Ramsdens Holdings PLC ($RFX)

Good afternoon, ladies and gentlemen. Welcome to the Ramsdens Holdings PLC Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so, on the Investor Meet Company platform. Before we begin, as usual, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Ramsdens. Peter, good afternoon, sir.

Thank you very much, and welcome, everybody. We're going to run through a presentation, which is slightly different to the one, if you like, that's on our website because we don't know whether people attending are existing shareholders or new shareholders. So we'll start with a bit of background. That is one of our latest stores. You can see that we're advertising currency and pawnbrokers and that we will buy golden watches, heavily weighted to jewellery. It's in a column format, so we can segregate new from secondhand. And obviously, there's a prominent rate board to the left-hand side. Inside the store, there'll be a jewellery serving area and then there'll be financial services tills as well. As we get into it, we start off with a disclaimer. Everyone can read that at their leisure. Quick summary of the contents. So background to us, the label that we get is a diversified financial service provider and retailer. What does that mean? We have a mix of services. We have foreign currency, which is if anybody is off to Benidorm, we will sell euros to you to take with you. We'll also supply you with a Ramsdens multicurrency card, which is operated by Mastercard for us. And if you've got a house out in Spain and you want to send somebody to your Spanish bank account, we can do that for you as well. Then we have 3 jewellery-based services. One is if you've come to our doors and said you'd like your jewellery back and you would like a loan, that's a pawnbroking loan. If you're coming to sell that jewellery, that goes into the purchase of precious metals if we melt the jewellery. If we recirculate the jewellery that we bought from you and together with new jewellery and premium watches, that will come into the retail jewellery section, which we'll go into in more detail. We're across Scotland, Wales, Northern England, and we are in Kent and Essex and also Boscombe and Poole. 175 stores strong as at today, headquartered on Teesside. A bit of background, there's a, two kind Trustpilot ratings for us, and you can see the pie chart of the mix of our gross profit, which we will come back to in more detail. So what are the highlights? Well, the first one is we made more profit in the last 6 months than we did last year. So why is that? Well, the headline story is gold price and gold volumes. But the underlying business, pawnbroking, foreign currency, retail jewellery is all doing well given the circumstances. The numbers are there. Again, we'll come back to them, revenue gross profit up, profit up and a really, really strong balance sheet, which I don't know whether we get true credit for. The assets on that balance sheet are really strong. It's loans that are secured on gold jewellery. There's a lot of jewellery held that's under its intrinsic value. And obviously, we've got a lot of cash on our balance sheet as well. For those interested in the dividend, we have typically paid out for probably the last 3 or 4 years now 43% of our profits. And chances are it will be the same this year, but we're starting off with an interim and special dividend because we again, we were flagging out that we have some exceptional profits with a high gold price. And then depending on where your crystal ball sits, we would always look through the dark side of it and say it could come down. You might look at it where it's going to stay and you also might think it's going to go up. But at this moment in time, that's where we're at to call out a bit of special dividend. Operationally, we've increased the store estate. We've opened in Hull and Wakefield, both stores are doing very nicely. We bought a business in Sheerness that we've now converted. That's going well. We've relocated in Bristol, happy with that one as well. Platform refresh in the jewellery website. Again, we're happy with how that started and how that is starting to show some positive numbers into May. In-house has now got established as a service, and we just need to continue to grow that. We have 50,000 currency cards as at the end of March and obviously, we've got a few more now because we're selling them every day and week. Outlook, well, we've upgraded again as part of this interims announcement, we think our profit for the year will be between GBP 30 million and GBP 33 million. And the rest of it is what we've told people in the past. We're trading well. Gold price has given us an extra, but really, it's still -- it's there anyway. It's just a bit more of it now. New stores. We'll come back to the strategy because we'll go through it in detail and go through the new stores. A bit of history on the left -- top left is our profit PBT graph. I think you can see a nice little staircase. The gold bar chart is the last 12 months, and you can see how that has really stepped up. And obviously, that's last H2 and this H1. And then we call out the dividends. And again, the green bar at the bottom is, if you like, the dividend that's there, the interim and the gold will be the final dividend. FY '25 saw the introduction of specials and obviously, that's zipped up this time as well. I've already mentioned the net assets, net cash, strong return on equity because we're doing extra gold buying with the same sort of cost base. So that's flowing through with an exceptional return. A bit more detail on that diversified income streams. For the last 12 months at a gross profit level, 37% of our gross profit is coming from gold buying, 18% is foreign currency, 19%, I think, is the pawnbroking and 29% is the jewellery retail. Martin will explain those details in due course. Strong foundations -- the top left, I think I mentioned we'll go through the detail, but more stores leverage off the cost base we've already got. Top right, it's our own IT system. I have 5 programmers in-house. We've integrated the websites. If we want to tweak it, we develop it, and it helps us take this business forward. It is definitely unique to what we need, helps us with the sales prompts, helps us with all the regulatory stuff that we have to adhere to. It's really, really strong systems. We've got a good, strong customer brand, high street with trusted people give us their joy to look after. We give back to communities. We have a strong reputation. We've got a growing reputation for we do the right thing and are generally seen as good guys because that's what we want to be. And again, that goes back to the culture. We help customers buy jewellery. We help customers get a short-term loan. We'll help the customer if they start to struggle to repay it. We have low staff turnover. And one thing that is new for this year is we've been recognized as within the Best Places to Work list of the Sunday Times for a big organization, which I think is 500 to 2,000 staff. So that's great recognition for us or we think it's great recognition for our team. Those that watch this webinar previously, this slide will look exceptionally familiar, but it's got new pictures. So on the left-hand side, 2 avenues to grow, if you like, what we say is the existing business. So the core estate, all the stores can get better. We're seeing great growth across the stores in retail, in pawnbroking, in gold buying coming through for that store profitability, and I think we've still got options to improve that with our retail offering, our retail skills, our conversations. We still do not sell 100% of FX in every single town that we're in. And obviously, that's something that we can aspire to in our desire to grow. We've got the card 50,000 cards. We have about 700,000 people who will buy foreign currency from us in a year. So we've got some growth opportunity there. And we see the online part of the business dovetailing in it. So the jewellery retail website is a proper e-commerce website in its own right, generates about GBP 1 million profit or contribution to the other head office costs that we have. But we've got a separate website for currency, separate website for pawnbroking, separate website for gold buying. And the currency website, while you can do home delivery, it's doing a lot more click and collect. So you put it on it online, you come and collect it from our store, you get a slightly better rate if you do that and some customers are shifting to that channel, but it's driving customers in store. Pawnbroking at distance doesn't really work. So if you want to borrow GBP 250, you want to hand over your jewellery, you get the cash. And it's the same with the gold. If you've got gold to sell and there's a trusted buyer of gold in your town, walk in with the gold, give it to us behind the counters at Ramsdens, and we will give you a good price for your jewellery. And then on the right-hand side, it's really what are we doing extra so we can expand our store estate. We're on target for over 10 this year. We said over 8 moving forward. It's a model that's easily replicable for us. It works. I have no loss-making stores. And then in addition to that, we can buy somebody, and we bought Tony's business in Sheerness in December. We Ramsdenised it in early January, and that's now open trading and has been well received by the people in Sheerness. I talk about the new stores on next page, we have a new store model, and we also have a map of where we are. People ask what's the limit? Now there are 350 opportunities where the town size is 30,000 or more. Within that, London counts as one location, which has 8 million people, and I think about 90 H&Ts. So there's plenty of opportunity for us to grow given that I've got very successful stores where the population is around 10,000 people. So the model is there. How does it cost for us to open a store? Well, it's around GBP 200,000 to GBP 250,000 shop fitting that store, and we will put jewellery in, including cash of about GBP 300,000 to GBP 350,000. We expect the store to make a loss in the first year. The stores that have opened so far have not done that, and they're all tracking to be profitable. And then obviously, we expect it to mature and grow its profitability as it ages. And there's opportunity well beyond year 4 that's in that model. That actually is below average. So we're obviously trying to be a lot better than average as we move forward. So I'll hand over to Martin, who will go through some of the financial information.

