REG - Ramsdens Holdings - Annual Results - year ended 30 September 2023
15/01/2024 07:00
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RNS Number : 6123Z Ramsdens Holdings PLC 15 January 2024
15 January 2024
Ramsdens Holdings PLC
("Ramsdens", the "Group", the "Company")
Annual Results for the year ended 30 September 2023
Milestone Profit Before Tax of £10.1m
Ramsdens, the diversified financial services provider and retailer, today
announces its Annual Results for the year ended 30 September 2023 (the
"Period").
FY23 FY22
% change
Revenue £83.8m £66.1m 27%
Gross Profit £45.8m £38.2m 20%
Profit before tax £10.1m £8.3m 22%
Net Assets £48.2m £41.8m 15%
Basic EPS 24.5p 20.9p 17%
Final dividend 7.1p 6.3p 13%
Full year dividend 10.4p 9.0p 16%
Highlights:
● FY23 profit for the Group was driven by strong performances across all four
key income streams.
● Foreign currency gross profit increased 8% year on year to £13.6m (FY22:
12.7m) and ahead of pre-covid levels.
● Jewellery retail revenue increased 23% to £33.5m (FY22: £27.1m) driven by
good growth in each product category of new jewellery, second hand jewellery
and premium watches.
● Demand for the Group's pawnbroking loans continued to grow. As at 30
September 2023, the active loan book had increased by almost 20%
to £10.3m (FY22: £8.6m).
● The high gold price has helped precious metals buying volume and values.
Revenue across this segment increased by almost 50% to £23.5m (FY22:
£15.8m).
● Basic EPS increased by 17% to 24.5p per share (FY22: 20.9p).
● The Board is recommending a final dividend of 7.1p per share for approval at
the forthcoming AGM, taking the total dividend for the Period to 10.4p per
share (FY22: 9.0p) an increase of 16%, continuing its commitment to a
progressive dividend policy.
Current Trading:
The Board is pleased to provide an update on Q1 FY24 trading (October to
December 2023).
● Foreign currency (FX) gross profit is flat on last year. While we are
encouraged by growing sales of FX, purchases of FX from returning holiday
makers are still subdued, indicating they are keeping their leftover FX cash
for another trip or have spent their cash while abroad.
● Ongoing demand for small sum short term credit has enabled the pawnbroking
loan book to incrementally increase to £10.6m from the year end position of
£10.3m.
● Jewellery retail revenue is broadly flat but gross profit is approximately 5%
ahead of last year in this key retail quarter. There has been a mixed
performance within the categories and channels. Our online premium watch
sales on retail finance have reduced while we have seen strong sales of new,
second-hand and diamond jewellery throughout our store network. This is
testament to our improved offering and greater customer awareness of the value
for money jewellery Ramsdens offers.
● The purchase of precious metals gross profit has increased by more than 10% on
the prior year due to growing awareness of the service offered by Ramsdens and
the continued high gold price.
● Following the year end, new stores have been opened in Cardiff, Poole and
Blackburn, taking the store estate to 165 stores (including two franchised
stores).
In summary, the Group is trading in line with the Board's expectations and
continues to benefit from the diversification of its activities.
Peter Kenyon, Chief Executive, commented:
"Ramsdens has had a great year, delivering a milestone profit in excess of
£10m.
I am hugely grateful for the Ramsdens team's dedication and commitment and
wish to publicly thank them for their efforts and success. We also recognise
their efforts with Company-wide bonus schemes and by paying the real living
wage (RLW) as our entry level pay which will continue in FY24. At the heart of
our business are our people. This has been recognised by the pawnbroking
industry, with Ramsdens awarded the National Pawnbroker's Association Employer
of the Year for 2023.
While we are very conscious of the tough economic conditions and the cost
pressures of energy pricing, increased interest rates, and paying the RLW, we
have confidence that our long-term strategy, which remains unchanged, will
deliver long-term benefits for all stakeholders."
Availability of Report and Accounts
The Company confirms that the Annual Report and Financial Statements for the
year ended 30 September 2023, together with notice of the Company's 2023
annual general meeting, will be published and posted to shareholders shortly
and will be available to view on the Company's investor relations
website: https://www.ramsdensplc.com/investor-relations/reports-and-presentations
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.ramsdensplc.com%2Finvestor-relations%2Freports-and-presentations&data=02%7C01%7Clwollam%40hudsonsandler.com%7C5e65bb6855a840ec736808d6e9028d50%7Ca33bdb157e25438ab1fd5c523a8866f9%7C1%7C0%7C636952594503059063&sdata=Cpng724nGX9wrWhD9NwOlkiZHLeIZZnzg6S71WXuRQE%3D&reserved=0)
, in accordance with AIM Rule 20.
The information contained within this announcement is deemed by the Group to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. The person responsible for making this announcement on
behalf of the Company is Peter Kenyon.
ENDS
Enquiries:
Ramsdens Holdings PLC
Tel: +44 (0) 1642 579957
Peter Kenyon, CEO
Martin Clyburn, CFO
Liberum Capital Limited, Nominated Adviser,
Financial Adviser and Broker
Tel: +44 (0) 20
3100 2000
Richard Crawley
Lauren Kettle
Hudson Sandler (Financial
PR)
Tel: +44 (0) 20 7796 4133
Alex Brennan
Lucy Wollam-Coles
Emily Brooker
About Ramsdens
Ramsdens is a growing, diversified, financial services provider and retailer,
operating in the four core business segments of foreign currency exchange,
pawnbroking loans, precious metals buying and selling and retailing of second
hand and new jewellery. Ramsdens does not offer unsecured high cost short
term credit.
Headquartered in Middlesbrough, the Group operates from 165 stores within the
UK (including 2 franchised stores) and has a growing online presence.
Ramsdens is fully FCA authorised for its pawnbroking and credit broking
activities.
www.ramsdensplc.com (http://www.ramsdensplc.com)
www.ramsdensforcash.co.uk (http://www.ramsdensforcash.co.uk)
CHAIRMAN'S STATEMENT
This Annual Report covers the 12-month period to 30 September 2023 (FY23).
I am pleased to report that the Group has achieved a milestone profit before
tax of more than £10m for the first time. These strong results are
reflective of the benefits of the Group's diversified income streams and, in
particular, the positive impact from the investments the Group has made in its
retail activities over recent years.
FINANCIAL RESULTS & DIVIDEND
The below table highlights the financial results:
£000's FY23 FY22
Revenue £83,805 £66,101
Gross Profit £45,759 £38,219
Profit Before Tax £10,105 £8,269
Net Assets £48,167 £41,843
Net Cash* £5,039 £8,835
EPS 24.5p 20.9p
Final dividend 7.1p 6.3p
Full year dividend 10.4p 9.0p
*cash minus bank borrowings
The Group achieved revenue of £83.8m (FY22: £66.1m) and Profit Before Tax of
£10.1m (FY22: £8.3m). The Strategic Report and Financial Review that
follow provide a more in-depth analysis of the Group's trading performance and
financial results.
The Board is recommending a final dividend of 7.1p (FY22: 6.3p) for approval
at the forthcoming AGM. Pending approval, the full year dividend of 10.4p
(FY22: 9.0p) would represent an increase of 16% year on year and 42% of the
earnings per share. Subject to shareholder approval, the final dividend is
expected to be paid on 22 March 2024 for those shareholders on the register on
16 February 2024. The ex-dividend date will be 15 February 2024.
LOOKING AHEAD
While the business is very well positioned to build upon its achievements, the
Board remains cognisant of the macroeconomic challenges currently impacting
consumer-facing businesses in the UK. The Group's diversified income streams
provide defensive qualities in the current environment characterised by higher
interest rates and levels of inflation.
The Group is not immune from rising costs, in particular in relation to staff
and energy costs. The Group's fixed energy pricing ends in February 2024 which
will result in an increase in costs of approximately £0.4m in FY24.
Ramsdens also strives to reward its staff fairly and previously took the
decision to pay at least the Real Living Wage (RLW) to everyone in the
business. The RLW will increase by 10% from May 2024 and we will continue to
offer this entry level of pay for our people, who provide a tremendous service
looking after our customers. I believe we have a fantastic team and would like
to publicly thank them for their efforts over the last year.
Notwithstanding these cost pressures, the Group still has significant
opportunities to grow each of its income streams. In the year ahead the
ongoing global economic uncertainty is expected to benefit the gold price,
which should remain higher than long term averages. This will continue to
benefit both our pawnbroking and precious metals buying business segments. Our
pawnbroking loan book grew by approximately 20% in FY23 and there is built up
latent interest income to come through in FY24, as well as an opportunity to
further grow our lending as customer demand for a small sum short term loan
remains high.
The investments made in our retail operations, including our instore and
online offering, produced revenue growth of 25% during FY23 despite the
economic conditions and squeeze on discretionary spending. This resulted in
our online jewellery department contributing £1m of net profit in FY23.
This strong momentum and planned further investment gives us confidence for
continued growth in FY24.
Foreign currency income grew year-on year by 8%, albeit the summer of 2023 was
a little disappointing after a particularly good first six months of the
year. In last year's Annual Report, we commented that economic conditions
had the potential to delay a full recovery in our foreign currency income
division and that would appear to have been the case in the summer months.
While the numbers of customers we served increased over 2022, economic
challenges led to our customers taking slightly less cash on holiday with
them. This lower average transaction value on sales also led to less currency
being exchanged back into sterling when customers returned. We are hopeful
that travel numbers and holiday durations in summer 2024 continue to increase
back towards 2019 levels. We recently launched the Ramsdens Mastercard®
Multi-Currency Card to support our foreign currency segment and capture a
greater share of our customers' holiday spending.
Our business is underpinned by a great culture of 'doing things right' and our
proven growth strategy remains unchanged. We strive to operate sustainably,
look after our people, play our part in the communities where we operate and
reward our shareholders. Our dividend policy continues to be progressive
with the full year dividend increasing by 16%. Our long-term dividend strategy
is to move towards distributing approximately 50% of earnings to shareholders,
subject always to the growth opportunities of the Group.
Andrew Meehan
Non-Executive Chairman
14 January 2024
CHIEF EXECUTIVE'S REVIEW
The Group has had a great year delivering record profit before tax of
£10.1m.
As well as the externally visible achievements of this record profitability,
new stores, new websites and the launch of the Ramsdens Mastercard®
Multi-Currency Card, a significant amount of work has gone into developing the
culture and sustainability of the business. During the year, a full review
of our ESG strategy was undertaken to ensure we are challenging ourselves and
continuing to raise the bar higher. Further details can be found in the ESG
report on page 26 of the Annual Report.
At the heart of our business are our people. They continue to be engaged,
motivated and look after our customers with great care, listening to them and
giving them support with whatever they want or need. Our colleagues serve a
diverse mix of customers by offering support with short term pawnbroking
loans, helping to find that special jewellery item, exchanging travel money
for holidaymakers or helping customers get cash for their unwanted
jewellery. I am hugely grateful for this dedication and commitment and wish
to publicly thank them for their efforts and success. I believe they are
the best team in the industry. We want to be an employer of choice and
therefore offer support and development, career opportunities, achievable
bonus schemes and the real living wage as our entrant level pay. Ramsdens
was recognised by the pawnbroking industry as a great place to work after
being awarded the National Pawnbroker's Association Employer of the Year award
for 2023.
BUSINESS REVIEW
Our clear growth strategy has remained consistent since our quotation on the
London Stock Exchange's AIM in 2017 and we have delivered very positive
results in FY23.
We have achieved growth across all four of our key income streams as a result
of our ongoing focus on continuous improvement. Within the core estate, we
have relocated two stores to more attractive locations in Kendal and Dundee.
The stores that were opened in FY22 are all performing well and those
relocated in FY22 have seen positive results, generating the benefits expected
in retail and / or foreign currency.
We have expanded our South East presence in Kent and Essex with three new
store openings in Croydon, Basildon and Maidstone as well as the acquisition
of a store in Bexleyheath. We also opened five stores in Yorkshire and the
North West, in Bootle, Bradford, Warrington, Southport as well as a second
store in York. The second store in York, while offering all services, is
aimed at lifting our retail offering even further. We are pleased to say
that all new stores are trading well, with several well ahead of
expectations. We ended the year with 160 stores and two franchised
stores.
