Ramsdens Holdings PLC Annual Report 2022

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FY2022 Annual Report · Ramsdens Holdings PLC

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RAMSDENS

HOLDINGS PLC

Annual Report and Accounts

Year ended 30 September 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Contents

STRATEGIC REPORT
Chairman’s statement

Chief Executive’s review

Business review

Financial Director’s review

Section 172 statement
Principal risks and uncertainties

CORPORATE GOVERNANCE
Board of Directors

Chairman’s introduction

Corporate governance principles

Audit and Risk Committee report

Nomination Committee report

Remuneration Committee report

Directors’ report

Statement of directors’ responsibilities

FINANCIAL STATEMENTS
Independent Auditor’s Report

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

Parent company statement of financial position

Parent company statement of changes in equity

Notes to the parent company financial statements

Company advisors

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this document, including any information as to the Group’s strategy, plans or future financial or operating performance, constitutes ‘‘forwardlooking statements’’. These forward-looking statements may be identified by the use
of forward-looking terminology, including the terms ‘‘believes’’, ‘‘estimates’’, ‘‘anticipates’’,‘‘projects’’, ‘‘expects’’, ‘‘intends’’, ‘‘aims’’, ‘‘plans’’, ‘‘predicts’’, ‘‘may’’, ‘‘will’’, ‘‘seeks’’, ‘‘could’’, ‘‘targets’’, ‘‘assumes’’, ‘‘positioned’’ or ‘‘should’’ or, in each case, their negative
or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout
this document and include statements regarding the intentions, beliefs or current expectations of the Directors concerning, among other things, the Group’s results of operations, financial condition, prospects, growth, strategies and the industries in which the
Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future or are beyond the Group’s control. Forward-looking statements
are not guarantees of future performance. Even if the Group’s actual results of operations, financial condition and the development of the industries in which the Group operates are consistent with the forward-looking statements contained in this document,
those results or developments may not be indicative of results or developments in subsequent periods. Accordingly, undue reliance should not be placed on these statements. The forward-looking statements contained in this document speak only as of the
date of this document. The Group and its Directors expressly disclaim any obligation or undertaking to update or revise publicly any forwardlooking statements, whether as a result of new information, future events or otherwise, unless required to do so by
applicable law, the AIM Rules for Companies or the Disclosure and Transparency Rules. Note: The financial information contained in this document, including the financial information presented in a number of tables in this document, has been rounded to the
nearest whole number or the nearest decimal place. Therefore, the actual arithmetic total of the numbers in a column or row in a certain table may not conform exactly to the total figures given for that column or row. In addition, certain percentages presented
in the tables in this document reflect calculations based upon the underlying information prior to rounding, and accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

RAMSDENS ANNUAL REPORT 2022

Our business

Ramsdens is a diversified financial services

provider and retailer operating In the

following core segments:

The first Ramsdens store opened in Stockton-
on-Tees in May 1987 and the Group retains its
Teesside roots with its Head Office located in
Middlesbrough.

Foreign Currency

Purchase of Precious Metals

Pawnbroking

Retail of New & Pre-Owned Jewellery

Today, Ramsdens’ services are delivered from
its 158 stores (including two franchised outlets)
across the UK, supported by a growing online
offering for foreign currency and jewellery retail.
Our mission is to provide a great customer
offering coupled with such fantastic service
that our customers become ambassadors for
Ramsdens.

Our strong customer proposition and reputation
for service is reflected in our high levels of repeat
business and excellent ratings on Trustpilot.

Ramsdens is an increasingly trusted and
recognised brand in each of our four key business
segments. The continued investment in our staff,
IT systems, marketing and store estate remain an
important factor in supporting the Group’s
long-term growth ambitions.

WE REMAIN FOCUSED ON DELIVERING OUR CORE MISSION,
WHICH HAS THREE COMPONENT PARTS:

TO HAVE A GREAT
CUSTOMER OFFERING…

2. …AND GIVE SUCH

FANTASTIC CUSTOMER
SERVICE…

3. …THAT OUR CUSTOMERS

BECOME OUR
AMBASSADORS.

• We offer very competitive

exchange rates for currency

• We offer a simple and trused

pawnbroking service

• We have continued to invest

in the quantity and quality
of our jewellery and watch
stock and how it is
presented to the customer
both in store and online

• We keep the store estate

modern and bright and
where appropriate continue
to relocate stores to higher
footfall locations

• We have a team of fully

trained and motivated loyal
staff who are passionate
about the business and their
customers, including
crossselling to meet
customer needs

• We have a first-class,

robust, customercentric IT
system that allows staff to
have a full appreciation of
a customer’s history with
Ramsdens, thereby
facilitating efficient
processing times

•

To ensure our retail jewellery
website is easy to navigate
and customers can find
what they may wish to buy

• Recommendations from family
and friends remains our biggest
source of new customers

Excellent

Trust Score 4.9 I 6,755 reviews

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Financial highlights
& store numbers

Revenue (£000’s)

£72,493

Gross Profit (£000’s)

£47,149

£66,101

£46,785

£39,942

£40,677

£30,522

£28,347

£38,219

£22,262

FY18

FY19

FY201

FY21

FY22

FY18

FY19

FY201

FY21

FY22

Profit Before Tax (£000’s)

£9,221

Dividend Decalred

9.0p

£6,312

£6,492

£8,269

7.2p

6.6p

2.7p

1.2p

£564

FY18

FY19

FY201

FY21

FY22

FY18

FY19

FY201

FY21

FY22

Net Assets (£000’s)

£30,908

£27,568

£35,555

£36,143

£41,843

Store Numbers (excluding franchisees) at year/period end

152

153

150

152

127

FY18

FY19

FY201

FY21

FY22

FY18

FY19

FY201

FY21

FY22

1 18 month period

RAMSDENS ANNUAL REPORT 2022Strategic
Report

Chairman’s statement

Chief Executive’s review

Business review

Financial Director’s review

Section 172 statement

Principal risks and uncertainties

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

RAMSDENS ANNUAL REPORT 2022Chairman’s
statement

I had every confidence that Ramsdens,
underpinned by the strength of its
diversified business model and
value-for-money proposition, would emerge
from the Covid-19 pandemic well-positioned
for continued growth.

I am pleased to say this is the position we
are now in.

This Annual Report covers the 12-month period to 30 September 2022
(FY22).

The financial results for FY22 are significantly ahead of FY21 as the latter
were severely impacted by retail closures and reduced international
travel resulting from the pandemic.

FY22 brought the challenges of the Covid-19 Omicron variant in H1,
which impacted retail, particularly in the weeks prior to Christmas 2021,
and also caused disruption to international travel. While these
challenges eased in H2, the trading conditions did not return to those
seen prior to the onset of the pandemic.

Despite these challenges, I am pleased to report that the Group has had
an excellent recovery.

FINANCIAL RESULTS & DIVIDEND

The below table highlights the financial results:

£000’s

Revenue

Gross Profit

Profit Before Tax

Net Assets

Net Cash*

EPS

Final dividend

Full year dividend

FY22

FY21

£66,101

£38,219

£8,269

£41,843

£8,835

20.9p

6.3p

9.0p

£40,677

£22,262

£564

£36,143

£13,032

1.2p

*cash minus bank borrowings

The Group achieved revenue of £66.1m (FY21: £40.7m) and Profit
Before Tax of £8.3m (FY21: £0.6m). The Strategic Report and Financial
Review that follow provide a more in-depth analysis of the Group’s

Andrew MeehanRAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

trading performance and financial results.

The Board has recommended a final dividend of 6.3p (FY21: 1.2p) for
approval at the forthcoming AGM. The full year dividend, of 9.0p (FY21:
1.2p) assuming approval at the AGM, would represent 43% of the
earnings per share. This payment recommences the Group’s progressive
dividend policy of paying approximately 50% of post-tax profits to
shareholders, always subject to executing on the Group’s growth
opportunities. Subject to approval at the AGM, the final dividend is
expected to be paid on 10 March 2023 for those shareholders on the
register on 3 February 2023. The ex-dividend date will be 2 February
2023.

LOOKING AHEAD

The Board believes Ramsdens’ diversified income streams provide
defensive qualities against the macroeconomic challenges that lie
ahead. The uncertainty caused by energy cost increases, general
inflationary pressures and higher interest rates will prove a challenge to
many businesses, and Ramsdens is no different.

However, we also see opportunities. We would hope that after three
years of disruption to summer holidays, 2023 may see the level of
holidays taken by consumers return to 2019 levels, although it is always
possible that economic conditions may delay that.

Tougher economic conditions will no doubt lead to increased and
sometimes unexpected bills for our customers. As an asset-backed loan,
pawnbroking provides a solution to an immediate borrowing need and
allows customers six months to repay their loans or to make longer term
financial arrangements. We have seen the continued demand for this
simple solution as the Ramsdens pawnbroking loan book finished the
year end at a record high. Due to global economic uncertainty, the gold
price is also expected to remain higher than long term averages, which
will benefit both our pawnbroking and precious metals buying business
segments. While there is greater uncertainty for the outlook on retail, as
jewellery is often a discretionary spend, Ramsdens has been
investing heavily in upskilling staff, building appropriate stock levels,
stock presentation and replenishment systems and it is expected that
the significant momentum we have seen during FY22 will support a
continued strong performance in FY23.

Of course, the Group is not immune from rising costs. While energy
prices for the vast majority of our stores are fixed until February 2024,
stores opened since February 2021 are not part of that contract and
have been subject to higher energy costs. The biggest cost to the
business is also our most important asset: our people. We have a duty
to look after our people and, in addition to professional development
initiatives, opportunities for career progression and welfare programmes,
we also want to reward our staff well. In addition to a one off ‘thank
you’ bonus, our January 2023 pay review will again ensure that our staff
are paid at least the Real Living Wage with the potential to earn more
through attractive bonus schemes.

I am extremely proud of the Ramsdens team’s skills and their continued
commitment to our customers and the communities in which we operate.
I would personally like to thank each and every one of my colleagues for
their continued dedication.

During the year, Steve Smith took the decision to retire from Ramsdens
prior to the 2023 AGM. The Nominations Committee undertook a
recruitment process and I am pleased to report that Karen Ingham
joined the Board on 1 November 2022. I would like to thank Steve for
his contribution to Ramsdens and wish him all the best for the future and
welcome Karen to our board.

Andrew Meehan

Non-Executive Chairman

16 January 2023

RAMSDENS ANNUAL REPORT 2022
Chief
Executive’s
Review

Despite the challenges faced during the
year, I am pleased that our diversified
income streams have performed extremely
well to deliver strong annual profits, in line
with those achieved prior to the onset of
the pandemic.

We started the year with optimism. We knew consumers had saved
significant sums and paid down debts through the pandemic and that as
restrictions were removed, normalised spending habits would resume,
and as a result there would be a greater need to borrow.

The Covid-19 Omicron variant of coronavirus slowed down the return
to more normalised trading conditions until after Christmas 2021. In
early 2022 we saw the end of the red and green ‘traffic light’ destination
lists and constraints on international travel reduced, most notably the
uncertainty of a pre-departure Covid-19 test. However, it soon became
clear that many airlines and airports were unable to manage the
increased volume of consumers travelling during peak holiday months
which led to a reduced number of international flights. As a result, our
opportunity to sell foreign currency was more limited than we initially
expected.

The war in Ukraine and the resulting energy crisis combined with other
inflationary pressures has impacted on both our business and
customers. However, the Group has fixed energy pricing across the
majority of its estate until February 2024 which provides mitigation in the
short term.

Our staff have once again delivered outstanding service to our growing
customer base during the year for which I’m hugely grateful. I would like
to take this opportunity to publicly thank them all for their commitment.
We continue to invest in attracting, retaining and rewarding our staff as
we develop what I believe to be the best team in the industry.

I remain very optimistic for the future of Ramsdens given our diversified
income streams, robust business model and strong balance sheet.

Peter KenyonRAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Business Review

Despite the external challenges faced during recent period, the Group has remained committed to its growth strategy.

Our continuous improvement ethos has led to the core store estate delivering growth across all income streams and gives us momentum as we move
forward. Within the core estate, we have relocated four stores, namely Carlisle, Kilmarnock, Newcastle and Manchester. We opened new stores in
Bolton and Glasgow and successfully expanded into the South East of England with a new store opening in Chatham. We acquired a further store on
the South coast at Boscombe. All of the new stores and relocations have performed well.

Two stores have been closed and merged locally in line with our approach of regularly appraising individual store performance, new opportunities and
return on investment, and we ended the financial year with 152 stores and two franchised locations.

Our online activities continue to grow. We commenced a project to refresh the retail jewellery website to improve the search facility for customers and
for organic reach. The refreshed website went live in Q1 FY23. In H1 2023, we will have individual websites for our four key income streams, further
improving the online customer journey.

During the year we acquired the freehold of our head office premises. This will allow us to expand this bespoke building to support our long-term
growth plans as well as introduce a greener energy solution.

The performance of each of the Group’s key income streams is discussed in greater detail on the next page.

RAMSDENS ANNUAL REPORT 2022OUR DIVERSIFIED BUSINESS
MODEL: PRODUCT OFFERING

Ramsdens operates in the four
core business segments of:

foreign currency exchange;
pawnbroking; jewellery retail
and purchase of precious
metals.

FOREIGN CURRENCY EXCHANGE

The foreign currency exchange (FX) segment primarily comprises the sale
and purchase of foreign currency notes to holidaymakers. Ramsdens
also offers international bank-to-bank payments through a third-party
arrangement.

FY22

FY21

Total Currency exchanged

Gross Profit

Online click and collect orders

Percentage of FX online

Percentage of Group gross profit

£364m

£12.7m

£38.7m

11%

33%

£77m

£3.3m

£6.9m

15%

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

We strongly believe that customers’ desire to go on holiday abroad
remains high, especially after three summers of disruption. We are
optimistic that more holiday makers will travel during summer 2023 than
did during 2022, and that numbers may return to 2019 levels. However,
it is also possible that economic conditions may delay the return to
pre-pandemic levels.

October 2021 volumes were approximately 30% of pre-pandemic levels,
rising to over 80% in May 2022 before settling through the summer at
circa 70% of pre-pandemic levels.

During this period of supressed volumes, the industry has widened
margins, and Ramsdens has benefited from this while still offering
attractive and competitive exchange rates to our customers. The overall
margin achieved on all foreign currency exchanged was 3.5%, down from
4.2% due to the changes in mix of foreign currency sales and purchases.

The average foreign currency sale transaction value (ATV) was £469,
an increase on the pre pandemic level of £401. We continue to have
confidence that UK travellers will continue to take cash abroad for both
convenience and to assist with budgeting whilst on holiday.

In line with our multi-channel strategy, the Group is refreshing its
currency travel card proposition with a new multi-currency card due to be
launched in 2023.

International payments income continues to be relatively small in
comparison to total foreign currency commission but we have a loyal
repeat customer base using the service.

RAMSDENS ANNUAL REPORT 2022
PAWNBROKING

JEWELLERY RETAIL

Pawnbroking is a small subset of the consumer credit market in the
UK and a simple form of asset backed lending dating back to the
foundations of banking. In a pawnbroking transaction an item of value,
known as a pledge, (in Ramsdens’ case, jewellery and watches), is held
by the pawnbroker as security against a six-month loan. Customers
who repay the capital sum borrowed plus interest receive their pledged
item back. If a customer fails to repay the loan, the pawnbroker sells the
pledged item to repay the amount owed and returns any surplus funds
to the customer. Pawnbroking is regulated by the FCA in the UK and
Ramsdens is fully FCA authorised.

The Group offers new and second-hand jewellery, including premium
watches, for sale. The Board continues to believe there is significant
growth potential in this segment by leveraging Ramsdens’ retail store
estate and ecommerce operations. The Group aims to cross-sell its retail
proposition to existing customers of the Group’s other services as well as
attracting new customers.

The retailing of new jewellery products complements the Group’s
second-hand offering to give our customers greater choice in breadth of
products and price points. In addition, new jewellery retailing enables the
Group to attract customers who prefer not to buy second-hand.

£000’s

Gross Profit

Total loan book* (capital value)

Past Due (capital value)

In date loan book* (capital value)

Percentage of Group gross profit

*excludes loans in the course of realisation

FY22

FY21

£7,533

£8,648

£721

£7,927

20%

£6,678

£6,137

£536

£5,601

30%

As Covid-19 restrictions eased, as expected, consumers started to
spend more which resulted in an increase in some customers’ short-
term requirements for financial assistance. This occurred across both
mainstream consumer credit, such as credit cards where card balances
increased in the last 12 months, as well as across the consumer base
using pawnbroker. At the same time, the number of small sum short
term credit providers in the market reduced. As a consequence, demand
for pawnbroking loans has increased and the loan book at the year-end
was at a record high of £8.6m (FY21 £6.1m).

The average loan value as at 30 September 2022 was £303, up from
£264 as at 30 September 2021. Our lending remains conservative in
line with our long-term policy.

We predict that increased energy bills, high inflation and higher interest
rates will squeeze household incomes in FY23 leading to an increased
demand for consumer borrowing. If consumers have assets to pledge,
pawnbroking can provide a short-term solution and therefore our loan
book is expected to increase during FY23.

£000’s

Revenue

Gross Profit

Margin %

FY22

FY21

£27,107

£18,252

£10,263

38%

£6,965

38%

Jewellery retail stock

£19,683

£13,979

Online Sales

£3,904

£2,822

Percentage of sales online

Percentage of Group gross profit

14%

27%

15%

31%

The Group’s retail performance is at a record high and continues to
perform well following investments in stock levels, stock presentation,
replenishment systems, staff training and our retail website over recent
years.

Retail revenue is now approximately equally spread across three key
categories of premium watches, new jewellery and preowned jewellery.
Margins by product category have remained consistent as has the overall
gross margin as all product categories have performed well.

Online growth remains strong with revenue increasing to £3.9m, up 38%
for the year. Online sales represented 14% of all jewellery items sold.

As well as a profitable sales channel, the jewellery website also serves as
a catalogue for our branches, assisting our staff with serving customers
where stock choice in a branch may be limited. For example, our top
watch sales branches have circa 60 watches in store but there are now
over 1,800 watches available on our website for customers to browse,
choose from and buy.

We believe there is an ongoing opportunity, instore and online, across
our product categories, to develop and grow our jewellery retail business.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

PURCHASE OF PRECIOUS METALS

OTHER SERVICES

In addition to the four core business segments, the Group also provides
additional services in cheque cashing, Western Union money transfer,
credit broking and receives franchise fees.

£000’s

Revenue

Gross Profit

Percentage of Group gross profit

FY22

FY21

£1,114

£1,122

This remains a steady source of income albeit we believe that cheque
cashing will continue to decline over the medium term.

Through our precious metals buying and selling service, Ramsdens buys
unwanted jewellery, gold and other precious metals from customers.
Typically, a customer brings unwanted jewellery into a Ramsdens store
and a price is agreed with the customer depending upon the retail
potential, weight or carat of the jewellery. Ramsdens has various
second-hand dealer licences and other permissions and adheres to the
Police approved “gold standard” for buying precious metals.

Once jewellery has been bought from the customer, the Group’s
dedicated jewellery department decides whether or not to retail the item
through the store network or online. Income derived from jewellery, which
is purchased and then retailed, is reflected in jewellery retail income
and profits. If the items are not retailed, they are smelted and sold to a
bullion dealer for their intrinsic value and the proceeds are reflected in
the Group’s accounts as precious metals buying income.

£000’s

Revenue

Gross Profit

Percentage of Group gross profit

FY22

FY21

£15,847

£10,369

£6,626

17%

£4,240

19%

The Sterling price for 9ct gold has remained high in comparison to long
run averages, at an average of £17.15 per gram during the year
(FY21: £16.05).

While the first half of the year the weight of gold purchased was subdued
in line with reduced footfall, during the second half year, the weight
purchased has returned to pre-pandemic levels.

Given the wider global political and economic situation, we believe the
gold price will remain high in the short to medium term, supporting the
Group’s margins.

RAMSDENS ANNUAL REPORT 2022Strategy

Following an extensive review, the Board believes that its existing strategy, communicated over the last few years,
remains the right course for growing our business and delivering value for all our stakeholders in a sustainable manner.

Our staff and their development are a core component of achieving our aims.

We continue to concentrate on:

Improving the
performance of our
existing store estate

Expanding the
Ramsdens branch
footprint in the UK

Developing our online
proposition

Appraising opportunities
presented by operating
in a challenging market

Focusing on
sustainability through
our ESG policy

1. IMPROVING THE PERFORMANCE OF OUR
EXISTING STORE ESTATE

All income segments have shown significant growth over FY21 levels, as
the Group has recovered from the pandemic restrictions.

The strategic focus we have placed on attracting new customers and
driving a higher wallet share from our repeat customers has led to a
record pawnbroking loan book and record jewellery retail revenue. Our
focus remains the same across the existing store estate.

Our costs are well controlled, with our largest cost being our staff.
We fully understand the important role our staff play in achieving our
strategic objectives and as a result we have budgeted for a positive pay
review which has been brought forward to January 2023 from April. We
are committed to ensuring that our staff remain not only productive but
also feel rewarded in their careers at Ramsdens.

