockdown in England in November, our stores remained
open following government advice and the exemption for essential
services. This decision was made with the knowledge that we could
keep our stores as safe as possible for our customers and staff and
adhere to COVID secure guidelines.
Liquidity
The Group was in a good position with its liquidity at the start
of lockdown. We also had opportunities to generate cash from the
intrinsic value of the gold in our jewellery stock if required.
This position has been improved in recent months following:
- profitable trading during the final 6 months of the reporting period;
- postponing the opening of new greenfield stores and saving the
associated capital expenditure;
- accelerating the merger of four stores and closure of two
stores, releasing working capital;
- customers repaying their pawnbroking loans during the period
at the same time as new lending being impacted from store closures
and reduced customer need. This will, however, have an impact on
future income generation while the loan book rebuilds over the
coming months; and
- the reduction of foreign currency cash, which improves
sterling cash held but not the overall net cash figure.
At 30 September 2020, the Group's cash position was GBP15.9m and
the revolving credit facility of GBP10m remained undrawn.
BUSINESS REVIEW
The 18 month period encompassed the ongoing development of the
core estate of branches; our ecommerce activities; the young stores
which opened in 2018 and 2019; and the stores acquired in March
2019 which previously traded as The Money Shop. This resulted in
Profit Before Tax for the full 18 month period increasing to
GBP9.2m (FY19: GBP6.5m). The majority of the profit was generated
during the first 12 months of the 18 month reporting period when
the Group traded in what is best described now as normal trading
conditions delivering a 27% increase in revenue and a 30% increase
in Profit Before Tax to GBP8.5m (FY19: GBP6.5m).
The generation of GBP0.8m Profit Before Tax during the six
months to September 2020 is considered to be a strong performance
by the Board, given the period of store closures and significant
reduction in international travel.
Each of the key income streams is discussed in greater detail
below showing the results for the last two and a half years to
enable comparisons.
The Group's retail estate grew to 158 stores as at March 2020
but has now reduced to 153 stores. The reduction is the result of
one new store opening in Boston post-lockdown and the merger of six
stores with other nearby Ramsdens stores. We have continued to
achieve growth in our online jewellery retail sales as we move
forward with our strategy to become a truly multi-channel
business.
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.
The following tables have references to;
H1 being the 6 months to 30 September 2019.
H2 being the 6 months to 31 March 2020.
12M20 being the 12 months to 31 March 2020.
H3 being the 6 months to 30 September 2020.
The FP20 represents the 18 month financial period to 30
September 2020.
Foreign Currency Exchange
The foreign currency exchange (FX) segment primarily comprises
of the sale and purchase of foreign currency notes to
holidaymakers. Ramsdens also offers prepaid travel cards and
international bank-to-bank payments.
000's FY19 H1 20 H2 20 12M 20 12M20 H3 20 FP20
v FY19
(audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total GBP496m GBP340m GBP181m GBP521m 5% GBP38m GBP559m
Currency
exchanged
----------- ------------- ------------- ------------- -------- ------------- -------------
Income GBP11.6m GBP8.4m GBP4.7m GBP13.1m 13% GBP1.8m GBP14.9m
----------- ------------- ------------- ------------- -------- ------------- -------------
Online GBP32m GBP23.9m GBP18.5m GBP42.4m 32% GBP3.0m GBP45.4m
C&C orders
----------- ------------- ------------- ------------- -------- ------------- -------------
% of online
FX 6% 7% 10% 8% 33% 8% 8%
----------- ------------- ------------- ------------- -------- ------------- -------------
Percentage
of GP 38% 41% 28% 35% (3%) 18% 32%
----------- ------------- ------------- ------------- -------- ------------- -------------
The table demonstrates the strong growth for the 12 months to
March 2020.
Approximately 784,000 customers used the foreign currency
service during the year to March 2020 up 11% on the previous 12
months of approximately 705,000 customers. The significant impact
of COVID-19 on the reduction of international travel and
consequently on the Group's foreign currency volumes is highlighted
by the number of customers falling from approximately 570,000 in
the six months to September 2019 to approximately 69,000 in the six
months to September 2020, an 88% fall.
The improvement in the rate of commission or gross profit from
the product has been driven by a focused effort by the Group to
widen margins and the volume of higher margin currency purchases
from customers representing a greater percentage of the total
currency exchanged.
In line with our multi-channel strategy, the Group intended to
refresh its currency travel card proposition in 2020 but given the
impact of COVID-19 this has been delayed to 2021.
As we look forward, we see the income from this service growing
in line with the easing of restrictions and as international travel
returns. We strongly believe that customers' desire to go on
holiday abroad remains high. While we have seen more people use
card payments in the UK, we believe the need for foreign currency
cash will remain high given the popular holiday destinations and
known spending patterns while abroad.
Pawnbroking
Pawnbroking is a small subset of the consumer credit market in
the UK and a simple form of asset backed lending dating back to the
foundations of banking. In a pawnbroking transaction an item of
value, known as a pledge, (in Ramsdens' case, jewellery and
watches), is held by the pawnbroker as security against a six-month
loan. Customers who repay the capital sum borrowed plus interest
receive their pledged item back. If a customer fails to repay the
loan, the pawnbroker sells the pledged item to repay the amount
owed and returns any surplus funds to the customer. Pawnbroking is
regulated by the FCA in the UK and Ramsdens is fully FCA
authorised.
000's FY19 H1 20 H2 20 12M 20 12M20 H3 20 FP20
v FY19
(audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Gross profit GBP7,520 GBP4,261 GBP4,706 GBP8,967 19% GBP3,281 GBP12,248
----------- ------------- ------------- ------------- -------- ------------- -------------
Total loan GBP7,643 GBP7,739 GBP7,747 GBP7,747 1.4% GBP6,548 GBP6,548
book
----------- ------------- ------------- ------------- -------- ------------- -------------
Past Due GBP1,032 GBP763 GBP1,115 GBP1,115 8% GBP1,559 GBP1,559
----------- ------------- ------------- ------------- -------- ------------- -------------
In date GBP6,611 GBP6,976 GBP6,632 GBP6,632 0.3% GBP4,989 GBP4,989
loan book
----------- ------------- ------------- ------------- -------- ------------- -------------
Percentage
of GP 25% 21% 28% 24% (1%) 33% 26%
----------- ------------- ------------- ------------- -------- ------------- -------------
The growth in pawnbroking income to March 2020 was primarily due
to the contribution from the Money Shop loan books that we acquired
in March 2019.
As our stores closed in March 2020, we quickly leveraged our
strengths as a multi-channel business and made a full service
online pawnbroking facility available. Whilst the volume of loans
being requested through the portal has been low, reinforcing the
view that customers prefer a face to face service, the portal did
enable a significant number of customers to repay their loans
during the lockdown period and collect their goods when stores
re-opened.