Our online retail business comprises online jewellery sales where goods are
shipped direct to customers, with sales of goods that are sourced online but
transacted in store accounted for within our branch profits. Our online
retail activities continue to achieve strong growth and delivered profit
contribution of over £1m during the year. We believe we have a strong
foundation to continue to scale this online retail business in the coming
years.
We launched our new Ramsdens currency website in July 2023 and we are
encouraged by the early results, albeit this new revenue stream will need time
to develop and grow. Our new pawnbroking website will go live in Q1 2024 and
a new gold buying website shortly after. These product focused websites will
support improved SEO performance, thereby improving overall profitability.
The performance of each of the Group's key income streams is discussed in
greater detail below.
OUR DIVERSIFIED BUSINESS MODEL: PRODUCT OFFERING
Ramsdens operates in the four core business segments of: foreign currency
exchange; pawnbroking; jewellery retail; and purchase of precious metals.
Foreign Currency Exchange
The foreign currency exchange (FX) segment primarily comprises the sale and
purchase of foreign currency notes to holidaymakers. Ramsdens also offers
international bank-to-bank payments through a third-party arrangement and
launched the Ramsdens Mastercard® multi-currency card in September 2023 just
before the year end.
FY23 FY22
Total Currency exchanged £408m £364m
Gross profit £13.6m £12.7m
Online click and collect orders £42.0m £38.7m
Percentage of FX online 10% 11%
Percentage of Group gross profit 30% 33%
While changes to purchasing habits in the UK have reduced the use of cash to
c14% of UK transactions, the vast majority of the customers buying foreign
currency are holidaying in Portugal, Italy, Greece and Spain where cash usage
is well in excess of 50% of all transactions. We have confidence that UK
travellers will continue to take cash abroad for both convenience and to
assist with budgeting whilst on holiday.
The Gross Profit from FX increased by 8% which is a solid result, albeit the
key summer period was slower than originally anticipated. Transaction
volumes increased by 18% to approximately 1 million but remain 30% lower than
pre pandemic levels.
The average transaction value for selling currency fell from £469 to £446
but remained well ahead of the pre pandemic average value of £401.
As anticipated, as volumes increased, we experienced some pressure on margins
as we sought to maintain our great value for money proposition. However, FX
margins remained higher than pre pandemic levels and we believe that going
forward margins will be at least at FY23 levels.
International payments income continues to be relatively small in comparison
to total foreign currency commission and the income from the new
multi-currency card was minimal in FY23 following its launch in September
2023. The new multi-currency card is supported by a dedicated easy-to-use
mobile app and will allow Ramsdens to capture more of the total holiday
expenditure by our customers. The card offers 18 currencies with the benefit
of Ramsdens' great exchange rates.
Our FX gross profit was 4% ahead of pre pandemic levels and we are optimistic
about future performance as more people travel and volumes grow.
Pawnbroking
Pawnbroking is a small subset of the consumer credit market in the UK and a
simple form of asset backed lending dating back to the foundations of
banking. In a pawnbroking transaction an item of value, known as a pledge,
(in Ramsdens' case, jewellery and watches), is held by the pawnbroker as
security against a six-month loan. Customers who repay the capital sum
borrowed plus interest receive their pledged item back. If a customer fails to
repay the loan, the pawnbroker sells the pledged item to repay the amount owed
and returns any surplus funds to the customer. Pawnbroking is regulated by
the FCA in the UK and Ramsdens is fully FCA authorised.
If consumers have assets to pledge, pawnbroking can provide a short-term
solution or give the customer time to put in place longer term financial
arrangements. Pawnbroking is simple to understand and is quick and easy to
arrange. It also benefits from there being no further debt consequences
should the customer be unable to repay the loan when due, although Ramsdens
works with our customers to try and ensure repayment where possible so the
customer is able to borrow again should they need to.
000's FY23 FY22
Gross profit £10,043 £7,533
Total loan book* (capital value) £10,264 £8,648
Past due (capital value) £859 £721
In date loan book* (capital value) £9,405 £7,927
Percentage of Group gross profit 22% 20%
*excludes loans in the course of realisation
Customer demand for small sum short term credit remains strong, in part driven
by the increased costs the UK consumer has faced this year. While more
traditional providers of short term credit have reduced in number (e.g. home
collected credit, guarantor loans and payday lenders), some of this capacity
has moved to unregulated 'lending' including through buy now pay later and
salary advance providers.
Due to the contraction in traditional short-term lenders, and Ramsdens
pawnbroking service being readily accessible in store or online, new customer
volumes have increased by 11% compared to FY22.
The average loan value as at 30 September 2023 was £325, up from £303 as at
30 September 2022. Our median loan value is £174 across the UK but £230 in
our southern branches. The broader demographics seen in the southern
communities in which we operate allows for higher loan values with higher
carats of gold jewellery offered as security for a loan.
Our lending remains conservative in line with our long-term policy and
repayment rates are in line with long run averages.
We believe that economic conditions will remain challenging for the UK
consumer in the year ahead and while we are expecting the loan book to
continue to grow, we are not anticipating growth to be as high in FY24 as the
20% we achieved in FY23.
Jewellery Retail
The Group offers new and second-hand jewellery, including premium watches, for
sale. The Board continues to believe there is significant growth potential in
this segment by leveraging Ramsdens' retail store estate and ecommerce
operations. The Group aims to cross-sell its retail proposition to existing
customers of the Group's other services as well as attracting new customers.
The retailing of new jewellery products complements the Group's second-hand
offering to give our customers greater choice in breadth of products and price
points. In addition, new jewellery retailing enables the Group to attract
customers who prefer not to buy second-hand.
000's FY23 FY22
Revenue £33,474 £27,107
Gross Profit £12,058 £10,263
Margin % 36% 38%
Jewellery retail stock £24,289 £19,683
Online sales £6,656 £3,904
Percentage of sales online 20% 14%
Percentage of Group gross profit 26% 27%
A 23% increase in revenue despite the challenging economic conditions in the
year was achieved following our investments in stock levels, stock
presentation, replenishment systems, staff training and our retail website.
Retail revenue is now relatively equally spread across three key categories of
premium watches (38% of revenue), new jewellery (31%) and preowned jewellery
(31%). Margins by product category have remained consistent but the overall
gross margin has fallen slightly due to an increase in the contribution of
premium watch sales to the overall sales mix, which carry a slightly lower
margin.
Online growth continued to be strong with revenue increasing to £6.7m (FY22:
£3.9m), up 70% against the prior year. Online sales represented 20% of all
jewellery items sold and the online channel contributed profit in excess of
£1m.
As well as a profitable sales channel, the jewellery website also serves as a
catalogue for our branches, assisting our staff with serving customers where
stock choice in a branch may be limited. For example, our top watch sales
branches have circa 120 watches in store but there are approximately 2,000
watches available on our website for customers to browse and buy.
We believe there is an ongoing opportunity, instore and online, across our
product categories, to develop and grow our jewellery retail business.
Purchase of precious metals
Through our precious metals buying and selling service, Ramsdens buys unwanted
jewellery, gold and other precious metals from customers. Typically, a
customer brings unwanted jewellery into a Ramsdens store and a price is agreed
with the customer depending upon the retail potential, weight or carat of the
jewellery. Ramsdens has various second-hand dealer licences and other
permissions and adheres to the Police approved "gold standard" for buying
precious metals.
Once jewellery has been bought from the customer, the Group's dedicated
jewellery department decides whether or not to retail the item through the
store network or online. Income derived from jewellery which is purchased and
then retailed is reflected in jewellery retail income and profits. If the
items are not retailed, they are smelted and sold to a bullion dealer for
their intrinsic value and the proceeds are reflected in the Group's accounts
as precious metals buying income.
000's FY23 FY22
Revenue £23,522 £15,847
Gross Profit £9,161 £6,626
Percentage of Group gross profit 20% 17%
Revenue from our purchase of precious metals grew by 48% with the gross profit
growing by 38%. The Sterling price for 9ct gold has remained high in
comparison to long run averages, which of course helps the divisional
performance - during FY23 the average price for 9ct gold was £18.48 per gram
(FY22: £17.15).
Given the wider global political and economic situation, we believe the gold
price will remain high in the short to medium term, supporting the Group's
margins.
Other services
In addition to the four core business segments, the Group also provides
additional services in Western Union money transfer and receives franchise
fees. Up to April 2023, the Group also received income for cheque cashing
services and small commissions for credit broking, however these services were
stopped to enable greater focus on the key services. In FY22, income from
the now ceased services was approximately £0.35m.
000's FY23 FY22
Revenue £849 £1,114
Gross Profit £849 £1,114
Percentage of Group gross profit 2% 3%
STRATEGY
Following an extensive review, the Board believes that its existing strategy
remains the right one to grow our business and deliver sustainable value for
all our stakeholders. Included in that review was an in-depth review of our
ESG strategy. See page 26 of the Annual Report for further details.
We continue to concentrate on:
1. Improving the performance of the existing store estate
2. Expanding the Ramsdens branch footprint in the UK
3. Developing our online proposition
4. Appraising opportunities presented by operating in challenging markets.
5. Focusing on sustainability through our ESG strategy
1. Improving the performance of the existing store estate
The Group's established stores continue to perform well and all income
segments have shown significant growth over FY22 levels with future
opportunities for further improvement.
Our mission statement is to have a great customer offering backed up by
fantastic customer service leading to customers being ambassadors for
Ramsdens. Recommendations from family and friends continues to be the
biggest source of new customers. We are also extremely proud of both of our
5-star Trustpilot ratings for our retail jewellery and foreign currency
services. Living our values of being trusted, open and passionate helps
deliver our mission statement and build our culture of doing the right thing,
whatever that 'thing' may be.
The strategic focus we have placed on attracting new customers and driving a
higher wallet share from our repeat customers has led to a record performance
across all key income streams. This focus remains unchanged.
Our people are key to implementing our strategy, and staffing remains the
largest cost within the business. During the year, we continued to pay the
real living wage (RLW) as our entry pay level. This resulted in pay
increases of 10% for our people in more junior or entry level roles.
The RLW announcement in October 2023 was for another increase in pay of 10%,
well ahead of inflation, effective from May 2024. We remain committed to
paying the RLW which will result in 85% of the employees receiving a pay rise
of greater than 8%, with more than 40% receiving an increase of 10% or more in
FY24.
The people in our business live and breathe the Ramsdens ethos and we are
committed to ensuring that our staff not only remain productive but also feel
valued and rewarded in their careers at Ramsdens. We are continually
investing in our training capabilities and how we develop our staff. We
understand that there is a desire to continue to learn so that everybody can
enjoy their role more, and benefit from higher remuneration with the
development of new skills and responsibilities. We are conscious that as the
entry level pay increases, there are challenges that need to be met to keep
pay differentials across our grading structure.
Our fixed price energy contract ends in February 2024. A new contract has
been entered into and the new energy pricing will result in an expected cost
increase of £0.4m in FY24 and £0.6m in FY25 over FY23. Once the new
contract commences all of our electricity will come from renewable sources.
Rents generally continue to be negotiated downwards where there is an
opportunity to do so, balanced with a desire for flexibility with lease expiry
and break dates. We continue to actively manage our portfolio, including
relocating stores to improve our footfall-reliant services of foreign currency
exchange and jewellery retail while potentially reducing operating costs at
the same time. Our two relocations this year in Kendal and Dundee were
examples of this.
We believe our store estate performance is complemented by a strong online
proposition. By investing in our retail jewellery website in recent years we
have improved each store's access to a wider range of jewellery which has
improved customer service levels and resulted in increased in-store sales.
We are confident that investment in the recently launched foreign currency
website will drive footfall to stores in addition to increasing click and
collect volumes. We also believe the investment in the two new websites for
pawnbroking and gold buying will also assist store performance.
In addition, we continually aim to improve the performance across our key
income streams:
Foreign currency:
· The three key drivers for foreign currency remain trust,
convenience and price. Having available stock and transparent pricing
continues to build trust among consumers.
· By having branches conveniently located on high streets and in
shopping centres, we will continue to attract consumers wanting foreign
exchange services.
· By having competitive exchange rates, we will attract new and
retain existing customers whilst continuing to manage margins closely, with
due regard to local market conditions.
· By improving the frequency of contact we have with our foreign
currency customers, we will stay in our customers' thoughts for when they next
need foreign currency.
· By introducing a market-leading multi-currency travel card, we
will seek to capture more of the customer's holiday spend while abroad.
