During the UK recession one business
which went from strength to strength was pawn broking. As the price of gold
soared and people sought quick and ready access to funds many opted to pawn
jewellery.
Pawnbrokers such as Albemarle &
Bond were among the beneficiaries of the financial crisis, with more people
using their services as mainstream banks offered fewer loans
Nothing lasts forever and the 30%
decline in the value of Gold since the end of 2011 is having a seriously
damaging effect on the pawn broking industry. Albermarle & Bond the UK’s
second largest pawn broking group is suffering the consequences of a fall in
gold prices combined with a spiralling debt book.
At the end of December the groups
borrowing stood at £50.3 million whereas profits for the year to the end of
June are forecast to have fallen by around 50% to £12 million.
Now with the spectre of breaching its
banking covenant there is the irony of a pawn broker looking to seek funds from
its shareholders or trying to raise additional funding from other sources to
secure its survival.
No comments:
Post a Comment