Jewellery-based pawnbroker Albemarle & Bond has posted strong interim results, with pre-tax profits surging 75% to £10.8m in the six months to December 31 2009.
This was despite a 5% decrease in total retail sales in the period due to a reduced demand for gold jewellery.
Group turnover increased 49% to £39.4m compared to £20.1m in first half of 2009.
Consumer awareness of the higher gold price drove consumers to its stores to sell off unwanted gold jewellery, although customers opted to purchase non-gold items as they sought out better value, with watches, charm bracelets and silver items selling well.
Albemarle & Bond said that there is now headroom for store expansion, as strong cashflow led to borrowing reducing to 47%. Eight news stores will open this year, with 7 already opened during the second half of 2009. Albemarle & Bond is piloting 9 pop-up shops to capitalise on gold sales.
Albemarle & Bond chief executive Barry Stevenson said: “Gold purchasing made a strong contribution in the second half of 2009, and is expected to continue to contribute strongly in the first half of 2010 although the year on year increase will be somewhat less. In the longer term we expect the gold purchasing market to reach maturity.”
He added that unsecured lending has improved its pawnbroking business profitability and the average loan size further increased in response to consistent customer demand for flexible and highly competitive pawn loans.
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