Pawnbroking:
· We have fully embraced the FCA's New Consumer Duty initiative.
We have always had the consumer at the heart of what we do and this has been
demonstrated by our loyal customer base. We will continue doing what we
believe are the right things for our customers - this includes reducing
interest rates for customers needing longer to pay and, if a customer
defaults, by continuing to obtain the best price possible for their pledged
items.
· We will continue to have prudent lending policies while examining
opportunities to lend more when the customer's borrowing history suggests
greater capacity to repay and where the pledged assets are more desirable and
readily saleable. The improvement in our retail jewellery operations gives
the Group confidence that it is able to lend more on higher value jewellery
items.
· We will continue to build upon the trust and high repeat customer
volumes earned by giving a great service and grow the customer base through
word-of-mouth recommendation.
Jewellery retail:
· Continued investment in our jewellery stock levels will give
customers more choice in-store and online and enable improved replenishment
capabilities. This investment continues with the benefit of lessons learned
during recent years and with the belief there is room for further improvement
across both jewellery and premium watches.
· Our concept window display design and stock presentation has been
well received by consumers. The simplicity of the display and strong
signposting has improved display standards across the store estate where it
has been implemented. The role out of this design will be completed in
FY24.
· We are continuing to invest in our retail website which also acts
as a stock catalogue for our branches to facilitate further in store sales.
· Where appropriate, we will relocate to higher footfall locations
and improve the jewellery offer with larger window display areas, often at
similar rents to current locations.
Purchase of precious metals:
· We are increasing the awareness amongst our existing customer
base, primarily foreign currency exchange customers who are unaware of the
service or the value held in damaged or simply unwanted or unworn jewellery.
· When launched, our new gold buying website will identify new
customers who may be unaware of the service or the value of their unwanted or
unworn jewellery.
2. Expanding the Ramsdens branch footprint in the UK
The Group offers its services across a portfolio of stores and online, and the
Board believes there are important growth opportunities through both of these
channels. The Group's model of diversified income streams sharing the
operational costs of the store has been successful in both small towns and
larger cities. There are c350 towns and cities with a population of 30,000
or more in the UK, London counting as one location. We believe that there
are significant opportunities to grow the store footprint over coming years
given we have proven, successful stores in towns with a population of less
than 15,000 where we have successfully established a community of returning
customers.
The retail property market is currently attractive and flexible deals can be
achieved as many towns have too much retail space. As a consequence, shorter
lease terms can be agreed, however, this results in higher levels of
depreciation (as spread over the lease term) at a time when shop fit costs
have also increased to c£0.2m. A retail focused store also requires c£0.3m
of working capital investment, which comprises mainly jewellery stock.
Expanding the store estate allows the Group to leverage off the services and
centralised costs of its head office.
As at 30 September 2023, we had 160 stores plus two franchised stores.
During the year, we opened eight greenfield sites and acquired a pawnbroker in
Bexleyheath. We closed one store in Blyth which was a casualty of the storms
in November 2021 and the landlord chose not to repair the property.
We now have five stores in the South East. Our store in Chatham, which has
been open for two years, continues to trade exceptionally well. During the
year we opened new stores in Basildon, Croydon, and Maidstone and a new store
in Romford will open in early 2024. While early trading across the new
stores has been good, especially retail jewellery, new staff in a new region
require significant support as well as ongoing training and development.
We also opened five stores in Yorkshire and the North West, in Bootle,
Bradford, Warrington, Southport and York. All are trading in line with or
ahead of our new store model expectation.
We have nine new stores planned for FY24. Poole, Blackburn and Cardiff all
opened in Q1 FY24. We have three stores with the legals completed, awaiting
shop fit completion and three new stores in various stages of the legal
process.
We have a strong pipeline of researched towns where we are awaiting the right
unit to take forward.
3. Developing our online proposition
We see the development of our online capabilities as being complementary to
our store estate and both will benefit as the store estate expands and the
websites generate increased brand recognition.
Jewellery retail website
www.ramsdensjewellery.co.uk (http://www.ramsdensjewellery.co.uk)
Revenue from the online retail jewellery website increased by 70% to £6.7m
(FY22: £3.9m) and the online retail channel contributed over £1m of
profitability.
This performance excludes jewellery sales in branches which use the in-store
digital facility to access the website as a catalogue of stock.
During the year we conducted in-depth reviews of our SEO and pay per click
activities. We continue to seek improvements in alternative payment options,
photography and product descriptions and we are learning from integrated AI.
The Board believes this ongoing development will continue to deliver online
retail jewellery sales growth over the coming years.
Foreign currency website
www.ramsdenscurrency.co.uk (http://www.ramsdenscurrency.co.uk)
The new currency focused website launched in July 2023. The first objective
of a seamless transition from the legacy website, www.ramsdensforcash.co.uk
(http://www.ramsdensforcash.co.uk) , has been achieved and we are now
investing in building our SEO.
Click and Collect currency sales account for 10% of all currency sold (FY22:
11%).
The website has been enhanced to include the launch of the Ramsdens
Mastercard® Multi-Currency Card and offer a buy back guarantee which has been
rolled out to the stores. We will re-launch a home delivery option in 2024.
Pawnbroking website
www.ramsdenspawnbrokers.co.uk (http://www.ramsdenspawnbrokers.co.uk)
A new website dedicated to pawnbroking will launch in Q1 2024. The first
objective will be a seamless transition from the legacy website,
www.ramsdensforcash.co.uk (http://www.ramsdensforcash.co.uk) , so that
customers who are already benefiting from the online payment facility to save
interest continue to do so.
Our SEO will then be developed so that we can enhance the awareness of
pawnbroking at Ramsdens to identify new higher value lending and attract
customers to stores. An online digital marketing campaign has already been
prepared ready for when the website launches. The true online only
pawnbroking loan book, where goods are posted into Ramsdens, is minimal, with
customers preferring the immediacy that a local pawnbroker provides for their
small sum borrowing need.
Gold buying website
www.ramsdensgoldbuyers.co.uk (http://www.ramsdensgoldbuyers.co.uk)
A new website dedicated to gold buying will launch in 2024. This will enable
focused SEO and other online advertising to attract customers to utilise this
service which they may be unaware of.
Legacy website
www.ramsdensforcash.co.uk (http://www.ramsdensforcash.co.uk)
The ramsdensforcash.co.uk website will become a portal to individual websites
for each of our four key income streams as well as providing background
information to who we are and what we do.
4. Appraising opportunities presented by operating in
challenging markets
The high street retail landscape remains challenging. Some locations are
thriving and others less so with an over-supply of shops often larger in size
following the demise of well-known high street chains. However, that brings
opportunities in the potential availability of prime sites that may have been
occupied by jewellers or travel agents. We continue to hope for a full
reform of the non-domestic rates system which may encourage more retailers to
open stores and recreate vibrant high streets. Without reform, we fear some
towns and high streets may suffer further decline and more empty shops. Our
property portfolio has been purposefully managed to be as flexible as possible
to provide risk mitigation in case any of our stores become isolated and
performance deteriorates.
We continue to be discerning in the acquisitions we are interested in. Often
jewellers have too much old and obsolete stock and we have the costs of store
conversion to consider. This can be the same for a pawnbroking purchase
where we have to consider whether it is more attractive to open a new store
and build a business.
While most pawnbrokers have seen increased lending levels in the last 12
months and have optimism for future lending given the macroeconomic conditions
and high gold price, the administration and cost burden of increased
regulation may mean some participants seek to exit the industry, which may
present further acquisition and expansion opportunities.
The number of pawnbrokers operating in the UK continues to fall. The main
reasons for closures tend to be the cost of regulatory compliance as well as a
lack of internal succession structures at what are typically one store, family
businesses. We believe the number of outlets overall has remained stable at
c.870 as we and H&T Pawnbrokers have opened new stores during the last
year.
We purchased Broadway Jewellers and Pawnbrokers in Bexleyheath in April
2023. This business has performed in line with expectations since
acquisition.
The South East has the highest concentration of pawnbroking outlets in the UK
and presents a compelling expansion opportunity for the Group. Our continued
expansion into the South East is aimed at creating a nucleus of Ramsdens
stores that build brand recognition and then, as opportunities arise,
acquiring further pawnbroking outlets or loan books to supplement our organic
growth.
When looking at new town and relocation opportunities, investments will only
be made in new stores after significant research of footfall and adjacent
retailer quality. The demise of certain retailers in a town can however
provide an opportunity to obtain reductions in rental levels in certain towns
while not compromising on location.
5. Focusing on sustainability through our ESG strategy
We know that our long-term strategic aims will only be delivered if we have
good sustainable practices built on firm foundations.
Our foundations are:
· Environment - we are very conscious of the impact of our
activities on the environment and our aim is to reduce our energy use and
recycle where we can
· Social - our people. How we look after our people, their
wellbeing, our inclusiveness and creating opportunities for all staff to
learn, develop and progress their careers is critical in how we then serve and
help our customers
· Social - our communities in which we operate. How we look after
customers, suppliers and the wider community including supporting local
charitable organisations helps define our Business
· Governance - we are committed to having the highest standards of
governance throughout the business. We have a strong structure of oversight
of what we do and how we do it, utilising our market leading in house bespoke
software to provide the necessary controls and reporting.
LOOKING AHEAD
The Group has momentum in all key income streams and we need to maximise that
opportunity. While we are not immune from the economic challenges and
increased energy and payroll costs, the Group is in a great place to make
further progress.
Looking at each income stream in turn:
· Foreign Currency Exchange
The recently launched Ramsdens Mastercard® Multi-Currency Card has enjoyed a
good start and will supplement our cash offering by participating in the
customer's card spend while on holiday.
The new website will improve awareness of Ramsdens as a foreign currency
supplier as will our continued pricing policies of having great rates on offer
to customers.
Subject to the economic conditions, we are confident that consumers have a
growing desire to travel, and this will continue to drive long-term demand in
overseas holidays and a need for foreign currency.
· Pawnbroking
With a backdrop of higher interest rates, ongoing inflationary pressure and a
reduction in the number of lenders offering small sum short term credit, we
believe pawnbroking will continue to be in demand and grow.
The gold price is favourable and we are not anticipating any major fall in the
gold price in the short term.
Our new website will create awareness that Ramsdens is able to not only lend
small sums but also that we have the expertise and skills to offer higher
value loans at attractive interest rates.
In line with recent years we anticipate that we will have the opportunity to
acquire at least one pawnbroker during the year, subject to identifying an
attractive proposition.
· Retail Jewellery
Our continued investment in display, stock levels, processes and staff
development should allow the business to grow its retail jewellery income.
We have managed the inflationary cost pressures well and our pricing still
provides customers with exceptional value for money.
Our retail jewellery website is a scalable online business and this continues
to receive focus and investment.
· Purchase of precious metals
The high gold price and challenging economic conditions will generate demand
from customers once they are aware of the service.
Our new website when launched will assist with awareness of this service.
We will increase awareness as more customers visit our stores.
The Group has great foundations on which to build and create value for all
stakeholders. As well as the positive momentum in each of our income
streams, we will benefit from the maturing of the stores opened in the last
two years in addition to the stores that we are investing in this year.
Underpinned by the strength of the Ramsdens brand and diversified business
model, the Board has continued optimism for the future and confidence in the
Group's ability to deliver on its growth strategy for the long-term benefit of
all stakeholders.
Peter Kenyon
Chief Executive Officer
14 January 2024
FINANCIAL DIRECTOR'S REVIEW
FINANCIAL RESULTS
For the year ended 30 September 2023, the Group's reported revenue increased
by 27% to £83.8m (FY22: £66.1m) with growth across each of the four key
income streams. Gross profit increased by 20% to £45.8m (FY22: £38.2m).
The Group's administrative expenses increased by 20% to £35.1m (FY22:
£29.4m), reflecting an increase in staff costs as the business returned to
more normalised trading levels. Finance costs increased 48% to £0.8m (FY22
£0.6m) due to higher interest base rates. Investments in working capital,
particularly jewellery retail stock, over the last two years have enabled the
Group to grow its retail proposition.
Profit before tax increased to £10.1m (FY22: £8.3m) as the Group benefited
from improved trading conditions.
The Group's cash position remains strong with £5.0m net cash at the year-end
(FY22: £8.8m), with the reduction in the year reflecting increased investment
in new stores, jewellery stock and the growth of the pawnbroking loan book.
