- Pawnbroker and jeweller upgrades annual profit forecasts for second time in two months
- Soaring gold price is a big contributor to the upside surprise
- Middlesbrough firm now expects record earnings
- Shares near their all-time high but still look cheap compared to the valuation implied by American bid for H&T last year
“Not every company that has come out of private equity ownership has shone once it has joined public markets, but pawnbroker-to-jeweller Ramsdens has definitely done investors proud, as an upgraded outlook for the current financial year has left the shares near their recent all-time high,” says AJ Bell investment director Russ Mould.
“This is the second profit forecast increase of 2026, following on from February’s trading update, and means Ramsdens is now on track to post record annual earnings in the twelve months to September 2026.
Source: LSEG Refinitiv data
“Back in January, chief executive Peter Kenyon and the board initially steered analysts’ forecasts for the current financial year to a pre-tax profit above £18 million, compared to the £16.2 million generated in the year to September 2025.
“Ramsdens upgraded that to at least £21 million in February’s update and has increased that again with the latest statement, saying that pre-tax income should exceed £24 million and even reach £28 million if gold prices stay strong and trading across the group’s operations maintain their current momentum.
Source: Company accounts. *Financial year end changed from March to September in 2020. **2026E based upon revised management guidance given in March trading statement.
“The good news is it is not just the soaring gold price that is doing the heavy lifting. Ramsdens reports strong sales of jewellery and rapid growth in the pledge book at the pawnbroking operation, while the foreign currency exchange business seems steady, although there remains a chance that the conflict in the Middle East has an impact there at some stage.
Source: Company accounts, for twelve months to September 2025
“Ramsdens also continues to expand its store estate, and the company is on track to add eight to twelve sites in the current financial year, to take the total to between 175 and 180.
“This measured expansion and balanced profits profile, coupled with Ramsden’s strong balance sheet, should help to reassure investors that the company is not going to follow in the path of one-time pawnbroking peer Albemarle & Bond, whose shares traded on AIM between 1995 and 2014.
“That company’s share price, and profits, leaned heavily on the gold price and the precious metal’s surge in the wake of the Great Financial Crisis to a peak of around $1,800 an ounce lured its management team into more aggressive buying of the commodity and more store openings. Disaster followed as the gold price retreated to $1,200 an ounce and Albemarle & Bond appointed administrators in 2014.
Source: LSEG Refinitiv data
“Ramsdens ended the year to September 2025 with just £1.7 million in net debt, including lease liabilities of £8.6 million and cash of £15.4 million more than covered the £11.4 million pawnbroking pledge book.
“Any deterioration in the UK’s economic fortunes could yet bring the pawnbroking operations into their own, and in this context shareholders may prefer to think about another peer, H&T, rather than Albemarle & Bond.
Source: LSEG Refinitiv data
“H&T delivered record profits in 2024 across its pawnbroking, jewellery and currency exchange operations and drew a takeover approach from America’s FirstCash in 2025, at a 44% premium to the undisturbed share price.
“The cash-and-dividend price of 661p a share valued H&T at barely 12 times forward earnings.
“Ramsdens’ base case of pre-tax profit of £24 million implies earnings per share north of 50p, to leave the stock on barely eight times. That may reflect some investor scepticism as to whether the gold price really can hold on to the $5,000-an-ounce mark for too long, but equally that rating suggests there could be further upside in Ramsdens’ shares even from here, if gold does maintain its upward momentum over the medium term.”