The impact of the national lockdown was that our customer base
had a reduced borrowing need. The restrictions on normal life
expenditure within the customer base and the significant UK
Government support - in particular the Coronavirus Job Retention
Scheme - led to a greater number of customers repaying their loans
over the normal redemption patterns.
The average loan value as at 30 September 2020 was GBP248, up
from GBP229 as at 31 March 2020 and GBP224 as at 31 March 2019. The
loan book is considered of high quality with a low loan to value
ratio of approximately 60% on the gold price alone at the period
end. Where loans are not repaid, the current high gold price
enables an improved recovery of interest where goods are scrapped
as opposed to being appropriate for retailing.
As we look forward, the Board is confident that the loan book
will rebuild over time. The typical pawnbroking customer is
cautious. They know that the item pledged is their store of wealth
and that this enables them to borrow when needed.
Jewellery Retail
The Group offers new and second-hand jewellery for sale. The
Board believes 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.
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, the retailing of
new jewellery enables the Group to attract some customers who
prefer not to buy second hand. New jewellery items now account for
31% of the retail revenue.
000's FY19 H1 20 H2 20 12M 20 12M20 H3 20 FP20
v FY19
(audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue GBP9,771 GBP5,499 GBP7,054 GBP12,553 28% GBP4,556 GBP17,109
----------- ------------- ------------- ------------- -------- ------------- -------------
Gross Profit GBP5,039 GBP2,598 GBP3,113 GBP5,711 13% GBP1,990 GBP7,701
----------- ------------- ------------- ------------- -------- ------------- -------------
Margin % 52% 47% 44% 45% (7%) 44% 45%
----------- ------------- ------------- ------------- -------- ------------- -------------
Jewellery GBP9,085 GBP8,111 GBP8,919 GBP8,919 (2%) GBP9,496 GBP9,496
retail stock
----------- ------------- ------------- ------------- -------- ------------- -------------
Online sales* GBP568 GBP322 GBP779 GBP1,101 94% GBP846 GBP1,947
----------- ------------- ------------- ------------- -------- ------------- -------------
% of sales
online* 5% 5% 9% 7% 2% 14% 9%
----------- ------------- ------------- ------------- -------- ------------- -------------
Percentage
of GP 17% 13% 19% 15% (2%) 20% 16%
----------- ------------- ------------- ------------- -------- ------------- -------------
*this is based on total jewellery sold which includes ex-pledge
items
Whilst many retailers had been recording falling sales, the
performance to March 2020 was very robust. The ongoing development
of the premium watch sales generates a higher cash margin per
product sold but at a lower percentage margin. Watch sales are seen
as incremental revenue for the Group. This is the primary reason
that the gross margin percentage for jewellery retail fell during
the period.
The total jewellery sold through our ecommerce activities
totalled GBP1.9m for the 18 month period and represents 9% of all
jewellery items sold. Sales of GBP846k were delivered in the last 6
months to September 20 and GBP1,101k in the 12 months to March 20
representing 94% growth over FY19 at GBP568k.
With the website recently developed to improve the customer
experience it is hoped that conversion rates will improve and
further growth will follow. 40% of our online sales are now to
customers living outside the natural catchment of our branch
network.
We believe there is an ongoing opportunity for improving and
growing our jewellery retail business. Following a restructure of
internal resources, we have placed greater focus on improving the
sales of each product category, diamonds, watches, second hand and
new jewellery through the store estate and online. We have been
investing in the website to improve the customer experience and
conversion rates. We have increased the ecommerce team headcount so
that we can list more individual second hand items and fulfil the
increased sales. We believe these investments will help deliver
ongoing growth in our retail jewellery segment in the coming
years.
Purchases of precious metals
Through its 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. The residual items are smelted
and sold to a bullion dealer for their intrinsic value and the
proceeds are reflected in the accounts as precious metals buying
income.
000's FY19 H1 20 H2 20 12M 20 12M20 H3 20 FP20
v FY19
(audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue GBP12,343 GBP10,080 GBP7,499 GBP17,579 42% GBP5,445 GBP23,024
----------- ------------- ------------- ------------- -------- ------------- -------------
Gross Profit GBP4,801 GBP4,122 GBP3,214 GBP7,336 53% GBP2,520 GBP9,856
----------- ------------- ------------- ------------- -------- ------------- -------------
Percentage
of GP 16% 20% 19% 20% 4% 25% 21%
----------- ------------- ------------- ------------- -------- ------------- -------------
The sterling gold price increased by 50% during the 18 month
period, reaching an all time record high. The current gold price is
considered to be higher than where we would expect it to be on a
medium-term basis.
In the 12 months to March 2020, an additional non-recurring
gross profit of GBP0.8m was generated from the sale of older
stock.
The weight of gold purchased has reduced since the re-opening of
our stores after the national lockdown. This is attributed to
people still not undertaking normal activities, the reduced need
for additional cash and a reduction in the number of foreign
currency customers to whom we have traditionally cross-sold this
service. We do anticipate the weight purchased increasing as we
move back to more normal trading conditions. Until then we believe
the gold price will remain high, assisting margins.
Other services
In addition to the four core business segments, the Group also
provides additional services in cheque cashing, Western Union money
transfer, credit broking and receives franchise fees.
000's FY19 H1 20 H2 20 12M 20 12M20 H3 20 FP20
v FY19
(audited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue GBP2,542 GBP1,594 GBP1,029 GBP2,623 3% GBP412 GBP3,035
----------- ------------- ------------- ------------- -------- ------------- -------------
Gross Profit GBP1,577 GBP1,138 GBP937 GBP2,075 32% GBP410 GBP2,485
----------- ------------- ------------- ------------- -------- ------------- -------------
Percentage
of GP 5% 6% 6% 6% 1% 4% 5%
----------- ------------- ------------- ------------- -------- ------------- -------------
Whilst this has been a steady source of gross profit, we believe
that the impact of COVID has switched some Western Union customers
online rather than using a store network. Cheque cashing was and
continues to be a service in decline.
OUR PEOPLE
It has been clearly demonstrated since the outbreak of the
pandemic earlier in 2020, that one of Ramsdens' greatest strengths
is its people. Our aim is to nurture, train and develop the best
talent in our industry, and to that end during the period the
senior management team have been collectively undertaking a
leadership development programme. This is assisting with an ongoing
desire to enhance and demonstrate our three core values of being
trusted, open and passionate.
The pride and enthusiasm shown by all of our employees continues
to create a working environment of infectious enthusiasm to deliver
the Group's mission statement, namely to provide a great customer
offering and give such fantastic service that our customers become
ambassadors for Ramsdens.
As well as doing the 'day job' and seeking a never ending higher
bar of achievement during the 18 month reporting period, the team
have successfully embedded the acquired Money Shop stores from
March 2019, trained the 89 staff members who transferred to
Ramsdens in the Ramsdens values and ways, maintained high levels of
repeat business from loyal customers, and faced the challenges of
COVID-19 head on. We have only been able to do this thanks to the
team's dedication, commitment, willingness to strive for continuous
improvement and its focus on delivering fantastic service to our
customers.
