Ramsdens Holdings (LSE:RFX) — Investor Presentation

0:00 Good afternoon, and welcome to the RAMSDENS HOLDINGS PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Peter Kenyon, CEO. Good afternoon, sir.

0:31 Good afternoon. Thank you. Well, let's go through the presentation. And, yes, we're very happy to take questions as they occur. So a bit of background of who we are. So 158 stores that are ours, and we have two franchise stores. We're headquartered in Middlesbrough, have just over 800 staff. Key services, foreign currency. So this is currently if you want to to go to Dubai, we'll sell you the dirhams. Or if you're going to Benedon, we'll sell you euros. Pawnbroking is a small sum loan secured on an asset of jewelry or a watch with ourselves, typically over six months. 85% plus repay their loans.

1:20 Average loan under £300. Retail jewelries, this is the sale of new jewelry and secondhand jewelry that we have bought from customers. And the purchase of precious metals is if we buy unwanted jewelry from you and we melt it for its intrinsic value, That is the purchase of precious metals. You can see a map of where our stores are in The UK. So we're we're pretty solid across Scotland and Southern Wales and the Northeast. Lots of gaps in the Northwest, certainly in the Midlands, and we have a smattering of new stores that are in the South Southeast there. We also can see there a pie chart of where we get our income from, so it's a reasonably balanced chart. Foreign currency is our biggest service at only 33%.

2:09 Trustpilot, ratings are very positive. You know, we're very proud of our five stars. We try to look after the the customer. Give me a quick overview of the income streams and a bit more detail about them. So foreign currency is about 95% where we sell currency to a holiday maker and 5% where we buy it back from a customer or a holiday maker in The UK. Mainly euros that we sell. 85 percent will be euros, 10% will be dollars, 5% everything else. That's long term averages. Currently, the the dollar sales are slightly lower than that, and Turkish is taking up some of that slack. Average selling margin, about 3% across all currencies.

2:59 Average buying margin, about 10. So you can see their average transaction values. You can see how many transactions we generally do. We have a small element of of FX payments going through through a joint venture with RFX, and we have a a new multicurrency card, 14 currencies, launching later this summer. You'd be able to swap between currencies. There'll be an app. It'll do all the good stuff that you would expect it to do. Retail jewelry explains sale of new and secondhand, including the premium watches. We come back to how that's performing later on. We've shared some ATVs there. We've got a a growing online operation that's doing fantastically well on how many transactions we do a year.

3:50 Next page, there's an overview on pawnbroking, which I feel like giving you a quick overview of what that is, and just highlight some statistics there for for people who are interested in that, and then really the same for purchase precious metals. I've rattled through that because I think most people know who we are and what we do and are probably more interested in what's the story been over the last the last six months. So, you know, the headlines are exceptionally positive. We would say in one respect that the like for likes were a bit soft because of Omicron going back to November 20. FX was a bit off the pace because of that. But, you know, we've we've done particularly well with with junior retailing, and you'll see a a graph that will present of how good that has been. Loan book is growing, and there's good reasons for that.

4:44 We've increased the dividend by 22%. So there's a lot of positive noises there and a positive message that we want to give for for how we've done. And we've continued our what we would call as a simple growth strategy. We've got the four pillars of how we're gonna grow the business, and we're making progress across all those four areas. Looking at our key income streams, first off, I'll explain that the graph in the bottom bottom left hand corner, the right hand bar is the last twelve months. So that's h two sorry, h one this year and h two last year, and gives you, like, an idea of where the twelve month run rate is. The rest of them are all twelve month periods, but there is a gap of six months, which was the prime COVID period when the stores were were closed. So there's, like, you know, doesn't have really much relevance. Neither does really twenty twenty twenty one, but it just shows you where we were with that income stream in that period of time.

5:49 Usual statistics in the top left hand corner that we've sort of shared before. And then in in a change to if you've seen one of our presentations previously, we've this time talked about opportunities and challenges. So what I'll do is just quickly sort of run through those, what our thoughts are, and give a summary of where we think we are on a look forward basis. So positive news about summer holidays this year, not necessarily back at pre COVID levels. So therefore, there should be some more positivity to come in future years. Reduced competition on the high street. We know that travel agents have been closing the door, in particular, Chewy and Hayes have had, you know, more stores close. We have, you know, talked about diversified pie chart of where we get our income, but all those income streams are shared across the cost base. So so we can if we wanna be price competitive, we can be price competitive.

