Albemarle shares plummet after pawnbroker issues third profit warning
Shares plummet as company issues third profit warning
Wednesday 27 November 2013
Pawnbroker Albemarle & Bond has issued a third profit warning today as it delayed the release of its full-year results, reiterating that it would make an underlying loss in the past five months and take other extreme cost-cutting measures
The latest warning sent shares plummeting a further 41% to 23.8p. They were trading at 140p less than three months earlier.
Bosses revealed they had started “a programme of exceptional smelting of retail stocks”.
All new payday loans have been suspended, along with the closure of its website, and only two pop-up cash-for-gold stores remain, with the rest closing due to their unprofitability.
The company also warned: “The board believes that market expectations are significantly more optimistic than its own.” Albemarle has struggled recently with gold prices falling by around 27% since March, while signs of an economic recovery have seen fewer customers needing to sell their possessions.
It has pushed the firm dangerously close to breaching its bank covenants which are linked to earnings. Debt stands at £51.1 million with just £2.4 million available to spend after lenders cut this from £65 million last month.
Costs of an aborted rights issue and restructuring continue to weigh on the business, say bosses.
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