Rents continue to be negotiated downwards where there is an
opportunity to do so, balanced with a desire for flexibility with lease
expiry and break dates, especially if the town has some demographic
challenges. In recognising this high street challenge, where the return
on capital justifies a relocation, we will actively move a store to improve
our footfall-reliant services of foreign currency exchange and jewellery
retail while potentially reducing operating costs at the same time.

We believe our store estate performance is complemented by a strong
online proposition. By investing in our retail jewellery website in recent
years we have improved each store’s access to a wider range of jewellery
which has improved customer service levels and resulted in increased
in-store sales.

In addition, we continually aim to improve the performance of our key
income streams:

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT
STRATEGIC REPORT

CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

FOREIGN CURRENCY:

JEWELLERY RETAIL:

•

The three key drivers for foreign currency remain trust, convenience
and price. Having available stock and transparent pricing continues
to build trust among consumers.
By having branches conveniently located on high streets and in
shopping centres, we will continue to attract consumers wanting
foreign exchange services.
By having competitive exchange rates, we will attract new and
retain existing customers whilst continuing to manage margins
closely, with due regard to local market conditions.
By improving the frequency of contact we have with our foreign
currency customers, we will stay in our customers’ thoughts when
they next need foreign currency.
By developing a market-leading multi-currency travel card, we will
seek to capture more of the customer’s holiday spend while abroad.

•

Stock levels have significantly increased over the last 18 months.
This has been a deliberate strategy to give our customers more
choice in-store and online and enable improved replenishment
capabilities. This investment continues with the benefit of lessons
learned during recent years and with the belief there is room for
further improvement across both jewellery and premium watches.
• We are continuing to work on the display of our products to create
more customer appeal as well as continuing to invest in our retail
website which also acts as a stock catalogue for our branches to
facilitate further in store sales.

• Where appropriate, we will relocate to higher footfall locations to

improve the jewellery offer with larger window display areas, often
at similar rents to current locations.

PURCHASE OF PRECIOUS METALS:

• We are increasing the awareness amongst our existing customer
base, primarily foreign currency exchange customers who are
unaware of the service or the value held in damaged or simply
unwanted or unworn jewellery.

PAWNBROKING:

• We have fully embraced the FCAs New Consumer Duty initiative.
We have always had the consumer at the heart of what we do
and this has been demonstrated by our loyal customer base. We
will continue doing what we believe are the right things for our
customers - this includes reducing interest rates for customers
needing longer to pay and, if a customer defaults, by continuing to
obtain the best price possible for them by selling by private treaty
and not using an auction process which we believe disadvantages
customers.

• We will continue to have prudent lending policies while examining
opportunities to lend more when the customer’s borrowing history
suggests greater capacity to repay and where the pledged assets
are more desirable and readily saleable. Our improvement in our
retail jewellery operations gives the Group confidence that it is able
to lend more on higher value jewellery items.

• We will continue to build upon the trust and high repeat customer
volumes earned by giving a great service and grow the customer
base through word-of-mouth recommendation.

RAMSDENS ANNUAL REPORT 20222. EXPANDING THE BRANCH FOOTPRINT IN THE UK

The Group has a successful branch-based model. With diversified income streams, stores generate a good return on capital while leveraging the head
office cost base. We have successful stores in small towns and large cities which gives us confidence that we can be successful on most high streets
that have a nucleus of returning shoppers.

As at 30 September 2022, we had 152 stores plus two franchised stores.

During the year, we opened three greenfield sites and acquired a pawnbroker in Boscombe. We closed stores in Middlesbrough (secondary foreign
currency kiosk) and Ripon; both of these stores were merged with other local Ramsdens stores.

The year also saw the first new store opened in the South East of England in Chatham, Kent. This store has had a good first year, well ahead of
expectations, and we plan to open up to another seven stores in the South East in FY23.

Overall, we have targeted 12 locations to open in FY23. In Q1, we have now opened stores in Bootle in the North West, a second store in Bradford in
Yorkshire, and Basildon in Essex. In Q2 we have stores scheduled to open in Croydon in Greater London, Maidstone in Kent and additional stores in
Yorkshire and the North West of England.

RAMSDENS ANNUAL REPORT 2022
Branch footprint
in the UK (Jan 2023)

SCOTLAND
Aberdeen
Airdrie
Alloa
Arbroath
Ayr
Bathgate
Bellshill
Clydebank
Coatbridge
Cumbernauld
Dalkeith
Dumbarton
Dumfries
Dundee
Dunfermline
East Kilbride
Edinburgh
Elgin
Falkirk
Fraserburgh
Glasgow,
Argyle Street
Argyll Arcade
The Forge
Queens Park
Glenrothes
Grangemouth
Greenock
Hamilton
Inverness
Irvine
Kilmarnock
Kirkcaldy
Kirkintilloch
Leith
Livingston
Motherwell
Musselburgh
Newton Mearns
Paisley
Partick
Perth
Peterhead
Rutherglen
Saltcoats
Springburn
Stirling
Wishaw

ENGLAND
Altrincham
Ashington
Barnsley
Barrow
Basildon
Berwick
Billingham
Bishop Auckland

Blyth
Bolton
Boscombe
Boston
Bradford,
Broadway Centre
Kirkgate Centre
Bridlington
Bristol
Byker
Carlisle
Castleford
Chatham
Chester Le Street
Chesterfield
Chippenham
Consett
Cramlington
Croydon
Darlington
Derby
Doncaster
Durham
Eston
Gateshead
Goole
Grimsby
Guisborough
Halifax
Harrogate
Hartlepool
Huddersfield
Hull,
Hessle Road
Holderness Road
Jarrow
Keighley
Kendal
Killingworth
Lancaster
Leeds
Lincoln
Liverpool,
Bootle
Norris Green
Old Swan
Whitechapel
Manchester
Middlesbrough,
Coulby Newham
Hillstreet Centre
Linthorpe Road
Morley
Newcastle,
Benwell
Eldon Square
Newton Aycliffe
North Shields
Northallerton

Oldham
Otley
Peterlee
Preston
Redcar
Rotherham
Sale
Scarborough
Scunthorpe
Sheffield,
Hillsborough
The Moor
Skelmersdale
South Shields,
King Street
Prince Edward Road
Stockton
Sunderland,
Chester Road
Southwick
The Bridges
Teesside Airport
Thornaby
Wallasey
Wallsend
Washington
Whitehaven
Whitley Bay
Workington
Worksop
York

WALES
Aberdare
Barry
Blackwood
Bridgend
Caerphilly
Carmarthen
Cardiff,
Albany Road
Cowbridge Road
Cwmbran
Ebbw Vale
Haverfordwest
Llanelli
Llanrumney
Merthyr
Neath
Newport
Pontypridd
Port Talbot
Swansea

FRANCHISES
Bury
Whitby

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

RAMSDENS ANNUAL REPORT 20223. DEVELOPING OUR ONLINE PROPOSITION

JEWELLERY RETAIL WEBSITE

www.ramsdensjewellery.co.uk

We continue to make good progress with the online sales of jewellery
items. Sales have increased to £3.9m, up 38% from £2.8m in FY21.
This performance excludes jewellery sales in branches which used the
in-store digital facility to access the website as a catalogue of stock.

As part of our ongoing review of performance, the retail website was
refreshed in Q1 FY23. This review improved the website layout and
should significantly increase the success rates of our search and filter
functions. Together with improved search engine visibility, investment
in pay per click advertising, social media and affiliate advertising, use
of differing payment options, improved photography and descriptions
and learning from integrated AI, this should drive ongoing retail jewellery
sales growth.

We see the development of our online retail jewellery website as
complementary to our store estate and both will benefit as the store
estate expands and the website generates increased brand recognition.

WEBSITE STRATEGY - OTHER KEY INCOME STREAMS

www.ramsdensforcash.co.uk

The ramsdensforcash website is currently being updated to create a
portal to individual websites for each of our four key income streams.

Three new websites for foreign currency exchange, gold buying and
pawnbroking will launch early in 2023 and will be supported by
investment in search engine optimisation. By having this broadened
online offering we hope to enhance our online channel revenues and
profitability as well as support the performance of the branch estate in
these segments.

While most pawnbrokers have seen increased lending levels in the last
12 months and have optimism for future lending given the
macro-economic conditions, the administration and cost burden
of increased regulation may mean some participants seek to exit
the industry, which may present further acquisition and expansion
opportunities.

The South East has the highest concentration of pawnbroking outlets in
the UK and presents a compelling expansion opportunity for the Group.
Our continued expansion into the South East is aimed at creating a
nucleus of Ramsdens stores that build brand recognition and then, as
opportunities arise, acquiring further pawnbroking outlets or loan books
to supplement our organic growth.

We continue to hope for a full reform of the non-domestic rates system
which may encourage more retailers to open stores and recreate vibrant
high streets. Without reform, we fear some towns and high streets may
suffer further decline and more empty shops. Our property portfolio
has been purposefully managed to be as flexible as possible to provide
a defensive quality in case any of our stores become isolated and
performance deteriorates.

When looking at new town and relocation opportunities, investments
will only be made in new stores after significant research of footfall and
adjacent retailer quality. The demise of certain retailers in a town can
however provide an opportunity to obtain reductions in rental levels in
certain towns while not compromising on location.

5. FOCUSING ON SUSTAINABILITY THROUGH
OUR ESG POLICIES

Our ESG policies are detailed on page 24.

Our long-term strategic aims will only be delivered if we have good
foundations.

We remain:
•

conscious of the impact of our activities on the environment and
aim to reduce our energy use and recycle where we can;
focused on our place in the communities in which we operate; how
we look after our staff; how we play a wider societal role with
respect to our customers, suppliers and charitable organisations;
and
committed to having the highest standards of governance
throughout the business.

•

4. APPRAISING OPPORTUNITIES PRESENTED BY
OPERATING IN A CHALLENGING MARKET

LOOKING AHEAD

The high street retail landscape has been challenging for a number of
years. Following on from the impact of the pandemic, retailers are more
likely to have higher debt burdens and now face increased energy costs
and increased staff costs at a time when consumer income is being
squeezed by high levels of inflation and increasing interest rates. This will
impact some travel agents and jewellers who may leave the high street
or indeed the market altogether, presenting opportunities for Ramsdens
to attract new customers, takeover prime retail locations or acquire
businesses.

Our estimate of the number of pawnbroking outlets in the UK remains
at approximately 870 - operated by circa 130 pawnbroking businesses.
The Ramsdens operating board are well networked within the industry
and should a pawnbroking business come up for sale in the UK, we
would expect to hear of it and then evaluate the opportunity against our
target rate of return. This was evidenced by the purchase of Geo A Payne
& Sons pawnbrokers in Boscombe in February 2022. This business has
performed well and in line with expectations since acquisition.

With the gradual removal of restrictions put in place during the
pandemic, FY22 saw the Group recommence the growth journey which it
had been on since its IPO in February 2017.

The graphs overleaf set out the Group’s performance in adjusted profit
before tax and in each of the four main income streams since the IPO.

To enhance comparability, the profit before tax below, has been adjusted
in 2017 by adding back the IPO fees and in 2020 by removing the one-
off profit from scrapping of aged stock. In addition, the six-month period
from April to September 2020, which was the period severely impacted
by the pandemic including the closure of all stores and furloughing of
692 colleagues, has been excluded from the graphs.

The graphs show the adjusted profit before tax, pawnbroking gross profit,
purchase of precious metals gross profit and foreign currency exchange
gross profit trajectories being interrupted by the pandemic and the
growth in jewellery retail revenue throughout the time period as a result
of the ongoing self-help investments.

RAMSDENS ANNUAL REPORT 2022ADJUSTED PROFIT BEFORE TAX

JEWELLERY RETAIL

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

The graph below demonstrates the growth in profit before tax over the
period and shows that profitability has now returned to pre-Covid levels,
despite performance in the first six months of FY22 being impacted by
Covid-related restrictions.

Adjusted profit before tax (£’000)

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2017
(y/e March)

2018
(y/e March)

2019
(y/e March)

2020
(y/e March)

2021
(y/e Sep)

2022
(y/e Sep)

FOREIGN CURRENCY EXCHANGE

The expected number of international travellers in FY23 is subject
to some debate given the squeeze on household incomes, but with
disrupted holiday travel over the past three years it is anticipated that
summer 2023 will bring normalised levels of demand. Due to rising
costs for bureau de change operators, we believe that the margins will
remain higher than pre-pandemic levels.

Foreign currency gross profit (£’000)

14,000

12,000

10,000

8,000

6,000

4,000

2,000

2017
(y/e March)

2018
(y/e March)

2019
(y/e March)

2020
(y/e March)

2021
(y/e Sep)

2022
(y/e Sep)

PAWNBROKING

It is reasonable to expect that the demand for pawnbroking loans may
continue to be high in FY23 due to the cost-of-living increases and the
squeeze on household incomes at a time when there are fewer providers
of short-term loans. There is potentially a greater risk of default on the
repayment of loans but the pawnbroker is secured and would sell the
jewellery to repay the loan, potentially at a value which can return surplus
funds to borrowers.

Pawnbroking gross profit (£’000)

Our jewellery retail segment may experience the greatest headwinds in
FY23 as a result of the inflationary environment and rising cost of living,
but we are pleased to be starting from a strong position. This will be
enhanced by several ‘self-help’ initiatives – higher stock levels, staff
training, improved window displays and a website refresh, which means
we have momentum to navigate those headwinds and the confidence to
continue to grow.

Retail revenue (£’000)

In-store

Online

30,000

25,000

20,000

15,000

10,000

5,000

2017
(y/e March)

2018
(y/e March)

2019
(y/e March)

2020
(y/e March)

2021
(y/e Sep)

2022
(y/e Sep)

PURCHASE OF PRECIOUS METALS

We believe the gold price will remain high and with increasing footfall
over recent years our ability to cross sell should enable gold purchases to
remain strong in FY23.

Purchase of precious metals gross profit (£’000)

One-off scrapping exercise

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

2017
(y/e March)

2018
(y/e March)

2019
(y/e March)

2020
(y/e March)

2021
(y/e Sep)

2022
(y/e Sep)

SUMMARY

Our diversified income streams and our strong financial base have
allowed the Group to trade through the pandemic successfully. We
believe we have made good progress as a business since the Group’s IPO
in 2017 and are well positioned for the future particularly with regards to
our well-invested staff development and our pipeline of new stores.

The Board has continued optimism for the future and confidence in our
ability to deliver on our growth strategy for the long-term benefit of all our
stakeholders.

2017
(y/e March)

2018
(y/e March)

2019
(y/e March)

2020
(y/e March)

2021
(y/e Sep)

2022
(y/e Sep)

Peter Kenyon

Chief Executive Officer

16 January 2023

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

RAMSDENS ANNUAL REPORT 2022Financial
Director’s
Review

FINANCIAL RESULTS
For the year ended 30 September 2022,
the Group’s reported Revenue increased by
63% to £66.1m (FY21: £40.7m) with growth
across each of the four key income streams.

Gross profit increased by £16.0m (72%) to
£38.2m (FY21: £22.3m).

The Group’s administrative expenses increased by £7.9m (37%) to
£29.4m (FY21: £21.5m), reflecting an increase in staff costs as the
business returned to more normalised trading operating levels. Finance
costs remained low reflecting the seasonal use of the Group’s revolving
credit facility during peak holiday periods.

Profit before tax increased to £8.3m (FY21: £0.6m) as the Group
benefited from improved trading conditions.

The Group’s cash position remains strong with £8.8m net cash at the
year-end (FY21: £13.0m), with the reduction in the period reflecting
increased investment into jewellery stock and the recovery of the
pawnbroking loan book.

The table below shows the headline financial results:

£000’s

Revenue

Gross Profit

Profit Before Tax

Net Assets

Net Cash*

EPS

FY22

FY21

£66,101

£40,677

£38,219

£8,269

£41,843

£8,835

20.9p

£22,262

£564

£36,143

£13,032

1.2p

*Cash less bank borrowings

EARNINGS PER SHARE AND DIVIDEND
The statutory basic earnings per share for FY22 was 20.9p, up from 1.2p
in the previous year.

The Board is recommending a final dividend of 6.3p in respect of FY22
(FY21: 1.2p). Subject to approval at the AGM, the final dividend is
expected to be paid on 10 March 2023 for those shareholders on the
register on 3 February 2023. The ex-dividend date will be 2 February
2023. This brings the total dividend for FY22 to 9.0p (FY21: 1.2p). This
dividend is in line with the Board’s progressive dividend policy reflecting
the cash flow generation and earnings potential of the Group.

Martin ClyburnRAMSDENS ANNUAL REPORT 2022
STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

This dividend represents a 43% pay-out ratio of FY22 EPS. The FY22
ratio is mindful of the forthcoming changes to the rate of corporation tax
and allows for future dividends to be increased incrementally in line with
profits generated and our stated policy of approximately 50% of post-tax
profits being distributed.

Moving forward, the Board intends to pay interim dividends in October
and final dividends in March in the approximate proportion of one third
and two thirds respectively, subject always to the financial performance
of the Group and growth opportunities.

FINANCIAL POSITION
At 30 September 2022, cash and cash equivalents amounted to
£15.3m (FY21: £13.0m) and the Group had net assets of £41.8m (FY21:
£36.1m).

CAPITAL EXPENDITURE
During the reporting period, the Group invested in the store estate by
opening three new stores and relocating four existing stores. Capital
expenditure for tangible and intangible assets was £2.8m which also
included the purchase of the head office building for £0.5m. A business
in Boscombe was acquired during the year for £0.9m which included its
pawnbroking loan book and jewellery stock.

CASH FLOW
Working capital outflows in the year include the significant investment in
stock of £7.2m, and the growth of the pawnbroking loan book which has
resulted in trade and other receivables increasing by £2.6m. Trade and
other payables increased by £1.1m mainly due to the increased currency
creditor which was lower in the prior year due to the impact of Covid-19.
The net cash flow from operating activities for the year was £2.9m (FY21:
£1.1m)

Net cash at the period end was £8.8m (FY21: £13.0m).

The Group continues to have access to its £10m revolving credit facility
which expires in March 2024. The Group has one covenant of 1.5x cash
cover. At 30 September 2022, this facility was £6.5m drawn to support
the currency cash held. The cash position and headroom on the bank
facility provide the Group with the funds required to continue to deliver
its current stated strategy.

TAXATION
The tax charge for the period was £1.7m (FY21: £0.2m) representing
an effective rate of 20% (FY21: 33%). The tax rate was higher than the
standard UK rate of corporation tax mainly due to non-deductible
expenses including the amortisation of certain customer lists. A full
reconciliation of the tax charge is shown in note 10 of the financial
statements.

SHARE BASED PAYMENTS
The share-based payment expense in the period was £314,000 (FY21:
£254,000). This charge relates to the Long-Term Incentive Plans
(LTIP) and Company Share Option Plans (CSOP). Both schemes are
discretionary share incentive schemes under which the Remuneration
Committee can grant options to purchase ordinary shares. The shares
under option in the LTIP scheme can be purchased at a nominal 1p cost
to Executive Directors and other senior management subject to certain
performance and vesting conditions. The shares under option in the
CSOP scheme can be purchased at their issue price of 200.5p.

During the year, the LTIP award from 2018 did not meet the performance
criteria and therefore none of the share options vested. 250,000 share
options, which vested in the 2017 LTIP scheme, were exercised during
the year.

GOING CONCERN
The Board has conducted an extensive review of forecast earnings
and cash over the next 12 months, considering various scenarios
and sensitivities given the ongoing economic challenges and has
concluded that it has adequate resources to continue in business for the
foreseeable future. For this reason, the Board has been able to conclude
the going concern basis is appropriate in preparing the financial
statements.

Martin Clyburn

Chief Financial Officer

RAMSDENS ANNUAL REPORT 2022Section 172 Statement

When making decisions of strategic importance, the Board is mindful
of all stakeholders, whose engagement is important to the future
success of the Group.

faith, would be most likely to promote the success of the company for the
benefit of its members as a whole, and in doing so have regard, amongst
other matters, to:

The Board appreciates that different stakeholders have different
requirements and preferences, and our stakeholder engagement
processes enable the Board to understand these and take them into
account. The Board considers all the relevant factors and long-term
consequences of decisions in selecting the best course of action of how
to take the business forward.

The Board considers its key stakeholders to be: employees, customers,
shareholders, the communities in which it operates, the environment, its
regulators, suppliers and franchisees.
In accordance with Section 172(1) of the Companies Act 2006, a
Director of a company must act in the way he or she considers, in good

a. the likely consequences of any decision in the long-term
b. the interests of the Company’s employees
c. the need to foster the Company’s business relationships with customers
d. the impact of the Company’s operations on the community and the
environment
e. the desirability of the Company maintaining a reputation for high
standards of business conduct
f. the need to act fairly between members of the Company.

The following disclosure describes how the Directors of the Group
have taken account of the matters set out in section 172(1) (a) to (f)
and forms the Directors’ statement required under section 172 of the
Companies Act 2006.

