Question about Ramsdens

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24th Mar '20 by mattgws

9 comments 901 reads

Hi all,

I'm looking at Ramsdens Ramsdens Holdings (LON:RFX) as a possible long term investment given it's depressed share price and net cash position reducing the risk of bankruptcy. Diversified operations mean that although the FX part of the business will be deeply effected, the pawnbroking revenue stream should do well.

Whilst I can see how much revenue is attributed to each part of the business, I'd like to be able to see profit split. Can anyone help?

Ideally I'd like to see profit value in £'s for each revenue stream particularly: -

- Jewllery Sales

- FX

- Pawnbroking

- Gold buying

Can anyone help? Thanks in advance.

Matt

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Mattgws

Premium Member

9 comments

timarr

24th Mar '20

Hi Matt

It's where you'd expect, in the Annual Report:

https://www.ramsdensplc.com/do...

FX £11.6m profit
Pawnbroking £7.5m
Jewellery £5m
Precious metals £4.8m
Other services £1.6m

Given that their stores are closed their only revenue channel is online. That covers 5% of jewellery sales and 44% of FX. Sadly FX must be close to zero right now so to my best approximation they're making the square root of bugger all.

It's a nice business providing an important service but unless the government either allows them to trade as an essential service or adds them to the list of businesses qualifying for Business Rates Relief their survival is critically dependent on how long the shutdown lasts.

Equity investing is not for the fainthearted.

timarr

mattgws

27th Mar '20

Thanks Tim, couldn't see it for looking. Could only find revenue figures

timarr

27th Mar '20

No worries, sometimes you have to go the AR rather than just the reported results.

Both Ramsdens Holdings (LON:RFX) and H & T (LON:HAT) remain closed for business - I have to say I'm surprised, they're exactly the kind of last resort lenders that the government needs to be providing short-term finance to people under financial stress. I'd guess there are conversations ongoing, but the government has a lot of spinning plates at the moment.

However, if they're allowed to reopen stores even for restricted purposes and with limitations on interest rates I'd think they'd be safe to buy. If they survive then they'll do OK - and they probably will anyway, but why take the risk?

timarr

muzmano

27th Mar '20

Am i right that Ramsdens Holdings (LON:RFX) has announced the closure of its stores but H & T (LON:HAT) has yet to make an announcement?

timarr

27th Mar '20

Am i right that Ramsdens Holdings (LON:RFX) has announced the closure of its stores but H & T (LON:HAT) has yet to make an announcement?

If you look on the H&T website:

Q: Are your stores open?

A: Our stores are temporarily closed but we’re still available to help. You can speak to us through our Live chat option at the bottom of this page or by calling us on 01615050369. It is our aim to do whatever is possible to help our customers during this difficult time.

So they're closed too.

timarr

muzmano

27th Mar '20

Timarr, thanks i get that. Just find it odd that HAT hasnt released an RNS when Ramsdens has.

Surely it its a material change to their business and the market should be notified.

Martin5760

27th Mar '20

https://handt.co.uk says stores are closed

Singh73

26th Jun '20

Hi Tim, thank you for this write up - I have been toying with reducing my exposure to RFX - you explanation was very helpful and helped me a lot thank you -

timarr

27th Jun '20

Hi Hardeep

It was a while ago, mind.

Possibly worth noting that the Ramsden's FX prepaid card is one of those caught by the FCA clampdown on Wirecard yesterday. Not sure how much that would impact their FX business but it can't be helpful just at the market for foreign holidays is about to start again.

timarr

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Mattgws

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