H&T Group upbeat on first-half growth

20th Aug 2024 09:51

(Sharecast News) - Pawnbroker H&T Group reported a 12.5% increase in first-half profit before tax on Tuesday, to £9.9m, compared to £8.8m in the first half of 2023.

The AIM-traded firm said the capital value of its pledge book rose to £105m by 30 June, up from £101m at the end of 2023, with pledge lending during the period increasing 14% to £146m.

While there was an unexpected spike in loan redemptions during the spring, H&T said they had since returned to normal levels.

Its retail segment also performed strongly, with jewellery and watch sales increasing 27% year-on-year to £29.3m.

The company reported improved margins of 30% for the period, up from 28% in the first half of 2023.

Additionally, foreign currency profits grew 10% to £3.2m, supported by a 9% increase in transaction volumes.

In February, H&T expanded its portfolio by acquiring a £5.5m pawnbroking pledge book from Maxcroft Securities.

The board said the integration of the acquisition was progressing well, providing valuable insights for application across other stores.

It reported a strong balance sheet, with a net asset value of £181m, up from £177m in December.

Diluted earnings per share increased 8.6% to 17.7p, and the interim dividend was raised to 7p per share, a 7.7% increase from the prior year.

"I am pleased to report that we have continued to make positive progress in the first half of 2024," said chief executive officer Chris Gillespie.

"Our core pawnbroking business continues to attract increasing numbers of new and returning customers, for whom alternative sources of small sum regulated lending are much constrained.

"Retail sales have also been encouraging, with margins on all product categories improving in the second quarter and expected to further improve through the remainder of 2024."

Gillespie said the performance was supported by growing demand for the firm's foreign currency service, as well as improved margins on over-the-counter gold purchase.

"Maxcroft has performed well since the acquisition in February.

"We have begun to apply our learnings from their foreign currency business to selected H&T stores, and we have seen an increase in footfall and sales as a result.

"We remain focused on growing and broadening our core pawnbroking business and investing in the store estate."

At 0936 BST, shares in H&T Group were down 5.02% at 397p.

Reporting by Josh White for Sharecast.com.