- FirstCash comes back for Ramsdens after buying H&T last year
- American firm pays a lower valuation than it did for 2025’s purchase
- Pawnbroking market remains ripe for consolidation
“Excitement and a good story can carry a share price so far, but only for so long and the valuation paid to own a share of a company’s profits, cash flow and assets is the ultimate arbiter of investment return. In this context, FirstCash’s £203 million swoop to own all of Ramsdens makes perfect sense,” says AJ Bell investment director Russ Mould.
“It is just over a year since the American firm launched a bid for another British pawnbroker-to-jeweller, H&T, and now it is back again, not least because Ramsdens comes on a lower valuation than last year’s target.
“H&T had delivered record profits in 2024 across its pawnbroking, jewellery and currency exchange operations and FirstCash swooped with a cash-and-dividend offer of 661p a share. That represented a 44% premium to the undisturbed share price and valued H&T at around 12 times forward earnings.
“The pattern is similar at Ramsdens. Strong first-half results earlier in June enabled Ramsdens to upgrade profit forecasts for the year to September 2026 for the fourth time in five months. The shares reached a new all-time high but then stumbled as the gold price remained weak to provide FirstCash with what is clearly felt was an opportunity that was too good to miss.
Source: LSEG Refinitiv data
“Ramsdens’ shares stood at 453p before the recommended approach, a level that put them on barely seven times forward earnings, way cheaper than the multiple FirstCash paid for H&T, according to consensus analysts’ earnings forecasts. That also left the shares on a forward dividend yield of 5.9%, compared to the 2.8% implied by the takeover price for H&T, also based on consensus analysts’ estimates.
Source: LSEG Refinitiv data
“Even the 609p-a-share cash-and-dividend offer puts Ramsdens on barely nine times earnings and a 4.4% forward yield. FirstCash must think Christmas has come early as it snaps up another strongly performing player in a fragmented market that is ripe for consolidation.
“The gold price remains a risk, but FirstCash is clearly taking the view that it is not just the soaring gold price that is driving Ramsdens’ profit momentum.
Source: Company accounts, consensus analysts’ forecasts, Marketscreener. Financial year to September.
“The first-half results showed that sales at the jewellery operation were up by more than a quarter compared to the first six months of the previous financial year, and profits grew faster than that. Meanwhile, the pledge book and profits at the pawnbroking operation also continued to advance.
“If there was an area of weakness, it comes in the shape of the foreign currency exchange business, where volumes were flat and profits down, although the earnings decline looked to be the result of a shift in mix, as more customers used lower-margin digital services rather than ready cash.
Source: Company accounts, for six months to March 2026
“Ramsdens also continues to expand its store estate, and the company is on track to add eight to twelve sites in the current financial year, to take the total to between 175 and 180, after opening two new shops and acquiring one.
“This measured expansion and balanced profits profile, coupled with Ramsden’s strong balance sheet, should help to reassure investors that the company is not going to follow in the path of one-time pawnbroking peer Albemarle & Bond, whose shares traded on AIM between 1995 and 2014.
“That company’s share price, and profits, leaned heavily on the gold price and the precious metal’s surge in the wake of the Great Financial Crisis, to a peak of around $1,800 an ounce, lured its management team into more aggressive buying of the commodity and more store openings. Disaster followed as the gold price retreated to $1,200 an ounce and Albemarle & Bond appointed administrators in 2014.”
Source: LSEG Refinitiv data
