Business and Strategy

OUR BUSINESS

The business is headquartered on Teesside. The first Ramsdens store opened in Stockton-on-Tees in May 1987 and as at 31 January 2025 there are 168 Ramsdens stores including one franchised store supported by a growing online presence. The Group was admitted to AIM in February 2017.

Ramsdens is a diversified financial services provider and retailer. The Group operates in the four core business segments of;

• foreign currency exchange, primarily money for holidaying customers, including a multi-currency card 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 luxury pre owned watches and pre owned and new jewellery

The Group’s diversified income streams not only expose Ramsdens to multiple growth opportunities, but also provide resilience in challenging times. This model has consistently allowed the business to move forward against a backdrop of more challenging economic climates. While the macro-economic landscape continues to impact consumer facing businesses with rising costs, in particular energy and employment costs, at the same time the Group has benefitted from the high gold price that has risen as a result of numerous global events.

The Group’s proven growth strategy remains unchanged and the Ramsdens team have again excelled at implementing it during FY24, allowing us to further enhance and expand our store estate as well as growing the use of our new multi-currency card in its first year of operation along with progressing our new dedicated websites. I am exceptionally proud of the team’s commitment and wish to publicly thank them for their continued effort and to recognise their success.

BUSINESS REVIEW

During the year we continued to improve the core estate, grew our multi-currency card customer base, expanded the store estate with seven new stores and one acquisition, and invested in our online operations. We also expanded into a new head office, cementing our roots in Teesside, which will allow for greater expansion across operations, and were authorised by the FCA as an authorised payment institution to add to our consumer credit permissions. This authorisation will allow Ramsdens to offer international money transfers directly for customers and not through a third-party relationship going forward.

The improvements in the core estate have been supported by a programme to invest in refreshing our stores with a range of initiatives including new LED lighting, modern flooring, and stronger in-store branding. We relocated three stores in Scunthorpe, Cumbernauld and Cardiff during the period. Scunthorpe was relocated in April and all income streams have seen transformational performance. Cumbernauld was relocated from the old retail centre to the new centre and we are making excellent progress in improving our retail jewellery performance. Cardiff was relocated in September out of necessity following issues with the previous property’s condition. All stores that have been open for more than three years are operating profitably at a contribution to head office costs level. Given the breadth of the estate this is testament to the strength of our model, our store portfolio and most importantly our teams.

We have opened 15 new stores in the last two financial years and all are making good progress, with further profitability to come as these stores mature. The stores opened in FY24 were Blackburn, Central Cardiff, Poole, Romford, Burnley, Telford, and Blackpool. Since the period end, we opened a new store in Grantham in October 2024. We are pleased to say that all new stores are trading well, with several well ahead of expectations. We completed the purchase of one of our two franchised stores (located in Bury) in March 2024. We ended the financial year with 169 stores including one franchised store.

STRATEGY

The Board believes that its existing strategy remains the right one to grow our business and deliver sustainable value for all our stakeholders.

We continue to concentrate on:

1. Improving the performance of the existing store estate
2. Developing our online proposition
3. Expanding the Ramsdens branch footprint in the UK
4. Acquisition opportunities
5. Focusing on sustainability through our ESG policy

1. Improving the performance of the existing store estate

The Group has an ethos of continuous improvement and believes that every store has an opportunity to grow further. At the same time, the younger stores will continue to mature, the relocated stores continue to grow and this will add to Group profitability.

Our mission statement is to have a great customer offering backed up by fantastic service leading to customers being ambassadors for Ramsdens. This remains a focus for the Group because recommendations from family and friends continues to be the biggest source of new customers.

We are extremely proud of our 5-star Trustpilot ratings for our retail jewellery and foreign currency services.

Our cross-sell penetration rates are growing but remain low in absolute terms, which is a great indicator of the significant opportunity that exists. For example, only 2.2% of FX customers bought jewellery from Ramsdens in FY24.

In addition, we continually aim to improve the performance across our key income streams:

Foreign currency:

• Trust - stock availability and transparent pricing continue to build trust among consumers. 
• Convenience – our stores are conveniently located in high footfall areas, on high streets and in shopping centres. 
• Price – our exchange rates are competitive online and in store and we can continue to be competitive as we can spread our operating expenses across more services. 

• The sales of our foreign currency have strong momentum from FY24.
• The growing reach of Ramsdenscurrency.co.uk has driven a 30% increase in click and collect transactions in our stores.  While the average commission rate is lower online, the average transaction value is 60% greater, plus we have the opportunity to cross sell our other services.   
• Our market-leading multi-currency travel card customer base is growing.  We are confident this will grow in FY25 and beyond as customers maximise the competitive exchange rates on offer and the flexibility and ease of using the card and the accompanying app.  This allows the Group to capture more of our customers’ holiday spend while abroad. 
• The International Money Transfer service will be relaunched in FY25 following the Group’s approval by the FCA as an Authorised Payment Institution.  Our branch network will be able to facilitate smaller value payments for customers in addition to a digital offer for the service.  This service will need to grow over the coming years, and has potential in time to be a significant income stream for the Group.