Thank you, Peter. Good afternoon, everybody. As Peter said, a very, very strong period. The profit for the period higher than the full year profit, which is a very strong place to be. Revenue was up 62% to GBP 83.7 million. The big key number there is obviously the precious metals segment, which is up 141%. But actually, the retail growth of 26% is extremely strong as well and the pawnbroking growth of 18%, again, shows all of the segments performed well. Currencies had a slight reduction, which we'll talk to in terms of that page. But fundamentally, that market has been tougher because of the impact in the travel in the half year. When you look at the leverage of the business, as Peter mentioned, the cost of the stores are relatively fixed, and therefore, all the extra gold profit does fall through to the bottom line. So admin costs are up 12%. The key cost in here that we've seen increasing is people cost. That's been consistent now for several years. We pay a real living wage or entry pay, and that's up 6.7% from April 26, but we've seen that cost go up probably 10% a year now for the last few years. And that includes the national insurance costs, which is around GBP 400,000 year-on-year in the costs for this period. We've been spending more on advertising, as Peter mentioned, in terms of TV and website advertising to drive those results. So retail and gold buying have seen that investment, and that's been part of that development we've seen in terms of getting those income streams moving. So it's around about GBP 600,000 of extra advertising costs in H1 this year. Profit before tax up 173% to GBP 16.7 million. And basically earnings per share, very similar growth, 37.9p. So a very strong start to the year. If we look at each segment in turn, the Precious Metals segment first. You can see in the top left of the slide there, we show the average price in 9-carat gold terms of GBP 40.53, GBP 40.63 sorry. So that's about 55% up year-on-year. It equates to around $4,500 per ounce. It touched GBP 48 per gram in February. It came back to GBP 40. So it has been slightly volatile. But not only is the price that we bought a lot more gold in the period as well. So the gold that we've purchased is more than 50% up. We obviously take -- historically, we take around 20% of what we buy and we use that to stock our retail operation. Obviously, the extra that we buy, we don't have to take as much of that out. So therefore, all of the extra we buy effectively, we can scrap and therefore, that increases more than just the increase in the weight purchase. The TV advertising has worked well. We've also had the website. We talked about last time, we launched the website around February, March last year. The second half of last year, we saw some of the benefit of that, and that's continued into the first half of this year. The WIP purchase, we have that choice. We can decide to scrap it or we can put more into retail. The number of new stores affects that decision as well. And towards the end of the period, you can see the inventory in retail stock has increased as we've got that stock ready for those new stores, as Peter mentioned, that we've opened and are opening into H2. We see that the gold price has continued post period end. You can look at the market consensus. We get asked a lot about, I guess, the forward-looking numbers in the market. Cavendish have very clearly highlighted their assumptions in those numbers, which are below the current gold price for today. So we've generally been very cautious, which is why we've seen upgrades throughout this year as that gold price has stuck around that GBP 40 mark now for some time. Moving on to retail. So again, another very successful period for retail. You can see in the chart on the bottom left, we've seen sustained growth here for many years as we've continued to develop the service. Some of that is just putting more stock in. Some of that is from the price increases that we've put through because the gold price obviously is a big input cost into this segment as well. But some of that's from the displays, as you can see in the top right there in the pictures. Our displays over time have got much better. Our staff training, our development in terms of those -- how to sell the jewellery, our knowledge base in terms of that jewellery as well. That's all growing. And the website has been a success. You can see the online revenue, again, is up over 30% there as the website continues to develop and deliver very, very positive results. There are 3 different types of retail we sell, and they all do have slightly different trading conditions. So if you take our premium watches, they're obviously not impacted by the gold price. They're up about 20% in revenue terms in the period. 18% of that is volume. The price of a watch is very similar to it was a year ago. So that's been very, very positive in terms of volume of sales. Pre-owned jewellery, we're up 43% in revenue terms in that segment. This has been the biggest step forward of the 3 segments. Now a lot of that is in our pricing. So we're up around 30% in average pricing because the input cost of the gold is a much bigger proportion of the cost of the jewellery that we're selling. The new jewellery, the volume is up around 8%. Overall, the revenue is around 6% up. So what we've seen here is probably less people buying higher ticket heavier pieces and more people buying lower price points, maybe silver jewellery. So obviously, the price point has reduced because of the mix, the actual price of individual like-for-like pieces is probably up 20% similar because of the value of the metal within the new jewellery is a lower proportion of the overall cost. So all 3 have done well. All 3 have grown volume as well as the increase in pricing, and we've been able to maintain our margins across the 3. The slight improvement in margin overall is really just the mix of more pre-owned jewellery that grew faster in the period than the 2 segments. So we've obviously supported that with stock. You can see in the table, jewellery stock GBP 38.7 million. That's up GBP 6.5 million -- GBP 6.7 million in the period. And that's partly stock in the branches that come in, as I mentioned. So some of that stock is to fund those stores, which will open very quickly after the period end. Into Pawnbroking. So again, that graph in the bottom left, you can see that we've had good sustained growth for a number of years now in Pawnbroking, incrementally developing that customer base and lending a little bit more through the cycle. So what you see is the gold price has substantially increased over the last 2 or 3 years. We've not followed that our LTV or loan-to-value in our lending is