STAKEHOLDER
Employees

ENGAGEMENT EXAMPLES
•
•
• Weekly & monthly staff newsletters
•

Comprehensive face to face induction training
Company-wide digital learning and learning management platform

Active staff forum. - the Ramsdens Staff Forum met on four occasions during the year and discussed general matters
within the business including the Company’s environmental initiatives
Staff feedback and suggestion scheme allowing staff to have their say on any Company matter and make suggestions for
improvements
Staff engagement surveys. In July 2022 77% of Ramsdens employees completed the 2022 staff engagement survey
Regional Roadshow for all managerial grade staff. The most recent regional roadshow took place in November 2022

•

•
•

Further information is included in the Governance section, Principle 3 of the QCA Corporate Governance Code and the ESG
Policies section

Customers

•
•
•

Interaction with customers in store, online and by telephone
Customer service support function assists with customer queries
Social media and Trustpilot feedback reviewed and customers engaged with to resolve any queries and areas of
dissatisfaction

Shareholders

Further information is included in the Governance section, Principle 3 of the QCA Corporate Governance Code and the ESG
Policies section.

•

•
•

Individual meetings with institutional shareholders throughout the year and particularly following interim and full year
results
Shareholders are invited to submit questions to the Board at the Group’s Annual General Meeting
Information for investors is published on the Group’s website www.ramsdensplc.com

Further information is included in the Governance section, Principle 2 of the QCA Corporate Governance Code

Communities and
Environment

•

The Group contributes to local and national charities which are important to both the communities where our stores and
our staff are located
The Group’s Staff Forum has been challenged with reviewing the Company’s efforts to improve its environmental footprint

Further information is included in the Governance section, Principle 3 of the QCA Corporate Governance Code and the ESG
Policies section

Suppliers &
Franchisees

•

•
•

The Group has established long term key suppliers and enjoys good close working relationships. All supplier payments
were made in accordance with normal payment terms despite the impact Covid-19 has had on the business
Each supplier relationship is reviewed on a six-monthly basis to meet the Group’s strict responsible supplier policy
Each franchisee is audited at least twice a year

Further information is included in the Governance section, Principle 3 of the QCA Corporate Governance Code and the ESG
Policies section

•

The Group has processes in place and uses its retained advisers and lawyers to keep it up to date with legislative changes
and compliance requirements that may impact the business, for example, the forthcoming FCA New Consumer Duty
The Group’s management regularly engages with trade bodies including The National Pawnbrokers Association and the
Consumer Credit Trade Association

Further information is included in the Principal Risks and Uncertainties section of the Strategic Report and the Governance
section, Principle 3 of the QCA Corporate Governance Code and the ESG Policies section

Regulators

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

KEY BOARD DECISIONS IN THE REPORTING PERIOD

BOARD DECISION
The Board took the decision to purchase its
head office building, Birchwood House

CONSIDERATIONS
Due to space constraints at the Ramsdens head office, consideration was given to either purchasing the
freehold of Birchwood House to expand the building or relocating to a new purpose-built building.

Having considered both solutions, purchasing and expanding the existing building gave the best solution given
the existing infrastructure and the ability to incorporate a green energy solution into the expansion.

The purchase price and analysis of the return on investment from the potential saving of future rents was
discussed. From this the Board felt that the investment required to buy the freehold of the exisiting building
was merited.

The Group has returned to pre-pandemic levels of profitability and has therefore reinstated the interim
dividend and recommended a final dividend.

Further consideration was given to the amount of the dividend with the Board recommending that the
dividend should return to our policy of paying up to 50% of post-tax profit subject to being able to execute the
Group’s growth opportunities.

Consideration was given to the longer-term growth of the Group, the cash position and
future cash generation. Each opportunity was carefully assessed to meet the required return on capital
employed the Board sets for new store openings and relocations.

The Board took the decision to approve an
interim dividend of 2.7p and has
recommended a final dividend for the year of
6.3p

The Board approved eight new greenfield
store openings during the year. Three were
opened by the year end with the process for
the other five scheduled to complete in
FY23.

The Board approved six store relocations in
the year. Four relocations completed by the
year end with the remaining two scheduled
to complete in FY23.

Purchase of loan book and certain assets
from Geo A Payne & Sons Limited.

The Board agreed to purchase the business assets after carefully considering the long-term value of the
transaction and the return on capital employed.

The Board reviewed the results of the
Employee Engagement Survey and agreed a
number of initiatives to be implemented.

Consideration was given to the feedback from employees who completed the survey.

The Board actively listens to its employees and where possible implements good suggestions for improved
employee wellbeing and rewards.

RAMSDENS ANNUAL REPORT 2022ESG Policies

ENVIRONMENT

For several years we have continuously reviewed our environmental
impact and what we can do to improve it.

(Directors’ Report) and Limited Liability Partnerships (Energy and Carbon
Report) regulations 2018, which implement the Government’s policy on
Streamlined Energy and Carbon Reporting.

Our ethos is for the Ramsdens team to be better citizens by being more
environmentally aware, and where possible to reduce energy use, recycle
and reuse.

Tonnes of CO2

Year ended 30
September 2022

Year ended 30
September 2021

This review covers:
•
•
•
•

The services offered by Ramsdens
Energy & water usage including greenhouse gas emissions
Packaging used and waste generated by the business
ESOS Audits and data collection

Scope 2 Emissions

992

Per Employee

Energy Consumption
(MWh)

1.44

2,633

907

1.21

2,346

The services offered by Ramsdens
The services offered by Ramsdens have a sustainability and recycling
theme. Customers use already owned assets to obtain a loan or cash
and those assets, if left with, or sold to Ramsdens, are repurposed,
reducing the need to mine new gold, diamonds or other precious stones
and thereby reducing the environmental impact.

While the expectation of a pawnbroking customer is to repay the loan
in order to be able to borrow again, if they do not, the asset pledged
is either refurbished and recycled by being sold to a retail jewellery
customer or the item is melted for its intrinsic value with the precious
metal content reused in the manufacturing of new jewellery or other
manufacturing processes. The reclaimed precious stones are reused to
manufacture new jewellery either directly by Ramsdens or through our
trade contacts.

The same is true for our purchase of precious metals service. We buy
from customers unwanted, damaged or un-hallmarked jewellery items.
Those items are assessed for retail potential and refurbished, recycled
and hallmarked accordingly or melted for their intrinsic value.

Our retail jewellery offering is a mix of second-hand stock and new stock
with a good proportion of the new stock containing diamonds and semi-
precious stones which have been recycled. We stopped using plastic
jewellery boxes several years ago and now provide cardboard or polished
wood boxes when we retail jewellery items. We have also introduced
paper bags for customers and have where possible recycled older plastic
bags.

As part of our foreign currency exchange service, we have moved from
a clear plastic bag, which was specifically designed to meet the airport
security standards for carry on liquids, to a paper wallet.

In summary, we use energy as we need to heat and light our stores. Our
energy use has increased in the last year as our stores have been open
for longer as the pandemic restrictions have eased.

We use energy efficient LED lighting in all new stores and have a
programme of converting older stores to use more energy efficient LED
lighting.

Nearly all of our stores have air conditioning and guidance is given to
staff on the most efficient way to heat or cool our premises. We have
continued to make greater use of video conferencing thereby reducing
business travel but face to face meetings, especially for training
purposes, are still required.

While we incur logistic costs and use energy to ship our goods to stores,
we use couriers to do so, thereby sharing the transportation energy use
with other businesses. We try to minimise the number of deliveries we
make while also managing the security aspects of transferring high value
parcels.

In 2023, we will reward our branch teams for reduced energy use,
creating an incentive to do so for the years ahead.

As part of the purchase of our head office building, we are now able to
invest for the long term in renewable energy. We expect to undertake
expansion works in 2023 which will involve the fitting of solar panels with
the hope that the building can be self-sufficient in energy use.

Packaging and waste
The Group now uses cardboard and wood boxes plus paper bags within
our jewellery retail operations. We also now use paper wallets for the
issue of foreign currency notes and have stopped re-ordering our re-
useable clear plastic wallets which had an alternative use of carrying
liquids through airport security checks.

Energy & water usage including greenhouse gas emissions
Our main energy use is the heating and lighting of our premises. Smart
meters are fitted in many stores with more being fitted on an ongoing
basis.

The main waste generated by the business is general e.g. household
waste, paper and cardboard. All of our confidential paperwork is
shredded and recycled when destroyed.

Our water use is relatively low and facilitates staff personal needs as
opposed to an operational requirement. Water meters are installed at all
stores where possible.

We work with the company who manages our refuse collections and have
provided each location with an ability to recycle and have carried out
training to promote recycling by all staff.

Our greenhouse gas emissions fall under Scope 2, indirect emissions
from the generation of purchased energy. The Group’s methodology
involves the initial collection of energy use data in respect of Electricity
and Gas from suppliers, business mileage data for transport and the
subsequent use of UK Government Conversion Factors to calculate
emissions. The emission data set out below is for the period ended 30
September 2022 and is compiled in accordance with the Companies

Our staff forum ‘Think Green’ initiative continues to make all staff more
conscious of energy use, not to print paperwork unless necessary and
to re-use and recycle where possible. By influencing staff to be more
personally responsible, and to create new behaviours towards energy
use and waste at work and at home, we are confident that collectively
the Ramsdens team can play its part in improving our environmental
footprint.

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

ESOS Audits and data collection
We have complied with our ESOS audit requirements. Our audits have
been undertaken by Green Team Consulting. Through these audits and
our wider review, the business has developed a better understanding of
its energy use and is using this data to identify and support the various
initiatives detailed above.

SOCIAL
The Board understands that the Group must play a part in and
contribute to the wider society. The same ethos of seeking continuous
improvement that is adopted for its customer proposition is adopted for
its wider corporate relationships.

monies are returned to the customer. If the item sells for less than the
amount is owed, the shortfall is written off by Ramsdens and there are
no ongoing debt consequences for the customer.

Customer service levels
The Group prides itself on its high repeat customer rates and the low
number of complaints it receives.
The Group is committed to offering the highest standards of customer
service and appreciates that at times things go wrong. The Ramsdens
philosophy is to see every complaint from the customer’s perspective
and use a root cause analysis approach to put things right as quickly as
possible and learn from any mistakes.

The Board continually reviews:
•
•
•
•
•

Ramsdens’ responsible lending
Customer service levels
Employee relations, engagement and development
Charitable endeavours
Supplier relationships including franchisees

Ramsdens’ responsible lending
Ramsdens is FCA authorised for its consumer credit activities of
Pawnbroking and Credit Broking. As such, it is highly regulated and
follows the FCA’s 11 principles, adheres to the Senior Management
Regime and the Conduct Rules and welcomes the FCA’s New Consumer
Duty initiative.

Ramsdens considers itself a responsible lender, offering transparent
straightforward loans which are easily understood by customers. Unlike
other forms of credit, pawnbrokers can assess creditworthiness based
on the value of the goods, which therefore gives wider access to credit to
those who may need it most.

Pawnbroking loans are typically small sum and are served face to face
which results in a high cost to deliver with interest rates varying from
1.99% - 9.90% per month depending on the loan value. Our mean
average loan issued during the year was £271 and our median average
loan was £149. Interest is charged on a daily basis so the quicker a
customer can repay the less interest is paid. To help facilitate this,
Ramsdens has an online facility which is used by customers to repay
their loans when convenient for them and then collecting the pledged
goods later, thereby saving customer’s money.

We believe that our policies for pawnbroking and looking out for
vulnerable customers are industry-leading in treating our customers
fairly. The Group understands that circumstances change for customers
and Ramsdens works with customers offering tailored financial solutions
where necessary, as well as having automatic forbearance interventions
that reduce interest rates for customers and in certain instances, stops
charging interest altogether.

A pawnbroking loan is a flexible loan in that there are no expected
weekly or monthly instalments. The customer chooses when they repay
their loan. As such there are no missed payments until the loan period
expires. Once a loan approaches its expiry date, Ramsdens contacts
its customers to see what they wish to do and as part of that process
signposts providers of financial debt advice should a customer need to
consider this.

Where a customer’s pledged items do need to be sold to repay the
loan, Ramsdens sells items by private treaty, a process that we believe
achieves the best return for customers. During this process, Ramsdens
caps the interest payable by the customer from the sale of the goods. If
the item sells for more than the amount owed to Ramsdens, the surplus

The Group uses Trustpilot for customer feedback on its retail jewellery
and foreign currency offerings. Both services currently enjoy excellent
5-star ratings. In addition, from time to time Ramsdens undertakes
customer pulse surveys through its branch network to obtain customer
feedback. The data is used to improve the Group’s communication
strategies.

Employee relations, engagement and development
The people within the business are the reason for the success that
the Group has enjoyed and are the fundamental platform on which
Ramsdens builds its strategic ambitions. A continuous improvement
ethos can only be achieved because of the hard work, dedication
and enthusiasm of the people within the business. In return we are
committed to create a working environment in which our teams can grow
and develop, be looked after, well rewarded and well respected for their
contribution.

The pride shown by all of our employees continues to create a working
environment of infectious enthusiasm to deliver the Group’s mission
statement, namely to provide a great customer offering and give
such fantastic service that our customers become ambassadors
for Ramsdens. Our aim is to ensure we remain focused on how we
communicate and engage with all of our staff members.

The Group operates a staff suggestion scheme and a department
feedback scheme. Both are well supported as our people contribute to
how we can continue to evolve and improve our products or processes.
Suggestions which have been implemented include changes to the
Group’s core IT system which have improved the customer experience
and information to the business, as well as suggested changes to the
Group’s marketing initiatives, environmental initiatives and staff rewards.

The Group has an Employee Forum which met four times in FY22.
The Forum comprises staff in a variety of roles from head office and
branches. The Employee Forum has a remit of discussing general
matters that affect the business as well as how the Group can improve
with the use of technology or its contribution to the environment.

Ramsdens undertakes regular anonymous employee engagement
surveys. The last survey, undertaken in July 2022, saw 77% of staff
members complete the survey. The Board is grateful for the high level of
participation. The results of the survey are transparently shared with all
staff and an action plan created for the Company to raise the bar where
possible as part of its continuous improvement ethos.

The key findings in 2022 were:
57 questions were repeated from 2021 and for 53 of those questions
the 2022 responses were more positive than the previous survey which
itself had very positive answers. Notably:

92% of employees say their branch / department is a happy place to
work (2021 - 90%)

RAMSDENS ANNUAL REPORT 2022

94% of employees believe they have job security (2021 - 86%)
87% of the employees said they look forward to coming to work and are
enthusiastic about the job they do (2021 - 84%)

Twice a year, all employees have a face-to-face discussion with their line
managers. The discussion focuses on each individual’s happiness and
wellbeing, and how supported they feel. The discussion then develops
the staff member’s understanding of expectations in their role and staff
development activity is agreed in order that the staff member can be
more successful in their career. A bespoke training and development
plan is then created for that individual.

The Group has comprehensive training programmes. These start
with a week-long, classroom-based induction into the business, and
are supplemented by instore mentoring, e-learning courses, training
delivered remotely e.g. over Zoom and area face to face training
sessions. Certain training courses are mandatory and must be
completed on an annual basis e.g. health and safety, data protection,
FCA conduct rules, cyber risks and anti-money laundering, while other
courses focus on the development of an individual’s skills. We have
continued to invest in jewellery and watch knowledge and selling skills,
which have helped drive the jewellery retail results.

Training is also provided on staff wellbeing. The courses are
supplemented by an Employee Assistance Program provided by Health
Assured. This programme provides hints and tips to manage and improve
a staff member’s health and wellbeing but also includes confidential
expert advice and support if and when needed.

The Group is an equal opportunities employer and we believe in
appointing the best person based purely on merit to any role within the
business. The Group is committed to ensuring that people undertaking
the same or similar work are paid equally and have an equal opportunity
to progress. The Group encourages flexible working arrangements for
employees to continue to develop their careers whilst choosing how to
maintain their balance between work and home life.

At Ramsdens we believe that being a diverse organisation allows us
to grow and become the business we aspire to be. The Group has two
executive committees. One committee is focused on compliance and
risk matters and consists of seven people aged 33 to 57. The committee
comprises people in various roles encompassing audit, IT, people and
finance. Of the seven members one is currently female. The second
committee, which is tasked with delivering the Group’s strategic plan,
consists of 15 people representing all disciplines across the Group.
The members are aged 33 to 60 and four are female. The committee
continues to have great constructive and diverse input to how we move
forward.

During the year, the business restructured the management of its
store estate, going from four regional managers to three. One regional
manager was promoted to Head of People, a key role that will support
the Group in delivering its staff development objectives. The three
Regional Managers and 15 Area Managers range from 28 to 61 in age.
50% of these roles were promoted from within the business and this level
has an equal gender split. Our other key influencers are our field audit
team. Three of the six auditors are female and five of the team were

promoted from branch roles. 78% of the branch managers are female.

We have been working hard to build on the progress made by recruiting,
retaining and developing the best people. Great progress had been
made in reducing staff turnover prior to the pandemic when only
approximately 15% of the employees had service of less than one year.
The recruitment and retention situation throughout FY22 has been
challenging, in line with other retailers. At the year end, approximately
30% of all employees had less than 12 months’ service. The fact that
the Group has been able to produce such good results is testament to
the staff development programmes, quality of training and the systems
which are in place to help new employees serve customers to the best of
their ability.

The Group recognises and values long service. Each staff member
receives an additional day of holiday entitlement for their first five years’
service and upon reaching their 5th anniversary they receive company-
wide recognition and a monetary award. Further recognition happens at
10, 15 and 20 years’ service and beyond, with additional holidays and
financial rewards at those milestones. We were pleased to recognise 31
members of staff who celebrated their 10 years’ service award in 2022.

The Group issues weekly and monthly newsletters, keeping all staff
informed on Group matters and recognising the successes of individuals,
branches or departments.

The Group has a philosophy of wanting to share the financial success
of the business with staff. In recognition of the strong recovery, staff
members with at least six months’ service received a ‘thank you’ bonus.
This payment was in addition to the other available bonus schemes;
cross selling success, branch manager performance bonus and a head
office bonus scheme.

Following pay reviews in November 2021, January 2022, and April
2022, all staff were paid at least the recommended Real Living Wage.
The pay review in January 2023 will again increase the minimum pay to
that of the Real Living Wage. Once trained, staff receive an increase to
the basic level of their pay and subject to ongoing progression in their
careers, incremental pay awards are available. We are very conscious
that the pay of our branch managers and middle managers within head
office has been squeezed in recent years as the focus has been on
new entrant pay. The pay review in January 2023 will seek to address
this. As we move forward, every staff member has the ability to earn
a performance-related bonus. The Group has health insurance for its
senior management team plus extended company sick pay benefits.
All staff benefited from their birthday being an additional day’s holiday
during the year as well as the additional bank holidays.

Our philosophy with the Group’s long term remuneration incentives is to
have wider participation across various senior managers, currently 21
participants. The Group offers a Long Term Incentive Plan (LTIP) which
is awarded according to performance against targets for EPS growth
and total shareholder return, and a Company Share Option Plan scheme
(CSOP).

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

The remuneration of the two Executive Directors is not currently
specifically linked to ESG objectives. The Senior Bonus Scheme has
various clauses that enables the Remuneration Committee to have
discretionary powers over any bonus amounts taking into account all
aspects of the business including ESG. All bonus schemes including
LTIPs have malus and clawback provisions.

Charitable endeavours
The Group believes it has an obligation to give back where it can and has
a programme of supporting local and national charities.

This support has included directly donating, raffle and auction prizes,
sponsoring events and the collection of foreign coins. The Group also
uses its expertise, including IT skills, to help smaller local businesses
and charities.

Some of the charities supported are listed below:

In FY22, the Group has raised, donated or helped charities directly raise
over £19,000. The encashment of the foreign coin collection was
delayed beyond the year end and will be included in FY23 figures

Supplier relationships including franchisees
The Group has a limited number of key trade suppliers. Strong
relationships have been built up over many years, with the supplier
and Ramsdens working together to improve the trade for both parties.
Ramsdens reports on its supplier payment practices and believes
in paying all suppliers as and when payments are due. The Group
has sought assurance from its suppliers that they have no modern
slavery practices within their supply chains. The Group’s statement
on its compliance with the Modern Slavery Act is available at www.
ramsdensplc.com.

The Group has two franchisees operating two franchised stores. All
franchised businesses are well established and were audited quarterly to
ensure they meet the standards required by Ramsdens.

GOVERNANCE

The Group has always prided itself on acting responsibly in every aspect
of the business. We operate with three core values of being trusted, open
and passionate about our business. We believe that engaging with our
stakeholders, be those employees, customers, shareholders, regulators,
suppliers, franchisees or the wider local communities we operate in, and
living our values, are the best ways to develop long term relationships
for mutual benefit. This is the way in which we seek to manage the
business.

While we do not believe that we monitor social and human capital issues
to a recognised standard we have a substantial suite of policies that
include data security, customer privacy, anti-bribery, combatting modern
slavery, whistleblowing, staff welfare, anti-money laundering, as well as
adhering to all aspects of the FCA’s Senior Manager Regime and Conduct
Rules.

The Group is a member of the QCA and adopts its code of conduct as
detailed in our Corporate Governance section on pages 32 to 49.

The Nominations Committee undertakes a board effectiveness review
every year and as part of that review discusses diversity and
independence. As a result of those deliberations in FY22, Karen Ingham
was appointed to the board on 1 November 2022. Further details are
included in the Nominations Committee report on page 42.

