Albemarle & Bond is on borrowed time

The pawnbroker's lenders have pulled the plug on its turnaround plan and shares have been suspended.

by Rachel Savage
Last Updated: 24 Mar 2014

It’s been a torrid year for Albemarle and Bond, the UK’s largest pawnbroker: profits plummeting after the price of gold slumped, a mass exodus of board directors and being forced to melt down its own gold reserves in an attempt to pay down a veritable Mount Everest of debt. You’d think it couldn’t get any worse, but over the weekend the company’s lenders cut the cord on the management’s turnaround plan.

The pawnbroker asked for its shares to be suspended this morning, stating that its variously unpalatable options, including the sale of the business, didn’t hold out any prospect for shareholders of getting any more value from their beleaguered investments.

Lenders gave the company three months of breathing space until the end of March and had said they could extend the reprieve ‘in certain circumstances’. However, while the pawnbroker said it has enough cash to tide over its trading at the moment, they can’t afford to pay back the loans if they’re called in next week.

Albemarle and Bond’s shares had lost 97% of their value in the last 12 months and were trading at 6.65p when they were suspended. However, as the chart below shows, if the company had been able to hang on a little bit longer they might have grabbed on the coattails of a relative rebound in the price of gold. In this case, at least, all that glitters might well be gold.

Price of gold, $

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