Reflecting the vital role of our staff and their contribution,
in the period from March to July 2020 the Group topped up all
furloughed employees' pay to 100% of their normal salaries. We are
grateful to the UK Government for providing the Coronavirus Job
Retention (Furlough) Scheme and its extension to March 2021 which
has enabled the Group to protect the jobs of the Group's skilled
employees whose training and development we have already invested
in.
THE RAMSDENS BRAND
The high levels of repeat purchasing of foreign currency
exchange and pawnbroking loans demonstrates the trust our customers
have in Ramsdens.
Where our branches are located, we enjoy strong brand
recognition. However, there is scope to improve this recognition
across the full range of diversified services we offer, which
remains a key focus for the Group. In addition, improving our
online capabilities and the associated awareness of Ramsdens' great
products and value will enable the brand to increase recognition
beyond the branch network catchment areas.
IT AND INFRASTRUCTURE
The Group has continued to invest in and develop its bespoke
customer-centric IT operating system. Underpinning this system is a
scalable infrastructure, which undergoes regular capacity planning
to ensure that the growth of the Group can not only accommodate its
core business strategy but also readily take advantage of business
acquisition opportunities. The system infrastructure is maintained
with resiliency in all areas.
The Group maintains a continual focus on cyber security and the
associated threat landscape. The IT team regularly review the cyber
defences of the Group and have recently installed additional
network security software to raise the barriers and reduce cyber
risk.
The longstanding and layered approach we have to protecting our
systems and the data held allowed a seamless transition to remote
working for more of our staff in the last six months.
The Group's internal IT Team provide a highly effective and
efficient service ensuring the support requirements of the Group
are fulfilled. The IT Team are also integral to the Group's
business expansion strategy provisioning new store locations,
relocations and acquisitions of single and multiple stores.
STRATEGY
We have a consistent and established strategy for the long-term
development and growth of Ramsdens. Underpinned by the development
of our people, I am confident that the four pillars of the Group's
previously proven strategy remain relevant and appropriate in the
long-term.
We continue to concentrate on:
1. Improving the performance of our existing store estate
2. Expanding the Ramsdens branch footprint in the UK
3. Developing our online proposition
4. Continuing to appraise market opportunities presented by operating in a challenging market.
We remain focused on delivering our core mission, which has
three component parts:
1. To have a great customer offering...
-- We offer very competitive exchange rates for currency
-- We offer a simple and trusted pawnbroking service
-- We have invested in the quantity and quality of our jewellery
stock and how it is presented to the customer
-- We keep the store estate modern and bright and where
appropriate continue to relocate stores to higher footfall
locations
2. ...and give such fantastic customer service...
-- We have a team of fully trained and motivated staff who are
passionate about the business and their customers, including
cross-selling to meet customer needs.
-- We have a first-class, customer-centric IT system that allows
staff to have a full appreciation of a customer's history with
Ramsdens, thereby facilitating efficient processing times
3. ....that our customers become our ambassadors.
-- Recommendations from family and friends remains our biggest source of new customers.
Improving the performance of the existing store estate
Our strategic focus is on attracting more customers,
cross-selling our diversified services and driving higher spend
from those acquired customers. By doing this and controlling costs,
the profit contribution will increase.
The growth in the four key income segments across the core
estate during the first 12 months of the reporting period
demonstrate the effectiveness of this strategy. We are not resting
on past results and believe we have significant capacity for
further improvement. We will do this by continuing to engage with
our customers and provide standout products and service.
We aim to improve the performance of our key income streams:
- Foreign currency: by having competitive exchange rates to
attract new and retain existing customers. Margins will continue to
be managed closely with due regard to local circumstances. We will
develop a market-leading multi-currency travel card to capture more
of the customer's holiday spend while abroad. We have relocated
stores to higher footfall locations to improve the convenience we
offer our existing customers and to attract those customers who may
have been unaware of our secondary location within a town.
- Pawnbroking: by doing what we believe is the right thing for
the long term. This has included proactively supporting our
customers through the challenges that COVID-19 has brought by
waiving interest, reducing interest rates and offering long-term
repayment plans. Where customers default, we will continue to
obtain the best price possible for them by selling by private
treaty and not using an auction process which we believe
disadvantages customers. We will continue to give a great service
and grow the customer base through recommendation. We have very
prudent lending policies particularly given the high gold price.
Whilst not losing our in-built prudent approach to business and
management of cash, we are looking at improving our lending on
items that are desirable to retail and offering a more attractive
solution for borrowers with high value assets. The introduction of
a jewellery offering in the March 2019 acquired Money Shop stores
will also improve the pawnbroking results of those stores.
- Jewellery retail: by continuing to offer our customers greater
product choice and depth of supply with improved stock
replenishment systems and, where appropriate, greater levels of
inventory. This will apply to jewellery and premium watches. We are
continuing to work on the display of our products to create more
customer appeal as well as continuing to invest in our retail
website (see below) which also acts as a stock catalogue for our
branches to facilitate further in store sales. By relocating stores
to higher footfall locations we are often able to provide an
improved jewellery offering with greater stock on display for
similar rents. In addition, there is still the opportunity to
convert stores acquired from The Money Shop in March 2019 to have a
strong retail jewellery offering. An example is the recent
conversion of our Altrincham store.
- Purchase of precious metals: by growing the awareness amongst
our existing customer base, primarily foreign currency customers
who are unaware of the service or the value held in damaged or
simply unwanted or unworn jewellery.
Expanding the branch footprint in the UK
As at 30 September 2020, we had 157 stores including the four
franchised stores. During the 18 month period, we:
- Opened seven greenfield sites
- Opened four stores that previously traded as The Money Shop
- Merged eight stores where we had two stores in a town, seven
of which were in plan as part of the short-term strategy from The
Money Shop acquisition in March 2019
- Closed two stores in towns which were marginal and relocated
the pawnbroking loan book to a local Ramsdens branch
In February 2020, we had nine new greenfield sites in various
stages of agreement. These were all paused when the March lockdown
was implemented and will remain so as we continue to re-evaluate
the impact of the pandemic in those locations.
Whilst we have paused new greenfield stores, the Group's
medium-term strategy remains to open new stores and expand its
geographic footprint, leveraging off the Head Office cost base
which has been geared up to support our continued growth.
Developing our online proposition
Our journey to becoming truly multi-channel continues. Our
ecommerce activities include our jewellery retail website
www.ramsdensjewellery.co.uk and the use of ebay.
The total jewellery sold including ex pawnbroking items through
our ecommerce activities totalled GBP1.9m for the 18 month period
and represents 9% of all jewellery items sold. Sales of GBP846k
were delivered in the last 6 months to September 20 and GBP1,101k
in the 12 months to March 20 representing 94% growth over FY19 at
GBP568k.
