A day out of the office can work wonders for some analysts, especially if it is on a Company Visit.
Such a trip can help to cement impressions on just how well a company is trading and the way that its management performs.
So, it might not be too surprising to see that James Allen, from Liberum Capital, responded to the excursion, in rating the shares of this diversified company as a Buy.
Company visit proves beneficial
The journey to the group’s Head office in Middlesbrough also took in a visit to one of the company’s stores.
As a growing, diversified, financial services provider and retailer, Ramsdens Holdings (LON:RFX) operates in four core business segments – foreign currency exchange, pawnbroking loans, precious metals buying and the selling and retailing of second hand and new jewellery.
Recent positive Trading Update
Early in October the company issued a Pre-Close Trading Update for the year to end September, which led to positive reactions with the shares rising to 219p at one stage, before easing back to 163p before the end of that month.
Analyst Opinion
Liberum are estimating that the sales last year rose from a lockdown £40.7m to £65.3m, with pre-tax profits rising significantly from £0.6m to £7.5m, lifting earnings up to 18.5p (1.2p) and boosting the dividend to 8.3p (1.2p) per share.
Allen considers that in the current year the group’s pawnbroking side will remain resilient, while the forex division may see a dip in its trading volumes but with better margins.
For the precious metal activities, he believes that the hike in the gold price will help, while the retail jewellery business should see growth and that is despite the recession.
Current year looking good too
The current year could see £72.5m of revenues generating at least £8.5m profits, 20.1p earnings and paying a 9.3p dividend per share.
With the group’s shares now trading at 201p they look ready for a New Year lift ahead of the finals being declared in the second half of January.
Liberum Capital has a 240p Target Price on the shares – that could offer a good seasonal gain.