24 May 2010 07:02
Albemarle & Bond Holdings PLC
("Albemarle & Bond" or "the Company")
Announces an update on trading ahead of an Analyst and Investor site visit
Albemarle & Bond, a leading UK jewellery and pawnbroking business is pleased to announce an update on trading including the strengthening of its senior management team, ahead of analyst and investor store visits to be held today.
Trading update
The Company is pleased to announce that the business continues to perform strongly and the Board believes the results for the 12 months ended 30 June 2010 will be in line with market expectations. The following represent the key points in the Company's recent trading performance:
·; The core pawnbroking business, which represents 60% of gross profit including the sale of ex-pledge stock, is performing strongly with the pledge book, adjusted for prior year old gold loans, now showing c.10% year on year growth, a good indication of the Company's underlying performance.
·; Gold buying transactions have remained consistent with the strong performance in H1, before an incremental contribution from the new pop up shops. Whilst competition has increased to some extent, margins remain strong and we are increasing our exposure through the opening of further gold buying pop up stores which generate high returns on capital.
·; Management action to improve profitability across our financial services operations, especially around underwriting, bad debt management and collections, has continued to deliver improvements in profitability in the second half of the year.
·; As in the first half of the year, demand for gold jewellery has understandably slowed which has continued to impact retail sales in H2. However, this has been more than offset by the overall performance and also reflects that it has been more attractive to choose to scrap second hand items earlier and take advantage of current high gold prices, as opposed to offering them for sale via our retail channels.
·; The new store opening programme is on track with at least 15 opening in this financial year. They are trading in line with expectations and on average should break even within their first twelve months of opening.
·; The new stores have been funded from the increased level of organic cash generation and through continuing our focus on working capital efficiency. Headroom against facilities which stood at £16m at the end of H1 has increased to £17m comfortably absorbing the spend to support an accelerated store opening programme.
Strengthened operational team to support five year growth plan
As previously announced, the management team have formulated a growth plan that will shape the evolution of the Group over the next five years. The Company is progressing the key elements of this plan and has made a series of senior management appointments to support its implementation.
Be More Accessible To More Customers
A key strategic aim is to be more accessible to more customers and to use increased cash generation to create long term value through an accelerated roll out of new pawn broking stores. To this end, Mike Harrison has been appointed as Head of Property; he was previously the Stores Acquisitions Manager at the Original Factory Shop and has excellent experience in value retail property management. Looking ahead, we have an extensive pipeline of new stores and are well placed to meet our target of 25 new stores for the next financial year, the balance being weighted into H1 2011.
The Company has successfully piloted nine gold buying pop up shops which have traded well generating excellent returns and short paybacks. As a result, a further six pop up shops will open by the financial year end. Each store is typically located in shopping malls, has low fit out costs and is on a highly flexible 3-6 month lease.
Increase Appeal and Awareness
Increasing understanding of our services and broadening the existing offer with new product development is a key aim. As part of this objective, Alaric Churchill has been appointed as Commercial Director. Alaric will be responsible for marketing and new product development. He has a wealth of experience in financial services, retail and consumer marketing and has previously worked at Barclaycard as Marketing and CRM Director and Legal & General Bank as Head of Marketing.
In addition, as part of the Company's objective to broaden appeal and reach more of the target customer base, Kevin Allfrey has been appointed as Head of E-Commerce. Kevin will be responsible for developing the Company's longer term online strategy. He was previously at Lloyds Banking Group where he was Head of Digital for their credit card business.
Become More Efficient and Responsive
The Company has appointed John Lucas as Head of Information Technology. John, who was previously at Infogroup, will be responsible for integrating backroom systems across the Company and upgrading existing systems, processes and procedure.
Build A Differentiated And Exceptional Customer Experience
Nygel Scourfield, previously the Southern Divisional Director at Homebase has been appointed Operations Director of Albemarle & Bond Jewellers & Pawnbrokers. He will be responsible for this division's operational efficiencies and ensuring exceptional customer service. Looking ahead, we expect the new stores in H1 2011, will showcase the improvements in branding and customer environment that we are trialling.
Be The UK's First Choice Pawnbroker
These new appointments will enable us to extend the reach of our highly competitive pawnbroking service, as well as improve the marketing and CRM activities for this division. The upgraded Operational, IT and E-commerce capability facilitates the building of a larger and truly multi channel network of pawnbroking operations.
Also in a separate announcement being made today, Nicholas Mardon Taylor, a non-executive Director, is retiring and is being replaced by John Farrell.
Analyst and Investor Store Visit
The Company is hosting an analyst and investor site visit to some of its London based stores today. Following the visit, a presentation will be made to investors and analysts providing an overview of the Company's store portfolio and expansion strategy. No material new information will be provided.
Enquiries
| Albemarle & Bond | 0118 955 8100 |
| Barry Stevenson, CEO Liam Moran, CFO |
|
|
|
|
| Collins Stewart | 020 7523 8350 |
| Mark Dickenson Piers Coombs |
|
|
|
|
| Cardew Group | 020 7930 0777 |
| Tim Robertson Shan Shan Willenbrock |
|
Notes to Editors
Albemarle & Bond is a leading UK jewellery based pawnbroking business with 126 branches offering pawnbroking, jewellery retailing, gold buying and financial services through two formats: Albemarle & Bond Jewellers & Pawnbrokers 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 a consistent track record of revenue and gross profit growth.