6:47 So we have that as a as a positive for us. We have a growing awareness of our service. Some people, believe it or not, don't know we do foreign currency, and we have to work hard at that. But we also want to, make sure customers become our ambassadors to to tell others where they've got a great deal for their foreign currency. In terms of online, we have an umbrella site, RAMSDENS for cash, in which you can go to that site and then go off to it to to do jewelry, or you can stay on that site for foreign currency, pawnbroking, gold buying, or if you wanna seek out a bit of information about the the business or the careers page. And we think that, you know, it's a bit of a a mix match. We can't really concentrate on SEO.

7:36 If we want to do pay per click, it's very difficult to do it because it's a it hasn't got a focus. So what we have in test currently and will launch this month is a new website for RAMSDENS currency. So we think that will allow us to to grow this income stream as we move forward. And then the last one, which if you notice has got a plus or a minus next to it, is the cash to card. If you think of COVID and and the change in customer behavior during COVID with people using cash less and using cards more, that UK behavior has now happened. Yet people are still going on holiday. They're still taking cash from us, and they do that as a means of budgeting. All they do is a means of safety that when they get to a strange destination, they know that they've got cash in their pocket from what may. And then once they've been there, they can you know, they know where they can use the cards or whatever.

8:32 So we don't think cash is going anywhere soon, you know, any eroding anywhere soon. People will still take cash on holiday. But we have our own new card launching. That'll launch hopefully at the end of July. Please don't hold me to that even though I've given you a date. It it hasn't gone into test yet, but it is with a leading supplier in this industry. So white label for RAMSDENS. It's got a few few RAMSDENS things within it, but that will launch July, hopefully. All in all, all those things, our summary is we would expect our our volumes to increase as we move forward. We might see a little, sorry, margin pressure in some locations where some competitors might might be price competitive for a period of time, but we can defend against that. We're seeing a little bit in the in the current h two, but it's only a little bit.

9:31 Our margins are a lot higher than they were pre COVID.

9:38 Into pawnbroking where the loan book has increased 29% year on year. Again, let's have a look at the graph in the bottom left hand corner. What you will notice that the last twelve months is still not as high as our peak period in the twelve months to March 24 income generation or gross profit, but the interest income lags the growth the growth in the loan book. So if you can look at the top left hand chart, you will see that the gross profit was 4,800,000 for h one in this financial year. Therefore, we should be at 9.6, which would put us at a record level of income if that holds for the second half of the year, which obviously it should do with a growing loan book and steady interest rates.

10:24 So we're in a good position, we feel like, starting the period. So how will it move forward? Well, the cost of living crisis is is just a a label that creates demand for for borrowing. Customers are borrowing for a need, whereas in good times, they might borrowing for once because they've got the confidence to bring out more, or they might want, you know, new clothes, whatever that that reason to borrow a small sum is, whatever the economic conditions we think people would borrow and need our services. What the real driver one of the real drivers is if you want to borrow £200, your options are a lot lower now than they used to be. So we're attracting people from you know, who previously would have used home collected credit, may have used an Internet supplier.

11:16 So we're seeing, you know, numbers of customers who are using our services first time customers coming to us. Their their numbers are are pretty steady consistently week in, week out, the attraction of new customers. It's about 90% repeat customers now and about 10% new, whereas that used to be ninety two and eight. So more new customers on a weekly basis. And in terms of repayment rates, the customer base, the majority of well over 80% are employed. And and as we know, you know, The UK economy, there's a lot more people that are in employment as opposed to out of out of employment. So our service, our pawnbroken redemption rates, so we profile this on a monthly basis. So our month one repayments are consistent with where they've been in recent months, recent years, and back to pre COVID.

12:10 And similarly, our our nonredeemed rate, the people who don't pay us back, again, that is very consistent on a three month average basis as it has been for, you know, months really, apart from the period post COVID where the repayment rates were even better because people couldn't spell that spend, you know, the cash that they had. So pawnbroking in a good place. Sterling gold price is a strong sterling gold price at the moment. That helps if the customer doesn't repay their loan. We have two two disposition routes. One is to just melt it for its intrinsic value. Second thing is to retail it in our shops. Consumer awareness of the pawnbroking service is growing as we know pawnbroking is a very niche market.

12:59 Only two percent of The UK population use a pawnbroker. Hopefully, that isn't growing, if you like, with that with that lack of supply of alternative providers. Geographic expansion, we have shared in the notes at the back that I ran through quite quickly. Our average trans our average, our median loan value across The UK is a £170. Now while we only have a limited number of Southern stores, that median value for just those Southern stores is £250. So we're able to lend more to a customer against their gold. It's the demographics of the customer. It's foreseen more 14 carat, seen more 22 carat gold so we can lend the highest sum. In terms of loan to value, we're pretty consistent at around 66% on plain gold of the gold price.