extremely conservative. We're around about 55% of the intrinsic value of the gold price and probably around 40% of the retail value of the goods if we can retail them. So we still have an opportunity to lend customers more if the gold price stays where it is. If the gold price was to reduce by another 20%, say, this would not affect our ability to lend at this level. We expect our pawnbroking to be unaffected in terms of the lending levels that we currently have. The expansion is obviously adding -- the new stores is adding some growth. The website is also attracting new customers, especially for higher-value lending. So we're seeing some good leads from that to actually compete, and we're driving a bit more traffic to that again through some increased advertising spend. So pawnbroking is not suffering in terms of repayment levels. The repayments are very, very consistent where they've been over the last 2 or 3 years. And there's no sort of indication of any customer behavior changing in pawnbroking. It's a very, very solid, consistent income stream, which continues to develop over the years. So foreign currency. So if you look in the top left table there, you can see the total currency exchange, GBP 145 million is extremely similar to the first half of last year, GBP 146 million. What's happened here is the mix of what we sold and how the customer has taken that currency is shifting, and we've had that for the last couple of periods. So more people are buying in advance online, so a click and collect service through our website. So you pay in advance and then collect in the store. That's a competitive pricing, slightly cheaper than if you were to just turn up in the store. So that gives us a lower margin. That's part of the reduction in revenue. And also some people are taking that on the card as well as the card is growing, some of that currency is shifting on to that. So we've got over 50,000 cards now travel cards in issue. And customers are using that. The repeat usage on the card has been extremely strong. We've seen probably for an average load in store, you get that spend about 5x the initial spend over the life of the card over the next year as the customer reuses that while still abroad. So we are capturing more of the customer spend even if it's at a slightly lower margin for the initial award in store. The key point we look at in terms of currency is the volume of customers that those customers then we can try and cross-sell our other products to. So gold buying in particular, and also retail sales rely on the footfall we get from currency. So we always look to be keen pricing. And therefore, our target in the year was to keep the volume of customers high. And therefore, we've given away a little bit of margin in terms of doing that to maintain the volume of customers. In-house international payment service is now continuing to develop. And again, that's a small service that is continuing to grow and offers customers the opportunity to send money bank to bank around the world, but typically for holiday homes, et cetera, around Europe. We've flagged here the impact of the Iran war, the fuel shortage. We've not seen -- we've seen obviously bookings numbers from airlines. I think there's slightly lower holiday bookings at this stage compared to last year. But equally, our trading so far into May and April and May post period end has been relatively consistent. And therefore, we sit here optimistic for the summer that people will travel. I think people have generally give up holidays as a last resort. They would generally go at 7 days, not 10 or they would go to a different location if where they would go historically was impacted. So I think Cyprus and Turkey, for instance, seen less travel, but other parts of Europe would probably pick some of that volume up. So as long as people travel, we will be able to sell good volumes of currency to them in the summer months. On to the cash flow. We've got a very cash-generative model. You open the store, the profitability comes through. What we have seen in this period is a step forward in terms of the inventory cost. So you can see the GBP 10.2 million of investment in inventory. So GBP 3.5 million of that is from the gold buying cycle. So we've got more gold and the cost of gold is higher. So that's tied up in the gold buying cycle. The other GBP 6.7 million is the retail stock as we talked through earlier. The GBP 2.5 million into trade and other receivables is the building of the pawnbroking loan book, which again has been very positive in the year. And the GBP 1.1 million of CapEx is 2 new stores. We've relocated a store and refurbished the store that we purchased in the period. We're expecting more CapEx in the second half as we move towards that 10, 11 stores that we'd expect for the full year. We do pay both levels of dividend in this half year. We pay in October and March. So October because when we come out of the FX season in September, the currency that we need to hold in the till in October significantly reduces. So we use that cash to pay the dividend in October, and then we pay the final in March. So you can see that a swing in cash generation across H1 and H2. So we -- our philosophy on dividend is very similar. We're paying 1/3, 2/3 typically on the dividend, and it's broadly around 43% payout. We've highlighted the fact that some of that we've called out a special because of that step forward in profitability. And obviously, we look at the working capital needs at each decision we make for dividends. But fundamentally, there's no change in strategy, and we expect that to be similar moving forward. As Peter mentioned, our balance sheet continues to strengthen. We've got very, very strong assets within it. Inventories of GBP 50 million include the scrap gold that we hold for a strong margin below the gold price. We have the retail stock that we purchased. Certainly, the pre-owned is typically a good margin below the gold price and even the new stock that we bought historically, it's probably now still below the gold price. So that's a very strong asset class. The trade and receivables, 55% loan to value, extremely well asset backed and the cash and the currency and metal is offset by the RCF. So typically, just a reminder that we use our RCF effectively to fund the cash in the FX cycle. So in the winter, we typically pay that back. And in the summer, we draw that to increase the cash in the till for FX and the cash in that cycle of buying on the FX as well. Well set, we expect that balance sheet to continue to grow as we look to our strategy of broadly 50% up to 50% out as dividend, either 50% reinvested for growth, the balance sheet will continue to grow and strengthen.

