Albemarle & Bond share price up 10% on buyout interest

on Dec 9, 2013
Updated: Oct 21, 2019
Listen, Monday, December 9: Shares in Albemarle & Bond Holdings (LON:ABM) jumped more than 10 percent this morning as unconfirmed media reports suggested that there is sufficient interest for the troubled pawnbroker, which put itself up for sale last week (Pawnbroker seeks takers, stock slumps). The Sunday Times reported, quoting sources, that a number of trade and financial buyers have formally expressed an interest in buying the UK’s second largest pawnbroking business, including the biggest player in the sector, H&T Group (LON:HAT), US pawnshop operator EZCorp (NASDAQ:EZPW), which owns around 30 percent of Albemarle & Bond, and private equity firm Better Capital, led by buyout veteran Jon Moulton. In addition, US-based global alternative asset manager Apollo Global Management (NYSE:APO) is said to be trying to buy part of the company’s £50 million debt pile.

Albemarle & Bond has been a major victim of a sector-wide downturn which has seen British pawnbrokers slammed by the slide in the gold price, wiping out much of the easy profit gained during bullion’s recession-era rally.
**Full-year profit drops 77 percent**
In a delayed full-year report, Albemarle & Bond said today that its pre-tax profit dropped 77 percent to £4.9 million in the fiscal year to the end of June as a result of difficult market conditions, significant declines in the gold buying market and a drop in the gold price. In addition there were £4.6 million worth of exceptional restructuring costs related to the rapid closure of the majority of its gold buying shops and other one off items, including severance costs associated with the departure of the former CEO and advisory fees for an operational review. Revenues fell nine percent to £107.1 million, while the company’s pledge book dropped from £40 million to £37 million.

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The AIM-listed company has seen its market value plunge by some 90 percent since the end of September following an unsuccessful emergency rights issue aimed at resolving potential covenant breaches and a statement that warned market expectations for the current financial year were significantly more optimistic than its own (Albemarle & Bond share price tumbles on profit warning ). It reiterated today that the competitive and trading environment has continued to be challenging, with no signs of recovery in the key trading metrics of pawnbroking advances or gold buying. The pledge book has continued to decline year-on-year as advances remain depressed in a challenging market. The business continues to manage within the current facilities of £53.5 million which form part of the covenant deferral agreement which runs to February 3. The sale of the business is expected to be completed before that date.
Albemarle & Bond’s shares traded at 16p as of 10:38 UTC today, up 10.34 percent from Friday’s close.
**As of 10:28 UTC buy Albemarle & Bond shares at 16.00p.**
**As of 10:28 UTC sell Albemarle & Bond shares at 15.50p.**


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