With this momentum we have recently developed and launched a new
retail website in October 2020 to enhance the user experience and
improve conversion rates by ensuring customers can find what they
are looking for quickly and more efficiently than ever before. The
development has remodelled the front end that the customer sees and
also optimised the platform on which the website is built which we
hope will achieve higher rankings in Google searches.
Offering a holistic set of payment options to our customers
further underlines the commitment to improving conversion rate and
the re-introduction of interest free finance as an additional
online payment method is expected to help drive additional growth.
We are looking at additional payment options for the customer early
in 2021.
Additional investment to deliver website personalisation (the
process of creating customised experiences for visitors to the
website using AI) is also planned and is expected to further
increase conversion rate.
The branch estate only covers approximately 25% of the UK
population and a fast-improving online offering will allow those
people outside of the Ramsdens network to have access to great
jewellery at fantastic prices.
Our online retail offering will be further improved by
additional investments in software to enhance product images and
upload times, increased focus on organic search engine optimisation
('SEO') and online advertising. With more products being listed on
the website than ever before, the customer has a greater choice and
our branch network has the opportunity to sell more products from
our website, which acts as a catalogue for our products.
The currency part of the Group's website has been developed to
improve the customer journey throughout the 18 month period. The
improvements made are demonstrated by the 32% growth in Click and
Collect foreign currency volumes through www.ramsdensforcash.co.uk
in the 12 months to March 2020 over the prior comparable year.
Further developments are planned to improve the customer journey.
While the website is mobile friendly, an app is being developed
alongside the planned launch of a multi-currency travel card.
Appraising opportunities presented by operating in a challenging
market
The retail landscape has been challenging for a number of years.
The uncertainties of Brexit and general economic outlook created a
headwind for most retailers but the COVID-19 pandemic seems to have
been a challenge too far for some high street retail jewellery
outlets, bureaux de change and travel agents with stores closing
permanently in many towns. This changing and challenging backdrop
will create an opportunity to acquire displaced customers that do
not wish to shop online once we see a post-pandemic new normal.
There is the caveat that certain high streets may have been damaged
too badly to ever recover without large investment in towns or
changes to the non-domestic rates system. Our property portfolio
has been purposefully managed to be as flexible as possible to
provide a defensive quality in case of one of our stores becomes
isolated and performance deteriorates, or agile should the town
nucleus shift.
The number of pawnbroking outlets in the UK continues to fall.
Our estimation is that there are circa 130 pawnbroking businesses
in the UK trading from circa 870 locations. The largest three
National Pawnbroker Association members account for circa 610
locations. Within our existing geographic territories, the
opportunity to acquire good pawnbrokers is limited but there may be
the possibility to acquire and expand our geographic footprint in
the future. In September 2020, the Group purchased two of the
oldest pawnbroking names in Scotland, Robert Biggar Pawnbrokers in
Glasgow and Duncanson & Edwards Pawnbrokers in Edinburgh. They
were purchased from Beauly Financial Limited with the combined
active loan books of GBP0.25m.
LOOKING AHEAD
The first half of FY21 will remain challenging, with pressure
continuing on high street footfall through regional lockdowns and
ongoing restrictions in line with the devolved governments' tiered
systems. Added to this, we have the challenges of macroeconomic
uncertainty with the scheduled end of the Brexit transition period
at the beginning of 2021 and, as yet, no clarity with respect to
future trading arrangements. Our foreign exchange service is
dependent upon the return of international travel and we await a
change to the UK Government's stance on quarantine and airport
testing prior to the development and roll out of a vaccine.
While headwinds remain, we have operated and will continue to
operate in a COVID secure way by ensuring that our customers
continue to receive excellent, socially distanced service in our
stores nationwide and by further developing our online capabilities
to better reflect the well-publicised consumer shift to online.
Driving this will be a greater focus on our retail jewellery
proposition and staff development in this area.
The Group has a strong financial footing, the benefit of
diversified income streams and a well-invested infrastructure. This
gives the Board confidence that Ramsdens is well-placed to not only
navigate this ongoing transitional period better than some of its
competitors, but also to emerge strongly from this challenging
period, with a growth strategy proven to deliver long term benefit
for all our stakeholders and value for our shareholders.
Peter Kenyon
Chief Executive Officer
FINANCIAL DIRECTOR'S REVIEW
FINANCIAL RESULTS
The Group changed its accounting reference date to 30 September
following consultation with the Group's auditors . To assist
comparison, the previously announced second interim unaudited
figures for the 12 months to 31 March 2020 have been included
below.
GBP000's FY19 12M 20 FP20
(12 months) (12 months) (18 months)
(audited) (unaudited) (unaudited)
Revenue GBP46,785 GBP59,504 GBP76,938
------------- ------------- -------------
Gross Profit GBP30,522 GBP37,204 GBP47,149
------------- ------------- -------------
Profit Before GBP6,492 GBP8,452 GBP9,221
Tax
------------- ------------- -------------
Net Assets GBP30,908 GBP34,961 GBP35,555
------------- ------------- -------------
Net Cash GBP8,236 GBP11,051 GBP15,873
------------- ------------- -------------
EPS 16.7p 21.4p 23.1p
------------- ------------- -------------
Revenue increased to GBP76.9m for the full 18 month period with
profit before tax increasing to GBP9.2m. As commented above the 18
month period covers two contrasting periods for trading conditions.
The 12 months ended 31 March 2020 represented mainly normal trading
conditions, with COVID-19 only impacting the final weeks of the
year. The Group previously reported strong growth for the year to
31 March 2020 with Revenue increasing 27% and growth coming from
across all segments. The final 6 months of FY20 were severely
impacted by COVID-19.
In the 12 months ended 31 March 2020 profit before tax increased
30% to GBP8.5m (FY19: GBP6.5m) representing a record 12 months for
the Group. In the final six months, t he Group utilised government
support to offset the store closure impact and was able to report a
profit for the period. With store closures lasting almost three
months and significantly reduced international travel impacting
foreign currency volumes, these results demonstrate the strength of
the Group's diversified business model.
The Group's administrative expenses for the 18 month period were
GBP37.9m. This is after receiving the Coronavirus Job Support
payments. For comparison purposes, the administrative expenses for
the 12 months ended 31 March 2020 were GBP28.2m which was a 18%
increase on FY19 reflecting an increase in staff costs to support
the growth of the business and the costs associated with new
stores.
In total the Group received GBP3.5m of Government support during
the final 6 months of FP20, GBP0.7m has been shown as other income
and GBP2.8m has been shown as a reduction to administrative
expenses.
Finance costs from borrowing remain low reflecting the Group's
strong cash position and the efficient seasonal use of the Group's
revolving cash facility during peak holiday periods.
