Pawnbroking firm Ramsdens has significantly upgraded its annual profit forecast, citing record levels of lending activity driven by consumers capitalising on soaring gold prices. The lender and retailer reported that the precious metal's rally is stimulating consumer demand and substantially bolstering its financial performance.
Record Lending Momentum
Ramsdens disclosed that pawnbroking lending reached unprecedented levels in February, with strong momentum continuing into March. This surge has resulted in an 18% increase in its loan book since the end of the previous financial year in September. The service allows individuals to secure loans using jewellery or watches as collateral, providing a quick credit alternative amid tightening financial options.
Jewellery Sales and Purchasing Operations
Beyond lending, Ramsdens operates a thriving jewellery retail business, with revenues from its shops increasing by approximately 25% year-on-year. The company also purchases unwanted jewellery from customers, subsequently selling these items through its physical stores, online platforms, or to bullion dealers, creating multiple revenue streams from the gold market.
Gold Price Rally and Geopolitical Factors
The dramatic rise in gold prices, which have hit record highs during 2026, is primarily attributed to global geopolitical instability, ongoing conflicts, and concerns over international tariffs. A notable spike occurred in early March following escalated tensions in the Middle East, pushing gold to around $5,400 (£4,040) per ounce.
Ramsdens noted that the average gold price year-to-date is roughly 50% higher than the previous year, with the current geopolitical and economic climate suggesting elevated prices may persist for the foreseeable future.
Revised Profit Forecasts
Due to robust trading in the first five months of its financial year and the favourable outlook for gold prices, the London-listed company now anticipates an annual pre-tax profit of at least £24 million, potentially reaching £28 million. This marks a substantial increase from analysts' earlier forecasts of £21.1 million for the year ending September 2026.
Executive and Analyst Commentary
Chief Executive Peter Kenyon emphasised that the business is benefiting significantly from the high gold price, which is enhancing both customer demand and profitability within its precious metals purchasing segment. He highlighted underlying progress across all operational areas.
Russ Mould, Investment Director at AJ Bell, observed that this represents Ramsdens' second profit forecast increase in 2026, following a February trading update, positioning the company for record annual earnings. He noted that strong jewellery sales and rapid growth in the pawnbroking pledge book are contributing factors beyond the gold price surge, though the foreign currency exchange business remains steady with potential Middle East conflict impacts.
Investor confidence was evident as Ramsdens' shares surged by approximately 10% following the announcement, reflecting market optimism about the company's strengthened financial trajectory amid favourable gold market conditions.
