Pawnbroking has changed in recent years, and those in the business have either diversified or perished. Thankfully, H&T (HAT) is one of the former, and by way of example, the personal loan book nearly doubled, delivering revenue growth of nearly two-thirds.
That’s not to say that the core pawnbroking business is not alive and well because the gross pledge book rose by 11.6 per cent to £46.1m, which helped to lift gross profits here by 4.5 per cent to £29.7m. The rise in pledges was partly a result of higher gold prices and an increase in loans on quality watches, although H&T conceded that revenue growth is likely to remain limited.
On the retail side, where it sells unredeemed items, sales grew by 16 per cent, and despite margin pressure generated by the higher cost of goods, gross profits were higher. This in part also reflected the development of new jewellery sales, which rose by nearly two-thirds. Online sales have shown an encouraging trend, providing the opportunity to show a greater number of items to a wider audience, and sales originating on the website rose tenfold to £1m.
Analysts at Numis are forecasting pre-tax profits for the year to December 2018 of £15.1m and EPS of 33.7p (from £14.1m and 31.4p in 2017).
| H&T GROUP (HAT) | ||||
| ORD PRICE: | 358p | MARKET VALUE: | £134m | |
| TOUCH: | 351-356p | 12-MONTH HIGH: | 369p | LOW: 265pp |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 288p* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 99 | 6.7 | 13.4 | 4.8 |
| 2014 | 88 | 5.5 | 11.8 | 4.8 |
| 2015 | 89 | 6.8 | 14.9 | 8 |
| 2016 | 97 | 9.7 | 20.9 | 9.2 |
| 2017 | 110 | 14.1 | 31.1 | 10.5 |
| % change | +14 | +45 | +48 | +14 |
| Ex-div: | 3 May | |||
| Payment: | 1 Jun | |||
| *Includes intangible assets of £18m, or 48p a share | ||||
