How investors could profit from Ramsden Holdings' four-part growth strategy

Ramsdens Holdings (Aim: RFX), worth £83 million, provides financial services through four channels: foreign-currency exchange (forex); pawnbroking; jewellery and watch retail (new and second-hand); and precious-metal purchases. Pre-owned jewellery and watches sell at substantial prices, with diamond rings fetching between £100 and £40,000, and Rolex watches £2,000-£30,000.

The firm is well diversified, as these four channels all provide comparable profit contributions. In addition, Ramsdens offers money transfers through Western Union, which makes a small contribution to overall earnings.

Ramsdens Holdings' four-part growth strategy

Ramsdens serves its customers through an expanding estate of 169 UK stores and a growing online presence. Websites operate for jewellery and forex (with a click-and-collect service). A pawnbroking site opened in November 2024, and a gold-buying one came online in March 2025. Online sales now make up 20% of jewellery revenue and 12% of forex sales. These proportions are expected to increase.

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The company has a four-pronged growth strategy: driving growth from the existing store estate, adding new shops, acquisition opportunities, and growing its online presence. The three main UK pawnbroking companies – H&T, Cash Converters and Ramsdens – have about 650 stores between them, compared with about 130 competitors with a total of around 220 stores between them. As there are only one or two shops per business, there are opportunities for acquisition as the sector consolidates.

Beyond London, the UK has some 350 locations with populations over 30,000, so there are significant opportunities to expand Ramsdens’ current estate of 169 shops, particularly in areas south of a line between Bristol and The Wash, where it currently has only nine of its stores and is looking for opportunities to acquire more, in addition to seeking out suitable sites.

A new branch typically makes a loss in its first year, a small profit of around £30,000 in its second year and a profit of £100,000 in its fourth. Seven new shops were opened in 2023-2024, together with one purchased from a franchisee, leaving only one franchised store in the current 169. A further five new shops are set to open in 2024-2025.

The increasing profit as a store matures means that all shops opened in 2021-2022 or later will increase their profit in 2024-2025. Ramsdens has flexible store leases, and where appropriate, it relocates shops to areas of higher footfall and in which the site offers a larger window display. Three stores were relocated in 2023-2024 and are already showing improved performance.

Online expansion

Ramsdens’ online presence is growing and in the second half of 2023-2024 online sales grew 35% year on year to £4 million, or almost 8% of total revenue. Ramsdens has 15,000 items on its jewellery website and premium watches comprise 65% of jewellery sales. The pawnbroking website opened in late 2024 and the gold-buying website began trading in March 2025. Both should help to accelerate online sales.

Ramsdens has a strong balance sheet with cash of £15.8 million and debt of £8.4 million (as of 30 September 2024). Current lease liabilities are £2.4 million, with non-current ones worth £7.3 million. This healthy balance sheet gives the company the financial strength to make acquisitions or invest in new shops.

In addition, the company has a £15 million revolving credit facility to provide working capital for growth and to fund people’s summer currency requirements. On 30 September 2024, £8.5 million had been drawn from it. Net operating cash flow in 2023- 2024 was sufficient to cover generous dividends and add to the cash pile.

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