Market turmoil during the past year has boosted the performance of the Royal Mint as demand for gold coins and precious metals surged, pushing the UK’s oldest surviving manufacturer’s profits to a record high.
The wholly state-owned company has supplied the country’s coins since the reign of King Alfred the Great more than 1,100 years ago. But in its modern form it has expanded into sales of precious metals, historic coins, jewellery and luxury collectibles.
A record number of investors hedged their portfolios with physical precious metals such as gold and silver during the course of its latest financial year to the end of March, pushing the Mint’s pre-tax profits to £18mn, up from £12.4mn in the previous 12 month period. Revenues rose from £1.1bn to £1.4bn.
Anne Jessopp, chief executive, said that investors moved into physical metals as a safe haven from the upheaval in global markets. Revenue in the US rose by 62 per cent on the back of booming sales of precious metals and commemorative coins.
Jessopp has overseen a modernisation of operations at the Royal Mint that started three years ago, when the company posted a loss of £3mn. The Royal Mint will pay a £5mn dividend to the Treasury this year, up from £3.7mn last time.
Other plans over the next five years include “opening a new factory to recover gold from electronic waste, expanding into the luxury market with jewellery, and continuing to grow our consumer businesses internationally”, Jessopp said.
The new plant will use patented chemistry to recover precious metals from electronic waste, generating hundreds of kilogrammes of precious metals every year.
The south Wales-based company sells precious metals in various forms, including British gold coins and stamped bars, as well as “slivers” of the metal that can be purchased by smaller investors and are stored in its vault.
The group also offers an exchange-traded fund, a type of pooled investment security that tracks the gold price, which Jessopp said had been one of the most successful in the world.
This is the second consecutive year that the Royal Mint’s profit has been driven entirely by its consumer facing divisions as the use of coins in circulation declines.
During the year, the Mint made 339mn coins for the UK, and 1.5bn coins and blanks for 22 countries worldwide. To mark the late Queen’s platinum jubilee, it was commissioned by a private collector to make the largest coin in its history — a 15kg gold piece that took more than 400 hours to craft. The Mint also started an auction scheme this year to offer rare and historic numismatic works of art.
The company’s financial performance triggered a profit share payment for employees of £4,943, who also received a 4.5 per cent annual pay rise.