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Thanks for sharing
Beginning to rise now.
because I realised how large a % comes from the foreign currency exchange, which must have collapsed in recent months, with little chance of much recovery for a while yet.
For that reason, I believe HAT is the better choice out of the two pawnbrokers on the stockmarket.
This may change if RFX trades at too much of a discount to HAT (it deserves to trading at some sort of discount to HAT but not too much, if that makes sense).
Apologies but that's my updated opinion.
Best of luck all
yet the buy and sell volumes shown look are really low so presumably something going on in the background perhaps?
* the Non-currency-exchange segments of the business should grow this year
(ignore reference to H2 - that was a mistake)
Low on the important metrics (PE of 7 and EV/EBIT of 5-6). Some of that must be because COVID will have a huge and somewhat irreparable impact on the Foreign Currency Exchange segment of the business (that has accounted for 35-40% of income previously), some of that will be because their stores have been shut during lockdown, and some of that will be because they’ve suspended their dividend.
However, on the other hand, the pawn broking part of the business should do incredibly well during the economic downturn. Traditional lenders have become super cautious (as evidenced by what we’re seeing in the mortgage lending market, where earnings ratios have been reduced, and high LTV mortgages have rapidly disappeared) and there are millions of people who are going to financially struggle once the furlough scheme comes to an end sadly.
When that happens there will be a rush of people eager to pawn off jewellery they don’t need, and just look how the value of gold has rocketed in recent months – rising from about 30-40% from April 2019 to April 2020. https://www.bullionbypost.co.uk/gold-price/10-year-gold-price-chart/
Therefore feel the Non-currency-exchange segments of the business should grow in H2. Not by enough to make up for the huge fall in the for in the currency-exchange segment this year but by enough to see revenues remain £50m+ I’m sure (vs £59.5m in the 2019/20 year). Revenues should realistically reach new highs (£60m+) in the 2021/22 financial year; and we can expect the dividend to reinstated as RFX’s pawn broking business continues to thrive off the economic downturn.
On this basis, I reckon we could see 200p in the next 12 months, and something closer to 300p in the next couple of years.
Not sure when to time an entry but I do believe there’s a disconnect between the stock market and the real world at the moment, with the stock market largely operated as if there is not an economic downturn happening, perhaps due to governmental schemes (the furlough scheme especially) masking the true impact. Sooner or later the market will panic and you’ll have so many funds/trusts/etc having to sell out of so many different companies at once, and looking to re-deploy their capital in companies which look as though they will benefit out of the downturn like RFX.
Will try work out how RFX compares to its peers in the sector but yeah I like the look of this one. GLA.
**** poor RNS following AGM with am obscure footnote confirming 150 stores now operational
12 stores have reopened. The other stores in England reopen 17/18 June. I guess they are waiting for the Regional Assemblies in Scotland and Wales to advise on reopening for "non essential retailers".
Update on RFX - Summary "at £1.51 share should recover".
Agreed. This one is a keeper.
Any news when the stores will fully reopen?
Invested here originally a year ago, during the drop have added along the way. Sipp investment. This is a great cash rich company which will see business boom as the months go by. I'll be very surprised if we don't see 52wk highs in a years time. Gla
Cheers Rich62. He concludes with: "...although earnings for the coming year will fall short of the 2019/20 record performance due to the Covid-19 induced disruptions, Ramdens’ business is far more resilient than Liberums’ estimates suggest. That’s simply not being priced in with the shares trading on five times cash-adjusted earnings based on the 2019/20 results, and 11 times Liberum’s low-ball estimates for the coming year. Buy."
Just tipped by ST in IC = up 9% in 5 minutes. Excellent that he can see the value here..
Noticed that H&T are reopening more of their shops following on from a trial to ensure that it was safe to do so (news article dated 22nd May). I'm expecting RFX to reopen from 1st June, when other shops including non essential shops can reopen. There should be significant footfall in town centres and no doubt people will require the use of pawnbrokers in these difficult times..