13:50 So nothing's changed in our policies. New website to come, RAMSDENS Pawnbrokers, in 2023, and then we can do SEO. As I mentioned about the currency side, same will happen with pawnbroking. We have major legislation through the FCA at the moment with consumer duty. That applies to us as well as banks and investment companies. We're ready for it. It's increased burden, administration burden, but no real change to how we operate business. We're comfortable where we are, where we're at with that. But this regulation is a barrier to entry for people coming into the industry. It's also a reason why some people are leaving the industry, and and we've made an acquisition in April in Bexley Heath, and and and regulation was one of the reasons that he wanted to to leave the industry and retire.

14:45 So a bit of age and a bit of, you know, what? I just don't wanna deal with the this regulation anymore. Summary, you know, we think our demand for our service will continue to grow, in coming months, certainly through '23 and into '24, given that economic climate and the competitive landscape for small sum loans. So positivity around home booking, despite being up 29% year on year. Into jewelry, retail, 32% year on year. And, again, have a look at the graph in the bottom left hand corner. And what we're very proud to draw out is that increasing, revenue line for both in store and online and in total.

15:32 That's all been driven by self help against the headwinds of the economic conditions. You can see in the bottom chart the split of the last twelve months retail revenue mix. So we've got premium watches at 38%, pre owned jewelry 31% and new jewelry at 31 has been the fastest growing sector, from a revenue perspective. The margins that we are achieving in each of those segments is consistent where it has been on a long run basis. So where we've had a little bit of price inflation on the supply side, we'll be able to pass that on to the customer. In the top right hand picture, you can see that our displays are quite modular. Now that is in between about 75, 80 stores currently, and we're continuing to roll that out across the state. That standardizes our windows.

16:24 And that's important, and I probably should draw it out now with with staff training development and new staff. Pre COVID, fourteen percent of our staff had, less than twelve months experience. Currently, that's thirty percent. So we've got a lot of new staff within the business, and yet we've still delivered these fantastic results over the last six months. And that's testament to the teamwork of of the of the experienced staff helping out the the the new staff that we have and also testament to the great systems that we have that are intuitive and and and, you know, because they're bespoke and built for our own business. You know, they they help the the staff members in store. So we have momentum.

17:11 We've been investing in in staff training. We've been investing in the stock levels. We've been investing in the how we present the staff, but investing in the retail website, and that is what has driven this momentum for us. We think that momentum will carry us forward going forward. We don't see our retail falling back, if you like. I would like to continue growing at 32% a year, but we, you know, got a bigger number now to grow up on. So, we still think we can maintain momentum in our retail. Our last key service is the purchase precious metals.

17:49 Again, bottom bottom graph shows that apart from a one off scrapping exercise in 2020, you know, this is now again at record levels for RAMSDENS. So, again, positivity around this service. The sterling gold price is high. Not really gonna expect that to fall with Russia, Ukraine, US, and China and, you know, just where the world is generally. Cost of living crisis does bring some customers to us to sell their goal, but, really, it's an awareness. It's making people aware of what the value is of that unworn jewelry that's at home, in a box, in a drawer that might be damaged, you know, sell it and and and use the cash for something else.

18:37 We're gonna have, again, a specific website. And in the short to medium term, you know, we're expecting the service to continue at at the levels that we're at. Against, you know, a good positive message of of of where we're at with that. That then leads into the financials, and I'll hand you on to Martin. Thanks, Peter. You know, I think the six month period has been a real real success. There's some excellent performance in there. There's a mix of of those segments that Peter mentioned. Some of them have been in a recovery phase. So, you know, you've seen FX in particularly coming back rather than seeing, you know, record levels of trade for the business. And others like retail have been particularly strong right throughout the pandemic.

19:23 And therefore, you know, some of that growth is is fantastic growth from a a difficult you know, a a real growth level based on where we've been, whereas there's there's a recovery on this. So so certainly, the 33% growth, you can see across all four segments there is consistent really across all the key key numbers. Gross profit's grown slightly smaller, that's about 30% growth. And that's really a couple of those margin movements in the mix of services. So Peter mentioned in retail, for instance, the premium watch part of that is growing faster. So as we sell more watches, that's a higher ticket price, but, typically, you know, that's a lower percentage margin. So while the cash margin is very strong, the percentage margin is smaller. So you'll see that dilution there into jewelry retail where the the overall margin is falling back slightly, But that's not pressure on the individual margins within retail. It's more of a mix of what we're selling.

