November 27, 2013 / 8:24 AM / 4 years ago

Albemarle & Bond says market expectations too high

LONDON, Nov 27 (Reuters) - British pawnbroker Albemarle & Bond warned on Wednesday it expected to make a loss at the earnings level in the first five months of the year, and that market forecasts needed to come down to reflect this.

The gold buyer said the discrepancy in expectations between it and investors had partially resulted from the failure to publish a 2013 annual report, due in June, because of the “current uncertainties”.

“As a result the board believes that market expectations are significantly more optimistic than its own,” it said in a statement, adding that its pledge book had declined 12 percent year-on-year.

Shares in the group, which have fallen 83 percent in the last 12 months as the price of gold fell, slumped 44 percent to 21 pence in early deals, giving the group a market value of 11.7 million pounds ($18.9 million).

The firm, which also offers short-term loans to cash-strapped consumers, issued a profit warning in April. In October, it failed to agree terms with its largest shareholder to underwrite an equity raise of 35 million pounds.

The company’s fortunes have fallen as the price of gold crumpled this year, falling 26 percent.

The company said its actions to control costs, including the closure of all but two of its gold-buying pop up shops, would not stop it making a loss at the core earnings level in the first five months of the financial year.

“Tough trading conditions have continued to impact our results, but we are making progress controlling costs and managing within our constrained banking facilities,” said Chief Executive Chris Gillespie.

The company said it was working toward publishing its results around December 9.

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