EARNINGS PER SHARE AND DIVID
The statutory basic and diluted earnings per share for FP20 the
year is 23.1p and 22.5p respectively up from 16.7p and 16.3p in
FY19.
The Board has not recommended a final dividend (FY19: 4.8 pence
per share) in respect of the reporting period ended 30 September
2020 owing to the impact of COVID-19 and the Group continuing to
receive ongoing government support. The total dividend for the 18
month period ended 30 September 2020 is therefore 2.7 pence per
share (FY19: 7.2 pence per share).
The Board intends to recommence its progressive dividend policy
once new normal trading conditions return. Owing to the change in
accounting reference date, future dividend dates are expected to be
scheduled as September for interim payments and March for final
payments, with the approximate proportion of one third and two
thirds respectively, subject to the financial performance of the
Group.
CAPITAL EXPITURE
During the reporting period, the Group invested in the store
estate by opening new stores and relocating existing stores.
Capital expenditure for tangible and intangible assets was GBP2.0m
which mainly reflected the opening of a further 7 new stores and
relocation of 4 stores during the period. Six pawnbroking loan
books were acquired. Additionally we entered new leases (or
licences to occupy) in relation to four stores previously trading
as The Money Shop.
CASH FLOW
The net cash flow from operating activities for the 18 month
period was GBP15.8m which includes government support of GBP3.5m
(FY19: GBP1.5m). Cash inflows have benefited from a reduction of
approximately GBP1.8m in trade and receivables, which was mainly
due to reduced pawnbroking lending during the final 6 months of the
period impacted by COVID-19 restrictions. As a result of the
implementation of IFRS16, property & vehicle lease payments of
GBP3.6m are now shown as a financing cash outflow, whereas in the
prior year lease payments were included in operating cash flows.
The total increase in cash in the period was GBP2.5m after repaying
GBP5.2m of debt.
T he Group renewed its revolving credit facility in March 2020
for a further 3 years to March 2023. The Group has one covenant of
1.5x cash cover. At 30 September 2020, this facility was undrawn.
The cash position and headroom on the bank facility provide the
Group with the funds required to continue to deliver its current
stated strategy.
Net cash at the Period end was GBP15.9m (FY19: GBP8.2m).
FINANCIAL POSITION
At 30 September 2020, cash and cash equivalents amounted to
GBP15.9m (FY19: GBP13.4m) and the Group had net assets of GBP35.6m
(FY19: GBP30.9m).
IFRS16
The Group adopted IFRS16 'Leases' from the start of the period
applying the modified retrospective approach with no restatement of
the prior year. On transition at the end of FY19, qualifying lease
commitments have been brought onto the balance sheet, as both a
'Right of use' asset and a corresponding lease liability. The
adoption of IFRS 16 has resulted in a reduction in balance sheet
retained earnings of GBP0.5m, primarily resulting from the Group
recognising right-of-use assets of GBP9.1m offset by lease
liabilities of GBP9.7m, with further adjustment for rental
prepayments, rent incentive accruals and deferred tax. Further
detail on the impact of IFRS16 is provided below in Note 2.
TAXATION
The tax charge for the period was GBP2.1m (FY19: GBP1.3m) at an
effective rate of 22% (FY19: 20.5%). The effective rate is higher
than the standard UK rate of corporation tax of 19% (FY19: 19%)
mainly due to the timing difference between depreciation charges
and capital allowances and non-deductible expenses including the
amortisation of certain customer lists.
SHARE BASED PAYMENTS
The share-based payment expense in the period was GBP398,000
(FY19: GBP221,000). This charge relates to the Long-Term Incentive
Plan (LTIP), which is a discretionary share incentive scheme under
which the Remuneration Committee can grant options to purchase
ordinary shares at a nominal 1p per share cost to Executive
Directors and other senior management subject to certain
performance and vesting conditions.
GOING CONCERN
The Group has prepared the financial statements with due
consideration to the unprecedented impact of COVID-19 on the
economy and society. The Board has considered the impact of
COVID-19 on each balance sheet item and conducted a going concern
review to ensure this basis remains appropriate. The Group has
significant cash resources of GBP15.9m and access to an undrawn
GBP10m revolving credit facility with an expiry date of March
2023.
The Board has conducted an extensive review of forecast earnings
and cash over the next twelve months, considering various scenarios
and sensitivities given the COVID-19 situation and uncertainty
around the future economic environment, including extreme stress
test scenarios that are detailed in note 2 below.
The Board has been able to conclude the going concern basis is
appropriate in preparing the financial statements.
Martin Clyburn,
Chief Financial Officer
Consolidated statement of comprehensive income
For the period ended 30 September
2020
12 months
18 months to 31
to 30 September March
2020 2019
Notes (unaudited) (audited)
GBP'000 GBP'000
Revenue 3 76,938 46,785
Cost of sales (29,789) (16,263)
----------------- ----------
Gross profit 3 47,149 30,522
-
Other income 725
Administrative expenses (37,858) (23,939)
----------------- ----------
Operating profit 10,016 6,583
Finance costs 4 (795) (131)
Gain on fair value of derivative financial
liability - 40
----------------- ----------
Profit before tax 9,221 6,492
Income tax expense (2,103) (1,332)
Profit for the period 7,118 5,160
----------------- ----------
Other comprehensive income - -
Total comprehensive income 7,118 5,160
----------------- ----------
Earnings per share in pence 5 23.1 16.7
Diluted earnings per share in pence 5 22.5 16.3
Consolidated statement of financial position
As at 30 September 2020 30 September 31 March
2020 2019
(unaudited) (audited)
Assets Notes GBP'000 GBP'000
Non-current assets
Property, plant and equipment 4,845 5,485
Right of use of assets 8,536 -
Intangible assets 870 1,228
Investments - -
Deferred tax assets 182 167
------------- -----------
14,433 6,880
Current Assets
Inventories 13,360 12,658
Trade and other receivables 8,743 10,906
Cash and short term deposits 15,873 13,420
------------- -----------
37,976 36,984
------------- -----------
Total assets 52,409 43,864
------------- -----------
Current liabilities
Trade and other payables 6,422 6,490
Lease liability 2,005 -
Interest bearing loans and borrowings - 5,184
Income tax payable 1,157 689
------------- -----------
9,584 12,363
------------- -----------
Net current assets 28,392 24,621
------------- -----------
Non-current liabilities
Lease liability 7,094 -
Accruals and deferred income 153 453
Deferred tax liabilities 23 140
------------- -----------
7,270 593
------------- -----------
Total liabilities 16,854 12,956
------------- -----------
Net assets 35,555 30,908
------------- -----------
Equity
Issued capital 7 308 308
Share premium 4,892 4,892
Retained earnings 30,355 25,708