20:19 So gross profit, you know, most of that revenue falling through to gross profit. And the biggest cost in our business is people. So as Peter again mentioned, you know, the the recruitment that we've had to do over the last probably eighteen months in recovering from COVID has has seen, you know, some of those vacancies where when the business, if you like, wasn't trading as as much due to that, you know, restriction in travel and and the furlough and people, I guess, making lifestyle choices to change career, which is seen across a lot of retailers. We we've actually taken quite a long time to to work through those vacancies. The number of people in the business had increased in the six months, certainly based on against last year. And also the cost of people has been going up as well. So that's the biggest inflationary pressure into our business is the cost of people.

21:09 And, you know, we pay the the real living wage. So it's about a 10% increase of people at the bottom end in terms of their, you know, their salary increase, and, obviously, there's more people as well. So it's about two thirds of the admin cost increase in the six months against last year. It's actually a people cost increase. The rest of the costs are very, very benign. You know, we've got we've we've had a fixed deal for our electric for a long time, so we've not seen any difference in that. That's a relatively small cost for us anywhere around 3 to 400,000. And our rents have been, you know, relatively consistent as well. We we have the opportunity to to make some savings on renewals, which typically we take the flexibility so that we can you know, we're not tied into stores for a long time. So our average term to a break, for instance, is around about eighteen months.

21:59 So if you have, you sacrificed a bit of potential rent saving to keep that flexibility. So what you'll see there is 3,700,000 of profit coming through in the six months. So that's a a step forward from the last year of two point two. Just to remind you, you know, we are a seasonal business. So in in the second half of the year, the travel segment, the FX comes through much stronger. You can see last year, we've made 8.2, 8,300,000. So it's about a £6,000,000 profit in h two last year. So the profit for the year, you know, we we've said in in April shortly after our half year end, we'd expect to see that no less than 9,500,000, but, you know, we can we can start from from a great position here in terms of momentum for the for the services we have and the business back now making strong profits and strong cash generation as we've done in the past.

22:52 Sorry. So just moving on to the cash flow statement. You know, the message we've always given historically is this business and the profit we make turns into cash. And when you open a store, you pay the CapEx, and there's very little other than small incremental investments in working capital. All the the profit comes through later as cash. So, historically, our our strategy has been about half of that cash profit that we make. We reinvest to grow the business. So we we buy, for instance, you know, eight to 12 stores would normally be our strategy, and the other half we pay out as as dividend. So, you know, that cash generation is is seasonal like the businesses. So in h two, a lot of that cash comes in through the FX profits.

23:39 And, you know, the the CapEx and the dividend payments really are the biggest cash out that you see. So in the first half of the year, we've paid 2,000,000 dividend, which is the final dividend from FY '22. And you can see we spent about a million and half of CapEx, and that's bought us six new stores and three relocations. So that strategy with the dividend is is crudely 50%, but certainly what you see is as we grow the profits, it normally lags that slightly. But the dividend increase in the first half of the year has been 22%, so we've declared a 3.3p dividend. And, you know, that progression that we see, that staircase, if you like, of of profit growth that we see should see the dividend continue to be progressive.

24:26 We jump forward to the to the balance sheet. What we have as a business is we've got very, very strong current assets. So the business keeps growing its net assets because that profitability and return profit in the business and growing the new stores, net assets continues to grow. And we've put a lot of investments into into stock in the last few years, not necessarily in the six months that we've just seen, but certainly if you go back to f y twenty two, we step forward the the inventory in the business. That inventory is made up of those three types of jewelry that we sell. So we've got pre owned stock where we buy that from the public. And, typically, that that's valued at at cost, which is normally less than the intrinsic value of the metal.

25:14 So that's a very, very strong asset class. We then buy, you know, wholesale jewelry. So, again, the metal cost of that jewelry is a big part of the cost of that. It's probably 8080% in some cases and 20 manufacture cost. So, again, it's a very, very strong asset. And then the the the rest of that is premium watches, which, again, if we can't sell them through retail, we could always sell them back through wholesale. So there's a real, you know, strong 23,300,000 of asset there. Actually, we can flex that upwards and downwards quite quickly with confidence knowing that, you know, the value of those assets is is very strong. Trade and receivables is the asset backed upon broken lending, and we've continued to see that grow in the six months.

