19 Apr 2013 17:42
Albemarle & Bond Holdings PLC (the "Company")
19 April 2013
Trading Update & Board Changes
On completion of Q3 trading and following a 14% drop in the sterling gold price during the last week, Albemarle & Bond today publishes an update on current trading expectations for the 12 months ending 30 June 2013.
The interim results announced on 12 February 2013 noted that profits had been impacted by tougher and more competitive markets and by a reduction in gold buying profits.
In the last three months we have seen another significant drop in profits from our gold buying business, after three stable quarters of profit performance following the initial drop in April 2012. We expect this decline to accelerate as a result of the sudden 14% drop in the gold price from the levels seen in March 2013.
Additionally our pawn loan business continues to be under pressure from the reduction in gold jewellery in circulation and the increase in high street competition, resulting in a declining pledge book. The lower gold price will reduce future loan advances and scrapping recovery on unredeemed pledges and retail stocks.
The other business divisions are trading broadly in line with the trends reported with our H1 results, and costs remain under tight control. Debt levels, after paying out the final 2012 dividend of £5.4m in January 2013, remain the same as at the half year end.
Since the half year, the Board has engaged with consultants to review opportunities for profit improvement and new products. In the current financial year, however, the costs of these initiatives and consultancy will exceed the benefits by circa £1m.
The Board is now of the view that underlying trading will lead to profits for the financial year ending 30 June 2013 being materially below current market expectations.
In these circumstances the Board has decided that new leadership is needed. Barry Stevenson (CEO) will bring forward his planned retirement and will leave the Board. Greville Nicholls (Non-executive Chairman) has accepted the Board's invitation to become interim Executive Chairman with immediate effect whilst the search for a new Chief Executive Officer is conducted.
Greville was Chief Executive of Albemarle & Bond from 1995 to August 2009 and oversaw a period of steady profit growth in the business and the Board is very grateful that he is retaking an executive role at this time. Greville will have the full support of the Board in focusing on initiatives to improve Albemarle & Bond's performance.
Greville Nicholls commented:
"We are disappointed that we have had to revise down our expectations for the year. The recent fall in the gold price has added an additional and unexpected challenge for the business.
"The Board is focused on improving the Company's performance and will report further on these initiatives shortly after the year end.
I would like to thank Barry for the very significant contribution he has made over the last three and a half years in modernising and expanding our business and wish him well in his future ventures."
Enquiries:
Albemarle & Bond Holdings PLC 0118 955 8100Greville Nicholls - Executive Chairman
Liam Moran - Chief Financial Officer
Canaccord Genuity 020 7523 8350Piers Coombs / Bruce Garrow / Lucy Tilley
MHP Communications 020 3128 8793
Reg Hoare / Katie Hunt