Pawnbroker H&T's in-line trading statement contrasted starkly with the profit warning issued by rival Albemarle & Bond last week and justifies our continued buy rating.
The company is expecting to deliver results in line with market expectations after a strong performance in pawn broking offset weaker like-for-like retail performance and competitive pressure on margins in the gold purchasing business, which was where Albemarle fell down. H&T has continued expanding, adding 14 stores in the first half.
It is now apparent that H&T has managed expectations much more successfully than Albemarle, where forecasts were far too aggressive, especially in the gold purchasing business. H&T's results were always expected to pale in comparison with last year's gold-plated effort and the company is working hard behind the scenes to develop a sustainable and growing pawn-broking business.