RAMSDENS ANNUAL REPORT 2022Principal Risks & Uncertainties
The Corporate Governance Report includes an overview of the Group’s approach to risk
management and internal control systems and processes.
Set out below are the principal risks and uncertainties that the Directors consider could impact the business model, the strategy, future
performance, solvency and/or liquidity of the Group. The Board continually reviews the potential risks facing the Group and the controls in place to
mitigate those risks as well as reduce any potential adverse impacts.

The Board recognises that the nature and scope of risks can change and that there may be other risks to which the Group is exposed. This list is not
intended to be exhaustive and excludes potential risks that the Board currently assess as not being material.

IMPACT AND
CHANGE IN RISK

The Board considers the risk of the
pandemic restrictions recurring to be
low but is mindful of the impact of a
future pandemic being significant.

MITIGATING FACTORS

While the pandemic and restrictions would be outside
the Group’s control, the Group has the following
protections in place;
•

Business continuity plans with delegated
decision-making authorities to establish a rapid
response to crisis situations

• Well invested IT systems which enable remote

working
Leases with flexible break options across the
store portfolio to adapt to any longer-term shifts in
customer behavior or local demand
Alternative supplier networks for key supplies
Essential service classification enabling the Group
to trade during lockdowns
Growing online presence

•

•
•

•

RISK AND IMPACT
Global / Regional Pandemic
The roll out of the vaccine to tackle the coronavirus
appears to have allowed daily lives to return to normal
with most of the world having few restrictions.

There is a possibility of another severe outbreak of the
virus as seen in China throughout 2022.

As seen in 2020, the implications of an outbreak of
Covid-19 are extreme, sudden and challenging to
mitigate. The impacts of a global or regional pandemic
include;
•

Restriction in international travel, having an adverse
impact on our foreign currency exchange revenues
Customer demand reduction having an adverse
impact on our retail values, purchase of precious
metals and pawnbroking loans
Supply chain disruption and delays could be
experienced in the supply of new jewellery resulting
in reduced revenue
The failure of key suppliers could impact the
provision of key services
Employee health and wellbeing with the impact that
key individuals, branches or departments may be
unable to undertake day to day operations

•

Economic Risk
Almost all of the Group’s revenue is generated in the UK
from UK customers.

The UK is suffering from high energy prices, double digit
levels of inflation and increasing interest rates. This ‘cost-
of-living’ crisis may adversely affect consumer confidence
to travel abroad, buy luxury items or be able to repay
loans.

Those increased costs also have an adverse impact on
Ramsdens directly.

Ramsdens uses energy to heat and light its store estate
and the increased cost will impact the Group.

The ’cost-of-living’ crisis and labour shortages are leading
to higher salary costs.

The Group’s suppliers will have higher costs and as such
may pass those costs on to Ramsdens.

The Group mitigates this risk by having diversified
income streams, some of which are counter cyclical and
to a degree leave the business recession neutral.

High inflation, high energy costs and
increasing interest rates suggest a
recession is highly likely.

Where possible the Group has property leases with
flexible break options should a store need to close or be
relocated.

The Group could pass on increased costs to the custom-
er by raising jewellery prices.

The Group could pass on increased costs by increasing
margins on its foreign currency exchanged.

The Group could pass on increased costs to customers
by increasing pawnbroking interest rates.

The Group has a substantial number of its properties
with agreed fixed energy pricing through to February
2024.

The Group only uses its RCF facility during the peak FX
summer season and as such its interest costs are low
and increased rates will have minimal impact.

The ‘cost-of-living’ crisis could impact
the business negatively through
reduction in international travel, less
jewellery sold and customers having
difficulty in repaying loans albeit the
Group holds readily realisable security.

At the same time, it should be noted
that pawnbroking may have an
opportunity to grow due to a reduction
in the supply of alternative consumer
credit.

The Group’s jewellery offering is
focused on value for money. New
customers may be attracted to
the lower price points available at
Ramsdens.

The Group has budgeted for an 8% pay
review commencing January 23.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

RISK AND IMPACT
IT Security
Failure of the IT systems, including its e-commerce
websites, if prolonged, could have an adverse impact on
the Group leading to business interruption, lost revenue
and reputational damage.

Malicious attacks, data breaches or viruses could lead
to business interruption and damage to the Ramsdens
reputation.

A malicious attack may cause a data breach or the IT
system to fail and lead to business interruption and
reputational damage.

Regulatory
The Group must be FCA authorised to offer its
pawnbroking and credit broking services and is a
registered Money Service Business (MSB) with HMRC for
foreign currency exchange and cheque cashing.

Risks include the business breaching regulations, loss
of regulatory approvals, or future changes in regulation
impacting the Group’s ability to trade. These risks could
lead to financial penalties, reputational damage or
increased administrative costs from increased regulation.

IMPACT AND
CHANGE IN RISK

The Board considers that there has
been no change in the risk.

MITIGATING FACTORS

The Group’s internal IT team assesses daily any
vulnerability to potential cyber threats and uses a
suite of tools such as antimalware, autonomous
network monitoring and response solutions, network
management software, web filtering and email filtering
to protect the system’s integrity.

The Group undertakes annual penetration testing and
RedTeaming testing to test the infrastructure and data
security.

The Group has a comprehensive business continuity
plan to minimise the impact to the business should the
IT systems fail. This is regularly reviewed and tested.

The Group also has cyber insurance cover, which the
Board believes is appropriate for its risk profile.

The Group was able to facilitate home working in a
secure way in response to the Covid-19 pandemic.

The Group has extensive training in cyber security for all
staff including an annual mandatory refresher course.

The IT Director reports to the Executive Compliance &
Risk Committee on a monthly basis.

The Group invests heavily in its staff development
including a face-to-face induction course which lasts
one week.

The Board considers that there has
been no change in the risk.

Offering a great customer service is part of the mission
statement for the Group and as such, customer service
levels are measured through customer surveys and
internal audits.

Complaints are reviewed with a root cause analysis
approach so that processes and policies are changed if
required.

Staff incentive schemes are approved by Head of
Compliance and Risk to ensure that all bonuses are
aligned with long-term principles and do not promote
poor short-term behaviour.

The Group has mandatory annual courses, which all
staff have to pass. These include anti money laundering
and financial crime, treating the customer fairly, policies
and procedures dealing with vulnerable customers

The Group retains a PR consultancy to provide ongoing
support and media engagement.

RAMSDENS ANNUAL REPORT 2022RISK AND IMPACT
Reputation
A risk of adverse publicity, or customer comment through
social media could have an adverse material impact on
the Group’s brand, reputation and customers using the
stores and websites.

The Group’s financial performance is influenced by the
image, reputation, perception and recognition of the
Ramsdens brand. Many factors such as the image of its
stores, its communication activities including marketing,
public relations, sponsorship, commercial partnerships
and its general corporate and market profile all contribute
to maintain the reputation of a trusted brand. The Group
is also well aware that customer recommendations are
critical to growing the business and that poor service will
not enhance that objective.

Exchange Rate Risk
While the Group trades almost exclusively in the UK, the
foreign exchange cash held in store is exposed to the
risks of currency fluctuations. The value exposed is
mainly in Euro and US dollars.

There is the daily risk of buying today, receiving the
currency the next day, and subsequently selling it and
being susceptible to movements in the exchange rate.

There is a period end risk for the FX stock which remains
in the branch tills.

Gold Price
The Group’s assets and profit are sensitive to movements
in the gold price and the prices of other precious metals.

A fall in the price of gold and silver and other precious
metals may reduce the value of the Group’s assets and
adversely affect liquidity.

A significant and sustained decline in the price of gold
would adversely affect the value of jewellery pledged as
collateral by pawnbroking customers and the stock held
by the Group. This may also affect volume of jewellery
sales and default rates on pawnbroking loans.

Liquidity and Forecasting Risk
The result of a risk to liquidity would be that the Group
runs out of cash and would be unable to pay its creditors
as they become due. This could be as a result of non
performance reducing profitability and cash generation,
expanding too quickly, or poor budgetary planning.

There is the risk that a bank or merchant card supplier
becomes insolvent and we would no longer have access
to the credit funds or our card takings.

MITIGATING FACTORS

IMPACT AND
CHANGE IN RISK

The Group invests heavily in its staff development
including a face-to-face induction course which lasts
one week.

The Board considers that there has
been no change in the risk.

Offering a great customer service is part of the mission
statement for the Group and as such, customer service
levels are measured through customer surveys and
internal audits.

Complaints are reviewed with a root cause analysis
approach so that processes and policies are changed if
required.

Staff incentive schemes are approved by Head of
Compliance and Risk to ensure that all bonuses are
aligned with long-term principles and do not promote
poor short-term behaviour.

The Group retains a PR consultancy to provide ongoing
support and media engagement.

The Group uses monthly forward contracts to hedge
against adverse exchange rate movements in its two key
currencies, Euros and US dollars.

The Board considers that there has
been no change in the risk.

The policy has been developed over time in conjunction
with our hedging suppliers and reviewed by Manchester
Business School.

Due to the systems, controls and staff training, the
Group has the flexibility to amend its buying parameters
at short notice to maintain margins in the purchase of
its precious metals.

The global energy crisis and the war
in Ukraine give general concerns over
global macro factors and have resulted
in a high sterling gold price.

With respect to pawnbroking the same systems,
controls and staff training allows the lending values to
be amended to reflect changes in the gold price. The
best disposal route for unredeemed pledges remains
retailing through the Group’s stores or online rather than
the intrinsic value of the precious metal held as security.

The Board sensitises the gold price in its budget
assumptions and keeps the possibility of hedging the
gold price under review.

The Group has a strong balance sheet with a healthy
cash position. The Group has a £10m revolving credit
facility in place to March 2024, provided by Clydesdale
Bank trading as Yorkshire Bank.

The Group currently has credit bank balances held with
Barclays Bank and Clydesdale Bank trading as Yorkshire
Bank. The Group currently uses Barclaycard to process
its merchant transactions.

The Board considers the risk is
unchanged.

The Board considers that there has
been no change in the risk.

A reduction in cash for investment will have a significant
impact on the Group’s ability to deliver its strategy of
opening new stores and expanding.

The Group uses a bespoke financial modelling tool to
help predict future cash flows to ensure it has sufficient
cash resources at all times.

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

IMPACT AND
CHANGE IN RISK

The Board considers that there has
been no change in the risk.

RISK AND IMPACT
Credit Risk Assessment
There is a risk that the pawned articles are overvalued
increasing credit risk. The Group is wholly reliant on the
article pledged should a customer default. A fall in the
gold price also impacts the value of the intrinsic value of
the security held.

MITIGATING FACTORS

The Group has invested in training programmes and
IT systems to help the customer facing store staff to
accurately value customer assets. The store staff are
supported by experienced and skilled Area Managers
and product experts.

Should loans not be repaid the Group can rely on the
intrinsic value of the stones and metal pledged but can
maximise returns by focusing on, and improving, its
jewellery retail operations.

It should be noted the risk is spread over approximately
18,000 customers and the average pawnbroking loan is
£303 as at 30 September 22.

Financial Crime
The Group is at risk of staff acting independently or in
collusion to defraud the Group. This could be the theft of
cash, jewellery or other assets or data.

The Group is at risk from various forms of criminal activity
including theft, money laundering, cybercrime or fraud.
This could expose the Group to financial losses as a
result of the loss of assets, reimbursement to customers
or other business partners, or to fines or other regulatory
sanctions, which could also significantly damage the
Group’s reputation.

The Group mitigates risk by having policies and
processes to identify and stop attempts to involve the
business with financial crime activity.

The Board considers that with a more
uncertain economic environment the
risk has increased.

The Group has a robust compliance monitoring
programme which involves every branch being
randomly audited and a centralised team reviewing and
investigating any abnormal patterns with transactions.

Processes, systems and controls are continually evolving
and being developed within the Group’s bespoke IT
system.

The Group has high levels of physical security and
sophisticated alarm systems for its stores and head
office.

The Group encrypts all customer data and retains it
behind two firewalls.

The Group maintains business insurance including cyber
insurance cover for material losses.

Retention and Recruitment
The Group is at risk of having insufficient staff resources
to achieve its strategic goals.

Where new staff are recruited they may not initially be as
skilled to serve customers and cross sell as experienced
members of staff.

The Group mitigates risk by having strong staff
engagement. Through that, the Group has received
great feedback on staff being happy working for
Ramsdens. The retention issue during and shortly after
the pandemic has been generally as a result of lifestyle
choices as opposed to changing career or moving to
another employer within a retail environment.

The Board considers this to be a new
risk on which to report.

While it has not had a material
impact to date on the Group, it is
an operational area the business is
focused on.

The Group is focused on staff development and has
an extensive induction programme offering classroom,
elearning and on the job training to enable new staff to
add value in the shortest possible timeframe.

The Group has excellent IT systems that assist new staff
members to process transactions while offering prompts
and inbuilt control parameters to minimize errors and
meet regulatory requirements.

The Strategic Report, as set out on pages 4 to 31, has been approved by the Board

By order of the Board

Peter Kenyon
Chief Executive Officer
16 January 2023

RAMSDENS ANNUAL REPORT 2022Corporate
Governance

Board of Directors

Chairman’s introduction

Corporate governance principles

Audit and Risk Committee report

Nomination Committee report

Remuneration Committee report

Directors’ report

Statement of directors’ responsibilities

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT
STRATEGIC REPORT

CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

RAMSDENS ANNUAL REPORT 2022

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RAMSDENS ANNUAL REPORT 2022Board of Directors

Executive directors

Non-Executive directors

PETER EDWARD KENYON (57)
CHIEF EXECUTIVE OFFICER

MARTIN ANTHONY CLYBURN (41)
CHIEF FINANCE OFFICER

ANDREW DAVID MEEHAN (67)
NON-EXECUTIVE CHAIRMAN

Peter joined Ramsdens in November 2001 as
Operations Director and was appointed Chief
Executive Officer in January 2008. Peter led
the MBO in 2014 and has been responsible
for over 30 acquisitions for the Group. He is
responsible for overseeing all operations of the
business and for deciding the Group’s strategy.
Prior to joining Ramsdens, Peter’s early career
was with Yorkshire Bank for 17 years. He is the
current President of the National Pawnbrokers
Association and became a Director of the
Company at the time of the MBO in September
2014.

Martin joined Ramsdens in 2009 and is
a Chartered Accountant having previously
qualified with respected North East firm, Keith
Robinson & Co. Martin joined the board of the
Company as Chief Financial Officer in August
2016. Martin is responsible for the Finance,
IT and Compliance & Risk functions within
the Group. Martin lectured part time at the
University of Teesside from 2006 – 2012 and
undertakes a board observer role within a
private equity backed company. Martin holds a
degree in Mathematics, Operations Research,
Statistics and Economics from Warwick
University.

Andy is a highly experienced retail executive
with over 30 years’ experience including CEO
and CFO in roles at the Co-Operative Retail
Services, Storehouse plc and Sears plc. Since
2006, he has held a number of chairmanships
and Non-Executive positions in several retail
and consumer product businesses including
Fortnum and Mason, GHD Group and American
Golf. Andy is a Chartered Accountant and
holds a degree in Politics and Economics from
Oxford University and has been Chairman of
the Company since September 2014.

External appointments
Peter is a Director of The National
Pawnbrokers Association.

External appointments
None.

External appointments
Andy is chairman of NEF Holdings Ltd,
Polyco Healthline Group Ltd, Shaw
Education Trust and Wessex Children’s
Hospice Trust. He is a Director of Lanthorne
Ltd, and Cheviot Court (Luxborough Street)
Ltd.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

SIMON EDWARD HERRICK (59)
NON-EXECUTIVE DIRECTOR

STEPHEN JOHN SMITH (65)
NON-EXECUTIVE DIRECTOR

KAREN INGHAM (57)
NON-EXECUTIVE DIRECTOR

Simon joined the board of the Company
on 1 January 2017. Simon has significant
experience in senior executive roles including
positions as CFO of Debenhams plc, Northern
Foods plc, Darty plc and PA Consulting Limited
and CEO of Northern Foods plc. Since leaving
Debenhams, Simon has undertaken consul-
tancy work in a number of sectors and has
a portfolio of Non Executive Director roles.
Simon is a Fellow of the Institute of Chartered
Accountants in England and Wales and holds
an MBA from Durham University.

Steve joined the board of the Company on
1 January 2017 and will be retiring from his
role on 1 February 2023. Steve retired as
CEO of Northgate plc in 2010 after a career
with Northgate spanning over 20 years.
Since leaving Northgate, Steve has served
as a Non-Executive Director on the boards of
various family, private equity backed and AIM
listed businesses, including four positions as
Chairman. Steve is a Chartered Accountant
and holds a degree in Economics from the
London School of Economics.

Karen joined the board of the Company on
1 November 2022. Karen has extensive
experience across several leading
consumer-facing and financial services
businesses as well as a proven track record in
developing and improving brands’ customer
experience to support their profitable growth.
Since 2017 Karen has held the position of
Vice President at Expedia Group in commercial
sales and support, the online travel and
shopping company.

External appointments
Simon is a Director of FireAngel Safety
Technology Group plc, Biome Technology
plc, Christie Group plc, Herrick Inc Ltd and
Sports Punk Ltd.

External appointments
Steve is a Director and Chairman of Kitwave
Group plc.

External appointments
Karen is a Director of Newcastle Building
Society and Newcastle Strategic Solutions
Limited.

RAMSDENS ANNUAL REPORT 2022Chairman’s Introduction

The Board is committed to supporting high standards of corporate
governance and during the financial year ended 30 September 2022
the Board continued to operate in line with the Quoted Companies
Alliance (QCA) Corporate Governance Code (the ‘Code’).

In this section of the Annual Report, we set out our governance
framework, how we apply the QCA ten principles, and reports of the
Audit & Risk Committee, Remuneration Committee and Nomination
Committee.

The Board is committed to a strong ethical corporate culture and
ensuring the culture within the business is consistent with the Group’s
strategic objectives and its values of being trusted, open and passionate.
The Board welcomes the New Consumer Duty initiative by the FCA and
observes the Conduct Rules as prescribed by the FCAs Senior Manager
and Certification Regime.

The Board achieves this by:

•

•
•

•

Encouraging diversity, inclusion and equal opportunities for all
employees,
Investment in training and development,
Regular updates from the Board’s Executive Directors and
communication with employees e.g. weekly internal newsletter
Group-wide video updates and an annual roadshow conference for
branch managers and the wider business
Appropriate induction for new employees

The Board monitors and assesses the culture in the business through an
annual employee engagement survey and smaller pulse surveys.

The results of these surveys are reviewed by the Board and senior
management to identify areas of focus – either to maintain and improve
on strengths or to develop actions and initiatives to address any areas of
concern.

Andrew Meehan

Non-Executive Chairman

RAMSDENS ANNUAL REPORT 2022Corporate Governance
Principles

PRINCIPLE 1
ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH
PROMOTE LONG TERM VALUE FOR SHAREHOLDERS

Please see the Strategic Report from pages 4 to 31.

The Board is responsible for the strategic direction of the Group and the
implementation of that strategy rests with the Chief Executive Officer and
his senior management team.

The long term strategy of the business has not changed since it listed on
AIM in 2017. The Group will continue to:

•
•
•
•

•

improve the performance of our existing store estate,
expand the branch footprint in the UK,
develop our online proposition,
appraise market opportunities presented by operating in a
challenging market, and
focus on sustainability through our ESG policy.

PRINCIPLE 2
SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS
AND EXPECTATIONS

The Executive Directors are keen to engage with shareholders and
they intend to maintain communication with institutional shareholders
through individual meetings, particularly following publication of the
Group’s interim and full year preliminary results.

Private shareholders have been encouraged to attend AGMs to ask
questions or at any time through our investor relations channels by
emailing IR@ramsdensplc.com directly. Videos have been produced to
give an insight into the Group. In addition, videos have been produced
to explain the interim and year end results and the Executive Directors,
through the Investor Meet Company platform, offer a live webinar where
questions can be asked. These are available to watch on the Company’s
website www.ramsdensplc.com

The Chairman and Non-Executive Directors remain available to discuss
any matters shareholders might wish to raise and will attend meetings
with institutional investors if requested.

PRINCIPLE 3
TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL
RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG
TERM SUCCESS

The Group has always prided itself on acting responsibly in every aspect
of the business. We operate with the three core values of being trusted,
open and passionate about our business. We believe that engaging
with our stakeholders, be that, employees, customers, shareholders,
regulators, suppliers, franchisees or the wider local communities we
operate in, and living our values, are the best ways to develop long term
relationships for mutual benefit.

Please see the Strategic Report pages 4 to 31 where the Group’s ESG
policy is discussed covering, employees, customers, suppliers, regulator
and the community in which it operates.

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

PRINCIPLE 4
EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING
BOTH OPPORTUNITIES AND THREATS THROUGHOUT THE
ORGANISATION

The Board recognises that effective risk management is essential and
continually invests in its Compliance and Risk department and activities.
The Audit & Risk Committee has detailed terms of reference which are
available on the Company’s website, www.ramsdensplc.com.

