Abbeycrest still battles price rises

JEWELLERY group Abbeycrest said the continuing rise in precious metal prices is forcing it to review its options.

The Leeds-based group agreed revised and extended facilities with its lenders in the UK and Thailand in May.

However, Abbeycrest said despite a “satisfactory” start to its financial year, its recovery has been “further impeded in recent weeks by difficult trading conditions, including continuing rising precious metal prices and retailer action to protect volumes”.

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Abbeycrest said it now needs to extend its facilities further or reduce its peak working capital needs by about £700,000 in October.

The update covered the group’s performance from March 1 to July 14.

Last month, Abbeycrest said surging bullion prices, pressure from retailers and weak consumer sentiment drove it to a £3m annual pre-tax loss.

The company said it was hammered by a 30 per cent increase in gold prices in 2010.

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Gold hit an average monthly price of £825 per ounce in 2010, compared with £636 a year earlier. Investors have piled into precious metals due to concerns over the Eurozone debt crisis.

Abbeycrest said the three per cent fall in revenues to £38.5m was significantly higher when precious metal inflation was factored in.

The group added high gold prices are also denting consumer spending, leading to a 16 per cent fall in hallmarking during the year.

The company’s £2.97m pre-tax loss in the year to the end of February compared with profits of £1.56m a year earlier.