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Pawnbroker Albemarle and Bond to slow expansion Pawnbroker Albemarle and Bond to slow expansion
(35 minutes later)
Pawnbroker Albemarle and Bond has said it will open fewer new stores this year due to worsening market conditions.Pawnbroker Albemarle and Bond has said it will open fewer new stores this year due to worsening market conditions.
It plans to open just five this financial year, compared with the 25 it opened in the 2011-12 financial year. The chain currently has 234 outlets.It plans to open just five this financial year, compared with the 25 it opened in the 2011-12 financial year. The chain currently has 234 outlets.
This is largely down to lower profits on buying second-hand gold, which were well down on their peak, the firm saidThis is largely down to lower profits on buying second-hand gold, which were well down on their peak, the firm said
Pre-tax profits for the year to the end of June were up 2% at £21.4m. Its dividend is unchanged at 9.75 pence.Pre-tax profits for the year to the end of June were up 2% at £21.4m. Its dividend is unchanged at 9.75 pence.
The company, which buys gold at its High Street shops and through 50 pop-up stores in shopping centres, said the gold price had been stable during the year following three years of 20%-a-year growth. Bristol-based Albemarle said it expected lower profits for the coming year, due mainly to lower returns from gold buying.
Profit margins on gold-buying were still above 30%, but well below the 87% peak seen earlier in the financial year. Albemarle said it did not expect to see such growth rates again. This knocked its shares in early trading. They were down by more than 8% at 227 pence per share.
Boom over
The company, which buys gold at its High Street shops, online and through 50 pop-up stores in shopping centres, said the gold price had been stable during the year following three years of 20%-a-year growth.
Profit margins on gold-buying were still above 30%, it said, but well below the 87% peak seen earlier in the financial year. Albemarle said it did not expect to see such growth rates again.
"We expect gold buying to continue to be a significant peak contributor to the Group, albeit at much reduced levels to that achieved at the peak," said chief executive Barry Stevenson."We expect gold buying to continue to be a significant peak contributor to the Group, albeit at much reduced levels to that achieved at the peak," said chief executive Barry Stevenson.
Bristol-based Albemarle has more than doubled in size in the past three years, thanks largely to the boom in buying second-hand gold. Albemarle has more than doubled in size in the past three years, thanks largely to the boom in buying second-hand gold.
Looking ahead, it expects to focus more on demand for short-term flexible loans.Looking ahead, it expects to focus more on demand for short-term flexible loans.
As part of that strategy, it has bought an online provider, the Early Pay Day Loans Company, for £1.2m.As part of that strategy, it has bought an online provider, the Early Pay Day Loans Company, for £1.2m.