The risk assessments together with the systems and controls are well
established within the Business. These and the operational contingency
plans are continually monitored as being fit for purpose as new threats
emerge, as new opportunities are explored and as the business
develops.

There is an Operational Compliance and Risk Committee, chaired by the
Head of Compliance and Risk, which meets at least ten times per annum
and reports to the Audit & Risk Committee on a six-monthly basis. The
chair of the Audit and Risk Committee and Head of Compliance and Risk
have open dialogue whenever they feel it is necessary outside of the two
formal reports.

The Head of Compliance and Risk reviews and develops the Group’s
comprehensive compliance monitoring programme to provide evidence
that the business has the required systems and controls to manage risk.
He is assisted by a centralised team of four Compliance and Risk officers
and a team of six field internal auditors. All branches and head office
departments are subject to regular audits. The audit and compliance
monitoring programmes are reviewed and developed on an ongoing
basis as risks change and include asset checks and adherence to policy
and procedures.

PRINCIPLE 5
MAINTAIN THE BOARD AS A WELL-FUNCTIONING,
BALANCED TEAM LED BY THE CHAIR.

At the year end the Board was comprised of five Directors, three
Non-Executive Directors, who are all considered independent and two
Executive Directors. Those five Directors have a mix of skills, experience
and backgrounds. As part of the annual board effectiveness review
and as part of the Group’s long term succession planning, Steve
Smith will stand down as Non-Executive Director on 1 February 2023.
The Nominations Committee and the CEO undertook an extensive
recruitment process and Karen Ingham was appointed to the board as a
Non-Executive Director on 1 November 2022. For a three-month period
the board will consist of six Directors before reverting to five Directors.
Karen Ingham has started an extensive induction programme to the
Group involving conversations with the 15 members of the operational
executive committee responsible for delivering the strategic aims and
objectives.

The Nominations Committee meet at least annually and their report is on
page 42.

PRINCIPLE 6
ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE THE
NECESSARY UP-TO-DATE EXPERIENCE, SKILLS AND
CAPABILITIES

The Directors of the Group and their biographies are set out on pages 34
and 35.

The experience and knowledge of each of the Directors gives them the
ability to constructively challenge strategy and scrutinise performance.

RAMSDENS ANNUAL REPORT 2022Each of the Non-Executive Directors has spent time in stores and head
office speaking with employees for an informal view of the business from
the ground up.

that it has the appropriate experience, skills and capability for a FCA
regulated business of its size.

The two Executive Directors both work full time and receive support
from a dedicated management team and professional advisers. The
Directors receive specialist advice from regulatory advisers and lawyers
when required. During the last year this advice has included anti money
laundering, FCA regulations, GDPR, AIM rules and Cyber Security. This
has been achieved by attendance on courses or through retained
advisory relationships.

The CEO and Company Secretary are satisfied that the Non-Executive
Directors have devoted sufficient time to the role as required to make a
good contribution to the Group.

The Company Secretary ensures that all Directors are kept abreast of
changes in relevant legislation and regulations, with the assistance
of the Group’s advisers where appropriate. Executive Directors are
subject to the Groups performance review process through which their
performance against objectives is reviewed and their personal and
professional development needs considered.

Having recently changed the Board composition, the Board believes
that it has the appropriate experience, skills and capability for a FCA
regulated business of its size.

The Nominations Committee meet at least annually and their report is on
page 42.

PRINCIPLE 8
PROMOTE A CORPORATE CULTURE THAT IS BASED ON
ETHICAL VALUES AND BEHAVIOURS

The Group’s future success over the long term is dependent upon it living
up to its high ethical values and demonstrating exemplary behaviours.

The business operates with 3 core values of being trusted, open
and passionate and challenges all staff to consider the values in the
decisions they make and actions they take.

The Board and the senior management team work to ensure that the
mission statement, in which the customer is at the heart of everything
the Group tries to do, is delivered.

As a FCA authorised business, the Group must adhere to the
Senior Managers and Certification regime. This sets out nine key
responsibilities and four conduct rules for senior managers and five
conduct rules for all staff. The Board is satisfied that the culture of the
business is to undertake all activities in line with the conduct rules. The
Board has embraced the FCA’s New Consumer Duty initiative and fully
expects to meet its timetable and requirements.

PRINCIPLE 7
EVALUATE BOARD PERFORMANCE BASED ON CLEAR
AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS
IMPROVEMENT

The Board is responsible for reviewing, formulating and approving the
Group’s strategy, budgets and corporate actions and oversee the Group’s
progress towards its goals. This is formally documented in a schedule of
matters reserved for board approval and include:

Living the values, obeying the FCA conduct rules and delivering the
mission statement is integral to the consistent communications of what
is expected, delivered through a weekly newsletter and face to face by
Regional Managers, Area Managers, Internal Auditors and Department
Heads.

The data gathered from complaints, compliments and trust pilot reviews
are used to monitor customer service levels.

•

•
•
•
•
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Strategy and Business Plans, including annual budget, new stores
and acquisitions
Structure and Capital including dividends
Financial reporting and controls
Internal controls on risk management and policies
Significant contracts and expenditure
Communication with shareholders
Remuneration and employment benefits
Changes to the board composition

Each member of the Board completes annually a questionnaire
style review of the effectiveness of the Board, as a collective and
the contribution by each Director. The Chairman then leads specific
discussion on the effectiveness of the Board, each member’s
contribution and how the Board can develop and improve its
effectiveness. The Chairman and Non-Executive Directors meet with the
wider senior management team to evaluate progress on the Group’s
strategic objectives and additionally meet regularly without the Executive
Directors being present.

As part of the annual board effectiveness review and as part of the
Group’s long term succession planning, Steve Smith will stand down
as Non-Executive Director on 1 February 2023. The Nominations
Committee and the CEO undertook an extensive recruitment process and
Karen Ingham was appointed to the board as a Non-Executive Director
on 1 November 2022.

All feedback received from staff and customers is used to test the
policies and procedures to ensure they remain fit for purpose and that
the business continues to evolve.

PRINCIPLE 9
MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES
THAT ARE FIT FOR PURPOSE AND SUPPORT GOOD
DECISION – MAKING BY THE BOARD.
During the year, the Board comprised two Executive directors and three
Non-Executive Directors. The Board aims to meet at least 10 times per
year.

The following table shows Directors attendance at scheduled board and
committee meetings during the reporting period.

Board

Audit

Remuneration

Nomination

Andy Meehan

11/11

4/4

Simon Herrick

11/11

Steve Smith

11/11

Peter Kenyon

11/11

Martin Clyburn

11/11

4/4

6/6

1/1

Having recently changed the Board composition, the Board believes

The Chairman, aided by the Company Secretary, is responsible for
ensuring the Directors receive accurate and timely information. The

RAMSDENS ANNUAL REPORT 2022
STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Company Secretary compiles the Board and Committee papers, which
are circulated to the Directors prior to the meetings.

The board papers have the following standing items; the matters
discussed include:

statement of financial position and statement of cash flows. The
budget is approved by the Board;
Detailed monthly reporting of performance against budget; and
Central control over key areas of capital expenditure, commercial
contracts, litigation and treasury.

•
•

•
•
•
•

•

Update on all governance legal, health & safety and risk matters
Financial performance review including cash flow management
Operating performance against KPIs,
Progress on all strategic aims of the business including new stores
and acquisitions
Proposals on any areas of major expenditure

The Group continues to review its system of internal control to ensure
compliance with best practice, whilst also having regard to its size
and resources available. The Board is pleased with how the Senior
Management Team have managed the Group through the last two years
of varying trading restrictions maintaining all system and compliance
overviews to the highest standards.

PRINCIPLE 10
COMMUNICATE HOW THE COMPANY IS GOVERNED AND IS
PERFORMING BY MAINTAINING A DIALOGUE WITH
SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS

The Group has and intends to maintain communication with institutional
shareholders through individual meetings with Executive Directors,
particularly following publication of the Group’s interim and full year
preliminary results.

Private shareholders are encouraged to attend the AGM at which the
Group’s activities are considered and questions answered. General
information about the Group is available on the Group’s website; www.
ramsdensplc.com.

The Non-Executive Directors are available to discuss any matters
stakeholders might wish to raise, and the Chairman and Non-Executive
Directors have attended meetings or had calls with investors and
analysts as required. Investor relations activity and a review of the share
register are standing items on the board agenda.

The Company’s AGM will take place on 27 February 2023. The Annual
Report and Accounts and Notice of the AGM will be sent to shareholders
at least 20 working days prior to this date.

The Board receives reports from the Executive Directors to enable it to be
informed of and supervise the matters within its remit. At varying Board
meetings, Department Heads are invited to present on key areas of the
Group’s operations. The Board considers at least annually the Group’s
strategic plan. Several senior managers from the wider executive
management team present and participate in the discussion.

The Company Secretary also ensures that any feedback or suggestions
for improvement on Board papers is fed back to management. The
Company Secretary provides minutes of each meeting and every Director
is aware of the right to have any concerns minuted.

In addition to the board meetings there is regular communication
between the Executive and Non-Executive Directors including where
appropriate updates on matters requiring attention prior to the next
board meeting.

The Board has delegated specific responsibilities to the Audit and
Risk, Remuneration and Nomination Committees. Each Committee
has terms of reference setting out its duties, authority and reporting
responsibilities. The terms of reference of each Committee are kept
under review to ensure they remain appropriate and reflect any changes
in legislation, regulation or best practice. The terms of reference are
available on the Company’s website, www.ramsdensplc.com. Each
committee comprises the Non-Executive Directors. The reports by the
Committees follow starting on page 40.

At each meeting, the Board considers Directors’ conflicts of interest.
The Company’s Articles of Association (Articles) provide for the Board to
authorise any actual or potential conflicts of interest.

The Company has purchased Directors’ and Officers’ liability insurance
as allowed by the Company’s Articles.

All of the Directors offer themselves for re-election at each AGM.

The Board has ultimate responsibility for the Group’s system of internal
control and for reviewing its effectiveness. However, any such system of
internal control can provide only reasonable, but not absolute, assurance
against material misstatement or loss. The Board considers that the
internal controls in place are appropriate for the size, complexity and
risk profile of the Group. The principal elements of the Group’s internal
control system include:

Day to day management of the activities of the Group by the Executive
Directors;

•

An organisation structure with defined levels of responsibility
including a comprehensive compliance and risk function. The
Head of Compliance and Risk maintains a risk register, compliance
monitoring programme and reports to the Executive Directors on a
regular basis;
A detailed annual budget is prepared including income statement,

RAMSDENS ANNUAL REPORT 2022Audit and Risk Committee

On behalf of the Board, I am pleased to present the Audit and Risk
Committee Report for the year to 30 September 2022.

The Audit and Risk Committee is responsible for ensuring that the
financial performance of the Group is properly reported and reviewed. Its
role includes monitoring the integrity of the financial statements (interim
and annual accounts and results announcements), reviewing any
changes to accounting policies, reviewing and monitoring the extent of
the non-audit services undertaken by external auditors, advising on the
appointment of external auditors and reviewing the effectiveness of the
Group’s internal controls and risk management systems.

MEMBERS OF THE AUDIT AND RISK COMMITTEE

The Committee during the year consisted of myself as Chair and my two
fellow Non-Executive Directors, Stephen Smith and Andrew Meehan.
The Committee has met four times in the period. The Board is satisfied
that I, as Chair of the Committee have recent and relevant financial
experience. I am a chartered accountant and recently served as Chief
Financial Officer at Blancco Technology Group PLC and currently chair
the Audit & Risk Committees at Christie Group plc, FireAngel Safety
Technology Group plc and Biome Technology plc. I report to the Board
on all issues discussed by the Committee and present the Committee’s
recommendations. The Committee also meets the external auditors
without any Executive Directors or senior management present.

DUTIES OF THE COMMITTEE

The main duties of the Audit and Risk Committee are set out in its
terms of reference, which are available on www.ramsdensplc.com. The
Committee will meet a minimum twice per year.

AUDIT PROCESS

The auditor prepares an audit plan for the review of the year’s financial
statements. The audit plan sets out the scope of the audit, identifies
significant and other risks associated with the audit (including Key Audit
Matters) and prepares an audit timetable. The plan is reviewed and
agreed in advance by the Audit and Risk Committee. Following the audit,
the auditor presented its findings to the Audit and Risk Committee for
discussion. The Audit Committee also has discussions with the Auditor,
without the management being present, covering the adequacy of
controls and any judgemental areas. The Auditor’s report can be found
on pages 52 to 59.

One issue has been raised by the Auditor as Key Audit Matters, requiring
more substantive audit work and verification.

1) Pawnbroking revenue may be misstated due to fraud and error
Interest receivable on pawnbroking loans is recognised as interest
accrues by reference to the principal outstanding and the effective rate
of interest applicable, which is the rate that discounts the estimated
cash receipts through the expected life of the financial asset to that
asset’s net carrying value. The recognition of interest reflects the
application of IFRS 9.

For active pawnbroking loans (loans not in the course of realisation) the
Group estimates the exepcted credit losses. An assessment is made on
a pledge by pledge basis of the carrying value represented by original
capital loaned plus accrued interest to date and its corresponding
realisation value on sale of unredeemed pledges to identify any credit
losses. The key estimates within the expected credit loss calculation are;

The main items of business considered by the Committee to date have
been:

1. Non-Redemption Rate:

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•
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Review of the suitability of the external auditor;
Review of the financial statements and Annual Report;
Consideration of the external audit report and management
representation letter;
Going concern review; and
Review of the risk management and internal control systems
including the internal compliance and risk function and compliance
monitoring programme.

As part of the continuous review of risks, the principal risks and
uncertainties were updated with the risks presented by the Covid-19
pandemic and the consequential changes in the labour market.

ROLE OF THE EXTERNAL AUDITOR

The Audit and Risk Committee monitors the relationship with the external
auditor, the provision of non-audit services by the external auditor and
assesses the auditor’s performance. This year is the second set of
financial statements audited by Grant Thornton UK LLP. The Committee
remains reassured that they are independent and by their approach
and objectivity. The Audit and Risk Committee recommends that Grant
Thornton UK LLP be re-appointed as the Company’s auditor at the next
AGM.

This is based upon current and historical data held in respect
of non-redemption rates.

2. Realisation Value:

This is based upon either;

- The current price of the metal that will be received through the
sale of the metal content via disposal through a bullion dealer.

- The expected resale value of those jewellery items within the
pledge that can be retailed through the branch network.

For pawnbroking loans in the course of realisation the Group estimates
the expected credit losses based on the expected outcome from selling
the pledged goods. The key estimates within the expected credit loss
calculation are;

Proceeds of sale:
This is based upon the retail price the goods are offered for sale at.

Time to sell:
This is based upon current and historical data in respect of the
average time to sell.

The Committee has considered the effective rate of interest calculation
and the recognition of pawnbroking interest. The Committee has also
reviewed the calculations undertaken to establish the expected credit

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

losses for pawnbroking loans. This includes the impact of changes to the
key credit loss assumptions listed. The Committee is satisfied that the
recognition of pawnbroking revenue and pawnbroking credit losses are
materially correct.

INTERNAL AUDIT

The Group has a compliance and risk function which under the direction
of the Audit and Risk Committee undertakes asset verification checks
of all branch and head office departmental cash, pledge and inventory
balances and audits processes for adherence to policies and procedures.
Each audit report for every branch and department is circulated to the
senior compliance and operational team. A summary of the findings
is discussed in the monthly Compliance & Risk presentation to the
Executive Committee. The minutes of the meetings are reviewed by the
Audit and Risk Committee.

RISK MANAGEMENT AND INTERNAL CONTROLS

The Group has established a framework of risk management and internal
control systems, policies and procedures. The Audit and Risk Committee
is responsible for reviewing the risk management and internal control
framework and ensuring it operates effectively. The Committee has
reviewed the framework and is satisfied that the internal control systems
in place are currently operating effectively.

WHISTLEBLOWING

The Group has in place a whistleblowing policy, which sets out the formal
process by which an employee of the Group may, in confidence, raise
concerns about possible improprieties in financial reporting and other
matters. There were no incidents or concerns raised for consideration
during the year.

ANTI-BRIBERY

The Group has in place an anti-bribery and anti-corruption policy,
which sets out its zero-tolerance position and provides information and
guidance to those working for the Group on how to recognise and deal
with bribery and corruption issues. During the period there were no
incidents for consideration.

Simon Herrick

Chair of the Audit and Risk Committee.

RAMSDENS ANNUAL REPORT 2022
Nomination Committee Report

On behalf of the Board, I am pleased to present the Nomination
Committee Report for the year ended 30 September 2022.

MEMBERS OF THE NOMINATION COMMITTEE

The Nomination Committee during the year consisted of myself and my
fellow Non-Executive Directors Simon Herrick and Stephen Smith.

DUTIES OF THE NOMINATION COMMITTEE

In carrying out its duties, the Nomination Committee is primarily
responsible for:

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•
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•
•

Identifying and nominating individuals to fill Board vacancies;
Evaluating the structure and composition of the Board with regards
the balance of skills, knowledge, experience and making
recommendations accordingly;
Drafting the job descriptions of all Board members;
Reviewing the time requirements of the Non-Executive Directors;
Giving full consideration to succession planning; and
Reviewing the leadership of the Group.

The Committee is scheduled to meet once a year but it will meet more
frequently if required. The Committee reports to the Board on how it has
discharged its responsibilities in accordance with its terms of reference.

Please refer to pages 34 and 35 for the Director’s biographies.

The Committee believes that the Directors are able to devote sufficient
time to the Group, taking into account their other Directorships

ACTIVITY DURING THE YEAR

The Committee discussed the skills, experience, size and diversity of the
current Board taking into account the current and future needs of the
Group, its culture and strategic objectives. As part of that review and
future succession planning for the Board, Steve decided that he would
not stand for re-election at the 2023 AGM. A recruitment process was
started in the spring of 2022. The Group received over 40 applications
with a diverse range of excellent skills. Following a diligent selection
process, Karen Ingham was recruited as the best person for the role.
Karen’s consumer facing background, both online and in a financial
services bricks and mortar organisation, made her the ideal candidate to
bring greater cognitive diversity to the Board. Karen joined the Board on
1st November 2022. Karen will join all of the Group committees.

The Committee also discussed the long-term succession planning
and emergency cover at Board level and of the Senior Management
Team. On a medium-term basis, the senior management team remains
relatively young and the Committee is fully supportive of the leadership
development plans in place which continue to further develop the team
and identify potential senior leaders of the future.

The terms of reference were reviewed and are available on
www.ramsdensplc.com

Andrew Meehan

Chair of the Nominations Committee

RAMSDENS ANNUAL REPORT 2022

Remuneration Committee

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the
year ended 30 September 2022 which sets out the remuneration policy and the
remuneration paid to the Directors for the period.

COMPOSITION AND ROLE

The Remuneration Committee during the year consisted of myself and
my fellow Non-Executive Directors Andrew Meehan and Stephen Smith.
The Committee operates under the Group’s agreed terms of reference
and is responsible for reviewing all senior executive appointments
and determining the Group’s policy in respect of terms of employment
including remuneration packages of Executive Directors. The
Remuneration Committee met six times during the year.

EXECUTIVE DIRECTORS’ SERVICE CONTRACTS

The Executive Directors have service contracts, which are not of fixed
duration and can be terminated by either party giving 12 months written
notice.

NON-EXECUTIVE DIRECTORS

The Non-Executive Directors signed letters of appointment, which may
be terminated on giving three months’ written notice. The Non-Executive
Directors’ remuneration is determined by the Board.

DIRECTORS’ REMUNERATION

REMUNERATION POLICY

Our remuneration policy is to:

•

Include a competitive mix of base salary, pension, annual bonus
and long-term incentives, with an appropriate proportion of the
package determined by stretching targets linked to the Group’s
performance;
The Executive Directors are entitled to have 10% of their basic
annual salary paid into their respective pension schemes. Due to
the annual pension contribution cap, the Remuneration Committee
have approved that any contributions above the cap can be paid as
a cash allowance;
Promote the long-term success of the Group in line with our
strategy; and
Provide appropriate alignment between the interests of sharehold-
ers and executives including minimum shareholdings.

The following table summarises the total gross remuneration of the Directors who served during the year to 30 September 2022.

Executive

Peter Kenyon

Martin Clyburn

Non-Executive

Andrew Meehan

Simon Herrick

Stephen Smith

Salary

Pension

PHI

Fixed Pay

Bonus

LTIP

Variable Pay

Total FY22

Total FY21

£206,057

£10,000

£1,654

£217,711

£221,000

£82,293

£303,293

£521,004

£272,681

£139,816

£11,720

£761

£152,297

£155,000

£53,987

£208,987

£361,284

£183,868

£67,559

£49,344

£41,120

£67,559

£49,344

£41,120

£67,559

£49,344

£41,120

£65,911

£48,140

£40,117

Aggregate remuneration

£503,896

£21,720

£2,415

£528,031

£376,000

£136,280

£512,280

£1,040,311

£610,718

The financial profitability of the Group was in excess of the stretching targets set at the beginning of FY22. As a result, the Directors have earned the full
entitlement of their bonus scheme.