------------- -----------
Total equity 35,555 30,908
------------- -----------
Consolidated statement of changes in equity
For the period ended 30 September
2020
Share Share Retained
capital premium earnings Total
Notes
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April 2018 308 4,892 22,368 27,568
Profit for the year - - 5,160 5,160
--------- --------- ---------- --------
Total comprehensive income - - 5,160 5,160
Dividends paid - - (2,097) (2,097)
Share based payments - - 221 221
Deferred tax on share-based
payments - - 56 56
--------- ---------
As at 31 March 2019 308 4,892 25,708 30,908
--------- --------- ---------- --------
As at 1 April 2019 308 4,892 25,708 30,908
IFRS 16 Leases - transitional
adjustment - - (531) (531)
--------- --------- ---------- --------
As at 1 April 2019 - Adjusted 308 4,892 25,177 30,377
Profit for the period - - 7,118 7,118
--------- --------- ---------- --------
Total comprehensive income - - 7,118 7,118
Dividends paid - - (2,313) (2,313)
Share based payments - - 398 398
Deferred tax on share-based
payments - - (25) (25)
As at 30 September 2020 308 4,892 30,355 35,555
--------- --------- ---------- --------
All figures in above table are audited for the year ended 31
March 2019 & unaudited for the period to 30 September 2020
Consolidated statement of cash flows
For the period ended 30 September 18 months 12 months
2020 to 30 September to 31 March
2020 2019
(unaudited) (audited)
Operating activities Notes GBP'000 GBP'000
Profit before tax 9,221 6,492
----------------- -------------
Adjustments to reconcile profit
before tax to net cash flows:
Depreciation and impairment of property,
plant
and equipment 2,238 1,215
Depreciation and impairment of right 3,523 -
of use assets
Amortisation and impairment of intangible
assets 616 157
Change in derivative financial instruments - (40)
Loss on disposal of property, plant
and equipment 185 74
Share based payments 398 221
Finance costs 4 795 131
Working capital adjustments:
Movement in trade and other receivables
and prepayments 1,781 424
Movement in inventories (702) (5,091)
Movement in trade and other payables 170 (651)
----------------- -------------
18,225 2,932
Interest paid (795) (131)
Income tax paid (1,678) (1,278)
----------------- -------------
Net cash flows from operating activities 15,752 1,523
----------------- -------------
Investing activities
Proceeds from sale of property,
plant and equipment 4 3
Purchase of property, plant and
equipment (1,787) (2,315)
Purchase of intangible assets (258) (109)
Acquisition - (1,504)
----------------- -------------
Net cash flows used in investing
activities (2,041) (3,925)
Financing activities
Dividends paid (2,313) (2,097)
Payment of principle portion of
lease liabilities (3,645) (8)
Bank loans drawn down 2,600 5,183
Repayment of bank borrowings (7,900) (1,875)
Net cash flows from financing activities (11,258) 1,203
----------------- -------------
Net increase in cash and cash equivalents 2,453 (1,199)
Cash and cash equivalents at 1 April 13,420 14,619
----------------- -------------
Cash and cash equivalents at 30
September / 31 March 15,873 13,420
----------------- -------------
Notes to the consolidated financial statements
1. Finance information and 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
During the period, the Group changed its Accounting Reference
Date to 30 September. The financial information set out in the
preliminary announcement does not constitute the Group's Annual
report and Accounts for the 18 month period ended 30 September 2020
and the year ended 31 March 2019. The statutory accounts for 2019
have been delivered to the Registrar of Companies. The auditors,
Ernst & Young LLP, has reported on the 2019 accounts, their
report was unmodified, does not include a reference to any matters
to which the auditors drew attention by way of emphasis without
qualifying their report, and does not constitute a statement under
either Section 498(2) or (3) of the Companies Act 2006.
The Annual Report and Accounts for the 18 month period ended 30
September 2020 will be finalised on the basis of the financial
information presented by the Directors in these preliminary results
and will be delivered to the Registrar of Companies following the
Annual General Meeting. The Annual Report will be made available on
the Company's website ( www.ramsdensplc.com ), at which time a
notification will be sent to shareholders.
The principal activities of the Company and its subsidiaries
(the "Group") are the supply of foreign exchange services,
pawnbroking and related financial services, jewellery sales, and
the purchase of gold jewellery from the general public.
The financial information set out in the preliminary
announcement has been prepared on the basis of the accounting
policies which are set out in Ramsdens Holdings PLC's Annual Report
and Accounts for the year ended 31 March 2019, with the exception
of the new standards below.
2. Significant accounting policies
Initial adoption of IFRS 16 Leases
The Group has adopted IFRS 16 - Leases using the modified
retrospective approach with the date of initial application of 1
April 2019. Under this method, the standard is applied
retrospectively with the cumulative effect of initially applying
the standard recognised at the date of initial application. The
Group elected to use the transition practical expedient allowing
the standard to be applied only to contracts that were previously
identified as leases applying IAS 17 and IFRIC 4 at the date of
initial application.
Therefore, the cumulative effect of adopting IFRS 16 - Leases
was recognised as an adjustment to the opening balance of retained
earnings at 1 April 2019 with no restatement of comparative
information. Comparative information continues to be reported under
IAS 17 - Leases and IFRIC 4 - Determining whether an Arrangement
contains a Lease.
The Group has lease contracts for properties and motor vehicles.
Before the adoption of IFRS 16, the Group classified each of its
leases (as lessee) at the inception date as an operating lease. In
an operating lease, the leased asset was not capitalised and the
lease payments were recognised as an expense in profit or loss on a
straight-line basis over the lease term. Any prepaid rent and
accrued rent were recognised under Prepayments and Trade and other
payables, respectively.
Upon adoption of IFRS 16, the Group applied a single recognition
and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The standard provides
specific transition requirements and practical expedients, which
has been applied by the Group .
Lease liabilities
On adoption of IFRS 16 - Leases, the Group recognised
liabilities in relation to leases which had previously been
classified as operating leases under the principles of IAS 17 -
Leases. These liabilities were measured at the present value of the
remaining lease payments, discounted using the Group's incremental
borrowing rate at 1 April 2019. The weighted average incremental
borrowing rate applied to the property leases on 1 April 2019 was
4.3% (with a range between 3.36% & 4.42%) and for motor
vehicles was 3.5% (with all vehicles using the same rate).