The table below shows the headline financial results:
£000's FY23 FY22
Revenue £83,805 £66,101
Gross Profit £45,759 £38,219
Profit Before Tax £10,105 £8,269
Net Assets £48,167 £41,843
Net Cash* £5,039 £8,835
EPS 24.5p 20.9p
*Cash less bank borrowings
EARNINGS PER SHARE AND DIVIDEND
The statutory basic earnings per share for FY23 was 24.5p, up from 20.9p in
the previous year.
The Board is recommending a final dividend of 7.1p in respect of FY23 (FY22:
6.3p). Subject to approval at the AGM, the final dividend is expected to be
paid on 22 March 2024 for those shareholders on the register on 16 February
2024. The ex-dividend date will be 15 February 2024. This would bring the
total dividend for FY23 to 10.4p (FY22: 9.0p). This dividend is in line with
the Board's progressive dividend policy reflecting the cash flow generation
and earnings potential of the Group.
This dividend represents a 42% pay-out ratio of FY23 EPS. The long-term
dividend strategy is to move towards approximately 50% of post-tax profits
being distributed subject to the financial performance and growth
opportunities.
FINANCIAL POSITION
At 30 September 2023, cash and cash equivalents amounted to £13.0m (FY22:
£15.3m) and the Group had net assets of £48.2m (FY22: £41.8m).
CAPITAL EXPENDITURE
During the reporting period, the Group invested in the store estate by opening
eight new stores, one store acquisition and relocating two existing stores.
Capital expenditure for tangible and intangible assets was £2.7m.
CASH FLOW
Working capital outflows in the year include the significant investment in
stock of £4.7m, and the growth of the pawnbroking loan book which has
resulted in trade and other receivables increasing by £2.0m. Trade and
other payables reduced by £2.3m. The net cash flow from operating
activities for the year was £3.3m (FY22: £2.9m)
Net cash at the year-end was £5.0m (FY22: £8.8m).
The Group continues to have access to its £10m revolving credit facility
which expires in March 2026. The Group has two covenants: 1 x cash cover and 2
x EBITDA cover. At 30 September 2023, this facility was £8.0m drawn to
support the currency cash held. The cash position and headroom on the bank
facility provide the Group with the funds required to continue to deliver its
current stated strategy.
TAXATION
The tax charge for the year was £2.3m (FY22: £1.7m) representing an
effective rate of 23% (FY22: 20%). The tax rate increased during the second
half of the year from 19% to 25%. A full reconciliation of the tax charge is
shown in note 10 of the financial
statements.
SHARE BASED PAYMENTS
The share-based payment expense in the year was £462,000 (FY22: £314,000).
This charge relates to the Long-Term Incentive Plans (LTIP) and Company Share
Option Plans (CSOP). Both schemes are discretionary share incentive schemes
under which the Remuneration Committee can grant options to purchase ordinary
shares. The shares under option in the LTIP scheme can be purchased at a
nominal 1p cost to Executive Directors and other senior management subject to
certain performance and vesting conditions. The shares under option in the
CSOP scheme can be purchased at their issue prices of 200.5p and 230.0p.
During the year, the LTIP award from 2019 partially met the performance
criteria and 73,425 share options vested. 71,775 share options were
exercised during the year with 1,650 fully vested options remaining
unexercised.
GOING CONCERN
The Board has conducted an extensive review of forecast earnings and cash over
the next 12 months, considering various scenarios and sensitivities given the
ongoing economic challenges and has concluded that it has adequate resources
to continue in business for the foreseeable future. For this reason, the
Board has been able to conclude the going concern basis is appropriate in
preparing the financial statements.
Martin Clyburn
Chief Financial Officer
14 January 2024
Consolidated statement of comprehensive income
For the year ended 30 September 2023
2023 2022
Notes
£'000 £'000
Revenue 5 83,805 66,101
Cost of sales (38,046) (27,882)
Gross profit 5 45,759 38,219
Other income 300 1
Administrative expenses (35,126) (29,392)
Operating profit 10,933 8,828
Finance costs 6 (828) (559)
Profit before tax 10,105 8,269
Income tax expense 10 (2,349) (1,683)
Profit for the year 7,756 6,586
Other comprehensive income - -
Total comprehensive income 7,756 6,586
Earnings per share in pence 8 24.5 20.9
Diluted earnings per share in pence 8 24.0 20.7
Consolidated statement of financial position
As at 30 September 2023
2023 2022
Assets Notes £'000 £'000
Non-current assets
Property, plant and equipment 11 7,949 6,681
Right of use assets 11 9,615 9,551
Intangible assets 12 673 779
Investments 13 - -
18,237 17,011
Current assets
Inventories 15 27,662 22,764
Trade and other receivables 16 15,355 13,264
Cash and short-term deposits 17 13,022 15,278
56,039 51,306
Total assets 74,276 68,317
Current liabilities
Trade and other payables 18 6,305 8,905
Interest bearing loans and borrowings 18 7,983 6,443
Lease liabilities 18 2,462 2,086
Income tax payable 18 1,225 932
17,975 18,366
Net current assets 38,064 32,940
Non-current liabilities
Lease liabilities 19 7,661 7,871
Contract liabilities 19 50 88
Deferred tax liabilities 19 96 149
Provisions 29 327 -
8,134 8,108
Total liabilities 26,109 26,474
Net assets 48,167 41,843
Equity
Issued capital 21 317 316
Share premium 4,892 4,892
Retained earnings 42,958 36,635
Total equity 48,167 41,843
The financial statements of Ramsdens Holdings PLC, registered number 08811656,
were approved by the directors and authorised for issue on 14 January 2024 and
signed on their behalf by:
M A Clyburn
Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 30 September 2023
Issued capital Share premium Retained earnings Total
Notes
£'000 £'000 £'000 £'000
As at 1 October 2021 314 4,892 30,937 36,143
Profit for the year - - 6,586 6,586
Total comprehensive income - - 6,586 6,586
Transactions with owners:
Dividends paid 22 - - (1,231) (1,231)
Issue of share capital 2 - - 2
Share based payments 25 - - 314 314
Deferred tax on share-based payments - - 29 29
Total transactions with owners 2 - (888) (886)
As at 30 September 2022
316 4,892 36,635 41,843
As at 1 October 2022 316 4,892 36,635 41,843
Profit for the year - - 7,756 7,756
Total comprehensive income - - 7,756 7,756
Transactions with owners:
Dividends paid 22 - - (1,994) (1,994)
Issue of share capital 21 1 - - 1
Share based payments 25 - - 462 462
Deferred tax on share-based payments - - 99 99
Total transactions with owners 1 - (1,433) (1,432)
As at 30 September 2023 317 4,892 42,958 48,167
Consolidated statement of cash flows
For the year ended 30 September 2023
2023 2022
Operating activities Notes £'000 £'000
Profit before tax 10,105 8,269
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and impairment of property, plant
and equipment 11 1,383 1,265
Depreciation and impairment of right of use assets 11 2,214 2,261
Profit on disposal of right of use assets 7 (72) (81)
Amortisation and impairment of intangible assets 12 137 163
Loss on disposal of property, plant and equipment 7 62 78
Share based payments 25 462 314
Finance costs 6 828 559
Working capital adjustments:
Movement in trade and other receivables and prepayments (1,996) (2,583)
Movement in inventories (4,692) (7,221)
Movement in trade and other payables (2,638) 1,144
Movement in provisions 327 -
6,120 4,168
Interest paid (828) (559)
Income tax paid (2,010) (672)
Net cash flows from operating activities 3,282 2,937
Investing activities
Proceeds from sale of property, plant and equipment 15 3
Purchase of property, plant and equipment 11 (2,721) (2,817)
Purchase of intangible assets 12 - (28)
Payment for acquisition 28 (298) (909)
Net cash flows used in investing activities (3,004) (3,751)
Financing activities
Issue of share capital 21 1 2
Dividends paid 22 (1,994) (1,231)
Payment of principal portion of lease liabilities (2,041) (2,211)
Bank loans drawn down 2,500 8,000
Repayment of bank borrowings (1,000) (1,500)
Net cash flows used in / from financing activities (2,534) 3,060
Net (decrease) / increase in cash and cash equivalents (2,256) 2,246
Cash and cash equivalents at 1 October 15,278 13,032
Cash and cash equivalents at 30 September 27 13,022 15,278
Notes to the consolidated financial statements
1. Corporate information
Ramsdens Holdings PLC (the "Company") is a public limited company incorporated
and domiciled in England and Wales. The registered office of the Company is
Unit 16, Parkway Shopping Centre, Coulby Newham, Middlesbrough, TS8 0TJ. The
registered company number is 08811656. A list of the Company's subsidiaries is
presented in note 13.
The principal activities of the Company and its subsidiaries (the "Group") are
the supply of foreign exchange services, pawnbroking, jewellery sales, and the
sale of precious metals purchased from the general public.
2. Changes in accounting policies
There are no changes to accounting policies in the current year. There are
no future changes in accounting standards which would materially impact the
Group.
3. Significant accounting policies
3.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted international accounting standards.
The consolidated financial statements have been prepared on a historical cost
basis. The consolidated financial statements are presented in pounds sterling
which is the functional currency of the parent and presentational currency of
the Group. All values are rounded to the nearest thousand (£000), except when
otherwise indicated.
3.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and all of its subsidiary undertakings (as detailed above). The
financial information of all Group companies is adjusted, where necessary, to
ensure the use of consistent accounting policies. In line with IFRS10, an
investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
3.3 Going Concern
The Group has prepared the financial statements on a going concern basis, with
due consideration to the present economic situation.
The Board have conducted an extensive review of forecast earnings and cash for
the period to 31 January 2025 considering various scenarios and sensitivities
given the ongoing cost of living crisis and uncertainty it has produced around
the future economic environment.
At 30 September 2023 the Group has significant cash balances of £13m, readily
realisable stock of gold jewellery and access to the £2m unutilised element
of a £10m revolving credit facility with an expiry date of March 2026. In the
year ended 30 September 2023 the Group has traded profitably and generated
cash from operations.
The Board have been able to conclude that they have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. Accordingly, the Group continues to adopt the going
concern basis in preparing the financial statements. The going concern
assessment covers the period to 31 January 2025.
3.4 Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred which represents the fair value of the assets transferred and
liabilities incurred or assumed. Acquisition related costs are expensed as
incurred and included in administrative expenses.
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred over the fair value of the identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still results in an
excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the statement of
comprehensive income as a gain on bargain purchase.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date, allocated to each of the
Group's cash generating units (CGU) that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
3.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at
cost. The cost of intangible assets acquired in a business combination is
their fair value as at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses, if any. Internally generated intangible assets,
excluding capitalised development costs, are not capitalised and expenditure
is recognised in the statement of comprehensive income when it is incurred.
The useful lives of intangible assets are assessed as either finite or
indefinite and at each date of the statement of financial position only
goodwill assets are accorded an indefinite life.
Intangible assets with finite lives are amortised over their useful economic
lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.
Amortisation is calculated over the estimated useful lives of the assets as
follows:
• Customer relationships - 40% reducing balance
• Software - 20% straight line
Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on intangible assets with
finite lives is recognised in the statement of comprehensive income in the
expense category consistent with the function of the intangible assets.
3.6 Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated
depreciation and accumulated impairment losses (if any). All other repair
and maintenance costs are recognised in the statement of comprehensive income
as incurred.
Depreciation is calculated over the estimated useful lives of the assets as
follows:
· Freehold property - 2% straight line
· Leasehold improvements - straight line over the lease term
· Fixtures & fittings - 20% and 33% reducing balance
· Computer equipment - 25% and 33% reducing balance
· Motor vehicles - 25% reducing balance
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the statement of comprehensive income when the asset is
derecognised.
The residual values, useful lives and methods of depreciation of property,
plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.
3.7 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's or CGU's
fair value less costs of disposal and its value in use. It is determined for
an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. Where the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified, an appropriate
valuation model is used.
The Group bases its impairment calculation on detailed budgets and forecasts
which are prepared separately for each of the Group's CGUs to which the
individual assets are allocated, which is usually taken to be each individual
branch store based on the independence of cash inflows. Central costs and
assets are allocated to CGUs based on revenue. These budgets and forecast
calculations are estimated for three years and extrapolated to cover a total
period of ten years.
Impairment losses of continuing operations are recognised in the statement of
comprehensive income in those expense categories consistent with the function
of the impaired asset.