All of the Directors basic annual remuneration has been reviewed and effective from January 2023 will be as follows;

Executive

Peter Kenyon

Martin Clyburn

Non-Executive

Andrew Meehan

Simon Herrick

Stephen Smith

Karen Ingham

Base Salary (including pension)

Private Health Insurance

Bonus

£250,000

£175,000

£69,206

£50,547

£42,122

£40,000

Yes

Up to 100%

The bonus opportunities for the FY23 financial year will be assessed by the Remuneration Committee, which retains discretion over the awards, against
the Group’s profit and strategic and personal performance objectives. The bonus percentage will adjust from zero to a maximum of 100% of year-end
base salary set against challenging performance targets.

RAMSDENS ANNUAL REPORT 2022LONG TERM INCENTIVE PLANS

ADMISSION LTIP

On admission to AIM the Group introduced a Long Term Incentive Plan
(LTIP) for seven members of the Senior Executive Team set against two
performance criteria over the financial years from admission to the year
ended 31 March 2020.

Peter Kenyon was the last participant to exercise his option and he did
this during the year, exercising the option to acquire and subsequently
sell 250,000 shares.

Fifty percent of the award is based on increasing the earnings per share.
No award will be made if the earnings per share does not exceed 19.5p
for FY23 with the maximum award vesting at 22p. A sliding scale will
apply between 19.5p and 22p.

The award is a number of shares, which can be bought at their nominal
value.

Peter Kenyon was awarded 120,000 share options and Martin Clyburn
80,000 share options under the scheme. An additional 262,500 share
options were allocated to 19 Group employees.

LTIP 5 FY21– FY24

The exercise of the LTIP does not constitute remuneration for the year as
this has been dealt with previously using the LTIP charge.

LTIP 2 FY18 – FY21

As expected, due to the impact of the Covid-19 pandemic, this scheme
lapsed with no options vesting.

A further scheme was introduced following the publication of the FY21
Annual Report. This scheme had two elements, an LTIP as per previous
years with performance conditions and a new CSOP which had only
employment service conditions. The scheme includes 21 members
of the senior team in line with the Group’s strategy to align the senior
managers with the shareholders.

LTIP 3 FY19 – FY22

A further LTIP scheme was introduced following the publication of the
FY19 Annual Report. This further widened the participation in line with
the Group’s strategy to align the senior managers with the shareholders.
Fifty percent of the award is based on the total shareholder return (share
price movement and the value of dividends) over the period from FY19
results to 31 March 2022 with no award being made if the return rate is
less than 30% over the period. A sliding scale will apply with 100% of the
award vesting if 50% growth is achieved over the period. The base share
price is £1.88

Fifty percent of the award is based on increasing the earnings per share.
No award will be made if the earnings per share do not grow by 24%
over the three years from FY19 to FY22. A sliding scale will apply with
100% of the award vesting if 45% growth is achieved over the period. The
hurdle target for the EPS is 19.2p.

The award is a number of shares, which can be bought at their nominal
value.

Peter Kenyon was awarded 50,000 shares and Martin Clyburn 25,000
shares under the scheme. An additional 160,000 shares were allocated
to 17 Group employees.

The Remuneration Committee exercised its discretion to change the
period for assessing whether the performance criteria have been met
from the 12 months ending 31 March 2022 to the 12 months ending 30
September 2022.

It is anticipated that approximately 30% of the total options will vest
based on EPS performance and TSR will be determined following
publication of the Annual Report.

LTIP 4 FP20 – FY23

A further LTIP scheme was introduced following the publication of the
FP20 Annual Report. This further widened the participation in line with
the Group’s strategy to align the senior managers with the shareholders.
Fifty percent of the award is based on the total shareholder return (share
price movement and the value of dividends) over the period from FP20
results to 30 September 2023 with no award being made if the return
rate is less than 50% over the period. A sliding scale will apply with
100% of the award vesting if 75% growth is achieved over the period.
The base share price is £1.48

The performance conditions of the LTIP scheme are:
TSR - Fifty percent of the award is based on the total shareholder return
(share price movement and the value of dividends) over the period
from FY21 results to 30 September 2024 with no award being made
if the return rate is less than 31% over the period. A sliding scale will
apply with 100% of the award vesting if 60% growth is achieved over the
period. The base share price is £1.665

EPS - Fifty percent of the award is based on increasing the earnings per
share. No award will be made if the earnings per share does not exceed
21.1p for FY24 with the maximum award vesting at 23p. A sliding scale
will apply between 21.1p and 23p.

The award is a number of shares, which can be bought at their nominal
value.

Peter Kenyon was awarded 100,000 share options and Martin Clyburn
70,000 share options under the LTIP scheme. An additional 168,000
LTIP share options were allocated to 10 Group employees.

The CSOP scheme includes 110,000 shares options, at an option price
of £2.005. This was issued to 18 participants. Peter and Martin and not
included in the CSOP scheme.

A total of 448,000 share options are included in the long term incentive
schemes for the period FY21 to FY24.

LTIP 6 FY22– FY25

It is the Board’s intention to issue a further scheme within 42 days of
the publication of this Annual Report. This scheme, which will include
an LTIP with performance criteria and CSOP with service criteria, will
continue to be issued to the wider senior management team to recognise
their contribution in seeking to implement the Group’s strategy and
achieve improved financial performance over the three-year period.

The LTIP scheme will follow the principles of the existing LTIPs with 50%
of any award linked to growing EPS and 50% of any award linked to total
shareholder returns. Again, stretching targets will be set to achieve
100% of the award.

The Remuneration Committee retain discretion over the amount and
terms of any long term incentive scheme.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

A summary of the scheme share option awards is below;

Name of Director

Testing Date

Exercise by date

Peter Kenyon

Martin Clyburn

Other beneficiaries (LTIP)

Other beneficiaries (CSOP)

LTIP 3

LTIP 4

LTIP 5

January 2023

January 2024

January 2025

July 2029

50,000

25,000

160,000
(17 beneficiaries)

February 2031

February 2032

120,000

80,000

262,500
(19 beneficiaries)

100,000

70,000

168,000
(10 beneficiaries)

110,000
(18 beneficiaries)

The Directors hold the following notifiable beneficial interests in the ordinary share capital of the Company

Type of share

Holding as at 30
September 2021

Acquired in the
financial period

Sold in the financial
period

As at 30 September
2022

Executive

Peter Kenyon*

Martin Clyburn*

Non Executive

Andy Meehan*

Simon Herrick

Steve Smith*

1p ordinary

*held in personal name, in spouse’s name or pension scheme.

1,152,507

209,375

347,320

19,950

71,348

1,152,507

209,375

347,320

19,950

71,348

If you have any comments or questions on anything contained in this Remuneration Report, I will be available at the AGM.

Simon Herrick

Chair of the Remuneration Committee

RAMSDENS ANNUAL REPORT 2022Directors’ report for the
year ended 30 September 2022

The Directors have pleasure in presenting their report and the financial
statements of the Group for the year ended 30 September 2022.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

DIRECTORS AND THEIR INTEREST

The principal activities of the Group during the period continue to be:
the supply of foreign exchange services, pawnbroking, related financial
services, jewellery sales, and the purchase of unwanted precious metals,
mainly gold jewellery from the general public subsequently sold to the
bullion market. The Group operates from branches supported by an
online offering. The results for the period and the financial position of
the group are as shown in the annexed financial statements.
A review of the business and its future development is given in the
Chairman’s and Chief Executive’s statements

RESULTS AND DIVIDENDS

The results for the period are set out in the Consolidated Statement of
Comprehensive Income on page 60.

The directors have proposed a final dividend of 6.3p following an interim
dividend of 2.7p paid on 30 September 2022.

LIKELY FUTURE DEVELOPMENT

Our priorities for the following financial year are disclosed in the Strategic
Report on pages 4 to 31.

SUBSTANTIAL SHAREHOLDINGS

The Company has one class of ordinary share, which carry no right to
fixed income. Each ordinary share has the right to one vote at general
meetings.

As far as the Directors are aware, the only notifiable holdings equal to
or in excess of 3% of the issued ordinary share capital at 30 September
2022 were as shown in the table below.

The Directors who served throughout the year, except where otherwise
stated, and up to the date of signing of the Annual Report and Accounts
are as follows;

Executive

Peter Kenyon

Martin Clyburn

Non-Executive

Andrew Meehan

Stephen Smith

Simon Herrick

Karen Ingham, appointed 1 November 2022

Directors’ beneficial interests and their remuneration are detailed in the
Remuneration Report on pages 41 to 46.

DIRECTORS’ INDEMNITIES

The Directors are entitled to be indemnified by the Company to the extent
permitted by law and the Company’s articles of association in respect of
certain losses arising out of or in connection with the execution of their
powers, duties and responsibilities. As permitted by the Companies Act
2006, the Company has also executed deeds of indemnity for the benefit
of each Director in respect of liabilities that may attach to them in their
capacity as Directors of the Company.

The Company also purchased and maintained Directors’ and officers’
liability insurance throughout the year.

Name of holder

Otus Capital Mgt.

Close Asset Management

Downing LLP

number

3,890,178

3,536,872

3,166,890

Hargreaves Lansdown Asset

2,390,970

Interactive Investor

Rowan Dartington

Peter Kenyon (CEO)

2,136,061

1,975,118

1,152,507

GOING CONCERN

% of voting rights in the
issued share capital

The Group has prepared the financial statements on a going concern
basis, with due consideration to the present economic situation.

12.29

11.18

10.01

7.56

6.75

6.24

3.68

The Board have conducted an extensive review of forecast earnings and
cash for the period to 31 January 2024 considering various scenarios
and sensitivities given the residual effects Covid-19 and the ongoing
cost of living crisis and uncertainty it has produced around the future
economic environment.

At 30 September 2022 the Group has significant cash balances of
£15.3m, readily realisible stock of gold jewellery and access to the
£3.5m unutilised element of a £10m revolving credit facility with an
expiry date of March 2024. In the year ended 30 September 2022 the
Group has traded profitably and generated cash from operations.

The Board have been able to conclude that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the Group continues to adopt the going concern basis in
preparing the financial statements. The going concern assessment
covers the period to 31 January 2024.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

FINANCIAL RISK MANAGEMENT

AUDITOR

Financial risk is managed by the board on an ongoing basis. The
principal risks relating to the Group are outlined in more detail on pages
28 to 31 of the Strategic Report.

A resolution to reappoint Grant Thornton UK LLP as auditors will be put to
the members at the Annual General Meeting.

Registered office:
Unit 16
Parkway Shopping Centre
Coulby Newham
Middlesbrough
TS8 0TJ

Signed by order of the Directors

Kevin Brown

Company Secretary

Approved by the Directors on 16 January 2023

POST BALANCE SHEET EVENTS
There have been no material post balance sheet events.

ANNUAL GENERAL MEETING
The next AGM will be held on 27 February 2023.

POLITICAL DONATIONS
No political contributions were made during the period (FY21: £nil)

STAKEHOLDER ENGAGEMENT
The Directors recognise that communication with the Group’s employees
is essential and the Group places importance on the contributions and
views of its employees. Details of employee involvement are set out in
the Strategic Report and in the section 172(1) statement.

The section 172(1) statement, together with the Focusing on
sustainability through our ESG policy section of this Report, also
details how the Directors have engaged with shareholders, customers,
partners and suppliers during the year to ensure that positive business
relationships are nurtured.

DISABLED EMPLOYEES
The Group gives full consideration to applications for employment
from disabled persons where the candidate’s particular aptitudes and
abilities are consistent with adequately meeting the requirements of
the job. Opportunities are available to disabled employees for training,
career development and promotion. Where existing employees become
disabled, it is the group’s policy to provide continuing employment
wherever practicable in the same or an alternative position and to
provide appropriate training to achieve this aim.

STREAMLINED ENERGY AND CARBON
REPORTING
Our streamlined energy and carbon reporting is set out in the Focusing
on sustainability through our ESG policy section of this Report.

DISCLOSURE OF INFORMATION TO THE
AUDITOR
In so far as each person who was a Director at the date of approving this
report is aware:

•

there is no relevant audit information, being information needed
by the auditor in connection with preparing its report, of which the
Group’s auditor is unaware; and
the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to
establish that the auditor is aware of that information.

RAMSDENS ANNUAL REPORT 2022Statement of
Directors’ responsibilities

The Directors are responsible for preparing the
Strategic Report, the Directors’ Report and the
financial statements in accordance with
applicable law and regulations.

Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to prepare
the financial statements in accordance with international financial
reporting standards in conformity with the requirements of the
Companies Act 2006 Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the company and of the group and
of the profit or loss of the group for that period. In preparing those
financial statements, the Directors are required to:

•

select suitable accounting policies and then apply them
consistently;

• make judgements and estimates that are reasonable and prudent;
state whether applicable UK adopted international accounting
•
standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group will continue in
business.

•

The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the group’s transactions and
disclose with reasonable accuracy at any time the financial position of
the group and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring the Annual Report and
the financial statements are made available on a website. Financial
statements are published on the Company’s website, www.ramsdensplc.
com, in accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the Directors.

The Directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT
STRATEGIC REPORT

CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

RAMSDENS ANNUAL REPORT 2022

RAMSDENS ANNUAL REPORT 2022Financial
Statements

Independent Auditor’s Report

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

Parent company statement of financial position

Parent company statement of changes in equity

Notes to the parent company financial statements

Company advisors

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT
STRATEGIC REPORT

CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

RAMSDENS ANNUAL REPORT 2022

RAMSDENS ANNUAL REPORT 2022Independent auditor’s report to
the members of Ramsdens
Holdings PLC

OPINION

Our opinion on the financial statements is unmodified
We have audited the financial statements of Ramsdens Holdings PLC (the
‘parent company’) and its subsidiaries (the ‘Group’) for the year ended
30 September 2022, which comprise the Consolidated statement of
comprehensive income, the Consolidated statement of financial position,
the Consolidated statement of changes in equity, the Consolidated
statement of cash flows, the Notes to the consolidated financial
statements including a summary of significant accounting policies, the
Parent company statement of financial position, the Parent company
statement of changes in equity and the Notes to the parent company
financial statements including a summary of significant accounting
policies. The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and UK
adopted International Accounting Standards. The financial reporting
framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ (United Kingdom Generally Accepted Accounting
Practice).

In our opinion:

•

the financial statements give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 30 September
2022 and of the Group’s profit for the year then ended;

the Group financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards;

the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and

the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the ‘Auditor’s responsibilities
for the audit of the financial statements’ section of our report. We are
independent of the Group and the parent company in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our
opinion.

CONCLUSIONS RELATING TO GOING CONCERN

We are responsible for concluding on the appropriateness of the
directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the
Group’s and the parent company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to

draw attention in our report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify the auditor’s
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our report. However, future events or conditions may
cause the Group or the parent company to cease to continue as a going
concern.

Our evaluation of the directors’ assessment of the Group’s and the
parent company’s ability to continue to adopt the going concern
basis of accounting included challenging the underlying data and key
assumptions used to make the assessment, evaluating the directors’
plan for future actions in relation to their going concern assessment
and their assessment of the Group’s and the parent company’s ability to
meet obligations in a worst-case scenario.

The worst-case scenario analysis supported the directors’ assessment
that there is no material uncertainty in relation to going concern due
to the strong balance sheet position, the ability to generate cash from
current assets, the significant cash balance and a profit-making year
and forecasts. This risk has been addressed by performing the following
procedures:

•

Obtaining management’s base case cash flow forecasts covering
the period to 31 January 2024, including relevant sensitivities,
assessing how these cash flow forecasts were compiled and
assessing the appropriateness of the underlying assumptions;

Obtaining management’s additional worst-case scenario
sensitivities to assess the potential impact of customer loss on the
business. We evaluated the assumptions regarding the impact of
no new revenue contracts being recorded in branches leading to a
reduction in revenue alongside a liquidation of the current assets
held at the year end and the impact that this would have on the
overall performance and position of the business. We considered
whether the assumptions were consistent with our understanding
of the business derived from other detailed audit work undertaken;

Assessing the impact of the mitigating factors available to
management in respect of the ability to restrict cash impact,
including the level of available facilities; and

Assessing the adequacy of related disclosures within the annual
report.

In our evaluation of the directors’ conclusions, we considered the
inherent risks associated with the Group’s and the parent company’s
business model including effects arising from macro-economic
uncertainties such as the increasing cost of energy and high inflation
rates, we assessed and challenged the reasonableness of estimates
made by the directors and the related disclosures and analysed how
those risks might affect the Group’s and the parent company’s financial
resources or ability to continue operations over the going concern period.

Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the Parent
company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for
issue.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.

This risk is no longer considered to be a key audit matter for the Group as
the forecast performance of the individual CGUs, as supported by actual
performance during the year demonstrated greater headroom compared
to the prior year so did not require significant management judgement.

There were no key audit matters identified in relation to the parent
company.

We performed an audit of one or more classes of transactions in relation
to the parent company and an audit of the financial information of its
subsidiary company, using component materiality (full scope audit). The
operations that were subject to full-scope audit procedures made up
100 per cent of the consolidated revenue and 99 per cent of the Group’s
profit before tax.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified.
These matters included those that had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion
on these matters.

Description

Audit response

KAM

Disclosures

Our results

The responsibilities of the directors with respect to going concern
are described in the ‘Responsibilities of directors for the financial
statements’ section of this report.

Materiality

Key audit
matters

Scoping

OUR APPROACH TO THE AUDIT

OVERVIEW OF OUR AUDIT APPROACH

Overall materiality:

Group: £525,000, which represents approximately 7.5% of the Group’s
profit before tax based on the expected value at the planning stage.
Parent company: £244,000, which represents approximately 2% of the
parent company’s total assets..

One key Group audit matter was identified:

•

Pawnbroking revenue may be misstated due to fraud and error –
same as prior year.

Our auditor’s report for the year ended 30 September 2021 included one
Group key audit matter that has not been reported as a key audit matter
in the current year’s report. This relates to:

•

Impairment of goodwill and other non-current assets.

RAMSDENS ANNUAL REPORT 2022In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.

High

Going concern

Impairment of goodwill and
other non-current assets

Other revenue
streams

Management
override of controls

Pawnbroking
revenue may be
misstated due to
fraud and error

Potential
financial
statement
impact

Cash and cash
equivalents

Wages and salaries
expenses

Inventory

Loan debtors
(pawnbroking)

IFRS 16
Additions

Trade
Creditors

Share based
payments (LTIP)

Low

Extent of management judgement

High

Key Audit matter

Significant risk

Other risk

KEY AUDIT MATTER – GROUP

HOW OUR SCOPE ADDRESSED THE MATTER – GROUP

Pawnbroking revenue may be misstated due to fraud and error

We identified the misstatement of pawnbroking revenue as one of the most
significant assessed risks of material misstatement due to fraud and error.

In responding to the key audit matter, we performed the following audit
procedures:

Pawnbroking revenue relates to interest receivable on pawnbroking loans. Such
interest accrues over the term of a loan and is accounted for using an effective
interest rate in accordance with IFRS 9 ‘Financial Instruments’. Management
calculate the expected credit loss on pawnbroking contracts and recognise a
provision for this within cost of sales.

The calculation of the effective interest rate and expected credit loss provision
includes complexity and requires management judgement to ensure that
revenue is recognised appropriately.

For the year ended 30 September 2022, pawnbroking revenue of £9.0m (30
September 2021: £7.5m) was recognised in the financial statements.

•

Assessing whether the revenue recognition policy is in accordance
with IFRS 9 and challenging management on the application of the
accounting policy following a policy change in the prior year;

Testing the operating effectiveness of controls relating to pawnbro-
king revenue, including the related IT controls, by testing a sample to
evidence of operation of the control;

Selecting a sample of pawnbroking revenue recognised in the year
and agreeing to supporting documentation to verify the occurrence of
revenue;

Evaluating the reasonableness of the expected credit loss calculation
through checking management’s calculations and challenging the key
assumptions made in the model by comparing to the known outcome
of last year’s credit loss provision and to other historic outcomes,
for both the live loan book and in relation to pledges that have now
expired;

Testing the recognition of revenue in the current year by testing
interest recognition on open loans at year end; and

Performing analytical review on the revenue recorded in the period
by comparing revenue year on year, overall and at branch level, and
assessing monthly trends to identify potentially unusual trends.

Relevant disclosures in the Annual Report and Accounts
to 30 September 2022
•

Financial statements: Note 3, Significant accounting policies

Our results
Based on the work performed, we have not found any material
misstatements within the pawnbroking revenue balance.

•

Financial statements: Note 5, Segmental analysis

We did not identify any key audit matters relating to the audit of the financial statements of the parent company.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and
of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report.

Materiality was determined as follows:

MATERIALITY MEASURE
Materiality for financial statements
as a whole

GROUP
We define materiality as the magnitude of misstatement in the financial statements that, individually or
in the aggregate, could reasonably be expected to influence the economic decisions of the users of these
financial statements. We use materiality in determining the nature, timing and extent of our audit work.

PARENT COMPANY

Materiality threshold

£525,000, which represented approximately 7.5% of
the Group’s profit before tax based on the expected
value at the planning stage. We chose not to revise our
materiality once the final profit before tax was known.

£244,000, which is approximately 2% of the
parent company’s total assets.