GBP'000
(unaudited)
Operating lease commitments disclosed at 31 March
2019 12,255
Removal of non-recoverable VAT (902)
Restated operating lease commitments at 31 March
2019 11,353
Removal of prepaid lease payments (289)
Discounted using the incremental borrowing rate
at 1 April 2019 (1,327)
--------------
Lease liability recognised at 1 April 2019 9,737
Current lease liabilities 2,165
Non-current lease liabilities 7,572
--------------
9,737
Right-of-use assets
The associated right-of-use assets for the Group's property and
motor vehicle leases were measured on a retrospective basis as if
the new rules had always been applied using the incremental
borrowing rate as at 1 April 2019 and adjusted for any prepayments
or rent incentive accruals. The recognised right of use assets at 1
April related to the following asset types:
GBP'000
(unaudited)
Properties 8,919
Motor vehicles 183
--------------
Total right-of-use assets 9,102
--------------
The change in accounting policy affected the following items in
the statement of financial position at 1 April 2019:
As at IFRS16 Adjusted
31 March adjustment balance
2019
(audited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Right-of-use assets - 9,102 9,102
Deferred tax asset 167 114 281
Trade and other receivables (prepayments) 10,906 (499) 10,407
Trade and other payables (rent incentive
& onerous lease accruals) (6,490) 166 (6,324)
Accruals and deferred income (rent
incentive accrual) (453) 323 (130)
Lease liabilities - (9,737) (9,737)
--------------
Net impact on retained earnings 25,708 (531) 25,177
The change in accounting policy has also resulted in operating
lease costs previously shown in administration expenses within the
Income Statement being replaced with depreciation (which is
contained within administration expenses) and finance costs related
to the right of use assets. For the 18 month period ended 30
September 2020, deprecation and impairment of right of use assets
reported within administration expenses is GBP3,523,000 and the
interest cost of right of use assets reported in finance costs is
GBP614,000. The table below show the amount of adjustment for each
financial statement line item affected by the application of IFRS
16 for the current period
18m to 30
September
2020
Unaudited
Increase in depreciation
of right-of-use assets (3,483)
Increase in impairment of
right-of-use assets (40)
Increase in finance costs (614)
Decrease in other operating
expenses 4,259
----------------------
Impact on profit 122
Practical expedients applied
In applying IFRS 16 - Leases for the first time, the Group has
used the following practical expedients permitted by the
standard:
-- the use of a single discount rate for a portfolio of leases
with reasonably similar characteristics
-- reliance on previous assessments of whether leases are onerous
-- accounting for low value operating leases and operating
leases with a remaining term of less than 12 months at 1 April 2019
on a straight line basis as an expense without recognizing a
right-of-use asset or a lease liability
-- the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract
is, or contains, a lease at the date of initial application.
Instead for contracts entered into before the transition date the
Group relied on its assessment made applying IAS 17 - Leases and
IFRIC 4 - Determining whether an Arrangement contains a Lease
--Right-of-use assets
The Group recognises right-of-use assets at the commencement
date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any re-measurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the
Group is certain to obtain ownership of the leased asset at the end
of the lease term, the recognised right-of-use assets are
depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. Right-of-use assets are
subject to impairment.
--Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the
lease term reflects the Group exercising the option to terminate.
The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying amount of lease
liabilities is re-measured if there is a modification, a change in
the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases (i.e., those leases that have a lease term of
12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets
recognition exemption to leases that are considered of low value
(under GBP5,000). Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis
over the lease term.
Going Concern
The Company has prepared the financial statements on a going
concern basis, with due consideration to the unprecedented impact
of COVID-19 on the economy and society. The Board has considered
the impact of COVID-19 on each balance sheet item and conducted a
going concern review to ensure this basis remains appropriate.
In the 18 month period to September 2020 the Company traded
profitably with profit before tax of GBP9.2m and repaid its debt
facility in full.
The Company has significant cash resources at 30 September 2020
of GBP15.9m and access to an undrawn GBP10m revolving credit
facility with an expiry date of March 2023. The Company has
successfully applied for government support grants including the
Coronavirus Job Retention Scheme and Retail Grants. The grant
support received in the period to September 2020 was cGBP3.5m. The
company also took advantage of the VAT deferral scheme and was
awarded business rates relief in respect of a number of its
branches
The Company's activities include services deemed essential
services by the government and therefore the Company's stores are
able to open in the event of a further lockdown. The Company's
essential services include pawnbroking, foreign currency, money
transfer and cheque cashing. The Company has a strong asset base
and the ability to generate cash quickly through the sale of
jewellery stock for its intrinsic value or by restricting new
pawnbroking lending.
The Board have conducted an extensive review of forecast
earnings and cash for the period to 31 December 2021, considering
various scenarios and sensitivities given the COVID-19 situation
and uncertainty around the future economic environment.
One such stress test scenario was to model the closure of all
stores for the period to 31 December 2021. This scenario is deemed
implausible given the essential services categorisation of some of
the Company's services and the fact that income has already been
generated in the period elapsed since 30 September 2020 to
date.
This scenario assumes that there is no revenue generation at
all. The only cost reduction applied to this scenario are variable
costs linked to revenue generation (such as the cost of taking
payments and handling cash), and discretion spending, for example
advertising. All budgeted capital expenditure and dividends were
assumed to be suspended. This scenario assumes only GBP0.6m of
further government support, despite the now confirmed extension of
the Coronavirus Job Retention scheme up to March 2021. The scenario
also did not include the further mitigating actions that could be
taken. Further mitigation could include online income generation,
staff redundancies, exit of certain store leases. Further options
to improve liquidity, which are outside management's control, would
be the ability to defer/renegotiate creditor payments (including
rents), the opportunity to access increased government support,
including for example CBILs, increase bank lending and/or relax the
cash covenant on the existing GBP10m RCF facility, or an equity
raise.
The output of this scenario without considering the available
mitigation, was that the Company had enough resources to pay the
costs due throughout the period despite no income. This was due to
the strong cash balance at the start of the going concern period of
GBP15.9 m and the ability to realise cash from inventory and
pawnbroking assets.
Given the extreme stress test modelling the Board have been able
to conclude that they a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements. The going
concern assessment covers the period to 31 December 2021.
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. 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.
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 comprises interest on pledge loan books
and comprises the following two distinct components:
Contractual interest earned:
Contractual interest is earned on pledge loans up to the point
of redemption or the end of the primary contract term. Interest
receivable on loans is recognised as interest accrues by reference
to the principle 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.
Revenue arising from the disposal of unredeemed pledge
contracts:
When a customer defaults on a pawnbroking loan, the unredeemed
pledge contracts are recognised as inventory. Revenue is recognised
on the subsequent sale of the pledged assets supporting the pledge
contract under IFRS 15.
Foreign currency exchange income
Revenue is earned in respect of the provision of Bureau de
Change facilities offered and represents the margin earned which is
recognised at the point the currency is collected by the customer
as this represents when the service provided under IFRS 15 has been
delivered.
Sale of precious metals acquired via over the counter
purchases
Revenue is recognised when control of the goods has transferred,
being at the point the goods are received by the bullion dealer and
a sell instruction has been issued. If a price has been fixed in
advance of delivery, revenue is recognised at the point the goods
are received by the bullion dealer.
Jewellery retail sales
Revenue is recognised at the point the goods are transferred to
the customer and full payment has been received. Customers either
pay in full at the time of the transaction and receive the goods,
or pay in instalments and receive the goods once the sale is fully
paid. Instalment payments are recognised as deferred income until
the item is fully paid. The Company has a 7 day refund policy in
store, and a 14 day refund policy online reflecting the distance
selling regulations.
