MIDAS SHARE TIPS UPDATE: Ramsdens shares rise as pawn shops selling jewels sparkle thanks to strong gold prices
- The Middlesbrough pawnbroker announced a £600,000 one-off profit last week
- Midas recommended Ramsdens shares last December at £1.66, they're now £1.94
Ramsdens is also benefiting from the popularity of gold. The Middlesbrough-based pawnbroking, jewellery and foreign exchange chain last week announced a one-off £600,000 profit from selling gold jewellery to be melted down.
The move was timed to take advantage of current strong gold prices, and brokers responded with enthusiasm.
Midas recommended Ramsdens shares in December last year, when they were £1.66. They closed last week at £1.94, having briefly topped £2 on the day chief executive Peter Kenyon revealed his neat little gold sale.
Ramsdens made a one-off £600,000 profit from selling gold jewellery to be melted down
Kenyon also said that the company was trading well, despite difficult conditions on the high street.
Ramsdens is less exposed to the tough economic environment than many shops because it sells a wide range of goods, from second-hand jewellery to holiday cash, and runs a thriving pawn business too.
The group is on the lookout for acquisitions, which should boost growth over time. Analysts forecast a 14 per cent increase in turnover to £53.6million for the year to March 31, 2020, and an 18 per cent rise in underlying pre-tax profits to £7.9million, including the one-off gain.
The dividend is expected to climb 3 per cent to 7.4p, putting the stock on a yield of almost 4 per cent.
Further increases are pencilled in for 2021 and beyond.
Midas recommended Ramsdens shares in December last year, when they were £1.66
Midas verdict: The retail sector has been filled with profit warnings, shop closures and other tales of woe. Ramsdens seems to be holding its own. Its high street customers are loyal and it has a small but fast-growing online business selling jewellery and foreign currency.
Ramsdens’ product range and ambition may continue to shield the business from some of the problems affecting the high street. But, with economic conditions weakening, shareholders have a right to feel cautious.
Having enjoyed a 17 per cent increase in the share price since last year, they may choose to sell half their stock and bank some gains. They can then keep the rest and hope that Kenyon continues to deliver.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Blue Whale fund manager on the best of the Magnificent 7
- Mail Online takes a tour of Gatwick's modern EV charging station
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Mercedes has finally unveiled its new electric G-Class
- Mini Cooper SE: The British icon gets an all-electric makeover
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- How to invest for income and growth: SAINTS' James Dow
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- We must copy the US to catch up, says HAMISH MCRAE
- Nationwide members pocket £350m loyalty bonus
- Coca-Cola HBC's boss pocketed more than £320,000 in 'cost...
- TONY HETHERINGTON: Nightmare over Neighbourhood Watch...
- Former LV boss Mark Hartigan is up to his old tricks as...
- What I've learned about money (and love) in 36 years of...
- It makes a £2 billion profit selling garments from just...
- JEFF PRESTRIDGE: Cash access is still so crucial to the...
- St James's Place facing humiliating exit from FTSE 100
- CITY WHISPERS: Boss Cook-ing up a big sparkler to woo De...
- Sales at Bloomsbury soar thanks to the craze for...
- Pressure on IMF to change gloomy forecast as Britain...
- CQS NATURAL RESOURCES GROWTH AND INCOME: Golden...
- Tesla's chairman dismisses as 'c**p' claims she is too...
- MARKET REPORT: China's Ping An insists it is not bailing...
- ALEX BRUMMER: End this Czech farce at Royal Mail now
- Thames Water is worthless: That's the verdict of its...
- INVESTING EXPLAINED: What you need to know about pandemic...