Abbeycrest still battles price rises

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”.

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.

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.