25:59 And as Peter said, that that growth in the lending will then give us that income over the coming months as well. So a strong balance sheet. And what we've had is, you know, this RCF facility that we've had now for since we listed, which is a 10,000,000 facility where we can use that to actually fund the FX swing in the business. So the FX that we hold in the tills is very seasonal. In the winter, we might hold 4 to 5,000,000 of FX in the in the stores. In the summer, we increase that as the volumes increase, and that swings to probably around nine to 10,000,000. And we use the RCF to fund the difference in that stock and the difference in the cash cycle around it. So not only do you need more FX in the till, it also takes longer then for the cash we receive for the those FX sales to get back through to the bank as well. So that 5,000,000 swing in FX is probably more like 7 or 8,000,000 swing in real working cash flow for the FX season.

27:00 So that's the that's the balance sheet, and we move we move on to this the strategy that we've had now for you know, certainly since we listed, it's been very, very consistent. So you got four key segments to this. As Peter said at the start, you know, we we've managed into to execute on all four. So one one one of them is to just make the stores we have do better, you know. So retail has been a big part of that. So growing the retail in the existing stores and growing the other services as well. And what we see here is, you know, all four segments are in a real good place. So foreign currency is not back to pre COVID volume, albeit we are back to pre COVID commissions now. But, you know, airlines have have spoken very, you know, bullishly, I guess, about bookings for the summer, so we look forward with optimism for that. We got pawnbroken, you know, or lending or record loan book at the end of March. We continue to see momentum as this lack of alternative credit providers in the market. So we see positivity for pawnbroken.

28:04 And then retail jewelry, that momentum should carry us forward again with with strong optimism. And the gold price is helping gold buying, particularly in the second half of of h '1. So that, again, gives us optimism looking forward. We will relocate probably another two stores in the second half of the year. And what relocation does actually is, you know, we we we got some stores on the fringes of of a high street or it's been off pitch in a town. And moving that to be a prime location really steps forward your your retail jewelry and your foreign currency because they're products where you need people walking past the front door because it's very much a a footfall product. Whereas typically for the other services, the customer would come and find the business, especially for Pawnbroken, for instance.

28:51 So those relocations will help also drive some growth from the existing stores. The next leg of the the strategy is to have just have more stores. You know? So we've got a very profitable model. We've got a 158 stores. There are a lot of places we can open a RAMSDEN store. We've got stores in small towns, and we've got some, you know, stores in big cities. When you look at The UK, we've you know, you look at the map of where our stores are, we've got a lot of opportunity. We would not run out of places to be able to put stores. So that is not a limiting factor. It's really about the pace of what you know, how many do we open. And that's typically driven by the operational challenge of, you know, embedding the new people, embedding the the systems, and and trying to open stores where, you know, around stores you already have. So if you open a store in the next town along, you actually can use you can leverage the the staff out to the local store, and that just helps, you know, train the staff. It helps them deliver the right service. And and, also, you you get less staff turnover if you do it on a more gradual level. If you go and open you know, if we open 20 stores in the Southeast, for instance, in one go, that would be a lot harder to manage. So that growth that you can see there, the six stores that we've opened, three pretty much in the North and three in the South, and that balance just helps us manage that operationally.

30:16 We put in here the model that we use, if you like, for the profitability hurdle for a new store. So it costs us around 300,000 in cash to open a store, and that's about half of that for CapEx and the other half for the working capital of the stone. Now that working capital does include the cash FX that you need to put in to trade the FX segment. So, you know, that's very easy to to take back out. For instance, it's not a commitment of cash that is lost. So, really, we look we often look at payback on the CapEx rather than the full cash that we have to put in. But, certainly, from a profitability point of view, the stores become profitable very quickly. That year one loss that we show there of 20,000, a lot of that actually is is preopening cost. You've gotta pay the rent. You've gotta have the staff probably at least a month, maybe two months before to train them.

31:09 So, you know, we've got that profitability growing and the run rate profitability growing within the first year. And often, new stars actually make make profit in year one, especially when, you know, you you've got a really good successful star. Whereas, you know, as a as a cohort, if you like the 158 that we do have that we if we ignore the brand new ones that we we've got very few loss making stores. If you've got one mature store that loses money, it doesn't lose very much money. So there's a very, very strong performance across the board for the stores that isn't the case where we're carrying a lot of poor performance stores.

