Business and Strategy

Business and Strategy

Our Business

Ramsdens is a diversified financial services provider and retailer which was enjoying a strong growth period to March 2020, prior to the impact of the COVID-19 pandemic. The Group has not been immune from the impact of the pandemic which has touched all aspects of society and adversely impacted the global economy. The Board is confident that Ramsdens is well-positioned to navigate these unprecedented times, supported by our strong balance sheet and good cash position.

The Group operates in the four core business segments of;

  • foreign currency exchange, primarily holiday currency notes supplemented by travel card sales and International bank to bank transfers
  • pawnbroking loans, which are short term loans up to 6 months in duration secured on items of jewellery or watches
  • precious metals buying, which is the buying of gold and silver from customers and selling the non retail pieces to a bullion dealer, and;
  • retailing of second hand and new jewellery

During the last financial year, the Group served more than 900,000 customers across its different services.

The business is headquartered in Middlesbrough and has a trusted brand. The first Ramsdens store opened in Stockton-on-Tees in May 1987 and there are now over 160 stores including 4 franchised stores (126 as at September 2017) supported by a growing online presence.

In a market where trust is critical, Ramsdens is an increasingly recognised brand in each of our four key business segments and our continued investment in marketing, store appearance and store location remain key factors in supporting the Group's growth.

The Board believes that the strong balance sheet and growing positive cash flows to March 2020 underpin the Group's ability to leverage the strength of a recognised high street brand with a diversified offering. The Board is confident that Ramsdens can continue to adapt and prosper, and is focused on delivering strong and ongoing capital and income returns for investors once we come through the COVID-19 impacted trading period.

Our Growth Strategy

Once we move past the COVID-19 adversely impacted trading period and into a "new normal" trading environment, we expect Ramsdens' growth strategy to remain unchanged being built on the following pillars:

  1. Continuing to improve the performance of our core estate
  2. Expanding the Ramsdens branch footprint in the UK
  3. Developing our online proposition
  4. Continuing to appraise market opportunities presented by operating in a challenging market, and;
  5. Developing our people

Continuing to improve the performance of our core store estate

The Group has a continuous improvement philosophy. This has resulted in initiatives to:

  • Increase staff skills, motivation and performance rewards
  • Increase the foreign currency margin and the average transaction value
  • Improve retail operations to generate more from the pawnbroking loan book
  • Increase the retail jewellery stock whilst maintaining close control of stock turnover and discounting older stock lines
  • Investing in the retail jewellery proposition
  • Cross selling services across the customer base
  • Review store capacity and location

By increasing the performance of the existing stores, the Group will improve the return on capital employed.

Expanding the branch footprint in the UK

The Group has the opportunity to infill within existing geographic territories, “ripple out” from existing territories or seek new territories as it has in the past with growing branch estates in Wales and Scotland.

Developing our online proposition

The development of the online channel is seen as additive to the core branch proposition. Online is viewed as its own profit centre, akin to a branch, but also acts as a reference point for all branches to aid in-store sales.

Ongoing investments have been made in relation to search engine optimization and the customer journey to improve the results of website which is a transactional website focused on jewellery retail only and which has a greater focus on foreign currency exchange.

The above investments are a continuation of a journey to improve the online proposition from Ramsdens in order for the business to become multi-channel. 

Continuing to appraise market opportunities presented by operating in a challenging market

The previous backdrop of Brexit uncertainty and generally a struggling retail market, has been compounded by the impact of the COVID-19 pandemic. The Directors believe that the strength of the Group’s balance sheet, strong cash generation and diversified income streams will enable it to take advantage of opportunities that may present themselves as weaker businesses contract or withdraw from the high street.

The number of pawnbroking providers in the UK is now c900 following the closure of the store estates of Instant Cash Loans Limited trading as The Money Shop and Speedloan Finance Limited trading as Albemarle & Bond Pawnbrokers and Herbert Brown Jeweller & Pawnbrokers. The higher than average gold price is currently helping pawnbrokers.

Meanwhile, the impact of COVID-19 on travel has been severe and as a consequence, the Directors believe that travel agents and single service bureau de changes have greater challenges in trading through to a 'new normal'. Together with Banks continuing to close locations, this may provide the Group with opportunity to obtain a greater share of local foreign currency exchange markets.

Retail jewellery trading is expected to be challenging with social distancing restrictions. The Directors believe the impact on some jewellers will lead to store closures.

Developing our people

At the heart of our growth strategy is a continuous improvement ethos. This can only be embedded across a business by the people within it sharing a common mission, having a willingness to develop, being motivated to work hard and maintaining a focus on the customer.

Our people are well trained and highly skilled which allows the business to devolve decision making to staff close to the customer. This empowerment helps Ramsdens’ people to better engage with, and be part of, the local community, which is a key contributor to the Group’s strong customer relationships, high repeat business, growing customer base and growing product penetration across services. It is notable that the main source of customer acquisition remains customer recommendation.

During the last year, 40 Senior Managers within the business have and are participating in a leadership development programme. This programme has been designed to enable these key influencers to live the Ramsdens core values and embed them throughout all activity within the business.