Financial services-to-retail group Ramsdens (LON:RFX) rallied to all-time highs after posting record H1 results and raising FY26 profit guidance once again. Investors welcomed a 3p special dividend from the Teesside-headquartered company. This was in addition to a 33% increase in the H1 payout to 6p.
Ramsdens’ latest upgrade primarily reflects the sky-high gold price, which continues to drive exceptional demand for gold buying in its precious metals business. But the company is also seeing positive momentum across the balance of its reassuringly-diversified business.
Upgrade cycle continues
For the year to September 2026, Ramsdens now expects to generate pre-tax profits in the £30 million to £33 million range. That is ahead of the previously-upgraded £28.6 million consensus estimate and implies year-on-year growth of at least 85%. Broker Cavendish hiked its FY26 taxable profits forecast by 6% to £30.3 million on the news.
Record H1 results revealed a 173% surge in pre-tax profits to a record £16.7 million, surpassing the £16.2 million generated in the whole of FY25.
H1 highlights included healthy growth in pawnbroking profits, where the loan book now stands at £14.5 million. Elsewhere, past investments in the jewellery retail business are clearly paying off. Jewellery retail sales rose 26% year-on-year to £26.1 million and a shift in consumer demand towards value-for-money is boosting demand for preowned ranges.
The only business line that struggled was foreign exchange, where a shift towards online and card sales pressured gross margins. And management indicated that any reduction in summer travel due to potential fuel shortages could negatively impact currency demand.
In a great position
CEO Peter Kenyon insisted Ramsdens is ‘in a great position. While the gold profits grab the headlines, the group has also delivered gross profit growth of 18% in pawnbroking and 31% in retail jewellery.’
Kenyon added: ‘Customer numbers in FX continue to be strong with total currency exchanged broadly flat. Whilst the economic backdrop remains challenging with increasing employment costs, high interest rates and continued inflation, we remain highly confident in our opportunity to further strengthen the performance of our existing stores while adding new locations, executing against our established long-term growth strategy.’
Following the update, Cavendish reiterated its Buy rating on Ramsdens and increased its target price to 596p.
‘With this performance reflecting more than just a positive gearing to the gold price, we believe the market continues to underappreciate the quality of the group’s integrated offering and market share in the retail and pawnbroking businesses,’ said the broker.
We remain fans of Ramsdens, whose value-for-money services should remain robust in these testing economic times. Economists are predicting that the gold price will remain high for the remainder of 2026 and all through 2027, so there could be further upgrades to come.
Ramsdens has continued to enjoy strong trading in the first few weeks of H2. Furthermore, the AIM-listed firm has plenty of scope for growth in both pawnbroking and jewellery retailing and is accelerating store openings to capture market share.
Kenyon points out that a number of its stores are still in their infancy and have capacity to mature and grow their profitability as a result.
Disclaimer: James Crux has a personal investment in Ramsdens.
Read the press release here: https://www.ramsdensplc.com/investor-relations/reports-and-presentations