31:52 Onto the third leg of the strategy, which is to grow online. We've got, you know, a retail website, which we we separated out from the rest of our website some time ago now, has really gone from strength to strength. So we've got, you know, a dedicated jewelry website. We've invested more and more in, you know, the quality of the product that goes on there, the way we take the photographs, you know, the amount of stock on there. The the platform that we we set the website on, it's had a refresh in the six months. And you can see, you know, we've had really, really strong results. We manage not just the revenue of the online business. We manage the profitability as well. So the profit graph would actually be very positive as well. So whilst we are investing more, for instance, in advertising by pay per click, and that investment probably was 20,000 a month.

32:41 If you go back a year, it's probably more like 50,000 a month in recent months. That's actually profitable, and, you know, that's coming through in terms of profitable growth, not just if you're, like, buying revenue for the sake of it. We we do manage that on a profitable level. So that success we've had for retail actually is is is why we're looking at taking the other products and following the same same model. So currency is getting his own website, and that will help people who land on that website. It'll help conversion as they know you know, they can see very clearly what the website is about, and we'll follow that through with pawnbroken and metal buying as well. So that's our online strategy, which is which is going very, very well.

33:28 The last leg of the of the strategy is is something will come up. So, you know, we we look here. We bought a business in April. If you if you remember last year, bought a business in Boston. There are a lot of independent farmbroken businesses, And and there's a lot of them in the South. So as we move south, it actually gives us an opportunity now to bolt on some of these one store pawnbroken businesses. And it's hard to to push the time in on on acquisitions. You know, people generally will be looking to exit when they retire. There's a lot of good independent businesses in the sector. But, you know, we we typically will pick some of us and when they're looking to exit the market. We underpin everything with our ESG strategy. You know, we've got a very sustainable business model.

34:19 We take in pre owned jewelry that people no longer want. We refurbish and resell the best jewelry at back out. And and the stuff that we can't resell, we actually melt back down, and that gold then would be used in the process to make more jewelry. So it's a very sustainable theme. We also you know, we try and do as much as we can in terms of energy and recycle and the education and and taking that into everything we do. There'll be a lot more disclosure and KPIs, etcetera, in our annual report this year given the the upcoming TFCT and and the, you know, the focus that businesses have now in terms of that report into to explain, if you like, our carbon footprint. We work really hard.

35:04 You know, we were very much a community business. You know, we're supporting our local communities. The services that we offer are very much aimed at supporting the community, and and and the social impact of the business is really important. But one of the key things for us on that on that front is our own staff. So we've worked really hard to make sure that we engage with our staff. We've got very, very strong staff engagement, and we've got a new staff engagement survey going out in the next month. But, you know, I think the results we've had historically are very, very good. And we, you know, we've got that high bar or higher bar, if you like, than the minimum wage. Actually pay everybody at least the real living wage. And we do a bit, you know, in terms of charities and trying to support the communities that we're in. In terms of governance, you know, we're a very, very regulated business. You know, we're FCA regulated.

35:54 We're a money service business for foreign currency. You know, we're we're enlisted. We were part of the QCA as we follow their code. So, you know, we do everything that we think we can, and we work really hard to to be the best we can be. We've refreshed the board in the year. So in the six months, Karen Ingham has joined us. She's got a fantastic background. She came from Expedia. She's also got FCA knowledge from her work with the Newcastle Building Society. And Karen's already, you know, offers a lot of support and advice, and I think she's gonna be a great addition to the team. So that's, if you like, underpins everything we do. I'll just pass back to Peter for a quick summary. So some reason, we're in a good position. We've had a good a good half year. All of our key core income streams are performing well. We have a strong balance sheet. We've got good cash generation.

36:51 We're optimistic and confident, hence, a 22% increase in the dividend. We have opened six new stores that are going really well. We have a good strong pipeline to grow the estate. And, you know, the the start of h two is is going well. So, you know, we're we're very confident of the future and in a in a good position. I won't go through the appendices, but there's a there's the mug shots of of both Peter and I sorry, Martin and I. And there's also a page on the lease estate. So the average term to a break date in our lease portfolio is by eighteen months. So if we do need to relocate stores because towns have shifted or we do have stores that are maybe not giving us the return that we want, we can get out of various leases.

37:45 So that's it. That's that's the presentation. So I'll hand back and Peter, Martin, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. I please ask you to read out the questions and give responses where it's appropriate to do so, and I'll pick up from you at the end. Right. Okay. So how are you performing in the Southeast so far? What is the opportunity in the region?

38:31 The three new stores and Chatham that's been open eighteen months now, very pleased with retail across all four stores is going fantastic. Pawnbroking, a little bit mixed across the four stores, and that's you know, if the competition do their job well, it'll be hard and take us time to to convert customers to RAMSDENS, but we're here for the long haul And foreign currency, again, mixed response mixed from average probably to very good. So we're very happy with how the Southeast has gone. There are lots of opportunities for us to expand further, but we have to go at the right pace for operational reasons.