Thanks, Martin. Okay. To summarize then where we are -- so profit this year between GBP 30 million and GBP 33 million based on where we're expecting the gold price to be. As Martin has alluded to, we know where we are at the end of April, obviously, and at the end of May. And we've already got our gold that we bought that we will process through June. So we're in a very good, strong position to deliver on those numbers. It's -- if you ignore the gold price, this is a robust business model. It doesn't matter really what the economic conditions are unless it's not COVID. We have done well over the years. We've tried to build a staircase of profitability, growing income streams, stronger balance sheet, and we have done that over the years. And then we have an opportunity because the gold price has gone exceptionally high in our opinion. There's potential for it to go further, but we always caveat that it could come down. And we're making additional profits this year, and we're rewarding that out with an additional well-increased dividend with a very strong special dividend to again call out the exceptional profits that we see in that one part of the business. I'm looking to lead a very talented and strong team that work very hard every day to deliver those numbers to help our customers in whatever they're looking for. And as a Board, we're very confident of our future to continue to grow, continue to create shareholder value and move our business forward. That concludes the presentation. So I'll stop there.

Peter Martin, if I may just jump back in there, thank you very much indeed for your presentation this afternoon. [Operator Instructions] Just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboards. Guys you can see that we have received a number of questions throughout your presentation. Thank you to all of those on the call for taking the time to submit their questions. But Peter and Martin, at this point, if I may just hand back to you to address those questions where appropriate. And if I pick up from you at the end, that would be great. Thank you.