Significant judgements made by auditor in
determining the materiality

In determining materiality, we made the following
significant judgements:

In determining materiality, we made the
following significant judgements:

•

the Group’s profit before tax is considered the
most appropriate benchmark because it is the
most relevant performance measure to the
stakeholders of the Group and is presented as the
first financial highlight on page 3 of the Annual
Report and Accounts.

•

the parent company’s total assets
is considered the most appropriate
benchmark because it is the most
relevant measure of financial position
for the stakeholders of the parent
company, which does not trade.

Materiality in the prior year was based upon four years’
average profit before tax due to the impact of Covid-19
on 2020 and 2021 trading.
Materiality for the current year is higher than the level
that was determined in prior year to reflect an increase
in the profit base. The same 7.5% threshold has been
applied.

Materiality for the current year is consistent
with prior year.

Performance materiality used to
drive the extent of our testing

We set performance materiality at an amount less than materiality for the financial statements as a
whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a whole.

Performance materiality threshold

£393,750, which is 75% of financial statement
materiality.

£183,000, which is 75% of financial
statement materiality.

Significant judgements made by auditor in deter-
mining the performance materiality

In determining performance materiality, we made the
following significant judgements:

In determining performance materiality, we
made the following significant judgements:

•

the strength of the control environment based on
our assessment of the design and implementation
of controls in prior year and current year planning;

the effect of misstatements identified in previous
audits; and

no significant issues were noted in prior year
that have not been addressed or are expected to
reoccur.

•

Therefore, we consider the performance materiality
percentage to be appropriate.

the strength of the control environment
based on our assessment of the design
and implementation of controls in prior
year and current year planning;

the effect of misstatements identified in
previous audits; and

no significant issues were noted in prior
year that have not been addressed or
are expected to reoccur.

In the prior year the performance materiality percentage
was set at 70% of financial statement materiality to
reflect our lack of accumulated knowledge in our first
year’s audit.

Therefore, we consider the performance
materiality percentage to be appropriate.
In the prior year the performance materiality
percentage was set at 70% of financial
statement materiality to reflect our lack of
accumulated knowledge in our first year’s
audit.

RAMSDENS ANNUAL REPORT 2022MATERIALITY MEASURE
Specific materiality

GROUP
We determine specific materiality for one or more particular classes of transactions, account balances or
disclosures for which misstatements of lesser amounts than materiality for the financial statements as a
whole could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial statements.

PARENT COMPANY

Specific materiality

We determined a lower level of specific materiality for
the following area:

We determined a lower level of specific
materiality for the following area:

Communication of
misstatements to the Audit
and Risk Committee
Threshold for communication

•

Directors’ remuneration; and

Identified related party transactions outside of the
normal course of business.

•

Directors’ remuneration; and

Identified related party transactions
outside of the normal course of
business.

We determine a threshold for reporting unadjusted differences to the Audit and Risk Committee.

£26,250 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.

£12,200 and misstatements below that
threshold that, in our view, warrant reporting
on qualitative grounds.

The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.

Overall materiality – Group

Overall materiality – Parent company

Profit before
tax
£8,269k

PM
£394k, 75%

FSM
£525k, 6.3%

Total assets
£12,104k

PM
£183k, 75%

FSM
£244k, 2%

TFPUM
£131, 25%

TFPUM
£61k, 25%

FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

OTHER INFORMATION

We performed a risk-based audit that requires an understanding of the
Group’s and the parent company’s business and in particular matters
related to:

Understanding the Group, its components, and their environments,
including Group-wide controls
•

the engagement team obtained an understanding of the Group and
its environment, including Group-wide controls, and assessed the
risks of material misstatement at the Group level;

•

the group engagement team obtained an understanding of the
individual components, including component specific controls;
planning discussions were held between the engagement team and
the Group’s management team; and

• walkthroughs were performed on key areas of focus to understand

the controls and assess the design and implementation of these.

Identifying significant components
• we identified one significant component within the Group, being

the one and only trading subsidiary. The subsidiary company was
identified as a significant component based on its individual size in
relation to the profit before tax and total assets of the Group. The
parent company was not considered a significant component. There
are no other components in the Group.

Type of work to be performed on financial information of parent and
other components (including how it addressed the key audit matters)
•

the group engagement team performed an audit of one or more
classes of transactions over the financial statements of the parent
company, and full-scope audit of the financial information of the
subsidiary undertaking, thereby including 100% coverage of the
key audit matters and group significant risks and testing 99% of the
Group’s revenue and profit before tax.

Performance of our audit
• we attended the parent company’s primary location in

Middlesbrough to perform audit procedures (including a year-end
inventory, cash and pledged items count) as well as observing
inventory and verifying the physical existence of cash and pledged
items at a sample of branch locations at, or around the year-end,
based on quantitative and qualitative factors.

Communications with component auditors
• we did not engage with any component auditors and the group

engagement team performed all audit procedures.

The directors are responsible for the other information. The other
information comprises the information included in the annual report and
accounts, other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements, or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether
there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.

We have nothing to report in this regard.

Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and

the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.

Matter on which we are required to report under the Companies Act
2006
In the light of the knowledge and understanding of the Group and the
parent company and its environment obtained in the course of the audit,
we have not identified material misstatements in the strategic report or
the directors’ report.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:

•

adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or

the parent company financial statements are not in agreement with
the accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are
not made; or

• we have not received all the information and explanations we

require for our audit.

RAMSDENS ANNUAL REPORT 2022Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement, the
directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for
assessing the Group’s and the parent company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the parent company or to
cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.

A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.

Explanation as to what extent the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. Owing to the inherent limitations of an
audit, there is an unavoidable risk that material misstatements in the
financial statements may not be detected, even though the audit is
properly planned and performed in accordance with ISAs (UK).

The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:

the results of our enquiries through our review of the Board
minutes and of the minutes of the Audit and Risk Committee
and compliance meetings, inspection of the breaches registers,
inspection of legal and regulatory correspondence and reports to
the regulator, the Financial Conduct Authority (FCA);

•

In assessing the potential risks of material misstatement, we
obtained an understanding of:

- the Group’s and the parent company’s operations, including
the nature of their revenue sources, and of their principal
activities, to understand the classes of transactions,
account balances, expected financial statement
disclosures and business risks that may result in risks of

material misstatement;

the Group’s and the parent company’s control environment,
including the policies and procedures implemented to
mitigate risks of fraud or non-compliance with the relevant

laws and regulations; the significant judgements and
assumptions made by management in its significant
accounting estimates or in applying its accounting policies;
and
the rules and guidance issued by the FCA applicable to the

-
Group and the parent company;

• We assessed the susceptibility of the Group’s and the parent

company’s financial statements to material misstatement, including
how fraud might occur, by evaluating management’s incentives
and opportunities for manipulation of the financial statements.
This included an evaluation of the risk of management override of
controls. Audit procedures performed by the engagement team in
connection with the risks identified included:

- evaluation of the design and implementation of controls
that management has put in place to prevent and detect
fraud;

- checking the completeness of journal entries and identi
fying and testing journal entries, in particular manual
journal entries processed at the year-end for financial
statements preparation;

- challenging the assumptions and judgements made by
management in its significant accounting estimates; and

identifying and testing related party transactions by
agreeing to underlying records and obtaining confirmation
for directors’ emoluments.

• We obtained an understanding of the legal and regulatory

•

frameworks applicable to the Group and the parent Company and
the industry in which they operate. We identified areas of laws and
regulations that could reasonably be expected to have a material
effect on the financial statements from our sector experience and
through discussion with management, the Directors, Audit and Risk
Committee members and internal auditors. We determined that
the most significant laws and regulations were regulations relating
to consumer credit and those that relate to the financial reporting
framework, being the UK adopted International Accounting
Standards, (in respect of the Group) and Financial Reporting
Standard 101 ‘Reduced Disclosure Framework’ (in respect of the
parent company), together with UK tax legislation;

• We enquired of the Directors, Audit and Risk Committee members
and management including the compliance, risk and internal
audit departments to obtain an understanding of how the Group
and the parent company are complying with those legal and
regulatory frameworks and whether there were any instances of
non-compliance with laws and regulations, and whether they had
any knowledge of actual or suspected fraud. We corroborated

These audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud or
error. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error and
detecting irregularities that result from fraud is inherently more
difficult than detecting those that result from error, as fraud may
involve collusion, deliberate concealment, forgery or intentional
misrepresentations. Also, the further removed non-compliance with
laws and regulations is from events and transactions reflected in
the financial statements, the less likely we would become aware
of it.

•

The engagement partner’s assessment of the appropriateness of
the collective competence and capabilities of the engagement team
included consideration of the engagement team’s:

- understanding of, and practical experience with, audit

engagements of a similar nature and complexity, through
appropriate training and participation;

- knowledge of the industry in which the Group and parent

company operate; and

RAMSDENS ANNUAL REPORT 2022

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

- understanding of the legal and regulatory frameworks
applicable to the Group and the parent company.

• We made enquiries of management, the Directors, Audit and Risk
Committee members and internal auditors and have not been
made aware of any material fraud or non-compliance with laws and
regulations;

• We obtained an understanding of the Group’s and the parent

company’s responses to risks, including the work performed by the
compliance and internal audit department, and assessed these
responses to be sufficient to check appropriate compliance with
laws and regulations.

Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 . Our
audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.

MARK OVERFIELD BSC FCA

SENIOR STATUTORY AUDITOR

for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds

16 January 2023

RAMSDENS ANNUAL REPORT 2022

Consolidated statement of comprehensive income

For the year ended 30 September 2022

Revenue

Cost of sales

Gross profit

Other income

Administrative expenses

Operating profit

Finance costs

Profit before tax

Income tax expense

Profit for the year

Other comprehensive income

Total comprehensive income

Earnings per share in pence

Diluted earnings per share in pence

Notes

2022
£’000

66,101

(27,882)

38,219

(29,392)

8,828

(559)

8,269

(1,683)

6,586

20.9

20.7

2021
£’000

40,677

(18,415)

22,262

284

(21,510)

1,036

(472)

564

(198)

366

1.2

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Consolidated statement of financial position

As at 30 September 2022

Assets

Non-current assets

Property, plant and equipment

Right of use of assets

Intangible assets

Investments

Deferred tax assets

Current assets

Inventories

Trade and other receivables

Cash and short-term deposits

Total assets

Current liabilities

Trade and other payables

Interest bearing loans and borrowings

Lease liabilities

Income tax payable

Net current assets

Non-current liabilities

Lease liabilities

Contract liabilities

Deferred tax liabilities

Total liabilities

Net assets

Equity

Issued capital

Share premium

Retained earnings

Total equity

Notes

2022
£’000

6,681

9,551

779

17,011

22,764

13,264

15,278

51,306

68,317

8,905

6,443

2,086

932

18,366

32,940

7,871

149

8,108

26,474

41,843

316

4,892

36,635

41,843

2021
£’000

5,195

8,164

714

14,153

15,151

10,379

13,032

38,562

52,715

7,673

2,159

9,893

28,669

6,442

119

118

6,679

16,572

36,143

314

4,892

30,937

36,143

The financial statements of Ramsdens Holdings PLC, registered number 08811656, were approved by the directors and authorised for issue on 16
January 2023 and signed on their behalf by:

M A Clyburn

Chief Financial Officer

RAMSDENS ANNUAL REPORT 2022Consolidated statement of changes in equity

For the year ended 30 September 2022

Notes

Issued
capital
£’000

308

Share
premium
£’000

4,892

Retained
earnings
£’000

30,355

314

4,892

316

4,892

Total
£’000

35,555

366

254

(38)

222

36,143

6,586

366

254

(38)

216

30,937

6,586

(1,231)

314

(888)

36,635

314

(886)

41,843

As at 1 October 2020

Profit for the year

Total comprehensive income

Transactions with owners:

Dividends paid

Issue of share capital

Share based payments

Deferred tax on share-based payments

Total transactions with owners

As at 30 September 2021

As at 1 October 2021

Profit for the period

Total comprehensive income

Transactions with owners:

Dividends paid

Issue of share capital

Share based payments

Deferred tax on share-based payments

Total transactions with owners

As at 30 September 2022

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Consolidated statement of cash flows

For the year ended 30 September 2022

Operating activities
Profit before tax

Adjustments to reconcile profit before tax to net cash flows:

Depreciation and impairment of property, plant and equipment

Depreciation and impairment of right of use assets

Profit on disposal of right of use assets

Amortisation and impairment of intangible assets

Loss on disposal of property, plant and equipment

Share based payments

Finance costs

Working capital adjustments:

Movement in trade and other receivables and prepayments

Movement in inventories

Movement in trade and other payables

Interest paid

Income tax paid

Net cash flows from operating activities

Investing activities

Proceeds from sale of property, plant and equipment

Purchase of property, plant and equipment

Purchase of intangible assets

Payment for acquisition

Net cash flows used in investing activities

Financing activities

Issue of share capital

Dividends paid

Payment of principal portion of lease liabilities

Bank loans drawn down

Repayment of bank borrowings

Net cash flows from financing activities

Net increase / decrease in cash and cash equivalents

Cash and cash equivalents at 1 October

Cash and cash equivalents at 30 September

Notes

2022
£'000

8,269

1,265

2,261

(81)

163

314

559

(2,583)

(7,221)

1,144

4,168

(559)

(672)

2,937

(2,817)

(28)

(909)

(3,751)

(1,231)

(2,211)

8,000

(1,500)

3,060

2,246

13,032

15,278

2021
£'000

564

1,074

2,223

(45)

218

140

254

472

565

(3,992)

1,217

2,690

(472)

(1,135)

1,083

(1,574)

(62)

(1,626)

(2,304)

(2,298)

(2,841)

15,873

13,032

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

1. CORPORATE INFORMATION
Ramsdens Holdings PLC (the "Company") is a public limited company incorporated and domiciled in England and Wales. The registered office of the
Company is Unit 16, Parkway Shopping Centre, Coulby Newham, Middlesbrough, TS8 0TJ. The registered company number is 08811656. A list of the
Company's subsidiaries is presented in note 13.

The principal activities of the Company and its subsidiaries (the "Group") are the supply of foreign exchange services, pawnbroking and related financial
services, jewellery sales, and the purchase of gold jewellery from the general public.

2. CHANGES IN ACCOUNTING POLICIES
There are no changes to accounting policies in the current year. There are no future changes in accounting standards which would materially impact
the Group

3. SIGNIFICANT ACCOUNTING POLICIES
3.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with UK adopted international accounting standards.

The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are presented in pounds
sterling which is the functional currency of the parent and presentational currency of the Group. All values are rounded to the nearest thousand (£000),
except when otherwise indicated.

3.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all of its subsidiary undertakings (as detailed above).
The financial information of all Group companies is adjusted, where necessary, to ensure the use of consistent accounting policies. In line with IFRS10,
an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.

3.3 Going Concern
The Group has prepared the financial statements on a going concern basis, with due consideration to the present economic situation.

The Board have conducted an extensive review of forecast earnings and cash for the period to 31 January 2024 considering various scenarios and
sensitivities given the residual effects Covid-19 and the ongoing cost of living crisis and uncertainty it has produced around the future economic
environment.

At 30 September 2022 the Group has significant cash balances of £15.3m, readily realisable stock of gold jewellery and access to the £3.5m utilised
element of a £10m revolving credit facility with an expiry date of MArch 2024. In the year ended 30 September 2022 the Group has traded profitably
and generated cash from operations.

The Board have been able to conclude that they a reasonable expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the Company continues to adopt the going concern basis in preparing the financial statements. The
going concern assessment covers the period to 31 January 2024.

3.4 Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration
transferred which represents the fair value of the assets transferred and liabilities incurred or assumed. Acquisition related costs are expensed as
incurred and included in administrative expenses.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the fair value of the identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-
assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure
the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain is recognised in the statement of comprehensive income as a gain on bargain purchase.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition date, allocated to each of the Group’s cash generating units (CGU) that are expected to benefit from
the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

3.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination
is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is recognised in the statement of comprehensive income when it is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite and at each date of the statement of financial position only goodwill
assets are accorded an indefinite life.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period.
Amortisation is calculated over the estimated useful lives of the assets as follows:
•
•

Customer relationships - 40% reducing balance
Software - 20% straight line

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for
by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the statement of comprehensive income in the expense category consistent with the function of the
intangible assets.

3.6 Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses (if any). All other repair and
maintenance costs are recognised in the statement of comprehensive income as incurred.

Depreciation is calculated over the estimated useful lives of the assets as follows:
•
•
•
•
• Motor vehicles - 25% reducing balance

Freehold property - 2% straight line
Leasehold improvements - straight line over the lease term
Fixtures & fittings - 20% & 33% reducing balance
Computer equipment - 25% & 33% reducing balance

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the statement of comprehensive income when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.

3.7 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an
asset’s or CGU's fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Group’s CGUs to which
the individual assets are allocated, which is usually taken to be each individual branch store based on the independence of cash inflows. Central costs
and assets are allocated to CGUs based on revenue. These budgets and forecast calculations are estimated for three years and extrapolated to cover a
total period of ten years.

Impairment losses of continuing operations are recognised in the statement of comprehensive income in those expense categories consistent with the
function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised.

The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would
have been determined, net of depreciation or amortisation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the Statement of Comprehensive income unless the asset is carried at a revalued amount, in which case the reversal is treated as a
revaluation increase.

Goodwill
Goodwill is tested for impairment at the end of each accounting period and when circumstances indicate that the carrying value may be impaired.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than their carrying amount, an impairment loss is recognised. Impairment losses relating to
goodwill cannot be reversed in future periods. Goodwill is allocated to CGUs based on the price paid of the relevant acquisition.

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

3.8 Inventories
Inventories comprise of retail jewellery and precious metals held to be scrapped and are valued at the lower of cost and net realisable value.

Cost represents the purchase price plus overheads directly related to bringing the inventory to its present location and condition.

When the Group takes title to pledged goods on default of pawnbroking loans up to the value of £75, cost representsthe principal amount of the loan
plus term interest.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs to sell.

3.9 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets
Financial assets are all recognised and derecognised on a trade date basis. All recognised financial assets are measured and subsequently measured
at amortised cost or fair value depending on the classification of the financial asset.

Classification of financial assets
Financial assets that meet the following criteria are measured at amortised cost:
the financial asset is held within the business model whose objective is to hold financial assets in order to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.

In accordance with IFRS 9 Financial Instruments the Group has classified its financial assets as amortised cost.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition less the principal repayments, plus
the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for
any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand, foreign currency held for resale and
short-term deposits held with banks with a maturity of three months or less from inception. Debit/credit card receipts are recognised as cash at point
of transaction

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash, foreign currency held for resale and short-term
deposits as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.

Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets that are measured at amortised cost. The amount of credit losses
is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. However, if the
credit risk on the financial instrument has not increased significantly since initial recognition, the Group recognises the 12 month expected credit
losses. As pawnbroking loans are typically over a six-month term the lifetime credit losses are usually the same as the 12 month expected credit losses.

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Company compares the risk of a
default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable
including historical experience.

The measurement of expected credit losses is a function of the probability of default, and the loss (if any) on default. The assessment of the probability
of default is based on historical data. The loss on default is based on the assets gross carrying amount less any realisable security held. The expected
credit loss calculation considers both the interest income and the capital element of the pawnbroking loans. Interest on loans in default is accrued net
of expected credit losses. Details of the key assumptions for pawnbroking expected credit losses are given in note 4.

Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial
asset to another entity. On derecognition of a financial asset measured at amortised cost, the difference between the assets carrying amount and the
sum of the consideration received and receivable is recognised in the Statement of Comprehensive Income. Pawnbroking loans in the course of
realisation continue to be recognised as loan receivables until the pledged items are realised.

Financial liabilities
Debt and equity instruments are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and equity instrument.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

All financial liabilities are recognised initially at amortised cost or at fair value through profit and loss (FVTPL).

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method
(EIR). Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognised as well as through the (EIR)
amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The
EIR amortisation is included in finance costs in the Statement of Comprehensive Income.

Only the Group’s derivative financial instruments are classified as financial liabilities at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in the Statement of
Comprehensive Income. The net gain or loss recognised in the Statement of Comprehensive Income incorporates any interest paid on the financial
liability.

Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of Comprehensive Income.

Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the Statement of Financial Position only if there is a current
enforceable legal right to offset the recognised amounts and intent to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.

3.10 Fair value measurement
The Group measures financial instruments, such as derivatives, at fair value at the date of each statement of financial position.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy. This is
described, as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

3.11 Taxation

Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of
Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively
enacted by the date of the statement of financial position.

Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the date of each statement of financial position and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled or the asset is realised. Deferred
tax is charged or credited in the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity. Deferred tax is recognised on an undiscounted basis.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

3.12 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether:

•

•
•

•

The contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent
substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant
to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is
predetermined, the Group has the right to direct the use of the asset if either: The Group has the right to operate the asset; or
The Group designed the asset in a way that predetermines how and for what purpose it will be used.

As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined on the same basis as
those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.

The lease liability initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

•
•
•
•

Fixed payments, including in-substance fixed payments;
Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
Amounts expected to be payable under a residual value guarantee; and
The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the
Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain
not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded
in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months
or less and leases of low-value assets, including IT equipment. The Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.