Pawnbroking:

• We will continue to build on the trust and high repeat customer volumes earned by providing a high level of service and grow the customer base through word-of-mouth recommendations, alongside our other marketing initiatives.
• Our loan to value ratios are continuously reviewed in line with second hand retail pricing and the customer’s history of repaying loans. This may allow more to be lent to customers but the Group’s ethos is to have prudent lending policies.
• Our new dedicated website will create new business for the stores by creating awareness of the pawnbroking service available at Ramsdens. The website will also be focusing on attracting higher value lending and the Group will use its experienced branch and area managers to offer a bespoke service.
• We will maintain focus on giving customers a fair deal and will continue where required to reduce interest rates to support customers in financial difficulty to get their pledged goods back.
• Customers who require longer term support will continue to be encouraged to repay part of their capital borrowed so that the loan has an improved chance of being repaid and the pledged jewellery being returned to the customer.
• Where in some cases customers default, we will continue to use our growing retail expertise to obtain the best price possible for their pledged items.

Jewellery retail:

• The focus in FY24 on stock levels, quality and price and the progress made in H2 gives confidence and optimism that the Group is on track for future growth in its retail jewellery segment.
• The investment in the new head office will allow greater processing capacity which will assist improvements in the replenishment of each store’s stock.
• The concept window design roll out was completed in FY24 and this brings greater efficiency in stock replenishment.
• We are continuing to invest in our retail website which acts as a stock catalogue for our branches to facilitate further in store sales while allowing customers to fully transact online.
• Where appropriate, we will relocate to higher footfall locations and improve the jewellery offer with larger window display areas, often at similar rents to current locations.

Purchase of precious metals

• We are increasing the awareness amongst our existing customer base, primarily foreign currency exchange customers who are unaware of the service or the value held in damaged, unwanted or unworn jewellery. In FY24, 2.5% of our FX customers sold unwanted jewellery to the Group.
• When launched, our new gold buying website will seek to attract new customers who may be unaware of the service or the value of their unwanted or unworn jewellery.

Our people are key to implementing our strategy. We invest heavily in staff training and communication, focussing on the necessary product skills but also the customer conversation. We are pleased to say that the excellent feedback we receive in our staff engagement surveys has resulted in greater staff retention. With more experienced staff, customer interactions improve, driving improved customer service, revenue and ultimately branch profitability. The people in our business live and breathe the Ramsdens ethos and we are committed to ensuring that our staff not only remain productive but also feel valued and rewarded in their careers at Ramsdens.

The changes in the Budget, announced in October 2024, will increase staffing costs from April 2025. The change to the employer’s national insurance rate and threshold, will increase costs by £0.8m per annum. The Government also increased the National Living Wage (NLW) by 6.7% for those over 21 to £12.21 per hour. The Group will continue to pay the Real Living Wage (RLW), which has increased by 5% to £12.60 per hour, as its minimum pay for staff, effective from April 2025. Our 2025 pay review will result in our people receiving an above inflation pay review.

Furthermore, our fixed price energy contract was renewed in February 2024 for two years. The full year impact in FY25 will add an additional £0.25m over FY24. All of our electricity supply comes from renewable sources.

The Group believes that it can continue to make progress despite the aforementioned increased costs.

We continue to negotiate rents downwards where there is an opportunity to do so, balanced with a desire for flexibility with lease expiry and break dates. Our property portfolio has been purposefully managed to be as flexible as possible to provide risk mitigation in case any of our stores become isolated and performance deteriorates.

We believe our store estate performance is complemented by a strong online proposition.

2. Developing our online proposition

We see the development of our online capabilities as being complementary to our store estate and both will benefit as the store estate expands and the websites generate increased brand recognition.

Jewellery retail website
www.ramsdensjewellery.co.uk

Revenue from the online retail jewellery website increased by 8% to £7.2m (FY23: £6.7m). H2 performance was particularly strong with revenue growth of £1m over FY23 following a slower than anticipated H1. This performance excludes jewellery sales in branches, which use the in-store digital facility to access the website as a catalogue of stock of over 17,000 items.

The website is continually reviewed for search engine optimisation, pay per click return on investment and affiliate schemes. Each area is refined on an ongoing basis to drive future success. The jewellery website will undergo a platform refresh in 2025.

The retail website revenue is still low when compared to other retail jewellery websites and therefore provides an opportunity for growth.

Foreign currency website
www.ramsdenscurrency.co.uk

The currency website continues to grow. Click and collect sales generated by the website grew by 23% in FY24 to £51.7m (FY23: £42.0m) and now represents 12% (FY23: 10%) of all currency sales. Home delivery volumes are low but offered to complement the services.