All right. Excellent. Okay, then leading forward, so I can read the screen. How much would the gold price have to fall to have a material effect on profitability? I think the only thing I can probably comment on that one is if you read Cavendish's research, they've got a 20% fall in the gold price. They've got about a 13%, 15% fall in volume, and that results in a business making GBP 20 million profit before tax. So if you think the gold price is going to fall 20% and you think that the -- our volumes will fall as a consequence of a low gold price, then that's the sort of number that could be delivered. I would say a GBP 10 million fall in profitability is material. However, I'd also have to say that this is really good times for us, and we're calling it out as exceptional, but it could last. In the same way an importer and exporter would hedge their FX exposure, does the business have any hedging in place against the price of gold? Generally, we don't. We might do it across the year-end, but not as a rule. Our margins are about 40%. It's a very short cycle. We have always got a secondary exit route and that we could refurbish it for sale and try and push the retail harder. So we don't necessarily hedge. What impact to the bottom line would having the gold price have? Well, I've answered that one. Thank you for engaging with retail investors. You're welcome. Please, could you tell us a little bit more about the attractiveness of buying single-store pawn brokers to increase Ramsdens' footprints and how the required investment might compare with the new store opening and fit out? You're quite right. That really is a key question for us that people who might want to sell, we firstly put it against do we want to be in that town? If we opened our own store, what would our return on capital be? And that will limit in some ways, what we'll buy for the business. Now some businesses, Tony had a good business. It was quite lean. This is G&S. He wanted to retire. We were happy to move in. We agreed a price and it gave them an exit route. It's very difficult currently with where the market is at and the strong gold price for a pawn broker to have a desire to sell unless if you like, it is retirement or if you like, it's frustration with the regulation, which continues to creep. But as a bigger business, we've got the staff to cope with that. I hope that answers the question. [ Leo ], do you have an estimate of the difference between the book value and intrinsic value of your jewellery stock? Several million is probably my answer.

Yes. I mean we're looking to retail it. So we're not going to melt it. So I guess the point, just to be clear there is that we need that stock to continue to develop retail. I think the -- if you were to melt all of the whole jewellery we have, we would be millions to give round numbers.

Yes. Probably GBP 6 million or something like that. The retail stock is about GBP 38 million, and that's new watches and secondhand or pre-owned. The scrap in the balance sheet at the period end is about GBP 11 million, and that's obviously got profit in it because it's going through that process to be melted. So yes, a few million. Has Ramsdens' market share decreased, increased or stayed much the same since H&T's takeover? I suppose which market is my first question that one, Peter. Pawnbroking, I suspect we have 4%, 5% of the market share, maybe even a little bit less. Pawnbrokers usually keep what their loan books are a close guarded secret and the FCA do not publish any numbers, so we can all see where we are. In a retail environment, I think we're less than 1%. We have to be less than 1% of the retail market when you consider how large that is and all the different suppliers that there are at all different levels of jewellery. There's obviously some very, very high-value jewellery sold in the U.K. FX market, slightly different because we don't cover the whole of the U.K. I don't know, maybe 10% in some of the areas. Again, there's no reliable numbers to put a number on it. We don't have massive market shares, but we have opportunity to, therefore, to continue acquiring customers and market share.

And I don't think we've seen H&T do anything different post deal to pre-deal. So they are doing exactly the same things they were doing before. So it's not really a change in activity from them.