For assets excluding goodwill, an assessment is made at each reporting date as
to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists,
the Group estimates the asset's or CGU's recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since the last
impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation or amortisation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in
the Statement of Comprehensive income unless the asset is carried at a
revalued amount, in which case the reversal is treated as a revaluation
increase.
Goodwill
Goodwill is tested for impairment at the end of each accounting period and
when circumstances indicate that the carrying value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of
each CGU (or group of CGUs) to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than their carrying
amount, an impairment loss is recognised. Impairment losses relating to
goodwill cannot be reversed in future periods. Goodwill is allocated to CGUs
based on the price paid of the relevant acquisition.
3.8 Inventories
Inventories comprise of retail jewellery and precious metals held to be
scrapped and are valued at the lower of cost and net realisable value.
Cost represents the weighted average purchase price plus overheads directly
related to bringing the inventory to its present location and condition.
When the Group takes title to pledged goods on default of pawnbroking loans up
to the value of £75, cost represents the principal amount of the loan plus
term interest.
Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and estimated costs to sell.
3.9 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets
Financial assets are all recognised and derecognised on a trade date basis.
All recognised financial assets are measured and subsequently measured at
amortised cost or fair value depending on the classification of the financial
asset.
Classification of financial assets
Financial assets that meet the following criteria are measured at amortised
cost:
· the financial asset is held within the business model whose
objective is to hold financial assets in order to collect contractual cash
flows; and
· the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
In accordance with IFRS 9 Financial Instruments the Group has classified its
financial assets as amortised cost.
The amortised cost of a financial asset is the amount at which the financial
asset is measured at initial recognition less the principal repayments, plus
the cumulative amortisation using the effective interest method of any
difference between that initial amount and the maturity amount, adjusted for
any loss allowance. The gross carrying amount of a financial asset is the
amortised cost of a financial asset before adjusting for any loss allowance.
Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise
cash at banks and on hand, foreign currency held for resale and short-term
deposits held with banks with a maturity of three months or less from
inception. Debit / credit card receipts processed by merchant service
providers are recognised as cash at point of transaction. Foreign currency
bank notes are ordered for next day delivery and are recognised once the
control of these has been transferred.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents consist of cash, foreign currency held for resale and short-term
deposits as defined above, net of any outstanding bank overdrafts.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial
assets that are measured at amortised cost. The amount of credit losses is
updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Group recognises lifetime expected credit losses when there has been a
significant increase in credit risk since initial recognition. However, if the
credit risk on the financial instrument has not increased significantly since
initial recognition, the Group recognises the 12 month expected credit losses.
As pawnbroking loans are typically over a six-month term the lifetime credit
losses are usually the same as the 12 month expected credit losses.
In assessing whether the credit risk on a financial instrument has increased
significantly since initial recognition, the Group compares the risk of a
default occurring on the financial instrument at the reporting date with the
risk of a default occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both quantitative
and qualitative information that is reasonable and supportable including
historical experience.
The measurement of expected credit losses is a function of the probability of
default, and the loss (if any) on default. The assessment of the probability
of default is based on historical data. The loss on default is based on the
assets gross carrying amount less any realisable security held. The expected
credit loss calculation considers both the interest income and the capital
element of the pawnbroking loans. Interest on loans in default is accrued net
of expected credit losses. Details of the key assumptions for pawnbroking
expected credit losses are given in note 4.
Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
to another entity. On derecognition of a financial asset measured at amortised
cost, the difference between the assets carrying amount and the sum of the
consideration received and receivable is recognised in the Statement of
Comprehensive Income. Pawnbroking loans in the course of realisation
continue to be recognised as loan receivables until the pledged items are
realised.
Financial liabilities
Debt and equity instruments are classified as either financial liabilities or
equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and equity instrument.
All financial liabilities are recognised initially at amortised cost or at
fair value through profit and loss (FVTPL).
The Group's financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate
method (EIR). Gains and losses are recognised in the Statement of
Comprehensive Income when the liabilities are derecognised as well as through
the (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance costs in the Statement of Comprehensive
Income.
Only the Group's derivative financial instruments are classified as financial
liabilities at fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated at fair
value, with any resultant gain or loss recognised in the Statement of
Comprehensive Income. The net gain or loss recognised in the Statement of
Comprehensive Income incorporates any interest paid on the financial
liability.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the Statement of Comprehensive
Income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount
reported in the Statement of Financial Position only if there is a current
enforceable legal right to offset the recognised amounts and intent to settle
on a net basis, or to realise the assets and settle the liabilities
simultaneously.
3.10 Fair value measurement
The Group measures financial instruments, such as derivatives, at fair value
at the date of each statement of financial position.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy. This
is described, as follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or indirectly
observable
• Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is unobservable
3.11 Taxation
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the Consolidated Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group's liability for current tax is
calculated using tax rates and laws that have been enacted or substantively
enacted by the date of the statement of financial position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the date of each
statement of financial position and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates and laws that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the Consolidated Statement of
Comprehensive Income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in
equity. Deferred tax is recognised on an undiscounted basis.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
3.12 Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:
The contract involves the use of an identified asset - this may be specified
explicitly or implicitly and should be physically distinct or represent
substantially all of the capacity of a physically distinct asset. If the
supplier has a substantive substitution right, then the asset is not
identified;
· The Group has the right to obtain substantially all of the
economic benefits from use of the asset throughout the period of use; and
· The Group has the right to direct the use of the asset. The Group
has this right when it has the decision-making rights that are most relevant
to changing how and for what purpose the asset is used. In rare cases where
the decision about how and for what purpose the asset is used is
predetermined, the Group has the right to direct the use of the asset if
either:
o The Group has the right to operate the asset; or
o The Group designed the asset in a way that predetermines how and for what
purpose it will be used.
As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of the right-of-use assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Generally, the Group uses
its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the
following:
· Fixed payments, including in-substance fixed payments;
· Variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;
· Amounts expected to be payable under a residual value guarantee;
and
· The exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional renewal period
if the Group is reasonably certain to exercise an extension option, and
penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise
a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or less
and leases of low-value assets, including IT equipment. The Group recognises
the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
3.13 Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are measured using the directors' best estimate of the
expenditure required to settle the obligation at the date of each statement of
financial position.
If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
The majority of the Group's premises are leased and include an end of lease
rectification clause to return the property to its original state. The Group
provides for rectification costs throughout the life of the lease as required.
The Group maintains stores to a high standard and completes any necessary
repairs and maintenance on a timely basis using the in-house property
department and external contractors. These repair costs are expensed as
incurred.
3.14 Pensions and other post-employment benefits
The Group operates a defined contribution pension scheme. The assets of the
scheme are held and administered separately from those of the Group.
Contributions payable for the year are charged in the statement of
comprehensive income. Total contributions for the year are disclosed in note 9
to the accounts. Differences between contributions payable in the year and
contributions actually paid are shown as either accruals or prepayments in the
statement of financial position.
3.15 Employee share incentive plans
The group grants equity settled share option rights to the parent entity's
equity instruments to certain directors and senior staff members under a LTIP
(Long-term Incentive Plan) and a CSOP (Company Share Option Plan).
The employee share options are measured at fair value at the date of grant by
the use of either the Black-Scholes Model or a Monte Carle model depending on
the vesting conditions attached to the share option. The fair value is
expensed on a straight line basis over the vesting period based on an estimate
of the number of options that will eventually vest. The expense is recognised
in the entity in which the beneficiary is remunerated. Further details are
provided in note
25.
3.16 Revenue recognition
The major sources of revenue come from the following:
· Pawnbroking
· Foreign currency exchange
· Purchase of precious metals
· Retail jewellery sales
· Income from other financial services
Pawnbroking revenue is recognised in accordance with IFRS 9, whereas revenue
from other sources is recognised in accordance with IFRS 15.
Pawnbroking revenue
Revenue from pawnbroking loans comprises interest earned over time by
reference to the principal outstanding and the effective rate applicable,
which is the rate that discounts the estimated cash receipts through the
expected life of the financial asset to that asset's net carrying value.
When a customer defaults on a pawnbroking loan, the pledged goods held as
security are sold to repay the customer debt. At the point the loan becomes
overdue the loan is classified as in default and interest income is accrued
net of expected credit losses. At the start of the realisation process the
expected credit loss calculation is re-performed based on the expected cash
flows of the retail process, with any increase in expected credit losses
recognised as a cost of sale. Further details of the expected credit loss
calculations are provided in note 4.1.
Foreign currency exchange income
Revenue is earned in respect of the provision of Bureau de Change facilities
offered and represents the margin earned which is recognised at the point the
currency is collected by the customer as this represents when the service
provided under IFRS 15 has been delivered.
Sale of precious metals acquired via over the counter purchases
Revenue is recognised when control of the goods has transferred, being at the
point the goods are received by the bullion dealer and a sell instruction has
been issued. If a price has been fixed in advance of delivery, revenue is
recognised at the point the goods are received by the bullion dealer.
Jewellery retail sales
Revenue is recognised at the point the goods are transferred to the customer
and full payment has been received. Customers either pay in full at the time
of the transaction and receive the goods, or pay by layby in instalments and
receive the goods once the sale is fully paid. Instalment payments are
recognised as a creditor until the item is fully paid. The Group has a 7-day
refund policy in store, and a 14-day refund policy online reflecting the
distance selling regulations. Premium watch sales are sold with a limited
12-month warranty. A provision for warranties is recognised when the
underlying products are sold, based on management's best estimate, and is
included as a cost of sale.
Other financial income
Other financial income comprises cheque cashing and other miscellaneous
revenues. Cheque cashing revenue is recognised when the service is provided
under IFRS 15 which includes making a payment to the customer.
3.17 Administrative expenses
Administrative expenses include branch staff and establishment costs.
3.18 Government grants
Government grants that are a contribution to a specific administrative expense
are recognised in the income statement as a reduction to administrative
expenses in the period to which the expense relates. Other government grants
are recognised as other income when there is reasonable assurance that the
entity will comply with the conditions and the grants will be received.
4. Key sources of estimation uncertainty and significant accounting judgements
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
4.1 Key sources of estimation uncertainty
Pawnbroking loans interest and impairment
The Group recognises interest on pawnbroking loans as disclosed in note 3.16.
For active pawnbroking loans (loans not in the course of realisation) the
Group estimates the expected credit losses. An assessment is made on a
pledge by pledge basis of the carrying value represented by original capital
loaned plus accrued interest to date and its corresponding realisation value
on sale of unredeemed pledges to identify any credit losses. The key estimates
within the expected credit loss calculation are:
1. Non-Redemption Rate
This is based upon current and historical data held in respect of
non-redemption rates.
2. Realisation Value
This is based upon either;
- The current price of the metal that will be received through the
sale of the metal content via disposal through a bullion dealer.
- The expected resale value of those jewellery items within the
pledge that can be retailed through the branch network.
For pawnbroking loans in the course of realisation the Group estimates the
expected credit losses based on the expected outcome from selling the pledged
goods. The key estimates within the expected credit loss calculation are;
1. Proceeds of sale
This is based upon the retail price the goods are offered for sale at.
2. Time to sell
This is based upon current and historical data in respect of the average time
to sell and is assumed to be 12 months.
See note 14 for further details on pawnbroking credit risk and provision
values, including sensitivity.
Impairment of property, plant and equipment, right-of-use assets and
intangible assets estimate
Determining whether property, plant and equipment, right-of-use assets and
intangibles assets are impaired requires an estimation of the value in use of
the CGU to which the assets have been allocated. The value in use calculation
requires the Group to estimate the future cash flows expected to arise from
the CGU and selecting a suitable discount rate in order to calculate present
value. The review is conducted annually, in the final quarter of the year. The
impairment review is conducted at the level of each CGU, which is usually
taken to be each individual branch store.
Management have determined that the key sources of estimation uncertainty, to
which the impairment analysis of property plant and equipment, right-of-use
assets and intangible assets is most sensitive, relate to the following
assumptions:
1. The Group prepares pre-tax cash flow forecasts for each branch.
Cash flows represent management's estimate of the revenue of the relevant CGU,
based upon the specific characteristics of the branch and its stage of
development.
2. The Group has discounted the forecast cash flows at a pre-tax,
risk adjusted rate of 16%.
