Royal Mint Reports Success of Diversification Plan

For his opening statement in The Royal Mint (TRM) Annual Report 2022-23, Chairman Graham Love chose the following words: ‘I feel a strong sense of pride in how The Royal Mint has performed throughout the past year. Our evolution into a consumer brand is successfully safeguarding The Royal Mint for the future, protecting jobs, preserving our heritage and ensuring our relevancy in today’s markets. As one of Britain’s oldest businesses, we’re committed to conserving our legacy for the next generation’.

He followed this with: ‘we appreciate that the way people use coins is changing, and that coin usage is decreasing, and we’re realistic about what that means for The Royal Mint. Our historic core mission remains to ensure the availability of circulating UK coins but alongside that, our plan to transform our business is proving a success. As a result, I am delighted to report that we have achieved another positive result for the year, successfully mitigating the performance of our loss-making Currency business and the start-up costs for our new businesses by increased contribution from our more established Consumer businesses, particularly commemorative coins and precious metals investments.’

Anne Jessopp, the Royal Mint’s Chief Executive, also noted that this has been a pivotal year for the Mint as it embarked on a five-year business transformative plan.

Revenue for the year increased by 33.82% to £1.87 billion, from £1.4 billion in FY 2022. Operating profit increased by 27.3% to £17.7 million compared with £13.9 million for the previous year. The Mint noted that its underlying profit increased to £24.4 million, which enabled a significant investment in its new businesses. During the year, it increased its production staff from 457 in 2022 to 487, its sales and marketing staff from 194 to 242 and its administration staff from 759 to 909.

Although revenue for Currency (circulation coins) increased by 16.1%, from £64.1 million in FY 2022 to £74.4 million in FY 2023, its operating profit fell by 191%, from a loss of £4.5 million to a loss of £13.1 million.

Only 56 million circulating coins were produced for use in the UK. TRM also sold 1.34 billion coins and blanks to 28 countries in the year (compared with 1.55 billion coins to 22 countries the previous year).

The number of coins issued dropped sharply, from 339 million to 56 million. The majority (33 million) were £1 coins. No 1p, 2p or £2 coins were produced.

UK coins issued by year in million pieces (source: The Royal Mint Annual Report 2022-23).

This gives context to the Chairman’s opening statement and the focus on developing new businesses and revenue streams.

In comparison, TRM’s Consumer business, which offers precious metals investments, collectables and historic coins, delivered its most profitable result to date as it continued to grow internationally, increasing its market share in precious metals and releasing the first official coins of King Charles III’s reign.

The Precious Metals Investment division, alone, has grown to account for almost half of TRM’s operating profits. Revenue in FY 2023 increased by £437.7 million (+36%) to £1.65 billion, from £1.21 billion in FY 2022.

The Mint indicated that its profitability had enabled it to make a significant £6.8 million investment in two new business divisions as part of its five-year transformation strategy.

First is the new luxury jewellery and lifestyle business – 886 by The Royal Mint – which was launched in May 2022.

Second, and emphasising TRM’s commitment to sustainability, is a pioneering, world first, factory that recovers gold from electronic waste, and that is planned to open later this year. The precious metals recovered from this plant will be used in the new sustainable jewellery line – 886 by TRM – and for the Mint’s customers across the Consumer business, both supporting its sustainability and market leading ambitions.

Notable craftsmanship and production achievements during the year have been the creation of the largest ever coin in the Royal Mint’s 1,100-year history, the launch of a dedicated Diwali range, and the introduction of a 20g gold minted bullion bar for the Islamic community depicting the Kaaba.

Chief Executive, Anne Jessopp, noted that, the year was also one of great historic significance, with the passing of Her Late Majesty Queen Elizabeth II and the transition to the coinage of a new monarch. The Royal Mint has struck coinage for every British monarch since Alfred the Great and, following a respectful period of mourning, we were honoured to reveal the first official coinage portrait of King Charles III. It felt fitting that the first coin to feature His Majesty The King’s portrait paid tribute to Her Late Majesty, with a memorial dedication appearing on the reverse of the coin’.

A leader in sustainability

In the annual report, 17 pages are dedicated to strategy and 14 pages to Environment Social and Governance (ESG), reflecting TRM’s significant work and focus on this area.

TRM has developed and is deploying a sustainability framework, built around key ESG considerations. As part of its decarbonisation ambitions, it has developed near-term (2030) and long-term (2050) science-based targets for validation by the Science Based Targets Initiative (SBTi). It aims to achieve an absolute reduction on Scope 1 and 2 greenhouse gas (GHG) emissions of 42% by 2030 and 90% by 2050; Scope 3 emissions will be reduced by 25% by 2030 and 90% by 2050.

Key environmental achievements have been:

• Investing in the creation of TRM’s Sustainable Precious Metals business which recovers gold from printed circuit boards in discarded electronic devices, such as mobile phones and laptops.

• Installing a temporary combined heat and power plant (CHP) which was replaced with a permanent 2 megawatt CHP and a 2 megawatt 4,000 panel ground-mounted solar farm. TRM has a purpose-built, onsite local energy centre (see page 3).

• Hosting its top 30 suppliers as part of implementing its responsible sourcing policy.

• Extending its work with gold and silver refiners who are on the London Bullion Market Association (LBMA) Good Delivery List or who are full LBMA members, to include platinum product suppliers who must meet the industry standards set by the London Platinum and Palladium Market.

• Introducing 100% recycled gold bars into its physically gold-backed exchange-traded commodity. All bars backing this investment product have 100% post-2019 LBMA Good Delivery status.

• Procuring carbon-neutral remanufactured laptops working with circular computing.

The Royal Mint Annual Report 2022-23 can be downloaded here.