3.13 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured using the directors’ best estimate of the expenditure required to settle the obligation at the date of each statement of
financial position.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

The majority of the Group’s premises are leased and include an end of lease rectification clause to return the property to its original state. No provision
is made until a board decision has been taken to exit the lease. Additionally, the group maintains stores to a high standard and completes any
necessary repairs and maintenance on a timely basis using the in-house property department and external contractors. These costs are expensed as
incurred.

3.14 Pensions and other post-employment benefits
The company operates a defined contribution pension scheme. The assets of the scheme are held and administered separately from those of the
Group. Contributions payable for the year are charged in the statement of comprehensive income. Total contributions for the year are disclosed in note
9 to the accounts. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments
in the Statement of Financial Position.

3.15 Employee share incentive plans
The group grants equity settled share option rights to the parent entity's equity instruments to certain directors and senior staff members under a LTIP
(Long term incentive Plan). The employee share options are measured at fair value at the date of grant by the use of either the Black- Scholes Model
or a Monte Carle model depending on the vesting conditions attached to the share option. The fair value is expensed on a straight line basis over the
vesting period based on an estimate of the number of options that will eventually vest. The expense is recognised in the entity in which the beneficiary
is remunerated. Further details are provided in note 25.

3.16 Revenue recognition
The major sources of revenue come from the following:

•
•
•
•
•

Pawnbroking
Foreign currency exchange
Purchase of precious metals
Retail jewellery sales
Income from other financial services

Pawnbroking revenue is recognised in accordance with IFRS 9, whereas revenue from other sources is recognised in accordance with IFRS 15.

Pawnbroking revenue
Revenue from pawnbroking loans comprises interest earned over time by reference to the principal outstanding and the effective rate applicable,
which is the rate that discounts the estimated cash receipts through the expected life of the financial asset to that asset’s net carrying value. When
a customer defaults on a pawnbroking loan, the pledged goods heald as security are sold to repay the sutomer debt. At the point the loan becomes
overdue the loan is classified as in default and interest income is accrued net of expected credit losses. At the start of the realisation process the
expected credit loss calculation is re-performed based on the expected cash flows of the retail process, with any increase in expected credit losses
recognised as a cost of sale. Further details of the expected credit loss calculations are provided in note 4.1.

Contractual interest earned:
Contractual interest is earned on pledge loans up to the point of redemption or the end of the primary contract term. Interest receivable on loans
is recognised as interest accrues by reference to the principal outstanding and the effective rate applicable, which is the rate that discounts the
estimated cash receipts through the expected life of the financial asset to that asset’s net carrying value.

Revenue arising from the disposal of unredeemed pledge contracts:
When a customer defaults on a pawnbroking loan, the unredeemed pledge contracts are recognised as inventory. Revenue is recognised on the
subsequent sale of the pledged assets supporting the pledge contract under IFRS 15.

Foreign currency exchange income
Revenue is earned in respect of the provision of Bureau de Change facilities offered and represents the margin earned which is recognised at the point
the currency is collected by the customer as this represents when the service provided under IFRS 15 has been delivered.

Sale of precious metals acquired via over the counter purchases
Revenue is recognised when control of the goods has transferred, being at the point the goods are received by the bullion dealer and a sell instruction
has been issued. If a price has been fixed in advance of delivery, revenue is recognised at the point the goods are received by the bullion dealer.

Jewellery retail sales
Revenue is recognised at the point the goods are transferred to the customer and full payment has been received. Customers either pay in full at
the time of the transaction and receive the goods, or pay in instalments and receive the goods once the sale is fully paid. Instalment payments are
recognised as deferred income until the item is fully paid. The Company has a 7 day refund policy in store, and a 14 day refund policy online reflecting
the distance selling regulations.

Other financial income
Other financial income comprises cheque cashing and other miscellaneous revenues. Cheque cashing revenue is recognised when the service is
provided under IFRS 15 which includes making a payment to the customer.

RAMSDENS ANNUAL REPORT 2022
Notes to the consolidated financial statements

3. SIGNIFICANT ACCOUNTING POLICIES continued

3.17 Administrative expenses
Administrative expenses includes branch staff and establishment costs.

3.18 Government grants
Government grants that are a contribution to a specific administrative expense are recognised in the income statement as a reduction to administrative
expenses in the period to which the expense relates. Other government grants are recognised as other income when there is reasonable assurance
that the entity will comply with the conditions and the grants will be received.

The grants recognised in the financial statements all relate to Covid-19 support with job retention scheme support shown net of the wage cost in
administrative expenses and retail grants shown as other income. There are no unfulfilled conditions and contingencies attaching to recognised grants

Other income

Administrative expenses

Total

2022
£’000

2021
£’000

134

1,472

1,606

4. KEY SOURCES OF ESTIMATION UNCERTAINTY AND SIGNIFICANT ACCOUNTING JUDGEMENTS

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.

4.1 Key sources of estimation uncertainty

Pawnbroking loans interest and impairment
The group recognises interest on pawnbroking loans as disclosed in note 3.16. For active pawnbroking loans (loans not in the course of realisation) the
Group estimates the expected credit losses. An assessment is made on a pledge by pledge basis of the carrying value represented by original capital
loaned plus accrued interest to date and its corresponding realisation value on sale of unredeemed pledges to identify any credit losses. The key
estimates within the expected credit loss calculation are;

1. Non-redemption Rate

This is based upon current and historical data held in respect of non-redemption rates

2. Realisation Value

This based upon either;
The current price of the metal that will be received through the sale of the metal content via disposal through a bullion dealer.
The expected resale value of those jewellery items within the pledge that can be retailed through the branch network.

For pawnbroking loans in the course of realisation the Group estimates the expected credit losses based on the expected outcome from selling the
pledged goods. The key estimates within the expected credit loss calculation are;

1.
2.

Proceeds of sale - This is based upon the retail price the goods are offered for sale at
Time to sell - This is based upon current and historical data in respect of the avergae time to sell

Impairment of property, plant and equipment, right-of-use assets and intangible assets estimate
Determining whether property, plant and equipment, right-of-use and intangibles are impaired requires an estimation of the value in use of the CGU
to which the assets have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the
CGU and selecting a suitable discount rate in order to calculate present value. The review is conducted annually, in the final quarter of the year. The
impairment review is conducted at the level of each CGU, which is usually taken to be each individual branch store.

Management have determined that the key sources of estimation uncertainty, to which the impairment analysis of property plant and equipment, right-
of-use assets and intangible assets is most sensitive, relate to the following assumptions:

The Group prepares pre-tax cash flow forecasts for each branch. Cash flows represent management’s estimate of the revenue of the relevant CGU,
based upon the specific characteristics of the branch and its stage of development.
The Group has discounted the forecast cash flows at a pre-tax, risk adjusted rate of 12%.

Whilst the impairment review has been conducted based on the best available estimates at the impairment review date, the Group notes that actual
events may vary from management expectation. If outcomes within the next financial year are different from the assumptions made in relation to future
cash flows, this could lead to a material adjustment to the carrying amount of the assets affected. The carrying amounts for tangible assets, right-of use
assets and intangible assets are disclosed in notes 11 &12.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

4. KEY SOURCES OF ESTIMATION UNCERTAINTY AND SIGNIFICANT ACCOUNTING JUDGEMENTS

continued

Where the recoverable amount of the CGU was estimated to be less than its carrying amount, the carrying amount of the CGU was reduced to the
estimated recoverable amount.
4.2 Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on
the amounts recognised in the consolidated financial statements:
Lease term
For leases which contain a break clause an assessment is made on entering a lease on the likelihood that the lease break would be exercised. If the
lease break is not expected to be exercised the break clause is ignored in establishing the lease term.

5. SEGMENTAL ANALYSIS

The group’s revenue from external customers is shown by geographical location below:

Revenue

United Kingdom

Other

2022
£’000

65,948

153

66,101

2021
£’000

40,665

40,677

The Group’s assets are located entirely in the United Kingdom therefore, no further geographical segments analysis is presented. The Group is
organised into operating segments, identified based on key revenue streams, as detailed in the CEO’s review.

The Group’s revenue is analysed below between revenue from contracts with customers and other sources which comprises interest income earned on
pawnbroking loans.

Revenue

Contracts with customers

Pawnbroking interest income

2022
£’000

57,134

8,967

66,101

Pawnbroking interest income is recognised over time as each loan progresses whereas all other revenue is recognised at a point in time.

Revenue

Pawnbroking

Purchase of precious metals

Retail Jewellery sales

Foreign currency margin

Income from other financial services

Total Revenue

Gross profit

Pawnbroking

Purchases of precious metals

Retail jewellery sales

Foreign currency margin

Income from other financial services

Total gross profit

Other income

Administrative expenses

Finance costs

Profit before tax

2022
£’000

8.967

15,847

27,107

13,066

1,114

66,101

7,533

6,626

10,263

12,683

1,114

38,219

(29,392)

(559)

8,269

Income from other financial services comprises of cheque cashing fees and agency commissions on miscellaneous financial products.

2021
£’000

33,151

7,526

40,677

2021
£’000

7,526

10,369

18,252

3,408

1,122

40,677

6,678

4,240

6,965

3,257

1,122

22,262

284

(21,510)

(472)

564

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

5. SEGMENTAL ANALYSIS continued

Revenue from the purchases of precious metals is currently from one bullion dealer. There is no reliance on key customers in other revenue streams.

The Group is unable to meaningfully allocate administrative expenses, or financing costs or income between the segments. Accordingly, the Group is
unable to meaningfully disclose an allocation of items included in the Consolidated Statement of Comprehensive income below Gross profit, which
represents the reported segmental results.

In addition to the segmental reporting on products and services the Group also manages each branch as a separate CGU and makes local decisions on
that basis.

Other information

Tangible & intangible capital additions (*)

Depreciation and amortisation (*)

Assets

Pawnbroking

Purchases of precious metals

Retail jewellery sales

Foreign currency margin

Income from other financial services

Unallocated (*)

Liabilities

Pawnbroking

Purchases of precious metals

Retail jewellery sales

Foreign currency margin

Income from other financial services

Unallocated (*)

2022
£’000

3,060

3,689

11,853

3,081

20,125

10,123

139

22,996

68,317

613

2,012

2,042

392

21,412

26,474

2021
£’000

1,636

3,515

9,173

1,172

14,306

5,314

139

22,611

52,715

492

3,433

1,335

541

10,750

16,752

(*) The Group cannot meaningfully allocate this information by segment due to the fact that all segments operate from the same stores and the assets
in use are common to all segments.

Fixed assets are therefore included in the unallocated assets balance.

2022
£’000

163

396

559

2021
£’000

388

472

6. FINANCE COSTS

Interest on debts and borrowings

Lease charges

Total finance costs

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

7. PROFIT BEFORE TAXATION HAS BEEN ARRIVED AT AFTER CHARGING/(CREDITING)

Items reported within Other income -

Compensation for surrendering a lease

Retail grants

Items reported within Cost of sales -

Cost of inventories recognised as an expense

Pawnbroking expected credit losses

Items reported within Administrative expenses -

Depreciation of property, plant and equipment

Impairment of property, plant and equipment

Depreciation of right of use of assets

Profit on disposal of right of use assets

Amortisation of intangible assets

Impairment of intangible assets

Loss on disposal of property, plant and equipment

Staff costs (see note 9)

Foreign currency exchange losses/(gains)

Auditor’s remuneration

Short term lease payments

Share based payments (see note 25)

2022
£’000

(1)

26,065

1,434

1,265

2,261

(81)

163

16,643

265

145

470

314

The Company paid an additional £5,000 to the auditor in respect of non-audit services for a first half of the year review.

8. EARNINGS PER SHARE

Profit for the year

Weighted average number of shares in issue

Earnings per share (pence)

Weighted average number of dilutive shares

Effect of dilutive shares on earnings per share (pence)

Fully Diluted earnings per share (pence)

2022
£’000

6,586

31,559,874

20.9

291,939

(0.2)

20.7

2021
£’000

(150)

(134)

17,416

848

1,073

2,223

(45)

172

140

11,452

135

140

441

254

2021
£’000

366

31,161,726

1.2

481,481

(0.0)

1.2

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

9. INFORMATION REGARDING DIRECTORS AND EMPLOYEES
Directors’ emoluments (£’000)

Emoluments

Pension

LTIP

Total

Emoluments

Pension

LTIP

Total

2022

2021

Executive

Peter Kenyon

Martin Clyburn

Non Executive

Andrew Meehan

Simon Herrick

Steve Smith

Total

427

295

880

435

872

307

201

134

204

435

1,337

489

204

Included in administrative expenses:

Wages and salaries

Social security costs

Share option scheme

Pension costs

Total employee benefits expense

The average number of staff employed by the Group during the financial period amounted to:

Head office and management

Branch counter staff

10. INCOME TAX

The major components of income tax expense are:

Consolidated statement of comprehensive income

Current income tax:

Current income tax charge

Adjustments in respect of current income tax of previous year

Deferred tax:

Relating to origination and reversal of temporary differences

Income tax expense reported in the statement of comprehensive income

2022
£’000

14,890

1,089

314

350

16,643

2022
£’000

115

578

693

2022
£’000

1,552

(9)

1,543

140

1,683

211

351

716

2021
£’000

10,011

856

254

331

11,452

2021
£’000

106

586

692

2021
£’000

159

198

RAMSDENS ANNUAL REPORT 2022
STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

10. INCOME TAX continued

A reconciliation between tax expense and the product of accounting profit multiplied by the UK domestic tax rate is as follows:

Profit before income tax

UK corporation tax rate at 19% (2021 19%)

Expenses not deductible for tax purposes

Prior period adjustment

Income tax reported in the statement of comprehensive income

Deferred tax
Deferred tax relates to the following:

Deferred tax assets

Share based payments

Deferred tax assets

Deferred tax liabilities

Accelerated depreciation for tax purposes

Other short-term differences

Deferred tax liabilities

Reconciliation of deferred tax (asset) / liabilities net

Opening balance as of 1 October

Deferred tax recognised in the statement of comprehensive income

Other deferred tax

Closing balance as at 30 September

2022
£'000

8,269

1,571

122

(10)

1,683

2022
£'000

180

(31)

149

2022
£'000

140

(29)

149

Factors affecting tax charge
The standard rate of UK corporation tax for the year was 19% (2021: 19%). An increase in the UK corporation tax rate from 19% to 25%
(effective 1 April 2023) was substantively enacted on 24 May 2021.

2021
£'000

564

107

198

2021
£'000

112

118

2021
£'000

(159)

159

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

11. PROPERTY, PLANT AND EQUIPMENT

Freehold
property
£’000

Leasehold
improvements
£’000

Fixtures &
Fitting
£’000

Computer
equipment
£’000

Motor
vehicles
£’000

210

485

695

684

208

6,356

1,280

(623)

7,013

3,518

622

(617)

3,523

3,490

2,838

Leasehold
Property
£’000

12,919

4,039

(2,659)

14,299

4,800

2,221

(2,268)

4,753

9,546

8,119

3,629

926

(389)

4,181

1,867

520

(341)

2,046

2,135

1,762

840

126

(370)

596

486

106

(343)

249

347

354

Motor
Vehicles
£’000

174

(129)

129

(129)

Cost

At 1 October 2021

Additions

Acquisition (note 26)

Disposals

At 30 September 2022

Depreciation

At 1 October 2021

Depreciation charge for the year

Disposals

At 30 September 2022

Net book value

At 30 September 2022

At 30 September 2021

Right of use of assets

Cost

At 1 October 2021

Additions

Disposals

At 30 September 2022

Depreciation

At 1 October 2021

Depreciation Charge for the year

Disposals

At 30 September 2022

Net Book Value

At 30 September 2022

At 30 September 2021

Total
£’000

11,088

2,817

(1,382)

12,538

5,893

1,265

(1,301)

5,857

6,681

5,195

Total
£’000

13,093

4,039

(2,788)

14,344

4,929

2,261

(2,397)

4,793

9,551

8,164

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

12. INTANGIBLE ASSETS

Cost

At 1 October 2021

Additions

Acquisition (note 26)

At 30 September 2022

Amortisation

At 1 October 2021

Amortisation charge for the year

Impairment

At 30 September 2022

Net book value

At 30 September 2022

At 30 September 2021

13. INVESTMENTS

Customer
relationships
£’000

Website
£’000

Goodwill
£’000

2,179

200

2,407

1,938

158

2,096

311

241

105

526

453

Total
£’000

2,810

200

3,038

2,096

163

2,259

779

714

The Group has a minor holding in Big Screen Productions 5 LLP.
Big Screen Productions 5 LLP, whilst still trading, has wound down its operations and made a capital distribution equivalent to the value of the carrying
value of the investment in 2015. The investment now has a £nil carrying value.

Group Investments
Details of the investments in which the group and company holds 20% or more of the nominal value of any class of share capital are as follows:

Name of company

Holding

Proportion of voting rights and
shares held

Activity

Subsidiary undertaking

Ramsdens Financial Limited
(Registered office: Unit 16 Parkway Centre,
Coulby Newham, TS8 0TJ)

Ordinary Shares

100%

Supply of foreign exchange
services, pawnbroking, purchase
of gold jewellery, jewellery retail
and related financial services.

RAMSDENS ANNUAL REPORT 2022Notes to the consolidated financial statements

14. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

At 30 September 2022

Financial assets

Financial assets at amortised cost

Cash and cash equivalents

Financial liabilities

Trade and other payables

Interest bearing loans and borrowings

Lease liabilities

Net financial assets/(liabilities)

At 30 September 2021

Financial assets

Financial assets at amortised cost

Cash and cash equivalents

Financial liabilities

Trade and other payables

Lease liabilities

Net financial assets/(liabilities)

Fair value through
statement of
comprehensive
income
£’000

Loans and
receivables
£’000

Financial liabilities
at amortised cost
£’000

Book value
£’000

Fair value
£’000

12,683

15,278

27,961

(8,700)

(6,443)

(9,957)

(25,100)

Fair value through
statement of
comprehensive
income
£’000

Loans and
receivables
£’000

Financial liabilities
at amortised cost
£’000

£'000

9,723

13,032

22,755

(7,514)

(8,601)

(16,115)

12,683

15,278

(8,700)

(6,443)

(9,957)

2,861

Book value
£’000

£'000

9,723

13,032

(7,514)

(8,601)

6,440

12,683

15,278

(8,700)

(6,443)

(9,957)

2,861

Fair value
£’000

£'000

9,723

13,032

(7,514)

(8,601)

6,440

Financial assets at amortised cost shown above comprises trade receivables, other receivables and pledge accrued income as disclosed in note 16.

Trade and other payables comprise of trade payables, other payables as disclosed in notes 18 & 19

Loans and receivables are non-derivatives financial assets carried at amortised cost which generate a fixed or variable interest income for the Group.
The carrying value may be affected by changes in the credit risk of the counterparties.
Management have assessed that for cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities
their fair values approximate to their carrying amounts largely due to the short-term maturities of these instruments. Book values are deemed to be a
reasonable approximation of fair values.

Financial Risks
The Group monitors and manages the financial risks relating to the financial instruments held. The principal risks include credit risk on financial assets,
and liquidity and interest rate risk on financial liability borrowings. The key risks are analysed below.

Credit risk

Pawnbroking loans
Pawnbroking loans are not credit impaired at origination as customers are expected to repay the capital plus interest due at the contractual term. The
Group is exposed to credit risk through customers defaulting on their loans. The key mitigating factor to this risk is the requirement for the borrower to
provide security (the pledge) in entering a pawnbroking contract. The security acts to minimise credit risk as the pledged item can be disposed of to
realise the loan value on default.

The Group estimates that the current fair value of the security is equal to the current book value of pawnbroking receivables.

In addition to holding security, the Group further mitigates credit risk by:

1) Applying strict lending criteria to all pawnbroking loans. Pledges are rigorously tested and appropriately valued. In all cases where the Group lending
policy is applied, the value of the pledged items is in excess of the pawn loan.

RAMSDENS ANNUAL REPORT 2022STRATEGIC REPORT

CORPORATE GOVERNANCE

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

14. FINANCIAL ASSETS AND FINANCIAL LIABILITIES continued

2) Seeking to improve redemption ratios. For existing customers, loan history and repayment profiles are factored into the loan making decision. The
Group has a high customer retention ratio and all customers are offered high customer service levels.

3) The carrying value of every pledge comprising the pawnbroking loans is reviewed against its expected realisation proceeds should it not be
redeemed and expected credit losses are provided for based on current and historical non redemption rates.

The Group continually monitors, at both store and at Board level, its internal controls to ensure the adequacy of the pledged items. The key aspects of
this are:

•
•
•
•

Appropriate details are kept on all customers the Group transacts with;
All pawnbroking contracts comply with the Consumer Credit Act 2006;
Appropriate physical security measures are in place to protect pledged items; and
An internal audit department monitors compliance with policies at the Group’s stores.

Expected Credit losses
The Group measures loss allowances for pawnbroking loans using IFRS 9 expected credit losses model. The Group’s policy is to begin the disposal
process one month after the loan expiry date unless circumstances exist indicating the loan may not be credit impaired.

2022

2021