Whilst the impairment review has been conducted based on the best available
estimates at the impairment review date, the Group notes that actual events
may vary from management expectation. If outcomes within the next financial
year are different from the assumptions made in relation to future cash flows,
this could lead to a material adjustment to the carrying amount of the assets
affected. The carrying amounts for tangible assets, right-of use assets and
intangible assets are disclosed in notes 11 and 12.
Where the recoverable amount of the CGU was estimated to be less than its
carrying amount, the carrying amount of the CGU was reduced to the estimated
recoverable amount.
4.2 Significant accounting judgements
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
Lease term
For leases which contain a break clause an assessment is made on entering a
lease on the likelihood that the lease break would be exercised. If the lease
break is not expected to be exercised the break clause is ignored in
establishing the lease term.
5. Segmental analysis
The Group's revenue from external customers is shown by geographical location
below:
2023 2022
Revenue £'000 £'000
United Kingdom 83,805 65,948
Other - 153
83,805 66,101
The Group's assets are located entirely in the United Kingdom therefore, no
further geographical segments analysis is presented. The Group is organised
into operating segments, identified based on key revenue streams, as detailed
in the CEO's review.
The Group's revenue is analysed below between revenue from contracts with
customers and other sources which comprises interest income earned on
pawnbroking loans.
2023 2022
Revenue £'000 £'000
Contracts with customers 71,928 57,134
Pawnbroking interest income 11,877 8,967
83,805 66,101
Pawnbroking interest income is recognised over time as each loan progresses
whereas all other revenue is recognised at a point in time.
2023 2022
Revenue £'000 £'000
Pawnbroking 11,877 8,967
Purchases of precious metals 23,522 15,847
Retail jewellery sales 33,474 27,107
Foreign currency 14,083 13,066
Income from other financial services 849 1,114
Total revenue 83,805 66,101
Gross profit
Pawnbroking 10,043 7,533
Purchases of precious metals 9,161 6,626
Retail jewellery sales 12,058 10,263
Foreign currency 13,648 12,683
Income from other financial services 849 1,114
Total gross profit 45,759 38,219
2023 2022
£'000 £'000
Total gross profit 45,759 38,219
Other income 300 1
Administrative expenses (35,126) (29,392)
Finance costs (828) (559)
Profit before tax 10,105 8,269
Income from other financial services comprises of cheque cashing fees and
agency commissions on miscellaneous financial products.
Revenue from the purchases of precious metals is currently from one bullion
dealer. There is no reliance on key customers in other revenue streams.
The Group is unable to meaningfully allocate administrative expenses, or
financing costs or income between the segments. Accordingly, the Group is
unable to meaningfully disclose an allocation of items included in the
Consolidated Statement of Comprehensive income below Gross profit, which
represents the reported segmental results.
In addition to the segmental reporting on products and services the Group also
manages each branch as a separate CGU and makes local decisions on that basis.
2023 2022
Other information £'000 £'000
Tangible & intangible capital additions (*) 2,759 3,060
Depreciation and amortisation (*) 3,734 3,689
Assets
Pawnbroking 14,262 11,853
Purchases of precious metals 3,373 3,081
Retail jewellery sales 24,647 20,125
Foreign currency 6,061 10,123
Income from other financial services 44 139
Unallocated (*) 25,889 22,996
74,276 68,317
Liabilities
Pawnbroking 596 613
Purchases of precious metals 5 3
Retail jewellery sales 1,744 2,012
Foreign currency 453 2,042
Income from other financial services 339 392
Unallocated (*) 22,972 21,412
26,109 26,474
(*) The Group cannot meaningfully allocate this information by segment due to
the fact that all segments operate from the same stores and the assets in use
are common to all segments.
Fixed assets and sterling cash and cash equivalents are therefore included in
the unallocated assets balance.
6. Finance costs
2023 2022
£'000 £'000
Interest on debts and borrowings 368 163
Lease charges 460 396
Total finance costs 828 559
7. Profit before taxation has been arrived at after charging/(crediting)
2023 2022
£'000 £'000
Items reported within Cost of sales -
Cost of inventories recognised as an expense 35,777 26,065
Pawnbroking expected credit losses 1,834 1,434
Items reported within Administrative expenses -
Depreciation of property, plant and equipment 1,383 1,265
Depreciation of right of use assets 2,214 2,261
Profit on disposal of right of use assets (72) (81)
Amortisation of intangible assets 137 163
Loss on disposal of property, plant and equipment 62 78
Staff costs (see note 9) 20,107 16,643
Foreign currency exchange losses 318 265
Auditor's remuneration - Audit fees 192 140
Auditor's remuneration - Non-Audit fees 6 5
Short term lease payments 418 470
Share based payments (see note 25) 462 314
8. Earnings per share
2023 2022
£'000 £'000
Profit for the year 7,756 6,586
Weighted average number of shares in issue 31,679,095 31,559,874
Earnings per share (pence) 24.5 20.9
Weighted average number of dilutive shares 622,907 291,939
Effect of dilutive shares on earnings per share (pence) (0.5) (0.2)
Fully Diluted earnings per share (pence) 24.0 20.7
9. Information regarding directors and employees
Directors' emoluments (£'000)
2023 2022
Emoluments Pension LTIP Total Emoluments Pension LTIP Total
Executive
Peter Kenyon 383 9 37 429 427 10 435 872
Martin Clyburn 265 10 18 293 295 12 - 307
Non Executive
Andrew Meehan 69 - - 69 68 - - 68
Simon Herrick 51 - - 51 49 - - 49
Steve Smith 14 - - 14 41 - - 41
Karen Ingham 37 - - 37 - - - -
Total 819 19 55 893 880 22 435 1,337
2023 2022
£'000 £'000
Included in administrative expenses:
Wages and salaries 17,640 14,890
Social security costs 1,571 1,089
Share option scheme 462 314
Pension costs 434 350
Total employee benefits expense 20,107 16,643
The average number of staff employed by the Group during the financial period
amounted to:
2023 2022
No. No.
Head office and management 131 115
Branch counter staff 653 578
784 693
10. Income tax
The major components of income tax expense are:
Consolidated statement of comprehensive income
2023 2022
£'000 £'000
Current income tax:
Current income tax charge 2,364 1,552
Adjustments in respect of current income tax of previous year (60) (9)
2,304 1,543
Deferred tax:
Relating to origination and reversal of temporary differences 45 140
Income tax expense reported in the statement of comprehensive income 2,349 1,683
A reconciliation between tax expense and the product of accounting profit
multiplied by the UK domestic tax rate is as follows:
2023 2022
£'000 £'000
Profit before income tax 10,105 8,269
UK corporation tax rate at 22% (2022: 19%) 2,223 1,571
Expenses not deductible for tax purposes 186 122
Prior period adjustment (60) (10)
Income tax reported in the statement of comprehensive income 2,349 1,683
Deferred tax
Deferred tax relates to the following:
Deferred tax liabilities
Accelerated depreciation for tax purposes 403 180
Other short-term differences (307) (31)
Deferred tax liabilities 96 149
Reconciliation of deferred tax (asset) / liabilities net
2023 2022
£'000 £'000
Opening balance as at 1 October 149 38
Deferred tax recognised in the statement of comprehensive income 46 140
Other deferred tax (99) (29)
Closing balance as at 30 September 96 149
Factors affecting tax charge
The standard rate of UK corporation tax for the year was 25% (2022: 19%). An
increase in the UK corporation tax rate from 19% to 25% (effective 1 April
2023) was substantively enacted on 24 May 2021.
11. Property, plant and equipment
Freehold property Leasehold improvements Fixtures & Fittings Computer equipment Motor vehicles Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 695 7,013 4,181 596 53 12,538
Additions - 1,590 928 157 46 2,721
Acquisition (note 28) - - 7 - - 7
Disposals - (492) (278) (144) (26) (940)
At 30 September 2023 695 8,111 4,838 609 73 14,326
Depreciation
At 1 October 2022 11 3,523 2,046 249 28 5,857
Depreciation charge for the year 14 726 525 108 10 1,383
Disposals - (440) (265) (138) (20) (863)
At 30 September 2023 25 3,809 2,306 219 18 6,377
Net book value
At 30 September 2023 670 4,302 2,532 390 55 7,949
At 30 September 2022 684 3,490 2,135 347 25 6,681
Right of use of assets
Leasehold Property Motor Vehicles Total
Cost
At 1 October 2022 14,299 45 14,344
Additions 2,846 - 2,846
Disposals (2,373) (45) (2,418)
At 30 September 2023 14,772 - 14,772
Depreciation
At 1 October 2022 4,753 40 4,793
Depreciation Charge for the year 2,209 5 2,214
Disposals (1,805) (45) (1,850)
At 30 September 2023 5,157 - 5,157
Net Book Value
At 30 September 2023 9,615 - 9,615
At 30 September 2022 9,546 5 9,551
12. Intangible assets
Customer relationships Website Goodwill Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 2,407 105 526 3,038
Acquisition (note 28) 31 - - 31
At 30 September 2023 2,438 105 526 3,069
Amortisation
At 1 October 2022 2,096 90 73 2,259
Amortisation charge for the year 132 5 - 137
Impairment - - - -
At 30 September 2023 2,228 95 73 2,396
Net book value
At 30 September 2023 210 10 453 673
At 30 September 2022 311 15 453 779
13. Investments
The Group has a minor holding in Big Screen Productions 5 LLP.
Big Screen Productions 5 LLP, whilst still trading, has wound down its
operations and made a capital distribution equivalent to the value of the
carrying value of the investment in 2015. The investment now has a £nil
carrying value.
Group Investments
Details of the investments in which the group and company holds 20% or more of
the nominal value of any class of share capital are as follows:
Name of company Holding Proportion of voting rights and shares held Activity
Subsidiary undertaking
Ramsdens Financial Limited Ordinary Shares 100% Supply of foreign exchange services, pawnbroking, purchase of precious metals,
jewellery retail and other financial services.
(Registered office: Unit 16 Parkway Centre, Coulby Newham, TS8 0TJ)
14. Financial assets and financial liabilities
At 30 September 2023 Fair value through statement of comprehensive income Loans and receivables Financial liabilities at amortised cost Book value Fair value
£'000 £'000 £'000 £'000 £'000
Financial assets
Financial assets at amortised cost - 14,698 - 14,698 14,698
Cash and cash equivalents - 13,022 - 13,022 13,022
Financial liabilities
Trade and other payables - - (5,834) (5,834) (5,834)
Interest bearing loans and borrowings - - (7,983) (7,983) (7,983)
Lease liabilities - - (10,123) (10,123) (10,123)
Net financial assets/(liabilities) - 27,720 (23,940) 3,780 3,780
At 30 September 2022 Fair value through statement of comprehensive income Loans and receivables Financial liabilities at amortised cost Book value Fair value
£'000 £'000 £'000 £'000 £'000
Financial assets
Financial assets at amortised cost - 12,683 - 12,683 12,683
Cash and cash equivalents - 15,278 - 15,278 15,278
Financial liabilities
Trade and other payables - - (8,700) (8,700) (8,700)
Interest bearing loans and borrowings - - (6,443) (6,443) (6,443)
Lease liabilities - - (9,957) (9,957) (9,957)
Net financial assets/(liabilities) - 27,961 (25,100) 2,861 2,861
Financial assets at amortised cost shown above comprises trade receivables,
other receivables and pledge accrued income as disclosed in note 16.
Trade and other payables comprise of trade payables, other payables as
disclosed in notes 18 and 19.
Loans and receivables are non-derivatives financial assets carried at
amortised cost which generate a fixed or variable interest income for the
Group. The carrying value may be affected by changes in the credit risk of the
counterparties.
Management have assessed that for cash and short-term deposits, trade
receivables, trade payables, bank overdrafts and other current liabilities
their fair values approximate to their carrying amounts largely due to the
short-term maturities of these instruments. Book values are deemed to be a
reasonable approximation of fair values.
Financial Risks
The Group monitors and manages the financial risks relating to the financial
instruments held. The principal risks include credit risk on financial assets,
and liquidity and interest rate risk on financial liability borrowings. The
key risks are analysed below.
Credit risk
Pawnbroking loans
Pawnbroking loans are not credit impaired at origination as customers are
expected to repay the capital plus interest due at the contractual term. The
Group is exposed to credit risk through customers defaulting on their loans.
The key mitigating factor to this risk is the requirement for the borrower to
provide security (the pledge) in entering a pawnbroking contract. The security
acts to minimise credit risk as the pledged item can be disposed of to realise
the loan value on default.
