Abbeycrest overcomes gold cost

Simon Ashton, the company's executive chairman, said Abbeycrest had to respond dynamically to changing market needs.

In the year ended February 28, 2010, Leeds-based Abbeycrest recorded a pre-tax profit, before exceptional items, of 55,000, compared to a loss of 1m the year before.

The business remains exposed to fluctuations in the price of gold, which rose by 25 per cent over the year to 636 per ounce.

Revenue, after a "strategic withdrawal from lower margin activities" was 39.7m, down from 53.1m the previous year.

Mr Ashton said: "Market conditions remain challenging and while we are pleased with the progress of the turnaround, there is still a great deal to do within the business.

"Managing our exposure to any further increases in the gold price, given the clear impact of this variable on working capital funding, also remains key.

"As we approach the key Christmas trading period, we maintain our belief that the group is now much better positioned to capitalise on the opportunities in the global jewellery market."

The company said its Essentials division, which supplies mainstream precious metal jewellery products, had been transformed into a leaner, more focused operation.

The division delivered turnover of 27.2m, down from 41.5m the year before.

The Brands division, which operates in the design-led sector with branded jewellery collections, delivered an 8 per cent increase in revenue to 12.5m.