Nice rise to 153.5p today. I reckon this is in anticipation of small "non essential" shops being allowed to open from next week\ Government intend to do the briefing on Sunday. Should easily be able to get the shops up and running again quickly ensuring social distancing. Target 200p
Robbie Burns aka Naked Trader has short write up in his diary on 30/4/20 - Ramsdens RFX is a buy as people will need pawnbrokers. Target 200p
must be linked to their fx business ..view that folk wont go on hols overseas
A transfer of wealth going on here today. Seems to be lots of small sells and a few big buys. Shares bought currently higher than those sold too.
Canaccord are continuing to buy - they now have 12.35% with 3.8m shares, so have bought another 340,000 shares between the 10th and 22nd January:
Unusually, Simon Thompson's Buy tip update is free for all to view. so here it is:
"Diversified financial services group Ramsdens (RFX:248p) has also prompted analysts to upgrade their forecasts, vindicating my buy advice, at 204p, when I covered the half-year results (‘Ramsdens on the money’, 3 Dec 2019). Key drivers are the ongoing strong sterling gold price (up 24 per cent since May 2019), which is benefiting the group’s precious metals segment and profits from scrapping slower moving jewellery sales, and double-digit sales growth in both new and second-hand jewellery with premium watches (Rolex and Breitling, in particular) standout performers. Both pawnbroking and foreign currency exchange activities continue to produce good results, too.
Following a 10 per cent earnings upgrade, house broker Liberum expects pre-tax profits to rise by 25 per cent to £8.7m on revenue of £58.4m in the 12 months to 31 March 2020. On this basis, expect to EPS to rise by 30 per cent to 22.6p to support a payout per share of 8.1p. Net cash equates to 40p a share, implying the shares are rated on cash-adjusted PE ratio of nine.
The holding has produced a total return of 51 per cent since I included the shares, at 165p, in my 2019 Bargain Shares Portfolio and hit my 250p target price post the latest earnings upgrade. However, with the gold price on a tear, the upgrade cycle has further to run and I raise my target price to 275p. Buy."
Canaccord are serious buyers - today's RNS shows they now have 11.2% with 3.46m shares, so have bought another 160,000 shares between the 8th and 10th January:
(1) Simon Thompson in the IC has tipped RFX with a Buy and an increased 275p target price:
(2) And RFX were also tipped last night on Master Investor with a 280p target:
"Ramsdens Holdings (LON:RFX) – strong trading ahead of expectations
As a result of strong trading across the business the board now expects the full year pre-tax profits to be comfortably ahead of market expectations.
Well, is that positive enough for you?
The diversified financial services provider and retailer enjoyed a great Christmas trading period.
This company is a fast-growing operator in four core business sectors – foreign currency exchange, pawnbroking loans, precious metals buying and selling, and the retailing of second hand and new jewellery.
It would normally announce its annual results in June – however that could well be brought forward – remember ‘good news always travels faster’.
As the shares close the week trading at 247p, after breaking my 2020 target price at 251p last Wednesday, I fancy them for a slip back and then another upwards run, perhaps to 280p or thereabouts.
The finals trading update is normally due in early April, leaving some ‘stock playing time’."
A second RNS today - as well as Canaccord doubling their holding, Close Brothers have turned up with a 5.5% stake, i.e 1.69m shares, after buying a further 150,000 shares last week and crossing that 5% threshold:
Canaccord have more than doubled their holding here - they now have 10.7% with 3.3m shares, up from 5.2%:
Nice coverage for such a small cap in today's Times market report:
"There was better news among smaller stocks. Ramsdens, the pawnbroker and foreign exchange business, said that pre-tax profits for the year to the end of March would be “comfortably ahead” of forecasts. Punters rushed to snap up its second-hand Rolexes, while the company has taken advantage of the soaring gold price to scrap jewellery that has been sitting in its stores. The news sent the share price climbing by 11½p, or 4.9 per cent, to a record high of 247p."