- Pawnbroker and jeweller upgrades annual profit forecasts for fourth time in five months
- Soaring gold price is a big contributor to the upside surprise
- Middlesbrough-based firm now expects record earnings in the year to September 2026
- Special dividend accompanies increase in the regular interim payment
- Shares reach a new all-time high but still look cheap compared to the valuation implied by 2025’s American bid for H&T
“A strong set of first-half results and a fourth upgrade to profit forecasts in five months mean that Ramsdens is now on track to post record annual earnings in the 12 months to September 2026,” says AJ Bell investment director Russ Mould.
“Shares in the pawnbroking and jewellery retail specialist are responding to the latest positive surprise, which follows those of February, March and May, by setting new all-time highs.
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 trading update and then followed up in March by saying pre-tax income would exceed £24 million and even reach £28 million if gold prices stayed strong and trading across the group’s operations maintained their momentum. Another upbeat statement in April raised the bar again, this time to a range of £28.5 million to £31.5 million.
“Ramsdens is now topping even that with a fresh steer that pre-tax income will come in between £30 million and £33 million for the year, helped by how the first-half’s £16.7 million result exceeds the total achieved in all of the 12 months to September 2025.
Source: Company accounts. *Financial year end changed from March to September in 2020. **2026E based upon revised management guidance given alongside June’s interim results.
“Ramsdens’ shares had dipped a little this spring, despite the flow of profit forecast upgrades, thanks to a pullback in the gold price, whose rapid rise has definitely helped to drive earnings.
“However, the good news is that it’s not just the soaring gold price doing the heavy lifting. Sales at the jewellery operation are up by more than a quarter compared to the first six months of the last financial year, and profits have grown faster than that. Meanwhile, the pledge book and profits at the pawnbroking operation also continue to grow.
“If there is an area of weakness, it comes in the shape of the foreign currency exchange arm, where volumes are flat and profits down, although the earnings decline looks to be the result of a shift in business mix, as more customers use lower-margin digital services rather than ready cash.
Source: Company accounts, for six months to March 2026
“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, after opening two new shops and acquiring one.
“This measured expansion and balanced profits profile, coupled with Ramsdens’ 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 first half to March 2026 with just £6.1 million in net debt, including lease liabilities of £9 million and cash of £12.8 million matched by the £12.8 million ‘in date’ portion of the pawnbroking pledge book.
“Any deterioration in the UK’s economic fortunes could yet bring the pawnbroking operations into their own, although shareholders will note the 6% increase in the pledge book that is past due to just under £1 million.
“Risks do therefore remain, even if investors will draw reassurance from management’s statement that it is managing growth in the pawnbroking pledge book very carefully. This may help to explain why Ramsdens’ shares still look very cheap compared to the valuation multiples implied by FirstCash’s takeover of peer H&T in 2025.
“H&T had delivered record profits in 2024 across its pawnbroking, jewellery and currency exchange operations and FirstCash swooped in with a cash-and-dividend offer of 661p a share. That represented a 44% premium to the undisturbed share price and valued H&T at around 12 times forward earnings.
Source: LSEG Refinitiv data
“Ramsdens’ base case of pre-tax profit for the year to September 2026 of £30 million implies earnings per share north of around 70p, to leave the stock on barely seven times.
“That may reflect some investor scepticism as to the potential influence of the gold price, should it decline further, and also whether the flaccid UK economy could yet lead to increases in bad debts across the pledge book. But that lowly rating suggests there could be further upside in Ramsdens’ shares even from here, especially if gold does regain its upward momentum over the medium term and management can demonstrate further low-risk growth in lending.
“The declaration of a further special dividend at least suggests that Ramsdens’ board remains more optimistic than investors seem to be, given the lowly rating they are affording the stock.”
Source: Company accounts. *Financial year end changed from March to September in 2020.