The Group estimates that the current fair value of the security is equal to
the current book value of pawnbroking receivables.
In addition to holding security, the Group further mitigates credit risk by:
1) Applying strict lending criteria to all pawnbroking loans. Pledges are
rigorously tested and appropriately valued. In all cases where the Group
lending policy is applied, the value of the pledged items is in excess of the
pawn loan.
2) Seeking to improve redemption ratios. For existing customers, loan history
and repayment profiles are factored into the loan making decision. The Group
has a high customer retention ratio and all customers are offered high
customer service levels.
3) The carrying value of every pledge comprising the pawnbroking loans is
reviewed against its expected realisation proceeds should it not be redeemed
and expected credit losses are provided for based on current and historical
non redemption rates.
The Group continually monitors, at both store and at Board level, its internal
controls to ensure the adequacy of the pledged items. The key aspects of this
are:
- Appropriate details are kept on all customers the Group transacts with;
- All pawnbroking contracts comply with the Consumer Credit Act 2006;
- Appropriate physical security measures are in place to protect pledged
items; and
- An internal audit department monitors compliance with policies at the
Group's stores.
Expected Credit losses
The Group measures loss allowances for pawnbroking loans using IFRS 9 expected
credit losses model. The Group's policy is to begin the disposal process one
month after the loan expiry date unless circumstances exist indicating the
loan may not be credit impaired.
2023
2022
Category Gross amount Loss allowance Net carrying amount Gross amount Loss allowance Net carrying amount
£'000 £'000 £'000 £'000 £'000 £'000
Performing 11,299 203 11,096 9,510 178 9,332
Default 4,227 1,061 3,166 3,366 844 2,522
Total 15,526 1,264 14,262 12,876 1,022 11,854
The pawnbroking expected credit losses which have been provided on the period
end pawnbroking assets are:
Pawnbroking loans
£'000
At 1 October 2021 701
Statement of comprehensive income charge 1,434
Utilised in the period (1,113)
At 30 September 2022 1,022
Statement of comprehensive income charge 1,834
Utilised in period (1,592)
Balance at 30 September 2023 1,264
A 1% increase/(decrease) in the Group's redemption ratio is a reasonably
possible variance based on historical trends and would result in an impact on
Group pre-tax profit of £7k/(£7k). A one month increase/(decrease) in the
Group's time to sell assumption is a reasonably possible variance based on
historical trends and would result in an impact on Group pre tax profit of
(£120k)/£120k.
Cash and cash equivalents
The cash and cash equivalents balance comprise of both bank balances and cash
floats at the stores. The bank balances are subject to very limited credit
risk as they are held with banking institutions with high credit ratings
assigned by international credit rating agencies. The cash floats are subject
to risks similar to any retailer, namely theft or loss by employees or third
parties. These risks are mitigated by the security systems, policies and
procedures that the Group operates at each store, the Group recruitment and
training policies and the internal audit function.
Market risk
Pawnbroking trade receivables
The collateral which protects the Group from credit risk on non-redemption of
pawnbroking loans is principally comprised of gold, jewellery items and
watches. The value of gold items held as security is directly linked to the
price of gold. The Group is therefore exposed to adverse movements in the
price of gold on the value of the security that would be attributable for sale
in the event of default by the borrower.
The Group considers this risk to be limited for a number of reasons. First of
all, the Group applies conservative lending policies in pawnbroking pledges
reflected in the margin made on retail sales and scrap gold when contracts
forfeit. The Group is also protected due to the short-term value of the
pawnbroking contract. In the event of a significant drop in the price of gold,
the Group could mitigate this risk by reducing its lending policy on
pawnbroking pledges, by increasing the proportion of gold sold through retail
sales or by entering gold hedging instruments. Management monitors the gold
price on a constant basis.
Considering areas outside of those financial assets defined under IFRS 9, the
Group is subject to higher degrees of pricing risk. The price of gold will
affect the future profitability of the Group in three key ways:
i) A lower gold price will adversely affect the scrap
disposition margins on existing inventory, whether generated by pledge book
forfeits or direct purchasing. While scrap profits will be impacted
immediately, retail margins may be less impacted in the short term.
ii) While the Group's lending rates do not track gold
price movements in the short term, any sustained fall in the price of gold is
likely to cause lending rates to fall in the longer term thus potentially
reducing future profitability.
iii) A lower gold price may reduce the
attractiveness of the Group's gold purchasing operations.
Conversely, a lower gold price may dampen competition as lower returns are
available and hence this may assist in sustaining margins and volumes.
Financial assets
The Group is not exposed to significant interest rate risk on the financial
assets, other than cash and cash equivalents, as these are lent at fixed
rates, which reflect current market rates for similar types of secured or
unsecured lending, and are held at amortised cost.
Cash and cash equivalents are exposed to interest rate risk as they are held
at floating rates, although the risk is not significant as the interest
receivable is not significant.
The foreign exchange cash held in store is exposed to the risks of currency
fluctuations. The value exposed is mainly in Euro and US dollars. There is
the daily risk of buying today, receiving the currency the next day, and
subsequently selling it and being susceptible to movements in the exchange
rate. The Company uses monthly forward contracts to hedge against adverse
exchange rate movements in its two key currencies, Euros and US dollars. There
are no contracts in place at the year end.
Liquidity risk
Cash and cash equivalents
Bank balances are held on short term / no notice terms to minimise liquidity
risk.
Trade and other payables
Trade and other payables are non-interest bearing and are normally settled on
30 day terms, see note 18.
Borrowings
The maturity analysis of the cash flows from the Group's borrowing
arrangements that expose the group to liquidity risk are as follows:
As at 30 September 2023 <3 months £'000 3-12 months £'000 1-5 years £'000 >5 years £'000 Total
£'000
Lease liabilities 641 1,821 6,872 789 10,123
Trade payables 2,936 - - - 2,936
Interest bearing loans and borrowings 7,983 - - - 7,983
Total 11,560 1,821 6,872 789 21,042
As at 30 September 2022 <3 months £'000 3-12 months £'000 1-5 years £'000 >5 years £'000 Total
£'000
Lease liabilities 422 1,664 6,426 1,445 9,957
Trade payables 4,870 - - - 4,870
Interest bearing loans and borrowings 6,443 - - - 6,443
Total 11,735 1,664 6,426 1,445 21,270
The interest charged on bank borrowings is based on a fixed percentage above
Bank of England base rate. There is therefore a cash flow risk should there be
any upward movement in base rates. Assuming the £10million revolving credit
facility was fully utilised then a 1% increase in the base rate would increase
finance costs by £100,000 pre-tax and reduce post-tax profits by £75,000.
15. Inventories
2023 2022
£'000 £'000
New and second-hand inventory for resale (at lower of cost or net realisable 27,662 22,764
value)
16. Trade and other receivables
2023 2022
£'000 £'000
Trade receivables - Pawnbroking 14,262 11,854
Trade receivables - other 431 601
Other receivables 5 228
Prepayments 657 581
15,355 13,264
Trade receivables - Pawnbroking is disclosed net of expected credit losses,
details of which are shown in note 14.
17. Cash and cash equivalents
2023 2022
£'000 £'000
Cash and cash equivalents 13,022 15,278
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits.
Further details on financial instruments, including the associated risks to
the Group and allowances for expected credit losses is provided in note 14.
18. Trade and other payables (current)
2023 2022
£'000 £'000
Trade payables 2,936 4,870
Other payables 781 844
Other taxes and social security 521 293
Accruals 2,027 2,858
Contract liabilities 40 40
Subtotal 6,305 8,905
Lease liabilities (note 20) 2,462 2,086
Interest bearing loans and borrowings 7,983 6,443
Income tax liabilities 1,225 932
17,975 18,366
Terms and conditions of the above financial liabilities:
· Trade and other payables are non-interest bearing and are
normally settled on up to 60-day terms
· Trade and other payables include amounts received from customers
in relation to layby jewellery purchases of £1,120,000 (2022: £956,000).
Materially all of the prior year balance was released to revenue in the
current year
For explanations on the Group's liquidity risk management processes, refer to
note 14.
Bank borrowings
Details of the RCF facility are as follows:
Key Term Description
Facility Revolving Credit Facility with Virgin Money
Total facility size £10m
Termination date March 2026.
Utilisation The £10m facility is available subject to the ratio of cash at bank in hand
(inclusive of currency balances) to the RCF borrowing exceeding 1 as
stipulated in the banking agreement.
Interest Interest is charged on the amount drawn down at 2.4% above base rate when the
initial drawdown is made and for unutilised funds interest is charged at 0.84%
from the date when the facility was made available. The base rate is reset
to the prevailing rate at every interest period which is typically one and
three months.
Interest Payable Interest is payable at the end of a drawdown period which is typically between
one and three months.
Repayments The facility can be repaid at any point during its term and re-borrowed.
Security The facility is secured by a debenture over all the assets of Ramsdens
Financial Ltd and cross guarantees and debentures have been given by Ramsdens
Holdings PLC.
Undrawn facilities At 30 September 2023 the group had available £2m of undrawn committed
facilities.
19. Non-current liabilities
2023 2022
£'000 £'000
Lease liabilities (note 20) 7,661 7,871
Contract liabilities 50 88
Deferred tax (note 10) 96 149
Provisions (note 29) 327 -
8,134 8,108
20. Lease Liability
2023 2022
£'000 £'000
Lease Liabilities as at 1 October 9,957 8,601
Additions 2,846 4,039
Disposals (639) (472)
Interest 460 396
Payments (2,501) (2,607)
As at 30 September 10,123 9,957
Current lease liability 2,462 2,086
Non-current lease liability 7,661 7,871
The cash flows relating to financing activities for repayment of lease
principal amounts is £2,041,000 (2022: £2,211,000). Amounts repaid in the
year are shown in the consolidated Statement of Cash Flows.
Short term lease payments recognised in administrative expenses in the year
total £418,000 (2022: £470,000). The maturity analysis of lease liabilities
is disclosed in note 14, the finance cost associated with lease liabilities is
disclosed in note 6, and the depreciation and impairment of right-of-use
assets associated with lease liabilities are disclosed in note 11.
21. Issued capital and reserves
Ordinary shares issued and fully paid No. £'000
At 30 September 2022 31,643,207 316
Issued during the year 71,775 1
At 30 September 2023 31,714,982 317
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising the return to stakeholders
through the optimisation of the debt and equity balance. The capital structure
of the Group consists of cash and cash equivalents and equity attributable to
the equity holders of the parent, comprising issued capital, reserves and
retained earnings. The Group has a debt facility as disclosed in note 18.
22. Dividends
Amounts recognised as distributions to equity holders in the year:
2023 2022
£'000 £'000
Final dividend for the year ended 30 September 2022 of 6.3p per share 1,994 377
(year ended 30 September 2021 of 1.2p per share)
Interim dividend for the year ended 30 September 2023 of 3.3p per share 1,047 854
(year ended 30 September 2022 of 2.7p per share)
3,041 1,231
Amounts proposed and not recognised:
Final dividend for the year ended 30 September 2023 of 7.1p per share 2,252 1,994
(year ended 30 September 2022 of 6.3p per share)
The proposed final dividend is subject to approval at the Annual General
Meeting and accordingly has not been included as a liability in these
financial statements.
23. Pensions
The Group operates a defined contribution scheme for its directors and
employees. The assets of the scheme are held separately from those of the
Group in an independently administered fund.
The outstanding pension contributions at 30 September 2023 are £2,000 (2022:
£62,000)
24. Related party disclosures
Ultimate controlling party
The Company has no controlling party.
