Soaring gold price sees more people ‘clear out' jewellery boxes, Ramsdens says
The soaring price of gold prompting more people to 'clear out' their jewellery boxes has bolstered profits for retailer and lender Ramsdens.
The Middlesbrough-based chain, which has 169 UK stores, reported a surge in income from its precious metals buying service and its jewellery shop.
Pre-tax profits surged by 54% to a record £6.1 million for the six months to the end of March, compared with the same period last year.
Total revenues rose by 18% to £51.6 million year-on-year, the company told investors.
Revenues from buying precious metals were up by nearly a third as 'exceptionally high' gold prices helped increase the weight of gold being sold.
Ramsdens buys unwanted jewellery from customers and then either sells it in stores or online, or to a bullion dealer.
Gold hit its highest ever price in April, reaching about 3,500 US dollars (£2,600) per ounce, with investors flocking to the traditionally 'safe haven' asset as Donald Trump's tariff announcements sparked turmoil in the wider financial markets.
Ramsdens chief executive Peter Kenyon said: 'The gold price allows us to pay the customer more, means we make more as well, and also helps pawnbroking a bit with some of the recoveries when people don't pay us back.'
He said it is not the case that there are 'queues at the door' for gold-selling, but the higher price is more likely to encourage customers to sell more of their jewellery once they realise how much cash they can get for it.
'Most customers who sell their gold are new to that service because usually you only clear out your jewellery box once,' he told the PA news agency, adding it results in 'two transactions from a new customer' once they have made an initial sale.
Ramsdens recently launched a designated gold-buying website which it said is attracting more customers than it had expected.
Revenues for its jewellery shop surged 18% year-on-year, despite the higher cost of precious metals being passed on to customers through price rises.
Mr Kenyon said the group is 'able to weather a downturn' should the price of gold drop sharply in the months ahead.
Meanwhile, rival pawnbrokers chain H&T last month agreed to be bought by US giant FirstCash for nearly £300 million.
H&T is the UK's largest pawnbroker with more than 270 shops across England, Scotland and Wales.
Mr Kenyon said he was 'not surprised' by the takeover, as investment by US companies into the UK was increasingly attractive amid the strengthening dollar.
'We're a publicly-listed business and if someone came with a big chequebook we'd have to listen – but we're not seeking a purchase at the moment,' he told PA.
Shares in Ramsdens jumped by about 6% on Wednesday morning.
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