Pawnbroker Albemarle & Bond has issued a profit warning and closed 33 of its pop-up cash-for-gold stores as the price of gold has weakened.
It said in a statement that its two core businesses pawnbroking and gold buying are directly linked to the gold price and as such declining prices have created "significant uncertainty" over the company’s prospects for the current financial year and its profitability. However, it did state that the company’s profitability before exceptional items is within the range of market estimates for its financial year to 30 June 2013.
In reaction to the pressures created by the weakening gold price, Albermarle & Bond has closed down 33 pop-up cash-for-gold stores that it said were no longer profitable.
It also said that it is in active discussions with its banks about covenants applying to the its banking facilities, which amount to £65 million and with its largest shareholder, EZCORP International, about underwriting an equity raise of about £35 million to be structured as a rights issue at 50p per share open to all shareholders.
This morning the company also announced that it has appointed former Provident Financial executive director Chris Gillespie as its chief executive. Gillespie will join Albermarle & Bond on October 7 and will be appointed to the board on October 18th at which time executive Greville Nicholls will revert to his former role of non-executive chairman.
Nicholls said: "We are delighted to have successfully completed our search for new leadership of the business and we believe that, in Chris Gillespie, we have found the best candidate for the job.
"I am confident that Chris’ consumer financial services and lending background, together with his board level management and leadership experience, will be significant contributors to begin turning around the business."
Albermarle & Bond said yesterday that it was planning to release another update on its financial prospects and discussions with banks and shareholders within the next 48 hours.