A fall in gold purchasing profits from £17.2m to just £12m in the year, amidst lower gold prices, largely explains the headline profit slump at pawnbroker H&T (HAT). That also offset a rise in pawnbroking profits from £26.7m to £28.4m, and from scrapping forfeited gold items.
The end to such super normal gold-driven profits will also probably change the way that H&T grows. The group is now likely to focus more on acquisitions, especially as the price of taking out rivals in a fragmented market should now be lower than it was given that the gold boom has passed. In fact the group spent £6.2m on six acquisitions in the period, although a good deal of organic growth has taken place as a well - a net 26 stores were opened in 2012, with a further six so far in 2013, bringing the total to 192. H&T's pledge book has also continued to grow, from £46.6m to £51.6m - significantly helped by those new stores.
Reflecting further declines in gold purchasing, as well as at the cheque cashing operation, broker Numis Securities expects pre-tax profit for 2013 to fall to £16.5m from £17m, giving EPS of 32.6p (33.8p in 2012).
H&T (HAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 314p | MARKET VALUE: | £115m | |
| TOUCH: | 312-315p | 12-MONTH HIGH: | 342p | LOW: 240p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 237p* | NET DEBT: | 33% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 52.6 | 10.1 | 20.3 | 6.500 |
| 2009 | 88.4 | 18.5 | 37.8 | 8.100 |
| 2010 | 126 | 25.5 | 48.8 | 9.500 |
| 2011 | 126 | 23.5 | 51.1 | 10.80 |
| 2012 | 130 | 17.0 | 35.9 | 11.85 |
| % change | +3 | -28 | -30 | +10 |
Ex-div: 8 May Payment: 7 Jun *Includes intangible assets of £18.9m, or 52p a share Aim: other financials | ||||
