Troubled pawnbroker moves announcement of annual report to December.
Burdened pawnbroker Albemarle & Bond has resorted to melting down gold stock in order to raise funds, according to a trading update released on November 27.
The company said the impact of the competitive trading environment has continued to be a challenge, with no signs of recovery in its pawnbroking and gold buying sector.
The trading update outlined that Albemarle’s pledge book has declined by 12% year on year as of November 23 2013, as advances continue to be under pressure from a competitive market and a falling gold price. The gold price has seen further weakness and, as of November 26 2013, was 27% below the average price for March 2013.
The pawnbroker said that, as a result of the fluctuating gold price and marketplace factors, it will have incurred a loss at the EBITDA level in the first five months of the financial year "despite action taken to closely control operating costs, including the closure of all except two of the group’s pop up shops gold buying chains".
Albemarle has also incurred the costs owing to these closures and will continue to incur advisor costs related to the refinancing going forward. The company said it has implemented carefully targeted local promotional and marketing activity as well as other actions to improve underlying trading.
Among other initiatives to manage its funds, Albemarle has resorted to constraining its unsecured Speedloan lending, has closed its online lending business, and launched a programme of "exceptional smelting of retail stocks", enabling it to sell on the refined gold rather than it remaining on the shelf unsold jewellery.
At present, the company has banking facilities of £53.5m with current debt of £50.1m as at November 23 2013.
Albemarle also announced that it has delayed the publication of its 2013 annual report to reflect current uncertainties. It plans to announce the results for the year ended June 30 2013 on or around December 9 2013.
Albemarle & Bond chief executive Chris Gillespie said: "Tough trading conditions have continued to impact our results, but we are making progress controlling costs and managing within our constrained banking facilities."