39:18 Lots of new staff, higher staff turnover. We wanna get it right. We wanna be here for long term, make sure our customer service is as good as it is. Next question. What is behind the growth of the retail division? I think I'll probably cover that up. There's a lot of self help in terms of the investment in stock, investment in staff training, investment in the way that we present it, and it's been in the online activities and how we promote the online. So it's been a journey. Reference the graph. So I've covered that one off. Have you seen any changes in customer trends across pawnbroking? So, different types of customers using the service, different amounts borrowed, different types of items pawned. Across The UK, North, like I said, we talked about the diversity in the customer that we see a bit more 14 carat and 22 carat in the South, but it's very early days.

40:16 The customers are from all walks of life from you know, we lend 20 to put food on the table. We have lent 30,000 for a deposit for a Ferrari. Our highest loan currently is over 100,000. So, you know, we've got a well range of lending here across across our customers from from all walks of life. Will people still be going on summer holidays this year, and do you expect them to take less cash with them? People still going on holiday? Yes. All the holiday makers, holiday companies, travel, airline are all positive about summer bookings. So, yes, we do expect people to go on holiday. Do you expect them to take less cash with them? No. The average transaction value is up on pre COVID levels.

41:03 So, you know, we're we're positive about that as well. Next question. Is competition in the pawnbroken sector declining? Do you see further m and a opportunities? I wouldn't necessarily say it's declined. There's obviously ones and twos that are coming out of the sector, but both ourselves and H and T are growing their store estate. Not massively, but, you know, decent numbers probably greater than the people who are leaving the industry. So, I wouldn't say it's declining. And, yes, I probably do see m and a opportunities coming, but nothing transformational. It'll all be, you know, incremental business that we're well happy if it's attractive at the right price that is better than opening a store ourselves.

41:49 So we actually do carefully consider all applications, all all, acquisitions on that basis. Next one, how does loan to value ratio as at 03/31/2023 compared to September 22 and March 22? Exceptionally similar. Our our credit risk, credit lending, loan to values, all have been consistent for years now. So we fluctuate between 60 and and and 66%. Gold price is slightly higher at the moment, so we're probably 62 and a half of the gold price, about 40% of the secondhand retail value for plain gold. If you take a Rolex watch, it depends on the model. So if it's an older, less popular model, we'll probably lend 50% of the retail price.

42:41 If it's a, you know, a a sports model that is much sought after, we'll go 70% of the secondhand retail price because I also know the customer's gonna come back for it. So no change in our lending policies. As of the June 8, how many different high street banks does RAMSDENS bank accounts with? Because this will help us assess any banking risk. Three, Yorkshire, Lloyds, and Barclays. So those were the presubmitted questions. Steven has asked, can you add some color to the caption headed less competition? Oh, it depends, I suppose, on what service that is. I think if you talk about travel, there are less travel bureaus.

43:33 Hayes have closed about a 100. Chewy have closed about a 100 stores. So that's taking competition away. In the retail environment, you know, we know that Samuels are closing some stores. We know that Warren James have closed some stores, and we also know that some independents have left the market. So that's what I'm competition. If I haven't answered it, Steven, have another go and and ask another question. How long does it take to get a new store up to speed? Steven has asked. Well, that's the graph on the page, in the presentation. Page 17. That's the hurdle that we give ourselves. If if we have a store, we have a look at it, and the area manager doesn't think of it. The what they put forward doesn't pass that test. The store does not get opened.

44:26 So it depends on what you call up to speed. Our average store profitability is north of year three, and, obviously, stores mature, as they age. How quick depends really on the mix of income streams. So we have pie charts for what we expect a new store to look at, and I think I get every single one wrong, as we move forward because you're always surprised at which services go a bit quicker than others. Like I've explained, the ones in the Southeast, retail has gone off like a train. Steve has asked again, comment on cost of the ventures, I online car I online card for FX, please. Well, our investment, if you like, in the card program is less than a £100,000, if that helps.

45:18 Online, the websites are not that expensive, and, obviously, we've the cash resources to to do that. Colin has asked commercial property is having a bad time at this point in the cycle. Are you finding it easier to find new locations at good price in preferred locations? It's a mix, Colin. Some, towns where the locations are very sought after, there is no negotiation in the rent, and you understand it, and you're in competition for those units. And that's also know, in some locations, that's exactly where we want to be. We want to be where the customer is shopping. We want to be where the footfall is. I also get offered stores. I got offered one this month, not last month in May.