Other financial income
Other financial income comprises cheque cashing, buyback 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. Buyback revenue relates to the sale of
items to a customer, either the person who originally sold that
item to the business, or to a third party. Revenue is recognised
when the goods are transferred to the customer. Full payment is
taken at the time or prior to transferring the goods.
Administrative expenses
Administrative expenses includes branch staff and establishment
costs.
Government grants
Government grants that are a contribution to a specific
administrative expense are recognised in the income statement as a
reduction to administrative expenses in the period to which the
expense relates. Other government grants are recognised as other
income when there is reasonable assurance that the entity will
comply with the conditions and the grants will be received.
The grants recognised in the financial statements all relate to
Covid-19 support with job retention scheme support shown net of the
wage cost in administrative expenses and retail grants shown as
other income. There are no unfulfilled conditions and contingencies
attaching to recognised grants.
FP20 FY19
(unaudited) (audited)
GBP'000 GBP'000
Other income 725 -
Administrative expenses 2,769 -
------------- -----------
Total 3,494 -
Any grants recognised in the Statement of Comprehensive Income
but not received are included within the Statement of Financial
position under Trade and other Receivables
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.
Key sources of estimation uncertainty
Revenue recognition - pawnbroking loans interest and
impairment
The group recognises interest on pawnbroking loans as disclosed
in note 2 above. The pawnbroking loans interest accrual (pledge
accrual) is material and is dependent on the estimate that the
Group makes of both the expected level of the unredeemed
pawnbroking loans and the ultimate realisation value for the pledge
assets supporting those loans. 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
deficits. The principle estimates within the loan interest accrual
are;
1. Non Redemption Rate
This is based upon current and historical data held in respect
of non - redemption rates
2. Realisation Value
This based upon either;
- The current price of the metal that will be received through
the sale of the metal content via disposal through a bullion
dealer.
- The expected resale value of those jewellery items within the
pledge that can be retailed through the branch network.
See note 6 for further details on pawnbroking credit risk and
provision values, including sensitivity
Impairment of property, plant and equipment, right-of-use assets
and intangible assets estimate
Determining whether property, plant and equipment, right-of-use
and intangibles are impaired requires an estimation of the value in
use of the CGU to which the assets have been allocated. The value
in use calculation requires the Group to estimate the future cash
flows expected to arise from the CGU and selecting a suitable
discount rate in order to calculate present value. The review is
conducted annually, in the final quarter of the year. The
impairment review is conducted at the level of each CGU, which is
usually taken to be each individual branch store.
Management have determined that the key sources of estimation
uncertainty, to which the impairment analysis of property plant and
equipment, right-of-use assets and intangible assets is most
sensitive, relate to the following assumptions:
1. The Group prepares cash flow forecasts for each branch. Cash
flows represent management's estimate of the revenue of the
relevant CGU, based upon the specific characteristics of the branch
and its stage of development.
2. The Group has discounted the forecast cash flows at a pre-tax, risk adjusted rate of 12%.
It is reasonably possible, on the basis of existing knowledge,
that outcomes within the next financial year are different from the
assumptions made in relation to future cash flows, which could
require 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 the consolidated
statement of financial position. 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.
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.
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:
Taxes judgement
Deferred tax assets are recognised for unused tax losses to the
extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and the
level of future taxable profits, together with future tax planning
strategies.
3. Segmental analysis
12 months
18 months to 31
to 30 September March
2020 2019
(unaudited) (audited)
Revenue GBP'000 GBP'000
Pawnbroking 18,911 10,544
Purchases of precious metals 23,024 12,343
Retail Jewellery sales 17,109 9,771
Foreign currency margin 14,859 11,585
Income from other financial
services 3,035 2,542
Total revenue 76,938 46,785
----------------- -----------
18 months 12 months
to 30 September to 31 March
2020 2019
(unaudited) (audited)
Gross profit GBP'000 GBP'000
Pawnbroking 12,248 7,520
Purchases of precious metals 9,856 4,801
Retail Jewellery sales 7,701 5,039
Foreign currency margin 14,859 11,585
Income from other financial services 2,485 1,577
Total gross profit 47,149 30,522
----------------- -------------
Other income 725 -
Administrative expenses (37,858) (23,939)
Finance costs (795) (131)
Gain on fair value of derivative
financial liability - 40
----------------- -------------
Profit before tax 9,221 6,492
----------------- -------------
Income from other financial services comprises of cheque cashing
fees, electronics & buybacks, 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.
4. Finance costs
18 months 12 months
to 30 September to 31 March
2020 2019
(unaudited) (audited)
GBP'000 GBP'000
Interest on debts and borrowings 181 130
Lease charges 614 1
----------------- -------------
Total finance costs 795 131
----------------- -------------
5. Earnings per share
18 months 12 Months
to 30 to 31
September March
2020 2019
(unaudited) (audited)
GBP'000 GBP'000
Profit for the period/ year 7,118 5,160
Weighted average number of shares in
issue 30,837,563 30,837,653
------------- -----------
Earnings per share (pence) 23.1 16.7
Weighted average number of dilutive
shares 805,554 805,554
Effect of dilutive shares on earnings
per share (pence) (0.6) (0.4)
------------- -----------
Fully Diluted earnings per share (pence) 22.5 16.3
------------- -----------
6. Pawnbroking
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.
Category
Net carrying
Gross Loss amount
amount allowance GBP'000
GBP'000 GBP'000
At 31 March 2019 & 30 September
2020 8,753 1,269 7,484
Pawnbroking
Trade Receivables
GBP'000
At 1 April 2018 342
Utilised in the period (342)
Statement of comprehensive income
charge 393
------------------------
At 31 March 2019 393
Utilised in the period (390)
Statement of comprehensive income
charge 1,266
------------------------
Balance at 30 September
2020 1,269
All figures in above table are audited for the year ended 31
March 2019 & unaudited for the period to 30 September 2020
Expected credit losses have increased due to higher than usual
past due pawnbroking loans which is a result of the Group's
decision to offer further time to customers before commencing the
realisation process in line with FCA guidance following the impact
of Covid19.
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).
The ageing of the Pawnbroking trade receivables excluding those
in the course of realisation is as follows:
30 September 31 March
2020 2019
(unaudited) (audited)
GBP'000 GBP'000
Within contractual term 4,989 6,611
Past due 1,559 1,032
-------------- -----------
6,548 7,643
7. Issued capital and reserves
Ordinary shares issued and No. GBP'000
fully paid
At 31 March 2019 (audited)
&
30 September 2020 (unaudited) 30,837,653 308
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FZMMZVKFGGZG
(END) Dow Jones Newswires
December 15, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Ramsdens (LSE:RFX)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Ramsdens (LSE:RFX)
Storico
Da Apr 2023 a Apr 2024
