This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/2013/may/24/gold-price-collapse-pawnbroker-profits

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Gold price collapse hits pawnbroker profits Gold price collapse hits pawnbroker profits
(4 months later)
Britain's biggest pawnbroker on Friday warned the collapse in the gold price will knock its profits.Britain's biggest pawnbroker on Friday warned the collapse in the gold price will knock its profits.
H&T, the largest British high street gold buyer, warned that every 10% fall in the price of gold would wipe about £2m off its pre-tax profits. The stock market warning sent the company's shares tumbling more than 11% on Friday to 224p.H&T, the largest British high street gold buyer, warned that every 10% fall in the price of gold would wipe about £2m off its pre-tax profits. The stock market warning sent the company's shares tumbling more than 11% on Friday to 224p.
Pawnbrokers have been surfing on the wave of soaring gold prices for the last few years with TV adverts and websites encouraging consumers to cash in their jewellery.Pawnbrokers have been surfing on the wave of soaring gold prices for the last few years with TV adverts and websites encouraging consumers to cash in their jewellery.
But gold has lost almost a fifth of its value so far this year as some investors lose faith in the metal as a safe haven. Gold was trading at $1386 an ounce on Friday, significantly below the $1,600 an ounce price when H&T last updated investors.But gold has lost almost a fifth of its value so far this year as some investors lose faith in the metal as a safe haven. Gold was trading at $1386 an ounce on Friday, significantly below the $1,600 an ounce price when H&T last updated investors.
The company, which trades in 186 shops and a further 24 pop-up "GoldBar" kiosks in shopping centres, made a £12m profit from buying and selling gold last year, buying up more than £40m of gold from customers and selling it on for £52m. Those profits were down from "super-normal" profits of £17m in 2011, when it benefited from the "rising gold price environment".The company, which trades in 186 shops and a further 24 pop-up "GoldBar" kiosks in shopping centres, made a £12m profit from buying and selling gold last year, buying up more than £40m of gold from customers and selling it on for £52m. Those profits were down from "super-normal" profits of £17m in 2011, when it benefited from the "rising gold price environment".
H&T said it expected the collapse in the gold price would lead to more unwanted jewellery being resold to consumers rather than sold as scrap to metal dealers. "We sell as much as we can through shop windows, and anything that we can't gets sold as scrap – but that is subject to the gold price," a spokesman said. "As the price falls we expect more will be resold as jewellery rather than melted down."H&T said it expected the collapse in the gold price would lead to more unwanted jewellery being resold to consumers rather than sold as scrap to metal dealers. "We sell as much as we can through shop windows, and anything that we can't gets sold as scrap – but that is subject to the gold price," a spokesman said. "As the price falls we expect more will be resold as jewellery rather than melted down."
Rival pawnbroker Albemarle & Bond has already warned investors that it has been forced to "revise down" its profit expectations because of the gold price collapse.Rival pawnbroker Albemarle & Bond has already warned investors that it has been forced to "revise down" its profit expectations because of the gold price collapse.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.