ABM – poor trading update

Pawnbrokers ABM (Albermarle & Bond) released its trading statement on Fri 19 April at 5.42pm.

You just know that it’s going to be bad when a trading statement is released after hours on a Friday. The market hasn’t conveniently forgotten the statement, though, as the shares are down 30% to 130 as at 8.40am. Ouch. That’s not going to do my Stockopedia portfolio any favours. Let me share with you some of the delights contained therein …

The results were adversely affected by
* drop in gold price. Further declines expected
* tougher and more competitive markets
* loan business under pressure
* declining pledge book
* they have hired consultants to look for opportunities for profit improvements. It will cost £1m, though. As an aside, it is perhaps a disconcerting sign that management feel that they need outside consultants to give the company direction. Don’t the current management know?

“The other business divisions are trading broadly in line with the trends reported with our H1 results”.

Profits for y/e 30-Jun-2013 will be materially below expectations.

CEO Barry Stevenson will step down. Non-exec Chairman Greville Nicholls will replace him in the interim.

Pretty messy, and like all disasters, there’ll be no need to rush into this one. Maybe an opportunity for a quick in-and-out merchant to catch a bounce given how sharply it has dropped – although it is not something I shall be attempting. Worth keeping an eye on, though.


About mcturra2000

Computer programmer living in Scotland.
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