Transactions with related parties
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Transactions with key management personnel
The remuneration of the directors of the Company, who are the key management
personnel of the Group, is set out below in aggregate:
2023 2022
£'000 £'000
Short term employee benefits 819 880
Post employment benefits 19 22
Share based payments 200 136
1,038 1,038
25. Share based payments
The Group operates a Long-term Incentive Plan (LTIP) and Company Share Option
Plan (CSOP). The charge for the year in respect of the schemes was:
2023 2022
£'000 £'000
LTIP 420 314
CSOP 42 -
462 314
The LTIP is a discretionary share incentive scheme under which the
Remuneration Committee of Ramsdens Holdings PLC can grant options to purchase
ordinary shares at nominal 1p per share cost to Executive Directors and other
senior management. A reconciliation of LTIP options is set out below:
Number of conditional Shares Weighted average exercise price in pence
Outstanding at the beginning of the year 994,500
Granted during the year 358,000
Expired during the year (120,575)
Forfeited during the year (7,500)
Exercised during the year (71,775) 1
Outstanding at the end of the year 1,152,650
The options vest according to the achievement against two criteria:
Total Shareholder Return - TSR - 50% of options awarded
Earnings per Share - EPS - 50% of options awarded
The Fair value of services received in return for share options granted is
based on the fair value of share options granted and are measured using the
Monte Carlo method for TSR performance condition as this is classified as a
market condition under IFRS2 and using the Black-Scholes method for the EPS
performance condition which is classified as a non- market condition under
IFRS2. The fair values have been computed by an external specialist and the
key inputs to the valuation model were:
TSR Condition EPS Condition TSR Condition EPS Condition TSR Condition EPS Condition
Model Monte Carlo Black Scholes Monte Carlo Black Scholes Monte Carlo Black Scholes
Grant Date 05/04/23 05/04/23 17/03/22 17/03/22 08/02/2021 08/02/2021
Share Price £2.30 £2.30 £1.67 £1.67 £1.48 £1.48
Exercise Price £0.01 £0.01 £0.01 £0.01 £0.01 £0.01
Vesting period 2.5 years 2.5 years 2.5 years 2.5 years 2.64 years 2.64 years
Risk Free return 3.5% 3.5% 1.4% 1.4% 0.01% 0.01%
Volatility 33.6% 33.6% 53% 53% 51% 51%
Dividend Yield 5.0% 5.0% 3.5% 3.5% 0.0% 0.0%
Fair value of Option (£) 0.98 2.02 0.77 1.51 0.64 1.47
Early exercise of the options is permitted if a share award holder ceases to
be employed by reason of death, injury, disability, or sale of the Group. The
maximum term of the share options is 10 years.
The CSOP is a discretionary share incentive scheme under which the
Remuneration Committee of Ramsdens Holdings PLC can grant options to purchase
ordinary shares at an agreed exercise price subject to certain conditions.
The CSOP schemes in place at 30 September 2023 were as follows:
Grant date Exercise price (pence) Number of share options Earliest date of exercise Expiry date
CSOP 2022 23/06/2022 200.50 110,000 23/06/2025 23/06/2032
CSOP 2023 05/04/2023 230.00 150,000 05/04/2026 05/04/2033
26. Post Balance Sheet Events
There were no post balance sheets events that require further disclosure in
the financial statements.
27. Cash and cash equivalents
2023 2022
£'000 £'000
Sterling cash and cash equivalents 6,990 5,190
Other currency cash and cash equivalents 6,032 10,088
13,022 15,278
28. Fair value of acquisition
On the 12(th) April 2023 the Group purchased the trade and certain assets of
Broadway Jewellers (Kent) Ltd for a total consideration of £298,000, which
was fully paid in cash. The fair value of the assets acquired were as follows:
£'000
Tangible fixed assets (fixtures & fittings) 7
Intangible assets (customer relationships) 31
Trade receivables - Pawnbroking 54
Inventories 206
Net assets acquired 298
29. Provisions
2023 2022
£'000 £'000
Reinstatement provision 327 -
The Group provides for the reinstatement cost of returning leased properties
to their original state.
Parent Company Statement of Financial Position
As at 30 September 2022
2023 2022
Notes
Assets £'000 £'000
Non-current assets
Investments D 8,645 8,383
Deferred tax E 144 37
8,789 8,420
Current assets
Receivables F 2,908 3,683
Cash and short-term deposits 1,035 1
3,943 3,684
Total assets 12,732 12,104
Current liabilities
Trade and other payables G 380 409
380 409
Net current assets 3,563 3,275
Total assets less current liabilities 12,352 11,695
Net assets 12,352 11,695
Equity
Issued capital H 317 316
Share Premium 4,892 4,892
Retained earnings 7,143 6,487
Total equity 12,352 11,695
The profit after tax for the Company for the year ended 30 September 2023 was
£2,139,000 (2022: Loss £9,000)
These financial statements were approved by the directors and authorised for
issue on 14 January 2024 and signed on their behalf by:
M A Clyburn
Chief Financial Officer
Company Registration Number: 8811656
Parent Company statement of changes in equity
For the year ended 30 September 2022
Share Capital Share premium Retained earnings Total
£'000 £'000 £'000 £'000
As at 1 October 2021 314 4,892 7,403 12,609
Loss for the year - - (9) (9)
Total comprehensive income - - (9) (9)
Transactions with owners:
Issue of share capital 2 - - 2
Dividends paid (note I) - - (1,231) (1,231)
Share based payments - - 314 314
Deferred tax on share based payments - - 10 10
Total transactions with owners 2 - (907) (905)
As at 30 September 2022 316 4,892 6,487 11,695
As at 1 October 2022 316 4,892 6,487 11,695
Profit for the period - - 2,139 2,139
Total comprehensive income - - 2,139 2,139
Transactions with owners:
Issue of share capital 1 - - 1
Dividends paid (note I) - - (1,994) (1,994)
Share based payments - - 462 462
Deferred tax on share based payments - - 49 49
Total transactions with owners 1 - (1,483) (1,482)
As at 30 September 2023 317 4,892 7,143 12,352
Notes to the parent company financial statements
A. ACCOUNTING POLICIES
BASIS OF PREPARATION
Ramsdens Holdings PLC (the "Company") is a public limited company incorporated
and domiciled in England and Wales. The registered office of the Company is
Unit 16, Parkway Shopping Centre, Coulby Newham, Middlesbrough, TS8 0TJ. The
registered company number is 08811656. A list of the Company's subsidiaries is
presented in note D.
The principal activities of the Company and its subsidiaries (the "Group") are
the supply of foreign exchange services, pawnbroking, jewellery sales, and the
sale of precious metals purchased from the general public.
The separate financial statements of the Company are presented as required by
the Companies Act 2006. The Company meets the definition of a qualifying
entity under FRS 100 (Financial Reporting Standard 100) issued by the
Financial Reporting Council. Accordingly, the financial statements have been
prepared in accordance with FRS 101 (Financial Reporting Standard 101)
'Reduced disclosure Framework' as issued by the FRC in July 2015 and July 2016
The financial statements have been prepared on the historical cost basis.
As permitted by FRS 101, the Company has taken advantage of the disclosure
exemptions available under that standard in relation to business combinations,
share-based payment, non-current assets held for sale, financial instruments,
capital management, presentation of comparative information in respect of
certain assets, presentation of a cash-flow statement, standards not yet
effective, impairment of assets and related party transactions.
Where required, equivalent disclosures are given in the Group financial
statements of Ramsdens Holdings PLC. The Group financial statements of
Ramsdens Holdings PLC are available to the public.
The financial statements have been prepared on a going concern basis as
discussed in the Directors' Report.
The particular accounting policies adopted are described below.
TAXATION
Current tax
The tax currently payable is based on taxable profit for the year. The
Company's liability for current tax is calculated using tax rates and laws
that have been enacted or substantively enacted by the date of the statement
of financial position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
INVESTMENTS
Fixed assets investments are shown at cost less provision for impairment.
CASH AND CASH EQUIVALENTS
Cash and short-term deposits in the statement of financial position comprise
cash at banks and on hand, foreign currency held for resale and short-term
deposits held with banks with a maturity of three months or less from
inception.
FINANCIAL ASSETS
Financial assets are all recognised and derecognised on a trade date basis.
All recognised financial assets are measured and subsequently measured at
amortised cost or fair value depending on the classification of the financial
asset.
FINANCIAL LIABILITIES AND EQUITY
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the
company after deducting liabilities.
Equity instruments issued are recorded at the proceeds received, net of direct
issue costs.
DIVIDENDS
Dividends receivable from subsidiary undertakings are recorded in the
statement of comprehensive income on the date that the dividend becomes a
binding liability on the subsidiary company.
Dividends payable are recorded as a distribution from retained earnings in the
period in which they become a binding liability on the Company.
Employee Share Incentive Plans
Ramsdens Holdings PLC grants equity settled share option rights to the parent
entity's equity instruments to certain directors and senior staff members
under a LTIP (Long term incentive Plan) and CSOP (Company Share Option Plan).
The employee share options are measured at fair value at the date of grant by
the use either the Black-Scholes Model or a Monte Carle model depending on the
vesting conditions attached to the share option. The fair value is expensed on
a straight line basis over the vesting period based on an estimate of the
number of options that will eventually vest. The expense is recognised in the
entity in which the beneficiary is remunerated. The share based payment
expense in the period which relates to subsidiaries increases the carrying
value of the investment held.
B. COMPANY STATEMENT OF COMPREHENSIVE INCOME
As permitted by s408 of the Companies Act 2006 the Company has elected not to
present its statement of comprehensive income for the year.
The auditor's remuneration for the current and preceding financial years is
borne by a subsidiary undertaking, Ramsdens Financial Limited. Note 7 to the
Group financial statements discloses the amount paid.
C. STAFF AND KEY PERSONNEL COSTS
Other than the Directors who are the key personnel, the Company has no
employees, details of their remuneration are set out below
2023 2022
£'000 £'000
Remuneration receivable 819 880
Social security cost 169 65
Value of company pension contributions to money purchase schemes 19 22
Share based payments 200 136
1,207 1,103
Some of the directors of the Company are also directors of Ramsdens Financial
Ltd. These directors did not receive remuneration from Ramsdens Financial
Limited and amounts paid through the Company were £937,000 (2022: £947,000).
The directors do not believe it is practicable to apportion this amount
between their services as directors of the Company and other group companies.
Remuneration of the highest paid director:
2023 2022
£'000 £'000
Remuneration receivable 383 427
Value of company pension contributions to money purchase schemes 9 10
Share Based Payments 118 82
510 519
The number of directors accruing retirement benefits under the money purchase
scheme is 2 (2022: 2)
D. INVESTMENTS
Shares in subsidiary undertakings 2023 2022
£'000 £'000
Cost
Cost brought forward 8,383 8,205
Additions - Share based payments 262 178
Cost carried forward 8,645 8,383
Additions represent share based payment expense recognised in Ramsdens
Financial Limited.
The Investments in Group Companies which are included in the consolidated
statements are as follows
Name of company Holding Proportion of voting rights and shares held Activity
Subsidiary undertakings
Ramsdens Financial Limited Ordinary Shares 100% Supply of foreign exchange services, pawnbroking, purchase of precious metals,
jewellery retail and other financial services.
(Registered office: Unit 16 Parkway Centre, Coulby Newham, TS8 0TJ)
E. DEFERRED TAX
Deferred tax relates to the following:
2023 2022
£'000 £'000
Deferred tax assets
Share based payments 144 37
144 37
Reconciliation of deferred tax assets
2023 2022
£'000 £'000
Opening balance as of 1 October 37 80
Deferred tax credit recognised in the statement of comprehensive income 58 (53)
Other deferred tax 49 10
Closing balance as at 30 September 144 37
F. RECEIVABLES
2023 2022
£'000 £'000
Amounts owed by subsidiary companies 2,892 3,671
Prepayments 16 12
2,908 3,683
Amounts owed by subsidiary companies is payable on demand and no interest is
charged.
G LIABILITIES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£'000 £'000
Trade Payables 1 10
Other Creditors 291 379
Other taxes and Social Security 25 20
Current tax liabilities 63 -
380 409
H. CALLED UP SHARE CAPITAL
Details of the called up share capital including share shares issued during
the year can be found in note 21 within the Group financial statements of
Ramsdens Holdings PLC.
I. Dividends
Amounts recognised as distributions to equity holders in the year:
2023 2022
£'000 £'000
Final dividend for the year ended 30 September 2022 of 6.3p per share 1,994 377
(year ended 30 September 2021 of 1.2p per share)
Interim dividend for the year ended 30 September 2023 of 3.3p per share 1.047 854
(year ended 30 September 2022 of 2.7p per share)
3,041 1,231
Amounts proposed and not recognised:
Final dividend for the year ended 30 September 2023 of 7.1p per share 2,252 1,994
(year ended 30 September 2022 of 6.3p per share)
The proposed final dividend is subject to approval at the Annual General
Meeting and accordingly has not been included as a liability in these
financial statements.
J. POST BALANCE SHEET EVENTS
There were no post balance sheets events that require further disclosure in
the financial statements.
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