I think I don't know what the number count is. I think it's between 70 and 80, I would guess, of the towns that where we're both in the same town, and they've got -- I think it's now on 300 stores now. So there's not that much of an overlap. [ Powell ], thank you for yet another delivered spectacular performance. You're welcome. Can you share some detail on how you go about forming your gold price forecast, for example, for the purposes of your guidance, is there a situation in which you would be actively hedging gold price? Look, that's a great question. We have considered that. But there are lots of reports that we read that are quite bullish that gold price is going to increase from here. I've seen reports up to $7,200. And when I was talking to someone about this week, they said, I've seen $8,000. So I don't think we want to fix out too long when there's a chance that there's a rising market here. Cavendish have taken our lead, if you like, with the gold price, we're very cautious. We have had it drummed into us to underpromise and overdeliver. So we're cautious about that gold price because we have no control over it. Are you experiencing increased competition from the H&T? We've answered that one. No, it's just like business as usual. They've been opening stores where we're not. Why do you think the pledge book growth has accelerated over the past 12 months? Do you think -- expect this to continue? So we're serving more customers, [ Julian ]. That's in the low digits of more customers. We've got an opportunity. Our loan-to-value, we started the half year in October and signed off that we would lend the customer more money, if you like, on a pound per gram basis, would increase our risk, if you like, in that lending only for the gold price to continue to increase and my lending look even more conservative than it was at the start of the H1. It's an opportunity -- as a responsible lender, we want to make sure we don't overload customers. We want them to repay. We want them to use the service for years and for years to come if they need it. So we don't want to -- if you take a GBP 200 up to GBP 320 loan, cause customer difficulty to have to repay that and then lose their goods because that's short-termism for me. They need to get used to a higher amount. So if you had an average loan of GBP 250 now. But we have an opportunity if gold price stays at GBP 40 to lend a bit more, if gold price was to fall to the, if the Cavendish estimate at GBP 32, there will be no impact in our lending at all, and we will still have a very conservative loan book. [indiscernible], other than this exceptional period for gold, as that interests everyone, it seems, in what areas you see the biggest growth in the coming 2 to 3 years? And how are you pursuing that? And second question, is there a reason you have not yet opened up in London as a market for you? Again, 2 good questions. So biggest growth in the next 2 or 3 years, retail, we're a minnow. Absolutely something that we can get better at. We can get better at with our skills. We can get better at with the stock. We can get better with the advertising, we get better with online. So yes, having said all that, we're obviously pretty poor at retail. Now retail is going really well. We've done well, more opportunity to come. And I wish I could stand here and say expecting 31% growth in gross profit again, but that will be a little bit unrealistic. But we do expect retail to grow. In Central London, I've looked. We've never found the right unit that I've been happy with. And we've got so much opportunity across the rest of the U.K. It's about managing the staff, managing the operational challenge that we would have. So it's under consultation. I'm sure we will get there at some point. Thank you for your presentation. You've highlighted how research has been performed on a total of 350 locations within the U.K., which would be suitable for store -- sorry, I'm just -- for store locations, what is the likely ceiling for store location numbers and how will the business adapt assuming this is reached? I think in my lifetime, we will not stop opening stores, and I hope to live for another 20 years. So there's plenty of opportunity here for Ramsdens to continue to expand its store network. I'm not seeing any sort of ceiling current growth over 8 stores a year. If we -- let's say our profits remain at this sort of level, and we've got more cash to invest, obviously more cash to give back to shareholders in an increasing dividend, but also more cash to invest. We budget cash neutrally really. I'm not trying to increase our debt to expand quicker, and I'm not trying to repay the debt. We've got a very good facility, no structural debt there. It's a working capital facility for the foreign currency. So decent incremental growth, 8 to 10 stores that's going to get us to 300 in the next 13 years. And that's if the town size is 30,000 or more. There are many towns I'm looking at where -- well, this way, my property team, I just put one across my desk the other day, the store count, the town population is about 14,000 demographically looks okay, and there is no competition. So we shall see whether we take that forward. Are there any other lines of business you are considering entering? H&T bought a watch repair business a few years ago, for example. Yes, we've looked at watch repair businesses. It's obviously something that's a major cost to us. It's a major delay in getting our watches turned around if we're important customers, I would suggest to our suppliers, but we don't have control to if you like prioritize that for our business. It's hard to get those skills within the Northeast. And obviously, I don't want to start shipping watches around the U.K. because that would defeat that would add further cost to the business. So it's under watch, I would say, Julian, nothing imminent, but watch this space over the next couple of years. I'll pause slightly for any more questions to come in. One more has come in. Would you like to possibly accelerate the number of stores you open annually over time? If we've got the cash to do so and the opportunities are there? Yes, why not? Would be my answer to that one. So let's see what happens. We've got that joy of options with the cash that we generate, a good cash generation business. That's why there's a strong dividend. And yes, the rest of the cash we can invest to growth, whether that's working capital or whether that is new stores. That's what we make those decisions and hopefully, in the main get them right. I think that's all the questions.

Absolutely, guys. If I may just jump back in there. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended. But Peter, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that would be great.

Look, you guys have got varying investments in your portfolios. All I will say is Ramsdens is a very solid business. It's got a great balance sheet. It's cash generative. It's paying a dividend and it's got opportunities to grow. So if you haven't got us in -- look at the research, read it for yourself, ask any questions through our IR app or back through this platform, we're in a good position to move forward and grow this business.

That's great. Peter, Martin, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of Ramsdens Holdings PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good evening to you all.