Struggling pawnbroker resorts to melting down retail gold jewellery stocks to stay within bank borrowing agreements as profits slump
November 27, 2013 Leave a comment
Albemarle & Bond smelts its own gold jewellery to stave off bankruptcy
Struggling pawnbroker resorts to melting down retail jewellery stocks to stay within bank borrowing agreements as profits slump
By John Ficenec
2:19PM GMT 27 Nov 2013
The beleaguered pawn broker Albemarle & Bond is smelting down its own gold jewellery to stave off bankruptcy. The company said on Wednesday it was carrying out a programme of exceptional smelting of retail jewellery stocks in order to stay within constrained banking facilities. The company said it now expects to make a trading loss in the first five months of the year, and that the pledge book of pawned items had declined by 12pc on the same stage last year.Britain’s second largest pawnbroker, said that it currently has debts of £50.1m, out of an agreed maximum of £53.5m. The pawnbroker’s banks have agreed to delay tests on indebtedness until February 3.
The company’s biggest shareholder American pawnbroker EZCORP, which owns a 30pc stake in the company, said it would not underwrite the 50p-a-share sale to raise £35m in early October.
Shares in the group, which have fallen 83pc in the last 12 months as the price of gold fell, slumped 44pc to 21 pence in early trading, giving the group a market value of £11.7m.
The firm, which also offers short-term loans to cash-strapped consumers, issued a profit warning in April.
Albemarle & Bond’s fortunes have fallen as the price of gold has slumped by 26pc this year.
The company said its actions to control costs, including the closure of all but two of its gold-buying pop up shops, would not stop it making a loss at the core earnings level.
“Tough trading conditions have continued to impact our results, but we are making progress controlling costs and managing within our constrained banking facilities,” said Chief Executive Chris Gillespie.
About bambooinnovator
Bamboo Innovator 