Albemarle & Bond retail like-for-likes fell 20% in the half year to December 31 as the high gold price hindered jewellery sales.

The pawnbroker said it is a difficult market for second hand jewellery.  Soaring gold prices combined with attractive scrappage rates have slowed sales. New jewellery sales were more encouraging, up 30%.

For the group, which includes retail, pawnbroking, gold buying and other financial services, pre-tax profit dipped by 1% to £10.7m, as costs rose 24% to fund Albemarle & Bond’s store expansion. The pawnbroker remains on track to open at 25 stores per year.

Its pawn pledge book reported like-for-like growth of 26%, and is by far its largest business.

Albemarle & Bond chief executive Barry Stevenson said: “Due to the step up in the rate of store roll out under our five year growth plan this will be the transitional year.

“There is substantial scope to market our products to a wider audience. To achieve this objective, we are expanding the core business and exploring new opportunities including adding at least 25 full line stores per annum, opening flexible gold buying pop-up shops and developing new routes to market.”

Collins Stewart analyst Michael O’Brien said: “We see this as a credible performance in the context of the current consumer environment and the high gold price encouraging customers into other metals.”

The OFT has ordered cash-for-gold companies to change their business practices following customer complaints that their jewellery had been melted down before a final price was agreed.

Cash-for-gold companies must now make clear that prices offered are based on scrap value and customers will have the option to receive a quotation that requires a reply of acceptance or payment which they can return.