The currency website includes the ability to order and reload the Ramsdens Mastercard® Multi-Currency Card. Online card sales are still only a small proportion of all card sales and we are working with Mastercard to improve the online buying journey.

The currency website is also the conduit for attracting leads for International Money Transfers and the digital gateway to making a payment.

Pawnbroking website
www.ramsdenspawnbrokers.co.uk

The pawnbroking website was launched in November 2024 and has two areas of focus. Firstly, it provides customers with 24/7 access to repay their loan when it is convenient for them and secondly, it is a lead generator for customers wanting to use their assets to borrow cash.

We are investing in developing SEO and pay per click campaigns for this service now that it is on a standalone website. The first few weeks since launch have been encouraging.

Gold buying website
www.ramsdensgoldbuying.co.uk

This new website is dedicated to gold buying and will launch in Q1 2025.

While Ramsdens buys a lot of unwanted gold jewellery from customers, a significant number of consumers are unaware of the value in their unworn and potentially damaged jewellery. This website will benefit branches as well as develop into a profitable online income stream.

Legacy website
www.ramsdensforcash.co.uk

The ramsdensforcash.co.uk website will become a portal to individual websites for each of our four key income streams as well as providing background information to who we are and what we do.

3. Expanding the Ramsdens branch footprint in the UK

The Group ended the financial year with a portfolio of 169 stores offering the same services in small towns and larger cities. While the proportion attributed to each key income stream differs across the estate, the sum of the parts is that all mature stores are profitable and immature stores will grow their income streams and in turn, increase profitability.

This tried and tested operating model can be replicated in new locations and allows for leveraging off the centralised costs of the head office support services.

There are c.350 towns and cities with a population of 30,000 or more in the UK. We believe that there are significant opportunities to grow the store footprint over coming years given we have proven, successful stores in towns with a population of less than 15,000 where we have successfully established a community of returning customers.

A typical new store is an investment of approximately £0.5m, split equally into the store design and appearance and working capital assets such as jewellery and cash. We will continue to open new stores on a geographic rippling basis to leverage our existing operational strength and capacity.

During the year, we opened seven greenfield sites and acquired our franchised store in Bury. Romford opened in the South East, as well as stores in Poole to complement Boscombe in Dorset, in Cardiff city centre, in Telford to expand towards the Midlands and in Blackpool, Burnley and Blackburn in the North West.

We are very happy with the progress made by the FY24 new store cohort.

Grantham opened following the year end in October 2024 and its early weeks of trading have been encouraging.

We have a strong pipeline of researched towns where we are awaiting the right unit to become available. Units in towns are identified by taking into account footfall and adjacent retailer quality. The challenges at present are the state of some high streets and shopping centres with significant temporary lets and voids. We continue to hope for a full reform of the non-domestic rates system which may encourage more retailers to open stores and recreate vibrant high streets. For these reasons, we have reduced the planned number of store openings in FY25 to a further four, however, we expect to increase new store openings in FY26 and beyond.

4. Acquisition opportunities

We continue to look for acquisition opportunities in the market, considering any potential acquisition against the alternative of opening a new store using our successful branch model.

Historically we have benefited from acquiring pawnbroking businesses, however, the industry is quite fragmented and often businesses are under invested and generate lower returns on the capital employed. The number of pawnbrokers operating in the UK continues to fall. The main reasons for closures tend to be the cost of regulatory compliance as well as a lack of internal succession structures at what are typically one store, family businesses. We remain active in speaking to pawnbroking businesses who may potentially be looking to sell in the upcoming years and are well positioned should opportunities arise.

We have previously converted independent jewellery stores into successful Ramsdens branches, but recent opportunities have not been attractive with them holding too much obsolete stock.

We have and will continue to consider vertical diversification with repair or watch repair businesses and if the right opportunity presents itself at the right price, we would be interested.

We purchased our Bury franchisee in March 2024. This business has performed in line with expectations since acquisition with the franchisee remaining with the Group as the branch manager.

5. Focusing on sustainability through our ESG strategy

We know that our long-term strategic aims will only be delivered if we maintain our good sustainable practices built on firm foundations.

Our foundations are:

• Environment – we are very conscious of the impact of our activities on the environment and our aim is to reduce our energy use and recycle where we can
• Social – our people. How we look after our people, their wellbeing, our inclusiveness and creating opportunities for all staff to learn, develop and progress their careers is critical in how we then serve and help our customers
• Social – our communities in which we operate. How we look after customers, suppliers and the wider community including supporting local charitable organisations helps define our Business
• Governance – we are committed to having the highest standards of governance throughout the business. We have a strong structure of oversight of what we do and how we do it, utilising our market leading in house bespoke software to provide the necessary controls and reporting.

Please see our page on ESG which has further detailed information.