ABM.L Regulatory News (ABM)

24 May 2011

Albemarle & Bond Holdings PLC

("Albemarle & Bond" or "the Company")

Announces An Update On Trading Ahead of an Analyst and Investor Site visit

Albemarle & Bond Holdings PLC, a leading UK pawnbroking and retail financial services business is pleased to announce an update on trading, ahead of a visit to our operations by analysts and investors on 24 and 25 May 2011.

Trading update

The Company is pleased to announce that the business continues to perform strongly. As a result, the Board believes trading for the 12 months ending 30 June 2011 will be at the top end of analyst expectations.

The key factors driving the Company's recent trading performance are:

·; The core pawnbroking business, which represents c.50% of the Company's gross profit, has performed well. As at 30 April 2011, year on year pledge book growth (on a like for like basis) was 23.9%. This strong increase in the pledge book reflects the sustained rise in the gold price, our market leading lending practices, an increasing number of new customers and our consequent ability to increase the average loan size per pledge. The total pledge book stood at £37m as at 30 April 2011 (31 Dec 2010 £36m).

·; Gold buying has continued to contribute significantly and the gross margin levels reported at the half year have been sustained.

·; Net profitability from Other Financial Services has been encouraging, with strong bad debt management offsetting volume challenges in our cheque based products. We are focused on developing this division with a phased number of new product launches planned to capitalise on demand for growth in the small loans markets.

·; The new store opening programme is on track and we can confirm that we expect 28 stores will be opened in this financial year. Importantly, the new stores as a group continue to perform ahead of our expectations. We continue to develop our pop up store portfolio and expect to have 40 units trading at the year end. The total number of trading units including pop up shops is expected to be 200 at the end of June 2011 (June 2009 115)

·; The Group's financial position remains strong. The increased capital expenditure and working capital requirements of the store openings programme is being funded from free cash flow generated from operating activities.

·; The gold hedging instrument that has been in place for the last four years will end on the 30 June 2011. It is estimated that the cost of this hedge to the Company in the year to June 2011 will now be in excess of £3.5m, driven by the further appreciation in the gold price.

New product launch

The Company has committed to broadening the existing product range as part of 'Increasing Our Appeal and Awareness'. Based on research undertaken and the management team's detailed analysis of the UK small loans market, it is clear there is substantial scope to expand the Group's services. To that end, we are developing several new unsecured lending products and the Group is pleased, following a trial, to be announcing the launch of 'Payday Anyway', an innovative short term debit card based loan. Payday Anyway will be rolled out to all stores throughout the UK by the end of June 2011. Further new product launches will follow in FY 2012.

New Stores

With only c.1200 pawnbroking stores in the UK, the sector is under-represented compared to other markets such as the US and we estimate there is scope for over 3000 stores. Our research shows the catchment area for one of our stores is less than 3 miles, creating an opportunity to infill our existing network, broaden our footprint and leverage regional management structures. In September 2009, we commenced a store opening plan at a rate of c.25 per annum and this has been very successful. Through our in-house property team we continue to secure attractive leases on sites which meet our criteria and trading in the new stores has been ahead of internal forecasts. Typically our new stores are now passing their breakeven point in the twelfth month following opening which is a significant improvement on historic norms.

Barry Stevenson, Chief Executive Officer said: "This was always going to be a critical financial year as we have had to absorb a substantial increase in costs to support the expanding business in advance of benefitting from increasing revenues. It is therefore pleasing to be reporting on a trading and profit performance that is at the top end of expectations. Now we are well into the store roll-out programme, the 16 new greenfield stores opened in 2010 are now profit positive as a group and there will be a better balance to the business as the stores continue to mature. Similarly, we believe margins from gold buying are stable and whilst we do not expect to sustain the recent exceptional 20% plus LFL growth in the pledge book in the medium term, we are targeting a positive market leading expansion rate to help drive overall profitability. Overall, we are delighted with the Group's progress to date on delivering our growth plans."

Analyst and Investor Store Visit

The Company is hosting an analyst and investor site visit to some of its Liverpool based stores today and tomorrow. As part of the visit, a presentation will be made to investors and analysts providing an overview of the Company's store portfolio and on Payday Anyway. No material new information will be provided.

Enquiries

Notes to Editors

Albemarle & Bond Holdings PLC is a leading pawnbroking and retail financial services group with 155 full line branches offering pawnbroking, jewellery retailing, gold buying and financial services through two formats: Albemarle Bond and Herbert Brown. Founded in Bristol in 1986, the Company is now headquartered in Reading and was admitted to AIM in 1995 (TICKER: 'ABM'). Since inception, the Company has delivered 19 years of consistent revenue and gross profit growth.