14.01.2025
This morning’s announcement from Ramsdens Holdings (LON:RFX) reported another record set of results.
There is a growing amount of business out there for Ramsdens, which is ready to help its customers whether making a jewellery purchase, exchanging currency to enjoy a holiday, or raising cash from their jewellery by way of a loan or a sale.
The 2024 Results
The year to end September 2024 saw revenues rise 14% to £95.6m (£83.8m), while pre-tax profits were 12% better at £11.4m (£10.1m), its earnings improved by just 7% to 26.1p (24.5p) and its dividend was 8% up at 11.2p (10.4p) per share.
The diversified financial services provider and retailer declared record profits driven by growth across four of its key income streams.
Its pawnbroking side was up 16%, its retail jewellery segment was 10% better, foreign currency showed a 4% increase, while the group’s precious metals side was 29% up reflecting the stronger gold price.
Management Comment
CEO Peter Kenyon stated that:
"Ramsdens' record performance in FY24 - with profit before tax increasing by 12% to more than £11m - once again reflects the strength of the Group's diversified business model.
We are pleased with the positive momentum achieved across each of the Group's income streams, with a particularly strong performance in our precious metals segment where we continued to benefit from the high gold price.
The increase in sales of foreign currency indicate we are taking market share and - in its first full year of use - our multi-currency card has had a very encouraging start with opportunities for further growth in FY25 and beyond.
Jewellery retail has continued to grow and was particularly strong in H2, with our firm focus on stock management ensuring we are generating an optimum return on the capital employed from our investments in recent years.
Our pawnbroking loan book continues to grow incrementally and the launch of our new Ramsdens pawnbroking website in November, following the year end, has started well and is already attracting new customers.”
What The Brokers Say
Analysts James Allen, Rae Maile and Ross Luckman, at Panmure Liberum, have today published a 16-page research note on the group, declaring its shares as a Buy, with an upgraded Target Price of 320p (305p) per share.
For the current year to end-September 2025 they estimate sales of £101m (£96m), pre-tax profits of £12.0m (£11.4m), earnings of 27.0p (25.7p) and a dividend of 11.7p (11.2p) per share.
The brokers note that:
“We retain our BUY recommendation and increase our target price from 305p to 320p given the upgrades and based on a blend of a FY 25 P/E valuation and a dividend discount model.
The shares are trading on a modest CY 25 P/E of 8.7x.
We think that is too cheap when closest peer H&T is on 6.4x, Ramsdens has a more diversified operating model and has a better track record of delivering upgrades.
A dividend yield of 5.0% is also much higher than the c.4% average since listing.”
In My View
The group’s shares, which closed last night at 235p, valuing the group at only £75m, after hitting 250p this morning, they are currently trading at around the 245p level, up 10p on the results and accompanying statement.
This is a good little business, that is undervalued and capable of good steady expansion of its operations.
Its shares are ready to rise further from these highest levels, last breached in 2019 and then 2023.
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