Albemarle and Bond predicts end to pawnbroking boom

Pawnbroker Albemarle and Bond says it is putting the brakes on new store openings after it suffered a huge fall in the number of customers selling their gold jewellery for cash. Since the recession took hold Albemarle has benefitted from the so-called gold rush as hard-up Britons took advantage of a strong gold price and sold family trinkets. But a sharp slowdown in the last six months suggests the market has peaked and Albermarle boss Barry Stevenson said it would open just five stores this year compared with 25 in the year to 30 June. "The downturn in the gold-buying market happened very quickly and has set a new level to which we have quickly adapted," he said. Gross profits at its gold buying business jumped 87% in the first six months of the year but that figure slowed to just 18% in the second half. Over the last three years the pawnbroking chain has doubled in size thanks to the profits generated by its gold-buying business. Stevenson said current trading at the gold division had continued in a similar vein, which was a "major reduction" on the peak experienced in the first half of the previous financial year adding. Furthermore, he said "we do not currently expect any recovery in these trends". Stevenson insisted that gold-buying would remain a "substantial part" but acknowledged "there remains uncertainty around any further drop-off in gold buying volumes". Despite posting a small increase in annual profits to £21.4m, the company's share price closed down 12% to 260.5p. With the important gold-buying market under pressure, Albemarle is pushing into new areas including online lending and offering cash for second hand mobile phones. Yesterday it announced the acquisition of Early Pay Day Loans for £1.2m.