46:09 Five year deal, two and a half years rent free. We haven't taken up on that offer because it isn't that good. So it's a it is a mix, but we want to be where the footfall is, where there's a nucleus of returning shoppers. Pablo has said, congratulations on an excellent set of results. Thank you, Pablo. You have any indication of the possible upcoming labor government planning to impose crackdowns on pawnbroking or further regulating payday lending? Well, I don't care about payday lending because I don't do it. Do I think they're gonna crack down further on pawnbroking? One, Labour have to win the election. Two, no, I don't. I think the FCA, who are our regulator, understand pawnbroking.

46:58 Pawnbroking is centuries old. You can either go to the Medici family in the fourteen hundreds or the Chinese pre Christ, which, it's a simple service. Complaints are very low, and it's a much sought after service for customers, and it is highly regulated. What we would like any government to do is crack down on illegal lenders. Hope I've answered your question. Peter has asked, do you have a staff training school? Is training done in store or web or web based? It's a mix of all of that. I don't have a training school, perhaps. I do have four training centers that are above stores. We do training in store on the job.

47:46 I have area managers and assistant area managers that can give one to one training to the staff, in all sorts of, you know, the basics when they first come in to, you know, really detailed stuff with hand you know, handheld courses on watches and diamonds on what to look for, etcetera. Web based, yes, we have an elearning platform that we use, and we use that as a mix of of, regulatory courses or courses that are more more read and understand as opposed to practical. So we have a a a full mix of that. John has asked inventory per store for jewelry looks to be around 144, which is up on past reporting periods. Presume some of this is inflation a little bit.

48:34 What are the risks of inventory markdown if economy takes a further downturn, especially in the case of watches which have the lowest margins. I our retail has has momentum, John. See, I'm I'm not expecting any any need to, mark down our our products to to get them away. You know, we've been able to cope with price inflation, put the prices up a little bit, and maintain our margins. So, I have a more opt optimistic view, but, obviously, I'm not naive. We we are aware of the economy, but working hard. We've got momentum. We have a great value for money proposition for customers. So, hopefully, I don't have to do what you've suggested. I think the other thing with watches as well is it's the fastest moving product in our retail division. So whilst, you know, watches are high value equally, they're they're very desirable and they sell very quickly. Historically, that was probably about six months. As we've increased the stock, we've probably drawn that out slightly as part of that increase. But, certainly, you know, it's not as it's not as hard to sell a watch as this, instance, a diamond, which would be, you know, over a year's stock turn. So, certainly, the risk is is a lot lower than you might think given the actual the turn in the stock is actually quite fast. Yeah. And whilst diamonds do turn more slower, they have the highest margins.

49:56 So the return on capital of holding them is is in line with other products. Lawrence has asked, could there be a mix of share buyback and increasing dividends in the near term given the share price currently? Or is increasing dividends the focus going forwards? No intentions to do any share buyback. We want to, you know, grow the business, as Martin explained, roughly 50% out in dividend, 50% invested in the business. That would be the holy grail that we want to work to. Very conscious of the tax rates been mixed this year at a hybrid and then full 25% next. So we want to increase the pound value of our dividends paid out and get closer to that 50% over the next two years.

50:51 That's the the last question. Peter Peter Martin, thank you. And I think you've addressed all those questions you can for investors. And, of course, the company will review all questions submitted today. We will publish those responses on the investment company platform. Before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, could I please just ask you for a few closing comments? Well, we've got one question in other other interest rates. This rate movement's gonna affect our our future interest rates. Not really. You know, we're a plus and a £100 loan is 9.9% per month. Moving interest rates from three to four doesn't affect what we what we charge customers. The the summary comments, you know, what we went before, we've we've got a good business.

51:40 We want a we've had a recovery now through COVID. I hope that, I'm no longer talking about that in the future, that it is a thing of the past and lessons we have learned. And we can go back to what we would call a staircase. We increase profit, and we increase dividends. And we do that in a structured, carefully thought out, you know, well diversified, safe way. So, you know, that's what RAMSDENS is about, and we're back to, hopefully delivering that. You know, we've been on the market six years. I know, hopefully, we can continue to grow over the next six years and beyond. Peter, Martin, thank you for updating investors today. If I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

52:34 This will only take a few moments to complete, and I'm sure we'll be greatly valued by the company. On behalf of the management team of RAMSDENS HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.